THE   LAW 


OF 


KECEIYERSHIPS 


AS  ESTABLISHED  AND  APPLIED 
IN  THE  UNITED  STATES,  GREAT 
BRITAIN    AND     HER     COLONIES, 


WITH 

PROCEDURE  AND  FORMS 


BY 
JOHN  W.  SMITH,   Esq. 

OF  THE  CHICAGO  BAB 


SECOND    EDITION 


LAWYERS'  CO-OPERATIVE  PUBLISHING  CO. 
ROCHESTER,  N.  Y. 

1900 


Entered  according'  to  Act  of  Congress  in  the  year  cijrhteen  hundred  ninety-seven,  by 

THE  LAWYERS'  CO-OPERATIVE  PUBLISHING  CO. 

In  the  Office  of  the  Librarian  of  Congress,  at  Washington,  D.  C. 


Entered  according  to  Act  of  Congress  in  the  year  nineteen  iiundred,  by 

THE  LAWYERS'  CO-OPERATIVE  PUBLISHING  CO. 

In  the  Office  of  the  Librarian  of  Congress,  at  VVasliington,  D.  C. 

T 
\9oo 


E.  R.  ANDREWS,  PRINTER,  ROCHESTER,  N.  Y. 


PREFACE. 


Perhaps  no  other  branch  of  the  law  more  forcibly  illustrates  the 
constant  and  steady  growth  of  remedial  jurisprudence,  and  its 
adaptation  to  the  ever  changing  conditions  of  business  institutions 
and  methods  than  that  of  receivership.  The  crowning  feature  of 
equity  jurisprudence,  in  general,  is  its  power  under  all  circum- 
stances of  meteing  out  even  and  exact  justice  ex  foi'o  conscieiiticB 
to  all  parties  in  interest,  untrammeled  by  legal  forms  and  distinc- 
tions. It  draws  to  itself  all  parties  and  interests,  and  gives  to  each 
protection  pendente  lite,  adjudicates  and  determines  their  equitable 
rights  and  enforces  them  to  the  extent  of  the  property  or  fund 
subject  to  distribution.  The  basic  principle  in  the  law  of  receiver- 
ship is  in  the  power  of  the  chancellor,  through  a  receiver,  to  seize 
property,  the  subject-matter  of  litigation,  preserve  it  pending  suit, 
and  finally  distribute  the  same,  or  tlie  proceeds,  according  to  the 
equitable  rights  of  the  parties  concerned.  As  it  is  the  inefficiency 
of  the  common  law  remedies  that  affords  a  field  for  the  exercise  of 
chancery  jurisdiction,  so  the  latter  is  rendered  more  efficient,  com- 
prehensive and  expeditious  by  the  aid  of  the  law  of  receivership. 
It  has  been  said  that  receivership  is  of  recent  origin,  but  it  is  more 
correct  to  say  that  its  extended  application  is  comparatively  recent. 
The  great  increase  in  recent  years  in  the  number  of  private  corpor- 
ations, caused  by  the  advantages  of  concentrated  capital,  has  been 
instrumental  in  largely  extending  the  law  of  receivership.  This 
growth  has  been  augmented  by  the  difficulties  encountered  by  the 
courts  through  the  ordinary  avenues  and  instrumentalities  in 
affording  adequate  relief  under  the  varied  and  conflicting  interests 
involved.  The  difficulties  thus  encountered  developed  the  law  of 
corporate  receivership,  and  its  extension  in  this  direction  has  had  a 
stimulating  effect  in  its  application  to  other  equitable  proceedings, 
such  as  creditor's  actions,  partnership  dissolutions  and  mortgage 
foreclosures. 

It  has  been  the  purpose  of  the  writer  to  indicate  as  carefully, 
briefly  and  concisely  as  possible  the  scope  of  the  law  of  receivership 
as  it  now  exists,  in  its  application  to  the  several  proceedings  in 
which  it  has  been  employed.  At  the  same  time  it  has  been  deemed 
of  equal  importance  to  indicate,  in  the  same  manner,  the  limita- 


735991 


IV  PREFACE. 

tions  and  restrictions  courts  have  deemed  necessary  to  impose  upon 
the  exercise  of  jurisdiction  in  this  regard. 

An  earnest  effort  has  been  made  to  discover  and  state  tlie  under- 
lying principles  by  which  the  courts  have  been  governed  in  estab- 
lishing any  given  proposition  or  doctrine,  in  the  belief  that  the  mere 
abstract  statement  of  the  law  upon  any  subject  is  more  effective  and 
of  greater  utility  to  the  court  and  practitioner  if  in  the  same  con- 
nection may  be  seen  the  principles  upon  which  a  decision  is  based, 
and  the  leading  facts  upon  which  it  is  made.  Bat  for  this  the 
notes  herein  would  seem  out  of  proportion. 

It  is  a  fruitless  task,  in  some  cases,  to  attempt  to  reconcile  con- 
flicting decisions,  but  generally  a  careful  examination  will  show 
differentiating  facts  and  circumstances  in  the  cases  or  lines  of  cases, 
and  this  results  in  the  establishment  of  general  rules  and  exceptions 
which  have  been  followed  out  herein  as  carefully  as  possible. 
Equitable  principles  are  seldom  matters  of  dispute,  but  the  applica- 
tion of  those  principles  to  the  varying  facts  and  circumstances 
arising  in  litigation  taxes  courts  and  lawyers  to  the  utmost. 

If  we  have  not  been  mistaken  the  profession  demands  in  a  text- 
book not  only  the  carrying  out  of  the  principles  above  indicated, 
but  also  insists  upon  a  reference  to  all  the  decided  cases.  It  may 
be  that  the  case  requires,  and  the  time  at  the  lawyer's  disposal 
justifies,  a  personal  examination  of  all  the  adjudged  cases  upon  the 
questions  involved. 

Having  prepared  this  work  along  the  lines  thus  indicated,  the 
author  trusts  it  may  meet  the  requirements  of  the  profession. 

J.  W.  S. 
Chicago,  Feb.  15,  1897. 


In  recognition  of  the  very  gratifying  reception  my  effort  to  pre- 
sent the  law  of  this  subject  has  met  with  from  the  profession,  I 
have  prepared  a  supplement  to  the  original  work,  covering  the 
later  decisions  to  January  1,  1900,  and  enlarging  upon  some  points 
where  further  study  made  it  seem  to  me  desirable.  This  Supple- 
ment follows  the  chapters  and  sections  of  the  original  work  and 
may  be  referred  to  from  it. 

J.  W.  S. 
Chicago,  May,  1900. 


TABLE  OF  CONTENTS. 


CHAPTER  I. 

GENERAL  NATURE  AND  FEATURES  OP  THE  LAW. 

§  1.  Origin  of  the  law  ;  its  growth 2 

g  2.  Is  ancillary  and  provisional 3 

^  3.  Receiver  defined  ;  liquidators 3 

§  4.  Generally,  in  what  cases  appointed 6 

(a)  Where  parties  entitled  to  custody  are  incompetent. 

(i)  Over  infants'  estates. 

(2)  Over  lunatics'  estates. 

(3)  Over  decedents'  estates. 

(b)  Where  parties  entitled  to  custody  are  competent,  but  are  other- 

wise disqualified. 
(T)  Over  copartnership  property. 
(S)  Over  property  of  tenants  in  common. 
(3)  Over  properly  claimed  by  different  persons. 

(c)  Where  parties  in  custody  are  violating  fiduciary  duties  and 

trust  relationship. 
(1)  Over  trust  or  quasi  trust  property. 
(3)  Executors  and  administrators. 

(3)  Mortgagors  in  possession. 

(4)  Judgment  debtors. 

(5)  Vendees  in  possession. 
(C)  Fraudulent  purchasers. 

(7)  Annuities. 

(8)  Life  tenants  in  possession. 

(9)  Corporate  officers. 

(10)  Assignees  in  bankruptcy  and  insolvency. 

(d)  Where  the  ordinary  process  is  insufficient. 

(1)  Creditors'  suits,  supplementary  proceedings. 
(S)  Separate  estates  of  married  women. 
(3)  Statutory  proceedings  to  wind  up  corporations. 
§  5.  Rules  governing  the  appointment 10 

(a)  Appointment  rests  in  the  sound  discretion  of  the  court. 

(b)  Must  be  reasonable  possibility  of  plaintiff's  recovery. 

(c)  Must  be  a  necessity  of  preserving  property. 

(d)  Defendant  must  be  heard  or  have  an  opportunity. 

(i)  Exception  :  Final  relief. 
(S)  Exception  :  Where  all  parties  before  court. 
(3)  Exception  :  Where  defendant  absconded. 
{4)  Exception  :  Where  imminent  danger  of  loss. 
V 


vi  TABLE  OF  CONTENTS. 

I  6.  Functions  of  the  receiver 20 

(a)  Source  of  power  ;  nature  and  extent. 

(b)  Trustee  for  all  parties  ;  responsibility. 

(c)  Care  and  custody  of  property. 

§  7.  Effects  of  appointment 23 

(a)  Places  property  in  custodia  legis. 

(b)  Receiver  not  permitted  to  be  sued. 

(c)  Determines  no  rights,  and  affects  no  liens. 

§  8.  Kinds  of  receivers 25 

§  9.  At  what  stage  appointed 26 

(a)  There  must  be  a  suit  pending. 

(b)  Before  answer,  when. 

(c)  After  decree  and  sale,  when. 

(d)  After  appeal,  when. 

§10.  Application  for  ;  allegations  ;   who  appointed 27 

(a)  By  whom  application  made. 

(b)  Exercise  of  care  by  the  courts. 

(c)  Allegations  ;  averments. 

(d)  Receiver  must  be  disinterested. 

(e)  Subsequent  receivers,  ancillary. 

CHAPTER  11. 

MATTERS  RELATING  TO  THE  APPOINTMENT. 

§  11.  Scope  of  the  bill  of  petition 32 

§  12.  Time  when  appointed - 33 

(a)  Early  English  practice. 

(b)  Modern  English  practice,  adoption  of. 

(c)  After  decree. 

(d)  After  appeal. 

§  18.  Must  be  suit  pending — 35 

§  14.  Rules  governing  appointment ;  general  principles 37 

§  15.  Grounds  upon  which  jurisdiction  is  entertained 37 

(a)  Preservation  of  property. 

(b)  Danger  of  loss. 

(c)  Fraud. 

(d)  Insolvency. 

(e)  Plaintiff's  title. 

(f)  Remedy  at  law. 

§  16.  Jurisdiction  not  entertained 45 

§  17.  Effects  of  appointment 45 

(a)  Places  property  in  custodia  legis. 

(b)  Removes  defendant  from  possession  and  custody. 

(c)  Property  not  to  be  interfered  with  by  other  courts. 

(d)  Does  not  change  the  title  or  ultimate  right  of  possession. 

(e)  Custody  of  receiver  coextensive  with  jurisdiction  of  court. 

(f)  Leaves  the  rights  of  all  parties  in  statu  quo. 

(g)  Receiver's  rights  relate  to  date  of  appointment. 
(h)  Extent  of  power  as  to  property. 


TABLE  OF  C0:N  TENTS.  Vll 

§  18.  Courts  exercising  jurisdiction 54 

§  19.  Conflict  of  jurisdiction 56 

§  20.  Scope  of  jurisdiction 58 

§  21.  Wiio  appointed 59 

(a)  His  position  as  to  court. 

(b)  Is  a  trustee  as  to  parties. 

§23.  Form  and  scope  of  order G3 

(a)  Should  specifically  describe  the  property. 

(b)  Should  embody  power  to  preserve  property. 

(c)  Should  embrace  all  power  necessary  as  to  possession. 

(d)  But  caution  to  be  exercised  as  to  property  in  the  hands  of 

third  persons,  etc. 

(e)  Order  relates  back  to  the  date  of  granting. 

(f)  Assignment  not  necessary  to  pass  title. 

(g)  Order  subject  to  modification. 

(h)  Order  not  subject  to  collateral  attack, 
(i)  Nor  affected  by  irregularity  or  error, 
(j)  Is  subject  to  revocation. 

(1)  Where  it  was  a  nullity. 

(S)  Where  the  appointment  secured  by  collusion. 

(<?)  When  the  appointment  emprovidently  made. 

{4)  When  the  court  had  no  jurisdiction. 

(5)  Application  for  vacation  must  be  in  apt  time, 
(k)  Order  appointing  may  be  appealed  from,  when. 
(1)  Effect  of  appeal  from  order. 

(2)  Appeal  before  possession. 

(S)  Receiver's  functions  suspended  pending  appeal. 
§  23.  Bond 73 

(a)  Required  in  all  cases. 

(b)  Runs  to  whom, 

(c)  Sureties,  who  may  be;  discharge  of. 

(d)  Suit  on  bond. 

(e)  Liability  of  sureties. 


CHAPTER  III. 

RECEIVER'S  POWERS. 

§  24.  Generally 81 

§  25.  Source  of  power;  incidents 82 

(a)  Power  should  be  embraced  in  order. 

(i)  Application  to  court  for  instructions,  English  rule. 
American  rule. 

(b)  Practice  of  the  court. 

(c)  Power  of  statutory  receivers,  express  or  implied. 

(d)  Powers  being  limited  is  notice  to  all. 

(e)  Powers  remain  during  continuance  of  suit. 

(f)  Irregular  appointment,  confirmed  how. 


vui  TABLE  OF  CONTENTS. 

§  26.  Power  to  borrow  money - —     85 

(a)  When  to  carry  on  business, 

(b)  To  complete  road,  etc. 

§  27.  Power  to  loan  money —    87 

(a)  Must  have  specific  power. 

(b)  Cannot  loan  to  himself  or  to  his  firm. 

(c)  Conversion  by  firm. 

(d)  When  liable  for  interest. 

§  28.  Power  to  compromise  debts 88 

(a)  May  do  so  under  direction  of  court. 

(b)  May  be  given  general  power  to. 

(c)  No  power  where  defendant  has  fraudulently  transferred. 

(d)  No  authority  to  commute  debts. 

(e)  No  authority  to  accept  stock  when. 

§  29.  Power  to  employ  counsel - 89 

(a)  Must  have  general  or  special  power. 

(b)  Who  employed. 

(i)  Not  counsel  of  either  party. 

(2)  Third  parties  no  voice  in  selection. 

(3)  Complainant's  counsel  when  pioper. 

(4)  When  plaintiff's  counsel  cease  to  be  such. 

§  30.  Power  to  sue... 91 

(a)  All  suits  under  direction  of  court. 

(b)  Rights  of  action  available  to  debtor  are  to  him,  etc. 

(c)  Leave  of  court  necessary. 

(d)  Necessary  allegations. 

(e)  Power  to  avoid  what  contracts. 

§  31.  Power  to  make  repairs 93 

(a)  Without  order  power  limited. 

(b)  Power  liberal  when  repairs  permanent. 

§  32.  Power  to  purchase  supplies,  labor,  etc 94 

§  33.  Power  to  continue  business 96 

§  34.  Power  to  sell,  purchaser's  title,  etc _ 98 

(a)  Right  to  sell  real  and  personal  estate. 

(i)  Order  of  court  directing. 
{£)  Must  describe  property. 

(b)  Evidence  of  title;  purchaser's  requirement. 

(c)  Sale  not  subject  to  collateral  attack. 

§  35.  Power  to  perform  existing  contracts;  limitations 102 

(a)  Generally  such  power  not  granted. 

(i)  It  would  be  a  payment. 

(5)  Receiver  agent  of  court  and  not  of  owner. 
(3)  Would  be  a  preference  as  to  creditors. 

(b)  May  complete  under  order  of  court. 

§  36.  Power  to  lease 104 

(a)  When  he  may  do  so. 

(b)  Power  to  cancel  lease  when. 


TA.BLE  OF  CONTENTS.  IX 

§  37.  Power  over  property  in  foreign  jurisdiction 108 

(a)  English  rule. 

(b)  American  rule. 

§  38.  Power  to  impeach  fraudulent  acts  of  debtor Ill 

§  39.  Power  to  collect  unpaid  stock  subscriptions 115 

§  40.  Power  to  issue  certificates 117 

§  41.  Power  to  appeal 117 

§  42.  Miscellaneous  powers 119 


CHAPTER  lY. 
EECEIVER'S  POSSESSION. 

§  43.  How  disturbed 121 

§  44.  Not  disturbed  by  court  of  co-ordinate  jurisdiction 122 

§  45.  Not  to  be  disturbed  by  levy 126 

§  46.  Not  to  be  disturbed  by  strikes,  conspiracies,  etc 180 

(a)  Courts  will  not  enjoin  employees  from  quitting  service. 

(b)  Bat  will  enjoin  conspiracies. 

§  47.  Leave  of  court,  when  required 132 

§  48.  Duty  of  receiver  to  take  possession  of  property 133 

§  49.  As  against  public  improvements 135 

§  50.  Duty  as  to  operating  a  new  business 135 

§  51.  As  to  tenants _  136 

§52.  As  to  whom  restored _ 136 

§  53.  Extent  of 136 

§  54.  As  to  taxes. 137 

§  55.  As  to  set-off 138 

§  56.  As  to  exemptions 139 

S  57.  As  to  executors  and  administrators ._  139 


CHAPTER  Y. 

RECEIVER'S  TITLE. 

§  58.  Defined 140 

§  59.  By  possession 142 

§  60.  In  supplementary  proceedings 143 

§  61.  In  statutory  proceedings 144 

§  62.  In  actions  pendente  lite 145 

§  63.  To  choses  in  action  due  from  nonresidents. / 145 

§  64.  To  choses  in  action  generally 146 

§  65.  To  real  estate  in  foreign  states 147 

§  66.  To  real  estate  generally 148 

6^  67.  Extent  of 149 

§68.  Subject  to  allliens,  etc 150 


X  TABLE  OF  CONTENTS, 

CHAPTER  VI. 

SUITS  BY  RECEIVERS— DEFENSES  TO. 

§  G9.  Authority  of  the  court  Decessary. 153 

(a)  Where  decree  authorizes  suit. 

(b)  Where  debt  is  due  the  receiver  officially. 

(c)  Where  suit  is  in  the  court  appointing. 

(d)  Where  waste  is  being  committed. 

(e)  Where  the  statute  authorizes  suit. 

(f)  Leave  is  in  the  discretion  of  the  court. 

§  70.  Receiver's  right  to  sue  limited 156 

(a)  To  the  rights  of  action  of  the  person  for  whom  appointed. 

(b)  Except  when  by  statute  he  represents  creditors. 

(c)  Except  where  the  act  complained  of  is  ultra  vires. 

(d)  Except  in  supplementary  proceedings. 

§  71.  Receiver's  authority  must  be  shown 158 

(a)  That  his  principal  had  a  valid  cause  of  action. 

(b)  The  time  and  mode  of  appointment. 

(c)  His  qualification  by  giving  bond  when  required, 

(d)  Permission  to  sue. 

§  72.  Receiver's  power  to  sue  in  his  own  name 160 

(a)  Must  be  so  empowered  by  court,  or 

(b)  Authorized  by  statute. 

(c)  When  not  so  authorized  must  sue  in  name  of  principal. 

§  73.  Power  of  receiver  to  sue  in  foreign  jurisdiction 163 

(a)  Generally. 

(b)  Early  English  doctrine, 

(c)  Later  English  doctrine. 

(d)  Early  doctrine  in  United  Stater. 

(e)  Later  doctrine  in  United  States. 

§  74.  Power  to  sue  in  foreign  jurisdiction  as  to  realty 170 

§  75.  Power  of  receiver  to  sue  in  matters  of  fraud,  trusts,  etc _  171 

§  76.  Suits  against  officers  of  corporations 172 

§  77.  Suits  against  stockholders  on  unpaid  subscriptions 173 

§  78,  Suits  against  stockholders  on  statutory  liability 177 

§  79.  Suits  to  invalidate  liens -  178 

§  80.  Suits  on  debtor's  bond,  replevin,  distraint,  etc 179 

§  81,  Defenses  to  actions  brought  by  receivers — setoff , 180 

CHAPTER  YII, 

SUITS  AGAINST  THE  RECEIVER. 

§  82.  Generally - 182 

§  83.  Order  of  court  necessary 183 

^  84.  Exceptions  to  the  rule _-- 186 

(a)  Not  necessary  in  United  States  courts. 

(b)  Receiver  operating  railroad  in  foreign  state. 

(c)  In  cases  of  garnishment,  when. 


TABLE  OF  CONTENTS.  Xl 

(d)  Where  suit  is  to  fix  damages  merely. 

(e)  Where  levy  and  sale  by  judgment  creditor. 

(f)  Where  receiver  has  sold  property  illegally. 

(g)  Where  he  defends  without  objection. 

^  85.  In  what  court  receiver  may  be  sued 190 

§  86.  Suits  against  receiver  for  negligence 192 

§  87.  When  suits  against  him  may  be  enjoined 193 

§  88.  Receiver's  defenses 194 

§  89.  Character  of  judgment  against  receiver 195 

§  90.  Receiver  a  party  when  necessary 196 

§  01.  Receiver  may  be  restrained 197 

§  92.  Effect  of  discharge  of  receiver  as  to  suits  against  him.- 197 

CHAPTER  YIII. 
LIABILITY  OF  RECEIVER. 

§  109.  Generally 199 

(a)  When  liable. 

(b)  When  not  liable. 

§  110.  Must  obey  orders  of  court 205 

§  111.  Liability  for  use  of  property,  money,  etc.,  contempt-.- 206 

§  112.  As  common  carrier 208 

§  113.  As  common  carrier  for  personal  injuries.- 209 

§  114.  As  common  carrier  for  damages _  211 

§  115.  Corporation  in  hands  of  receiver  not  liable 213 

§  116.  Liability  for  use  of  receivership  funds 214 

§  117.  For  default  of  another 216 

§  118.  For  supplies,  labor,  etc , -  217 

§  119.  For  money  deposited  in  bank _ - 218 

§  120.  For  costs  and  expenses 219 

§  121.  For  rents .- 220 

§  122.  On  unexpired  leases - 221 

§  123.  Adoption  of  lease  by  receiver 222 

§  124.  Liability  on  leases  made  without  order  of  court --- - 224 

§  125.  On  contracts  other  than  leases - -.  224 

§  126.  On  contracts  of  predecessor 225 

§  127.  Order  of  payment;  preferred  payments 228 

(a)  As  between  judgment  creditor  and  mortgagee. 

(b)  In  proceedings  for  foreclosure  of  railways. 

§  128.  When  personally  liable 228 

§  129.  Liability  for  attorney's  fees - 230 

§  130.  For  disobeying  orders  of  court --- -.  231 

§  131.  To  account- --- 232 

S  132.  Order  on  receiver  to  pay;  effect  of -..  232 

§  133.  Effect  of  discharge --- 233 

§  134.  Liability  for  unjust  freights  exacted 233 

§  135.  Power  of  court  over  executors  of  receivers 233 

§  136.  Liability  for  contempt  of  court -- 234 


XU  TABLE  OF  CONTENTS. 

CHAPTER  IX. 

CREDITOR'S  BILLS.  SUPPLEMENTARY  PROCEEDINGS  AND 
PROCEEDINGS  IN  AID  OF  EXECUTION. 

§  146.  General  nature  of  remedy 235 

(a)  Chancery  jurisdiction. 

(b)  Based  on  inadequacy  of  common  law  remedies. 

(i)  Common  law  remedies  must  be  exhausted. 
{2)  Claim  must  be  reduced  to  judgment. 
(5)  Execution  returned  nulla  bona. 
(4)  Exception  to  rule  as  to  exhaustion  of  legal  remedies. 
§  147.  Classes  of  creditor's  proceedings 240 

(a)  In  equity  to  annul  fraudulent  transfers. 

(b)  Creditor's  bills  proper. 

(c)  Supplementary  proceedings,  statutory. 

§  148.  Fraudulent  conveyances 241 

(a)  Effect  generally. 

(b)  Rule  as  to  execution. 

(i)  Exception  in  case  of  lien  by  attachment. 

(2)  of  debtor's  insolvency. 

(3)  of  fraudulent  conveyances. 

(4)  of  levy  on  property  conveyed. 

(5)  of  an  absconding  debtor. 

(6)  of  insolvent's  estate. 

(7)  of  waiver  by  debtor. 

§  149.  Jurisdiction  in  matters  of  assignment 249 

(a)  Where  assignment  is  fraudulent. 

(i)  Where  the  debtor  is  to  continue  business, 

(2)  Where  benefit  to  debtor  reserved. 

(3)  possession  to  remain  with  debtor. 

(4)  debtor  to  derive  personal  benefit   from  partnership 

assets. 

(5)  intentional  omission  of  assets. 

(6)  fictitious  liabilities. 

(b)  Where  assignment  is  valid,  but  assignee  fails  or  refuses  to  act. 

(1)  Where  the  assignee  fails  or  refuses  to  carry  out  the  trust. 

(2)  Where  the  assignee  is  guilty  of  mismanagement. 

P  150.  Supplementary  proceedings 251 

§  151.  Necessity  of  ofiicers  retaining  execution,  statutory  period 252 

(a)  When  required. 

(b)  When  not  required. 

§  152.  Practice  in  code  states 254 

§  153.  Appointment  of  receiver,  order,  duties,  etc 255 

§  154.  Receiver's  powers  in  supplementary  proceedings 256 

§  155.  Functions 258 

§  156.  Right  to  sue  and  be  sued 260 

§  157.  Order  of  appointment 261 

§  158.  Power  in  foreign  jurisdiction .-- 262 


TABLE  OF  contents;  XlU 

§  159.  Priorities  under  creditor's  bills 263 

§  100.  Courts  reluctant  to  appoint  where  legal  title  involved 264 

CHAPTER  X. 

RECEIVERSHIP  IN  FORECLOSURE  OF  MORTGAGES. 

§  170.  Generally 266 

§  171.  Usual  grounds  for  invoking  jurisdiction 26G 

(a)  Where  mortgage  provides  for  receiver. 

(b)  Where  statute  provides  for  receiver. 

(c)  Where  security  is  inadequate. 

(d)  Where  waste  is  being  committed. 

(e)  Where  mortgagor  is  guilty  of  fraud. 

§  172.  When  appointed 267 

(a)  Where  rents  and  profits  are  pledged. 

(b)  Where  security  is  inadequate. 

(c)  Where  trustee  refuses  to  take  possession. 

(d)  Where  there  are  equitable  grounds  for  appointment. 

(e)  Where  statute  provides  for  appointment. 

(f)  Necessity  for  appointment  to  be  clearly  shown. 

(g)  Where  there  is  a  contest  as  to  property  mortgaged. 

(h)  Where  the  mortgagor  or  his  grantee  are  guilty  of  fraud, 
(i)   Where  the  mortgagor  is  committing  waste, 
(j)  Where  default  in  interest  and  property  indivisible. 
§  173.   When  not  appointed 278 

(a)  Where  legal  title  is  in  mortgagee  and  he  has  a  legal  remedy. 

(b)  Where  by  the  terms  of  the  mortgage  the  right  is  not  given. 

(c)  Where  by  statute  mortgagor  entitled  to  possession  until  sale. 

(d)  Where  plaintiff's  allegations  are  denied  or  amount  due  is  disputed. 

(e)  Where  insolvency  of  mortgagor  or  his  grantee  not  shown. 

(f)  Where  right  of  plaintiff  to  foreclosure  not  clearly  shown. 

(g)  Where  plaintiff  has  no  equitable  standing  in  court. 

(h)  Where,  pending  appeal,  appeal  bond  affords  protection, 
(i)   Where  defendant  secures  plaintiff  by  deposit,  etc. 
(j)    Where  receivership  property  is  a  statutory  homestead, 
(k)  Where  plaintiff  guilty  of  laches. 
§  174.  Inadequacy  of  security  as  ground  for 287 

(a)  Two  elements. 

(1)  Insufficiency  of  property  to  pay  debts. 
(S)  Insolvency  of  mortgagor  or  his  grantee. 

(b)  One  element  not  sufficient. 

(c)  Presumption  as  to  adequacy. 

(d)  Rule  in  N.  J.,  Cal..  S.  C,  la.  and  Mich. 

(e)  Inadequacy  has  reference  to  plaintiff's  indebtedness  alone. 

(f)  Rule  relaxed  when  other  equitable  grounds  shown. 

(g)  English  practice  as  to  rents  collected  before  and  after  time  for 

redemption. 


XIV  TABLE  OF  CONTENTS. 

§  175.  Same  subject  continued 294 

t^  176.  Over  what  appointed  .-- 295 

§  177.  When  appointed 297 

(a)  Before  decree. 

(b)  After  decree. 

§  178.  General  rules  applicable 299 

§  179.  Relative  rights  of  senior  and  junior  mortgagees 299 

(a)  English  rule. 

(b)  American  rule. 

§  180.  Application  of  parties  other  than  mortgagees 302 

(a)  In  behalf  of  wife. 

(b)  In  behalf  of  annuitants. 

(c)  In  behalf  of  bondholders. 

(d)  In  behalf  of  vendors.  ' 

CHAPTER  XL 

RECEIVERSHIP  IN  PARTNERSHIP  MATTERS. 

§190.  Power  to  appoint 305 

§191.  When  appointed - 30S 

(a)  Where  partnership  agreement  or  duty  is  violated. 

(b)  Where  one  partner  is  guilty  of  fraud. 

(c)  Where  there  is  serious  disagreement  between  partners. 

(d)  Where  one  partner  is  guilty  of  mismaoagement. 

(e)  Where  there  is  a  violation  of  dissolution  agreement. 

(f)  Where  one  partner  misappropriates  firm  property. 

(g)  Where  there  is  insolvency  of  limited  partnership, 
(h)  Where  plaintiff  is  entitled  to  to  a  dissolution. 

(i)    Where  upon  dissolution  partners  cannot  agree, 
(j)  Where  partner  in  charge  after  dissolution  is  insolvent, 
(k)  Where  there  is  an  exclusion  of  one  partner  from  profits. 
(1)   Where  both  partners  are  dead, 

(m)  Where  surviving  partner  is  guilty  of  mismanagement. 
§192.  When  not  appointed.. 308 

(a)  Where  there  is  a  mere  disagreement  between  partners. 

(b)  Where  existence  of  partnership  is  not  established. 

(c)  Where  the  only  ground  is  unprofitable  business. 

(d)  Where  defendant  is  responsible  and  charges  not  established. 

(e)  Where  plaintiff  is  in  possession  and  charge. 

(f)  Where  plaintiff's  allegations  are  fully  denied. 

(g)  Where  it  does  not  appear  that  a  dissolution  will  result, 
(h)  Where  a  receiver  is  not  necessary. 

§  193.  Prerequisites  to  appointment 309 

(a)  Copartnership  must  be  established,  and, 

(b)  A  substantial  violation  of  agreement  or  duty  shown. 

§194.  Who  appointed 311 

§  195.  Appointment  in  case  of  retiring  partner 313 

8  196.  In  case  of  assignment  by  insolvent  partner 315- 


TABLE  OF  CONTENTS.  xv 

^197.  In  case  of  dissolution  by  death 316^ 

§  19S.  On  application  of  creditors... 318 

§199.  In  case  of  limited  partnership 319 

g  200.  In  case  of  expiration  of  partuership 321 

^  201.  In  case  of  exclusion  of  partner 321 

§202.  In  case  of  fraud  by  one  partner 323 

§  203.  Where  one  partner  is  mismanaging  business. 324 

§204.  On  ground  of  insolvency 326 

§  205.  Where  dissolution  has  taken  place 329 

§  206.  Before  dissolution 333 

§207.  On  miscellaneous  grounds .,  335 

§  208.  Appointment  refused  when 335 

§  209.  Receiver's  power  and  duty 336 

(a)  Power  depends  on  scope  of  order. 

(b)  Legal  title  to  property  does  not  vest  in  him. 

(c)  Cannot  loan  receivership  fund  to  himself  or  his  firm. 

(d)  Is  representative  of  all  parties  in  interest. 

(e)  Must  use  ordinary  care  and  reasonable  diligence. 

(f)  May  maintain  actions  in  other  states  when. 

(g)  Has  no  greater  power  than  partners  had. 

§210.  Effect  of  appointment... 338 

§  211.  Receiver  as  manager 339 

CHAPTER  XII. 

RECEIVERSHIP  OF  CORPORATIONS. 

§220.  Jurisdiction 342 

§221.  Statutory  power 345 

§222.  Exercise  of  power  discretionary. 347 

§223.  Power  to  appoint,  limitation  of 349 

§224.  Application;  by  whom  made ._  350 

(a)  Stockholders. 

(b)  Sureties  for  corporation. 

(c)  Minority  stockholders. 

(d)  Defendant. 

(e)  Directors. 

(f)  Judgment  creditors. 

(g)  But  not  by  corporation. 

§  225.   Grounds  for  appointment 355 

(a)  Statutory  grounds. 

(b)  Default  in  mortgage  indebtedness. 

(c)  Mismanagement. 

(d)  Insolvency  and  officers  ceasing  to  act. 

(e)  When  corporation  dissolved. 

(f)  When  charter  repealed. 

(g)  When  declared  bankrupt. 

(h)  Neglect  of  majority  to  elect  officers. 

(i)  When  necessary  to  resort  to  unpaid  subscriptions. 


xvi  TABLE  OP  CONTENTS. 

(j)    When  charter  rights  are  violated, 
(k)  Judgment  creditors. 
§226.  When  not  appointed 363 

(a)  Unless  proceeding  is  to  dissolve  corporation. 

(b)  Mere  disagreement  not  sufficient. 

(c)  Where  no  effort  to  secure  redress  through  company. 

(d)  Law  affords  adequate  remedy. 

(e)  Repairs  are  required  by  law. 

(f)  Defendant  foreign  corporation  without  property. 

(g)  Title  to  premises  in  litigation. 

(h)  In  foreclosures,  right  to  foreclose  not  clear. 

(i)  No  showing  of  danger  or  loss. 

(j)   After  payment  of  mortgage,  no  excess. 

(k)  Relative  indebtedness  small. 

(1)   Applicant  a  secured  creditor. 

(m)  Possession  rightfully  in  mortgagee. 

§  227.  Fraud  as  ground  for  appointment 366 

§228.  Insolvency  as  ground  for  appointment 367 

§229.  In  foreclosure  proceedings --  371 

§230.  Effects  of  appointment 371 

(a)  Liens  remain  unimpaired. 

(b)  Possession  of  property  protected. 

(c)  As  against  interference  from  other  courts. 

(d)  As  to  unfriendly  litigation. 

(e)  Effect  as  to  unexpired  leases. 

(f)  Effect  as  to  predecessor's  contracts. 

(g)  As  to  corporate  powers, 
(h)  As  to  owner's  control. 

(i)  Abatement  of  pending  actions. 
§  231.  The  receiver's  relationship. 375 

(a)  Agent  of  the  court. 

(b)  Trustee  of  creditors. 

(c)  Representative  of  corporation  as  to  title. 

§232.  The  receiver  as  manager 377 

§233.  Receiver's  powers  and  duties 380 

(a)  Power  to  borrow  money. 

(b)  To  purchase  rolling  stock. 

(c)  To  make  needful  repairs. 

(d)  To  compromise. 

(e)  To  sue. 

(f)  To  redeem. 

(g)  To  pay  taxes, 
(h)  To  lease. 

(i)  To  mortgage, 

(j)  To  Invest. 

(k)  To  contract. 

(1)    To  sell. 

(m)  To  make  assessments. 

(n)  Duly  to  appeal. 


TABLE  OF  CONTENTS.  xvii 

.§234.  Liability  of  receiver 391 

(a)  On  his  contracts. 

(b)  For  rent. 

(c)  For  interest. 

(d)  For  debts  incurred. 

(e)  Personal  liability  for  torts. 

(f)  Official  liability  for  torts  and  damages. 

(g)  Extent  of  liability. 

(h)  Liability  for  loss  in  management, 
(i)  Liability  on  order  of  court. 
§235.  Suits  by  receiver  of  a  corporation 397 

(a)  Generally. 

(b)  When  he  may  sue  in  his  own  name. 

(i)  Where  assets  have  been  assigned. 
(S)  Where  decree  so  empowers. 
(3)  Where  statute  authorizes  it. 
§236.  To  recover  stock  subscriptions 402 

(a)  As  a  general  rule  he  may  recover. 

(b)  When  so  empowered  corporation  excluded. 

(c)  Extent  of  power  in  collusive  transactions. 

(d)  Extent  of  liability  governed  by  indebtedness. 

(e)  Court  must  first  determine  corporate  indebtedness. 

(f)  In  what  action  to  be  recovered. 

§237.  To  avoid  fraudulent  transfers 406 

§238.  To  recover  illegal  dividends 408 

§  239.  Leave  of  court  to  sue  required 410 

§  240.  Suits  by  foreign  receiver  of  corporation 411 

(a)  By,  for  foreign  corporation  dissolved. 

(b)  By,  as  against  creditor  of  same  state. 

(c)  By,  where  recovery  not  in  conflict  with  law  of  forum. 

(d)  By,  as  to  property  reduced  to  possession. 

(e)  By,  to  recover  assessment  on  premium  note. 

(f)  Necessary  allegations. 

§  241.  Collateral  attack  of  receiver 415 

§242.  Receiver's  possession ^ 416 

CHAPTER  XIII. 
RECEIVERSHIPS  OF  NATIONAL  BANKS. 

§252.  Appointment  and  power  under  Act  of  Congress 419 

(a)  Provisions  of  National  Banking  Act. 

(b)  Powers  of  comptroller  under. 

(c)  Jurisdiction  of  courts. 

§253.  Power  of  comptroller  to  appoint 425 

(a)  Failure  to  keep  stock  at  minimum  required. 

(b)  Failure  to  keep  surplus  good. 

(c)  Failure  to  keep  reserve  good. 

(d)  Failure  to  keep  place  for  redemption  of  notes. 

B 


xvm  TABLE  OF  CONTENTS. 

(e)  Holding  its  stock  over  for  six  months  as  security. 

(f)  Failure  to  pay  for  stock — impairment  of. 

(g)  Improperly  certifying  check. 

(h)  Nonpayment  of  circulating  notes. 

(i)  Dissolution  of  corporation  and  forfeiture. 

(j)   Failure  to  pay  judgment  for  thirty  days. 

(k)  When  it  has  become  insolvent. 

§254.  Power  of  receiver  of  national  banks 426 

§255.  Receiver's  title.     National  banks  ..., 42& 

§  256.  Receiver's  liability 432 

§257.  Suits  by  receiver 432 

§  258.  Liability  of  stockholders 437 

(a)  Liability. 

(b)  Defense. 

§  259.  Illegal  preferences _ 445 

§260.  Liability  of  directors 448 


CHAPTEK  XIY. 

RECEIVERSHIP  OF  RAILWAYS. 

§270.  General— attitude  of  courts 452' 

§271.  Notice  of  application 454 

§272.  When  appointed 456 

(a)  When  road  unlawfully  leased. 

(b)  When  default  in  payment  of  mortgage  indebtedness. 

(c)  When  diversion  of  income  and  revenues. 

(d)  When  default  in  payment  of  interest. 

(e)  When  mismanagement,  squandering  funds,  etc. 

(f)  AVhen  neglect  to  elect  officers. 

(g)  When  statutory  cause. 

§273.  When  not  appointed 465 

(a)  When  no  notice  of  application. 

(b)  When  Insolvency  alone  not  sufficient. 

(c)  When  right  to  foreclose  doubtful. 

(d)  When  application  by  minority  bondholders. 

(e)  When  default  in  interest  insufficient. 

(f)  When  plaintiff  has  adequate  remedy  at  law. 

(g)  When  trustees  have  ample  power. 

(h)  When  rights  of  third  parties  are  prejudiced. 

(i)  When  disagreement  as  to  management  alone. 

§  274.  Powers  of  railway  receiver 471 

§  275.  Power  to  pay  unsecured  claims 472 

(a)  Mortgage  by  implication  subject  to  claims  for  labor  and  supplies. 

(b)  Limitations  as  to  preferred  claims. 

§276.  Grounds  upon  which  preferred  claims  allowed 476 

(a)  Payment  a  necessity  to  lienholder. 

(b)  Payment  as  a  condition  to  relief  asked. 


TABLE  OF  CONTENTS.  xix 

(c)  Division  of  income  a  ground  for  allowance. 

(d)  When  allowed  by  statute. 

(e)  Classes  of  claims  preferential. 

{!)  Operating  expenses. 
(2)  Construction  account. 
§  277.  Scope  of  implied  power  as  to  operating  expenses 482 

(a)  Application  as  to  railroads.     Preferential  debts. 

(b)  Not  extended  to  private  corporations  generally. 

§278.  Preferential  claims,  basis  of 485 

(a)  Not  based  on  liens. 

(b)  Not  a  condition  of  equitable  relief. 

§  279.  Rule  in  Federal  courts 486 

(a)  Inherent  power  of  court  to  pay  operating  expenses. 

(b)  Is  not  a  condition  to  equitable  relief. 

(c)  Lien  not  a  matter  of  contract. 

(d)  When  receiver  appointed  at  instance  of  general  creditor. 

(e)  When  receiver  appointed  at  instance  of  mortgagee. 

(f)  Limitations  in  such  case. 

(i)  Tendency  not  to  enlarge  scope. 
{2)  Payment  does  not  depend  on  order. 
(-3)  Must  accrue  within  reasonable  time. 

(4)  Necessity  of  notice. 

(5)  Confined  to  operating  expenses  generally. 
i6)  Equitable  nature  of  such  claims. 

§  280.  Application  to  rolling  stock  and  car  trusts 491 

(a)  Receiver  not  adopting  contract  must  pay  reasonable  price  for  use. 

(b)  Receiver  if  adopting  must  pay  contract  price. 

(c)  Contract  price  is  not  necessarily  an  equitable  price. 

(d)  Vendor-lessor  entitled  to  a  return.     Demand. 

§281.  Claims  not  preferential 498 

(a)  Advances  to  complete  road. 

(b)  Damages  from  operation,  fire,  etc. 

(c)  Attorneys'  fees  before  appointment  of  receiver. 

(d)  Goods  sold  subsequent  to  mortgage. 

(e)  Locomotives  sold  to  company. 

(f)  Construction  of  such  contract. 

§282.  Extent  of  power  of  railway  receivers 500 

§283.  General  scope  of  his  power 501 

(a)  Preservation  of  receivership  property. 

(b)  Collection  of  outstanding  indebtedness. 

(c)  Reduce  to  possession  property  of  company. 

(d)  Disaffirm  unlawful  acts  of  officers  and  directors. 

(e)  May  restrain  unlawful  acts. 

(f)  Defend  suits  and  proceedings  when. 

(g)  Traffic  arrangements  and  facilities. 

(h)  As  to  unfurnished  or  incomplete  contracts, 
(i)   As  to  unexpired  leases. 
§284.  Limitations  on  receiver's  power 507 


XX  TABLE  OF  CONTENTS. 

§  285.  Liability  of  railway  receivers 503 

(a)  Receiver  acting  as  carrier  governed  by  general  rules. 

(1)  Corporation  liable  under  statute. 

(5)  Receiver  not  liable  on  executory  contracts. 

(b)  Railroad  not  liable  when. 

(c)  When  receiver  personally  liable. 

(d)  When  receiver  officially  liable. 

(e)  Liability  measured  by  that  of  corporation. 

^  286.  Effect  of  discharge  as  to  liability 517 

§  287.  Receivers'  certificates 522 

CHAPTEK    XY. 

RECEIVERSHIP  IN  DECEDENTS'  ESTATES. 

§  300.  Pertaining  to  decedents'  estates 526 

(a)  General. 

(b)  Contests  over  wills. 

§301.  As  to  executors  and  administrators 528 

(a)  When  appointed. 

(i)  Violation  of  trust;  waste,  etc. 

(S)  Insolvency  of  executor;  waste,  etc. 

(S)  Removal  from  state. 

(4)  Death  of;  refusal  to  act. 

(5)  Property  devised  belonging  to  another. 

(6)  Misapplication  of  executors;  fraud. 

(7)  No  one  competent  to  act. 

(S)  Contest  between  foreign  and  local  administrator. 
(9)  Nonresident  executor. 

(10)  Property  in  foreign  country. 

(11)  Bankruptcy  of  executor. 

(IS)  Conversion  of  trust  property  by  executor. 

(13)  In  matter  of  fraud. 

(14)  Refusal  to  obey  order  of  court.    Illegal  trust. 

(b)  When  not  appointed. 

(i)  Poverty  of  executor  or  administrator. 

(^)  Creditor's  proceeding  pending  at  death  of  testator. 

(3)  Application  of  surety  on  bond,  etc. 

(4)  When  defendant  is  solvent. 

(5)  When  complaint  not  adequate. 

(6)  When  misapplication  not  clearly  shown. 

(c)  Misconduct  and  refusal  to  act. 

(d)  Where  no  one  competent  to  act. 

CHAPTER  XYI. 

RECEIVERSHIP  OVER  TRUST  PROPERTY. 
S  305.  General 539 


TABLE  OF  CONTENTS.  XXl 

I  306.  Receiver  in  lieu  of  trustee 540 

(a)  When  appointed. 

(i)  In  case  of  misappropriation. 

(2)  In  case  of  fraud. 

(3)  Disobedience  of  orders  of  court. 

(4)  Illegal  trusts. 

(5)  Where  necessary  to  prevent  transfer. 

(6)  Fraud  not  always  necessary  to  be  shown. 

(7)  Where  purposes  of  trust  have  failed. 
(5)  Conflicting  claimants;  separate  suits. 
(9)  Mixing  of  trust  property. 

(10)  When  continued. 

(11)  Claim  against  beneficiary. 

(b)  When  not  appointed. 

(i)  Failure  of  proof. 

(5)  Where  money  in  hands  of  bailee. 

(<?)  Where  debt  charged  to  trustee  personally. 

(4)  Where  trustee  is  statutory. 

(5)  Where  trustee  acts  under  marriage  settlement. 

(6)  Where  other  parties  interested  than  cestui  que  trust. 

(7)  Discretion  of  trustee. 

§307.  Fraudulent  assignments 543 

§308.  Testamentary  trustees 544 

§  309.  Infants'  estates 545 

§  310.  Lunatics'  estates 547 

CHAPTER  XYII. 

MISCELLANEOUS  RECEIVERSHIPS. 

§  315.  As  between  vendor  and  vendee 548 

§  316.  Between  creditor  and  debtor 549 

§  317.  In  partition  suits  and  between  tenants  in  common 549 

§  318.  In  suits  for  specific  performance 551 

§  319.  As  between  lessor  and  lessee 551 

I  320.  In  ejectment  suits 551 

§  321.  In  alimony  suits 553 

§  322.  For  building  and  loan  associations 553 

§  323.  Grounds  for  appointment 554 

CHAPTER  XYIII. 

REMOVAL  AND  DISCHARGE  OF  RECEIVER. 

§  330.  Removal  and  discharge 557 

(a)  Notice  of  application. 

(b)  Application  for  removal. 

(c)  Application,  by  whom  made. 

(d)  Grounds  for  removal. 


XXU  TABLE  OF  CONTENTS. 

(e)  Removal  not  subject  to  appeal ;  effect  of  appeal. 

(f)  Effect  of  removal  and  discbarge. 

(g)  Grounds  for  refusal  to  discbarge. 

CHAPTEE  XIX. 

CLAIMS  AGAINST  RECEIVERSHIP  FUNDS. 
§  340.  Claims  against  receivership  funds 568 

(a)  Receiver  disinterested  as  between  claimants. 

(b)  Must  pay  parties  named. 

(c)  Proof  of  claims;  order  of  court. 

(d)  Validity  of  claims. 

§  341.  Character  of  claims  allowed 571 

(a)  Attorney's  and  counsel's  fees. 

(b)  Personal  property  tax. 

(c)  Surety  not  entitled  when. 

(d)  Creditors  holding  collaterals. 

(e)  Operating  expenses. 

(f)  Statutory  liens. 

(g)  Judgment  creditor's  liens. 

§  342.  Preferred  claims;  grounds  for  allowance 574 

§  343.  Nature  of  preferred  claims 576 

CHAPTER  XX. 

RECEIVER'S  COMPENSATION. 
§  350.  Compensation 582 

(a)  Must  be  reasonable. 

(b)  Fixed  on  commission  basis,  percentage. 

(c)  Sometimes  a  salary. 

(d)  When  compensation  refused. 

(e)  When  to  be  paid  by  plaintiff. 

(f)  Does  not  depend  on  result  of  litigation. 

(g)  Priority  of  payment  of. 
(h)  Additional  allowances, 
(i)    Statutory  compensation, 
(j)  Order  fixing  not  revoked. 

CHAPTER  XXI. 

REPORTS,  ACCOUNTS  AND  DISTRIBUTION. 

§  355.  General — Reports  and  accounts 592 

§  356.  Rules  applicable  to 593 

(a)  Must  be  to  court  appointing. 

(b)  Reference  to  master. 

(c)  Objections  to  master's  findings. 

(d)  Objections  to  master's  findings  and  exceptions. 

(e)  Appeal  not  allowed  as  a  rule. 

(f)  Effect  of  approval. 


TABLE  OF  CONTENTS.  xxill 

§  357.  Order  of  distribution 594 

^  358.  What  embraced  in  order  of  distribution 595 

(a)  Attorney's  fees. 

(b)  Notes  secured  by  invalid  mortgage. 

(c)  Debts  due  contractors. 

(d)  Rents  and  profits. 

(e)  Expenses  and  advancements. 

(f)  Money  paid  by  sureties. 

(g)  When  on  judgments. 

(h)  Where  collaterals  are  held. 

CHAPTEE   XXII. 

PRACTICE  AND  PLEADING. 

§  370.  General 601 

§  371.  Suit  pending 602 

§  372.  Prayer  for  receiver 603 

§  373.  Necessary  parties;  allegations 603 

§  374.  Notice  of  application 603 

§  375.  At  what  stage  of  suit  application  made. 604 

§  376.  When  application  granted  before  answer 604 

§  377.  Bond  of  receiver  required 604 

§378.  Effect  of  giving  bond 604 

§  379.  Form  of  bond 605 

§  380.  How  liability  enforced 606 

§  381.  The  order  appointing 606 

§  382.  Scope  of  order ..607 

§  383.  Findings  embodied  in  order 607 

§  384.  Aifidavits,  when  basis  of  order 607 

§  385.  Reference  to  master  or  referee 608 

§  386.  Examination  of  debtor  under  code  proceedings 608 

§  387.  Statutory  proceedings 609 

§  388.  National  banks 609 

§  389.  Mortgage  foreclosures 609 

§  390.  Suits  by  receiver 610 

§  391.  In  what  name  to  sue 611 

§  392.  Necessary  allegations 611 

§  393.  Form  of  allegations 611 

§  394.  Limitations  on  power  to  sue 611 

§  395.  Suits  against  receiver  ;  leave  to  sue 612 

§  396.  Actions  against  receiver  under  void  appointment 615 

§  397.  Form  of  judgment  against  receiver 617 

§  398.  Proceedings  in  original  cause  when 617 

§  399.  Right  of  set-off.. 618 

§  400.  Petition  of  receiver  for  authority 618 

§  401.  Application  for  directions 619 

§  402.   Receiver  as  manager 619 

fc;  403.  Interpleader  by  receiver 619 


XXIV  TABLE  OF  CONTENTS. 

§  404.  Possession  as  to  third  parties 620' 

§  405.  Acts  outside  of  receiver's  duty 622 

§  406.  When  receiver  refuses  to  act 622 

§  407.  Leave  to  compromise 623 

I  408.  Power  to  enforce  assessments 623 

S  409.  Leave  to  sell 625 

§  410.  Leave  to  contract  debts  and  liens. 625 

§  411.  Leave  to  issue  certificates 626 

§  412.  Trust  property  held  by  receiver 627 

§  413.  Effect  of  receiver's  discharge  pending  action... 629 

§  414.  Order  of  discharge 629 

§  415.  Conflicting  claims;  how  determined... 630 

§  416.  Receiver's  accounts 631 

§  417.  Appeal  by  receiver 632 

§  418.  Deed  by  receiver 632 

CHAPTER  XXIII. 
FORMS. 

No.    1.     Complaint  for  dissolution  of  copartnership.. 636 

2.  "  against  insolvent  corporation 637 

3.  "  allegation — Copartnership 638 

4.  "  "        — Foreclosure  proceedings 639 

5.  "  against  corporation  for  fraud  and  accounting 640 

6.  Affidavit  for  appointment  in  foreclosure 641 

7.  "        for  appointment,  general 642 

8.  Notice       "  "  "       642 

9.  Order  appointing  receiver  general 643 

10.  "  "  "        — Manufacturing  corporation 644 

11.  "  "  "       — Railroad  foreclosure 645 

12.  "  "  "                  "                "            Short  form 648 

13.  '•  "  "                 "                "            Trustees 650 

14.  "  "  "       — Partnership 651 

15.  "  "  "       — Joint  business. 652 

16.  "  "  "       to  manage  mine.. 653 

17.  "  "  *'  because  of  misconduct  of  corporate  officers. 

654 

18.  "  "  '*       of  specific  personal  property. 655 

19.  "  "  "       without  prejudice  to  encumbrancers..  655 

20.  "  "  "       of  rents  and  profits 656 

21.  "    to  show  cause  why  not  appointed 657 

22.  Bond  of  receiver 658 

23.  '•      "         "        Another  form 659 

24.  '•      "        "        Short  form ,.'. 660 

25.  Assignment  to  receiver 660 

26.  Notice  by  receiver  to  creditors  and  debtors  of  appointment 662 

27.  Order  on  creditors  to  exhibit  claims 662 

28.  "     appointing  special  commissioner  to  report  claims 662 

29.  "  "  commissioner  or  referee  to  report  claims 663- 


TABLE  OF  CONTENTS.  XXV^ 

30.  Order  to  pay  claims  accruing  prior  to  appointment 664 

31.  "     requiring  defendant  to  turn  over  books,  etc 665 

33.     Petition  by  recei ver  to  compel  delivery  of  assets 665 

33.  Affidavit  for  motion  to  compel  tenants  to  pay 666 

34.  "        for  order  to  stay  actions 667 

35.  Petition  by  receiver  for  leave  to  defend 968 

36.  "        by      "        "       "       tosettle  traffic  balances 669 

37.  Order  to  "        to  settle  traffic  balances 670 

38.  "      "  pay  rent 670 

39.  Petition  by  receiver  for  leave  to  sell 671 

40.  Order  to  "  "        "      to  pay  claim 671 

41.  "    for  sale  of  perishable  property 672 

42.  "    confirming  sale 672 

43.  Petition  for  order  on  purchaser  to  complete  purchase 972 

44.  Order  "  "         "  "  " 673 

45.  Petition  for  leave  to  pay  counsel 673 

46.  Order  granting       "    employ  counsel. 674 

47.  Petition  for  leave  to  pay  claims 674 

48.  Notice  for  instructions  to  receiver 674 

49.  Petition"  "  "        "        to  pay 675 

50.  "        "  "  '•        "        "  surrender,  etc   676 

51.  Notice  of  petition  for  leave  to  distribute 676 

52.  Petition  of  receiver  for  leave  to  account  and  be  discharged 677 

53.  Receiver's  account 677 

54.  "  "        —Objections  to 678 

55.  Notice  of  motion  for  revocation  of  appointment __ 679 

56.  Order  discharging  receiver 679 

57.  "    removing  and  appointing  substitute 780 

58.  Notice  of  motion  to  discharge 680 

59.  Order  to  show  cause  why  should  not  be  discharged _. 681 

60.  Notice  of  motion  for  discharge 681 

61.  Order  on  receiver  to  pay  over  funds  to  successor 681 

62.  Affidavit  to  show  cause  in  contempt  proceedings 682 

63.  "        "  continue  actions  against  receiver 682 

64.  Petition  by  receiver  to  be  substituted  in  action 683 

65.  Order  to  sheriff  to  withdraw  levy 684 

66.  Order  to  receiver  to  sue 684 

67.  Complaint  on  receiver's  bond  by  creditor 684 

68.  Declaration  on  assessment — National  bank 685 

69.  "  "  promissory  note 687 

70.  Petition  of  receiver  of  national  bank  to  compromise 689 

71.  Order  on        "         "        "  "      "  "  691 


OA.SES  CITED. 


Duplicate  citations  of  unofficial  reports  in  whicli  cases 
may  be  also  found  have  been  limited  to  the  Lawyers' 
Eeports,  Annotated  ("L.  K.  A.")  and  the  Lawyers'  Edi- 
tion ("L.  ed.")  of  the  reports  of  the  Supreme  Court  of 
the  United  States.  But  inasmuch  as  the  reporters  of  the 
"National  System"  mav  be  sometimes  more  accessible 
than  some  official  rej^orts,  a  table  is  published  on  the 
following  page  to  show  what  cases  they  include.  By  means 
of  the  blue  labels  on  the  Reporter  volumes  or  the  "  Blue 
Label  Book,"  published  for  that  purpose,  cases  therein 
published  can  be  readily  found  in  the  reports. 


iXVlU 


REPORTER  CITATIONS. 


Slale  or  Territory. 


Every  Case  in  Official 
Reports  from 


Reporter  where 
Found. 


Alabama 

t  Arizona 

Arkansas 

California 

Colorado  (Sup.  Ct.) 
t        "  (App.  Ct.) 

Connecticut 

J  Dakota 

Delaware 

Florida 

Georgia 

Idaho 

Illinois 

Indian  Ter 

Indiana  (Sup.  Ct.).. 
t       "         (App.  Ct }  . 

Iowa' 

Kansas  (Sup.  Ct.)... 
I  Kansas  (App.  Ct.). 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 

Montana 

Nebraska 

Nevada 

New  Hampshire. . . 
New^  Jersey 

New  3Iexico 

New^  York 


New  York 


Supreme, 

Superior, 

and 

Lower 

Courts. 


Norih  'Carolina 

X  North  Dakota , 

Ohio ' 

X  Oklahoma 

Oregon 

Pennsylvania 

Rhode  Island 

South  Carolina 

X  South  Dakota 

Tennessee  (Sup.  Ct.) 

Texas  (Sup.  Ct. ) 

"      (Ct.  App.)  Crim.  Cases... 
Court  of  Criminal  Appeals 

(Civ.  App.) 

Supreme  Court 

XV.  S.  Cir.  Cts.  of  App 

tU.  S.  Cir.  and  Dist.  Cts 

Utah 

Vermont 

Virginia 

X  Washington  State 

Washington  Ter 

West  Virginia 

Wisconsin 

Wyoming 


U.  S. 


81  Ala.,  p.  1 

1  Ariz.,  p.  1 

47  Ark.,  p.  1 

64Cal.,  p.  1 

7  Colo.,  p.  1 

1  Colo.  App.,  p.  1 

53  Conn.,  p.  1 

1  Dak.,  p.  1 

6  Del.  Ch.    7  Houst. . 

23  Fla.,  p.  1 

77  Ga.,  p.  794 

2  Idaho,  p.  1 

114111.,  p.  1 

1  Indian  Ter.,  p.  1 

102  Ind.,  p.  1 

1  Jnd.  App.,  p.  1 

51  Iowa,  p.  1 

30  Kan.,  p.  1 

1  Kan.  App.,  p.  1 

84  Ky.,  p.  203 

39  La.  Ann.,  p.  1 

77  Me.,  p.  408 

64  Md.,  p.  1 

139  Mass.,  p.  1 

41  Mich.,  p.  1 

26  Minn.,  p.  1 

64  Miss.,  p.  1 

89  Mo.,  p.  1 

4  Mont.,  p.  1 

8  Neb.,  p.  294 

17Nev.,  p.  1 

63  N.  H.,  p.  44G 

47  N.  J.  L.,p.  349 

40  N.J.  Eq.,  p.  345.... 
3N.  M.,  p.  1 

99  N.  Y.,  p.  1 

21  Abb.  N.  C. 

14  CivU  Proc. 

1  Con.  Sur.,  p.  1, 
U  Daly,  p.  497. 
6  Dem.  Sur.,  p.  413. 

48  Hun,  p.  304. 
6N.  Y.Cr.  R. 

56  N.  Y.  Super.  Ct.,  p.  1. 
1  Silvernail,  p.  1. 

96  N.  c,  p.  1 :. 

IN.  D.,  p.l 

laOhteat.,  p.  1 

1  Okl.,  p.  1 

11  Or.,  p.  1 

110  Pa.  St.,  p.  1 

15  R.  L,  p.  1 

26S.  C,  p.  1 

IS.  D.,p.l 

85Tenn.  Sup.,  p.  1 

66  Tex.,  p.  1 

21  Tex.  App.,  p.  1 

31  Tex.  Cr.  R.,p.  1 

1  Tex.  Civ.  App.,  p.  1.. 

106  U.  S.,  p.  1 

1  C.  C.  A.,  p.  1,  &  ) 
lU.  S.  App.,  p.  1  i  •••• 

No  official  repoi'ts 

3  Utah,  p.  1 

58  Vt.,  p.  1 

82  Va.,  p.  964 

IWash.  St.,  p.l 

2  Wash.  T.,  p.  1 

29  W.Va.,  p.  1 

46  Wis.,  p.  1 

3  Wyo.,  p.  1 


SOUTHERN 
PACIFIC 

SOUTHWESTERN 
PACIFIC 


ATLANTIC 

NORTHWESTERN 

ATLANTIC 

SOUTHERN 

SOUTHEASTERN 

PACIFIC 

NORTHEASTERN 

SOUTHWESTERN 

NORTHEASTERN 

U 

NORTHWESTERN 
PACIFIC 

SOUTHWESTERN 
SOUTHERN 

ATLANTIC 

u 

NORTHEASTERN 

NORTHWESTERN 
u 

SOUTHERN 

SOUTHWESTERN 

PACIFIC 

NORTHWESTERN. 

PACIFIC 

ATLANTIC 


PACIFIC 
NORTHEASTERN 


NEAY  YORK 

SUPPLEMENT 


SOUTHEASTERN 
NORTHWESTERN 
NORTHEASTERN 
PACIFIC 

ATLANTIC 

u 

SOUTHEASTERN 
NORTHWESTERN 
SOUTHWESTERN 


SUPREME  COURT 

FEDERAL 
(( 

PACIFIC 

ATLANTIC 

SOUTHEASTERN 

PACIFIC  .- 

u 

SOUTHEASTERN 
NORTHWESTERIS 
PACIFIC 


C^SES  CITED. 


(References  are  to  pag-es.) 


A. 

■p.  Jolland,  8Ves.  Jr.  72.. 

60,  215,  546 

V.  Lindsey,  15  Ves.  Jr.  91 . . 

105,  108 
Abbey®.  International  &  G.  N.  R. 
Co.  5    Tex.   Civ.  App. 

261 125,416 

Abbott  ».  Downer,  54  Iowa,  687.. 

230,  589 
V.  Stearns,  139  Mass.  168...  224 
Aberdeen  v.   Chitty,  3  Younge  & 

C    379  296 

Abrams  «.  Cureton,  74  K  C.  523. .  160 

Acker,  Re,  66  Fed.  Rep.  290 131 

Ackerman  v.  Halsey,  37  N.  J.  Eq. 

356 -484,436 

Acme  Copying  Co.  v.  McLure,  41 

ill.  App.  397 631 

Adair  u.  Wright,  16  Iowa,  385.  .. 

35,  283,  287 
Adair  County  v.   Ownby,  75  Mo. 

282-..118,  203,  214,  215,  232 
Adams?).  Bowe,  12  Abb.  N.  C.  322.  252 

«.  Hackett,  7  Cal.  187 338 

V.  Haskell,  6  Cal.  475 200 

?j.  Howard, 22 Fed.  Rep. 656.  142 
V.  Johnson     ("Bowden      v. 
Johnson"),    107  U.     S. 

251,  27L.  ed.  386 

426,  437-439,  444 

V.  Larimore,  51  Mo.  130 616 

V.  Mercantile  Trust  Co.   66 

Fed.  Rep.  617 345 

V.  Spokane     Drug    Co.    57 
Fed.  Rep.  889,  23  L.  R. 

A.  334.. ....138,151 

v.  Woods,  8  Cal.  152.  9  Cal. 

24 338 

v.  Woods,  8  Cal.  306 89,  90 

®.  Woods,  15  Cal.  206. 200 

Addison  v.  Burckmyer,  4  Sandf. 

Ch.  488.. 315 

V.  Lewis,  75  Va.  701.477,  499,  574 

Adee«.  Bigler,  81  N.  Y.  349 

239,  248,  354 
Adkin  v.  Thornton,  19  Ga.  325.178,  385 
Adkins  «.  Edwards,  83  Va.  316... 

27,  35.  604 
Adler  v.  Fen  ton,  56  U.  S.  24  How. 

407,  16L.  ed.  636 238 


Adler  v.  Milwaukee  Patent  Brick 

Mfg.  Co.  13  Wis.  57.343.  352,  354 

Adsit  V.  Butler,  87  N.  Y.  585 259 

Ahlhauser  v.  Butler,  50  Fed.  Rep. 

707. 123,124 

«.  Doud,  74  Wis.  400.42, 237,  246 
Aiken  v.  Colorado  River  Irrig.  Co. 

72  Fed.  Rep.  591- 66 

Aikin  v.  Jones,  93  Tenn.  353,  25 

L.  R.  A.  523 392 

Aikins  ®.    Blain,    13    Grant    Ch. 

(Ont.)646 296 

Ainsley,  Be,  1  Edw.  Ch.  576 89,  90 

Akers  v.  Veal,  66  Ga.  302 594,  632 

Alabama  Iron  &  R.  Co.  v.  Anniston 
Loan  &  T.  Co.  57  Fed. 

Rep. 25 207,525 

Alabama  Nat.  Bank  v.  Mary  Lee 
Coal  &  R.  Co.  (Ala.^  19 

So.  404 290 

Albany  City  Bank  v.  Dorr,  Walk. 

Ch.  317 254 

V.  Schermerhorn,    9    Paige, 
372. ...67,  85,  127,  186. 

188.  373,  416 
V.    Schermerhorn,     Clarke, 

Ch.  366 ...47.  61,  261 

Albany  City  Ins.  Co.  v.  Van  Vran- 

ken,  42  How.  Pr.  281..  160 
Albert  Average,  etc.,  Re,  L.  R.  5 

Ch.  App.   597 560 

Albright  v.  Albright,  91  N.  C.  220  544 
Alexander  «.  Mannine,  58  Miss.  634    55 

V.  Merry,  9  Mo.  524 74 

t.  Pendleton,    12  U.    S.    8 

Cranch, 462, 3  L.  ed.  624  178 
v.  Relfe.   9   Mo.   App.    133, 
Rev'din74Mo.  495.... 
114,157,160,163,172,375, 
376,  387,  397,  400,  408,  410 
7).  TollestonClub,  110  111,  65  113 
Alexandria  Palace  Co.,  Re,  L.  R, 

21  Ch.  Div.  149.   .-176.  409 
Alford  V.  Berkele,  29  Hun,  633...  331 
Allen  v.  Central  R.  Co.  42  Iowa,  683 
125,  130,  183,  188,  190, 

191,  209,  373,  418,  511 
t).  Chadburn,  3  Baxt,  225..     72 

V.  Curtis,  26  Conn.  456 351 

V.  Dallas  &   W,    R.    Co,    3 

Woods.  316 

34,  69, 371,  358,  458,  462.  464 


XXIX 


XXX 


CASES  CITED. 


Allen  V.  Dillingham,  60  Fed.  Rep. 

176 513 

V.  Hawley,  6  Fla.  143 

97,  306,  311.  340,  619 

v.  Kinyon,  41  Mich.  281 622 

13.  Montgomery,  48  Miss.  106  245 

V.  Tritch,  5  Colo.  222 251 

Alley  V.  Caspari,  80  Me.  234 51,  168 

Allison  V.  Coal  Creels  &  N.  R.  Coal 

Co.  87Teun.  60 578 

V.  "Weller,  6  Thomp.  &  C. 

291 258 

Allright  V.  Herzog,  12  111.   App. 

557 244 

Allyn  V.  Boorman,  30  Wis.  684...  314 
Alspaugh  V.  Adams,  80  Ga.  345...  197 
American  Asso.  v.  Hurst,  59  Fed. 

Rep.  4 124 

American  Bank  v.  Cooper,  54  Me. 

438 69,85 

V.  Wall,  56  Me.  167 440 

American  Bridge  Co.  v.  Heidel- 
bach,  94  U.  S.  798,  24 
L.  ed.  144.270,  272,  282, 

297,  358,  462,  479.  575 
American  Biscuit  Co.  v.  Klotz,  44 

Fed.  Rep.  721.. 45,  348,  355 
American  Const.  Co.  v.  Jackson- 
ville, T.  &  K.  W.  R.  Co. 

52  Fed.  Rep.  937 

82,  122,  372 
American  File  Co.  v.  Garrett,  110 
U.  S.  288,  28  L.  ed.  149 
103.  107,  204,  231,  223,  506 
American  Ice  Mach.  Co.  v.  Pater- 
son  Steam  Fire  Engine 
&  Mach.  Co.  33  N.  J. 

Eq.  73 847 

American  Ins.  Co.  ».  Schmidt,  19 

Iowa,  503 404 

American  Loan  &  T.  Co.  v.  East  & 
W.  R.  Co.  46  Fed.  Rep. 

101 .577.  579 

V.  Toledo.  C.  &  S.  R.  Co.  29 

Fed.  Rep.  416.-311,358, 

364,  366,  454,  459,  468.  471 

American  Nat.  Bank  n.  National 

Ben.  &  0.  Co.  70  Fed. 

Rep.  430 .356,401,417 

Ames  ».  Ames,  148  111.  331. 550 

V.  Birkenhead      Docks.    30 

Beav.  333 

85,  134,  132,  133,  615 
V.  Union  P.  R.  Co.  60  Fed. 

Rep.  971... -30,  95,  345,  506 
V.  Union  P.  R.  Co.  63  Fed. 

Rep.  7 131 

».  Union  P.  R.  Co.  73  Fed. 

Rep.  49 490 

Ames  Iron  Works  «.   Warren,  76 

Ind.  513 Ill 


Ammant  v.  New  Alexandria  &  P. 
Turnp.  Road,  13  Serg. 

&R.310 454 

Amory  v.  Amory,  95  U.  S.  186,  24 

L.ed.438. 411 

Amy  V.  Manning,  149  Mass.  487.. 

145,  357,  263.  401 

Anderson  v.  Anderson,  35  Beav.  190  334 

V.  Guichard,  9  Hare,  375...     33 

V.  Tompkins,  1  Brock.  456.  316 

Andrews  v.  Paschen,  67  Wis.  413 

139  179 
V.  Powys,  2  Bro.  P.  C.  504.'  465 
®.  Rowan,  38  How.  Pr.  126 

66,  139,  256 
V.  Sraith,19Blatchf.  103.137, 183 
V.  Stanton,  18  111.  App.  163 

183,  190 

Angela.  Smith,  9Ves.  Jr.  335 

35,   131.  126,   139,   130. 
133,  184,  186,  379,  418,  615 

Angell  V.  Draper,  1  Vern.  399 

337,  345,  349 
Anglo-Italian  Bank  ».  Davies,  L. 

R.  9Ch.  Div.  375... 65,  417 
Anglo-Moravian  Hungarian  Junc- 
tion R.  Co.,  lie,  L.  R.  1 
Ch.  Div.  130,  45  L.  J. 

Ch.ll5- 230 

Anhauser-Busch    Brew.    Asso.  v. 

Clayton, 56 Fed.Rep. 759  393 

V.  Morris,  36  Neb.  31. 393 

Anonymous,  1  Atk.  49 36 

2  Atk.  15. 24,  49.  126.  141 

3  Ves.  Jr.  515. 56,  60,  63 

6  Ves.  Jr.  287 

130,  153.  186,  195,  279 
12  Ves.  Jr.  4.. .33,  268,  529,  533 
Ansell  t).  Robson,  2  Cromp.  &  J. 

610 223,496 

Anthony  v.  Wood,  96  N.  Y.  185- .  246 
Appleton  ®.  Turnbull,  84  Me.  72..  406 

Arenz®.  Weir,  89  111.  25 

175,  177,  178,  385,  405 

Argall  V.  Pitts,  78  N.  Y.  243 267 

Armstrong,  Be,  41  Fed.  Rep.  381.  447 
V.  Armstrong,  L.  R.  12  Eq. 

614 155 

V.  Chemical  Nat.   Bank,  41 

Fed.  Rep.  334 446,447 

V.  Coopes,  11  111.  560 238 

V.  Ettlesohn,  36  Fed.  Rep. 

309 434,435 

V.  Scott.  36  Fed.  Rep.  63...  438 
V.  Trautman,  36  Fed.  Rep. 

375.. 434.  435,449 

©.  Warner,    31    Ohio  L.    J. 

136,  37  Ohio  L.  J.  100.  138 
V.  Warner,  49  Ohio  St.  376, 

17  L.  R.A.466 

138,  180,  384,  429,  439 


CASES  CITED. 


XXXI 


Arnold  ».  Bright,  41  Mich.  210 313 

V.  Penn  (Tex.  Civ.  Anp.)  32 

S.  W.  353 -.128,  569 

V.    Suffolli  Bank,  27  Barb. 

424 192,  197 

Arnot «).  Bingham,  55  Hun,  553..  392 
Arthur  v.  Commercial  &  R.  Bank, 

9  Smedes&M.  394 454 

V.  Master  in  Equity,  1  Harp. 

Eq.  47 591 

«.  Oakes,  63  Fed.  Rep.  310, 

25  L.  R.  A.  414.. 

121,  130,  181 
Artisans'   Bank  v.    Treadwell,  34 

Barb.    553 53,  125 

Ashurst  V.  Lehman,  86  Ala.  370, 

11.  13-15,  18-20,  43 
Asheville  Div.  No.  15,  S.  of  T.  v. 

Aston,  92  K  C.  578....  401 
Askew  V.  La  Cygue  Exch.  Bank, 

83  Mo.  366.. Ill 

Aspinwall  v.  Butler,  133  U.  S.  595, 

33  L.  ed.  779 438 

■2J.  Torrance,  1  Lans.  381 384 

Aston  V.  Heron,  2  Myl.  &  K.  390.  509 

Astor  V.  Turner,  11  Paige,  436 

34,  63,  267,  274,  296,  297 

V.  Turner,  2  Barb.  444. 

285,  288,  296 
Atchison  v.  Davidson,  2  Pinney, 

48 114,  375 

Atchison   Board  of  Education  v. 

Scofield,13Kan.  17....  251 
Atkins  V.    Petersburg  R.    Co.    3 

Hughes,   307 

476,  477,  483,  485 
V.  Wabash,  St.  L.  &  P.  R. 
Co.  29  Fed.  Rep.  161.. 

60,  354,  560 
Atkinson  v.  Henshaw,  2  Ves.  &  B. 

85 547 

V.    Rochester   Printing  Co. 

114    N.  Y.    168 

173,  392,  407 

V.  Smith,  89  N.  C.  72 

77,  78,  563,  606 
Atlantic  &  N.  C.  R.  Co.  v.  Cowles, 

69N.  C.59... 218 

Atlantic  Trust  Co.  v.  Consolidated 
Elec.  Storage  Co.  49  N. 

J.  Eq.  403 .369,  370 

Atlas  Bank  v.  Nahant  Bank,  23 

Pick.  480 125,  142,  190,  621 

Atlas  Iron  Const.  Co.,  Be, 11  N.Y. 

S.  R.  801 360 

Attleborough  Nat.  Bank  v.  North- 
western Mfg.  &  Car  Co. 

28  Fed.  Rep.  114 127 

Atty.  Gen.  v.  Atlantic  Mut.  L.  Ins. 

Co.  77  N.  Y.  336 

84,  357,  379 


Atty.  Gen.  v.  Atlantic  Mut.  L.  Ins. 

Co.  100  N.  Y.  279 49, 

141,142,143,  144,  149,  150 
V.    Bank    of    Columbia,    1 

Paige,   511. 

41,  61,  347,  359,  369,  370 
V.  Bank  of  Michigan,  Harr. 

Ch.  315 344 

V.  Chicago  &  N.  W.  R.  Co. 

35  Wis.  425... 343 

V.  Continental  L.  Ins.  Co.  71 

N.  Y.  325. 202 

D.  Continental  L.  Ins.  Co.  28 
Hun,  360,  93  N.  Y.  630 

144,  416 
V.  Continental  L.  Ins.  Co.  94 

N.  Y.  199 100,  101,  389 

V.  Continental  L.  Ins.  Co.  62 

How.  Pr.   130 572 

«.  Continental  L.  Ins.  Co.  31 

Hun,  623... 589 

V.  Guardian  L.  Ins.  Co.  93 

N.Y.  631 585,  591 

V.  Guardian  Mut.  L.  Ins.  Co. 

77  N.  Y.  272.. .66,  114, 

129,  157,  171,  356,  372, 

375,  387.  406,  407,  415-417 

V.  Guardian    Mut.    L.    Ins. 

Co.  82  N.  Y.  336 368 

V.  Life  &  F.  Ins.  Co.  4  Paige, 

224 84,  569 

V.  North  American  L.  Ins. 
Co.  6  Abb.  N.  C.  293.. 

193,  194 
V.  North  American  L,  Ins. 

Co.  82  N.  Y.  172 

368,  377,  610 

V.  North  American  L.  Ins. 

Co.  26  Hun,  294,  89  N. 

Y.  94.. 86,  87,  201,  218. 

368,  373,  388,  394,  583,  585 

«.  North  American  L.  Ins. 

Co.  91  N.  Y.  57 589 

V.  North  American  L.  Ins. 

Co.  29  Hun.  207 591 

V.   St.    Cross    Hospital,    18 

Beav.  601 46,  122 

V.   Utica  Ins.   Co.  2  Johns. 

Ch.  371.. 397 

V.  Vigor,  11  Ves.  Jr.  563.93,  382 
Attrill  V.  Rockawav  Beach  Improv. 

Co.  25  Hun,  376 

56,  557,  599 
Attwood  V.  Rhode  Island  Agricul- 
tural Bank,  1  R.  I.  376.  177 
Augusta  Ice  Mfg.  Co.  v.  Gray,  60 

Ga.344 .355,  608 

Austin  V.  Daniels,  4  Denio,  299...  173 

V.  Figueira,  7  Paige,  56 241 

V.  Morris,  23  S.  C.  408 528 

V.  Munro,  47  N.  Y.  360....  21(> 


XXXll 


CASES  CITED. 


Averall  v.  Wade,  Flan.  &  K.  325.     76 
Avery  v.  Blees  Mfg.  Co.  27  N.  J. 

Eq.412 363 

V.  Boston  Safe  Deposit  &  T. 
Co.  72  Fed.  Rep.  700.. 

183,  401 


B. 


Babcock,  Re,  115  N.  Y.  450 574 

«.  Brooks,  9  L.  J.  (U.  C.)  185  162 
Bacon  v.  Home,  123  Pa.  452,  2  L. 

R.  A.  355 167,412 

V.  Irvine,  70  Cal.  221 365 

v.  Northwestern  Stove  Co.  5 

Ohio  C.  C.  289.. 355 

Bagby  v.  Atlantic,  M.  &  O.  R.  Co. 

86  Pa.  291.. 50,  111,167,412 
Baggott  V.  Boulger,  2  Duer,  160..  78 
Bagley  v.  Scudder,  66  Mich.  97...  261 
Bailey  v.    Belmont,  10  Abb.    Pr. 

N.  S.  270 29 

V.  Ford,  13  Sim.  495 333 

V.  Mosher,  63  Fed.  Rep.  488  398 
V.  O'Mahony,  1  Jones  &  S. 

9gQ  29  1''2 

V.  Pittsburg  Coai  R.Co.  139' 

Pa.  213 362 

V.  Ryder,  10  N.  Y.  623 147 

T.  Staley,  5  Gill  &  J.  432...  244 

Bailie  v.  Bailie,  1  Ir.  Eq.  413 74 

Bain  v.    Clinton  Loan  Asso.  112 

N.  C.  248 406 

Bainbridge  v.  Blair,  4  L.  J.  Ch. 

N.  S.  207. 298,  536 

Bainbrigge  «.  Baddeley,  3  Macn. 

&G.  413 13,  43,  44 

Baines  v.  Babcock,  95  Cal.  581 405 

V.  Story  (Cal.)  30  Pac.  777..  405 
Baird    ».    Cumberland    &    S.    R. 

Turnp.  Co.  1  Lea,  394.     71 
Baker  v.  Backus,  32  111.  79.. 4,  18, 
21,26,39,40,60,61,321, 
343,  344,  347,  459,  467, 

589,  602,  603 

V.  Bartol,  7  Cal.  551 606 

V.  Cooper,  57  Me.  388 

154,  161.  399,  611 
V.  Herkimer,  43  Hun,  86...  248 
V.  Louisiana  Portable  R.  Co. 

34  La.  Ann.  754 

343,  346,  363 

V.  Pierson,  5  Mich.  456 293 

Balbach  ».  Frelinghuysen,  15  Fed. 

Rep.  675 439 

Balch  V.  Wastall,  1  P.  Wms.  451..  249 
Baldwins.  Crawford,  2  Chamb.Ch. 

(Ont.)9 203,214 

V.  Hosmer,  101  Mich.  432...  113 

Ball  V.  Chancellor,  47  N.  J.  L.  125    78 

V.  Oliver,  2  Ves.  &  B.  96...  547 


Ball  V.   Tompkins,  41  Fed.  Rep. 

486 123,542 

Ballard  v.  Callison,  4  W.  Va.  326.  307 

Ballentine^.  Beall,  4  111.  203 244 

Bailing.  Ferst,  55  Ga.  546. 263 

Ballou  V.  Farnum,  9  Allen,  47.209,  511 

V.  Jones,  13  Hun,  629 244 

Baltimore  v.  Chase,  2  Gill  &  J.  376  598 
Baltimore  &  O.  R.  Co.  v.  Cannon, 

72  Md.  493.... 346,  348,  366 
Baltimore  &  O .  Teleg.  Co.  v.  Inter- 
state Teleg.  Co.  54  Fed. 
Rep.  50,  8  U.  S.  App. 

340 44,  366 

Baltimore  Trust  &  G.  Co.  v.  At- 
lanta Traction   Co.    69 

Fed.  Rep.  358 514 

Bangs  V.  Duckinfield,    18  N.    Y. 

592...356,  383,  391,  415,  624 
V.  Mcintosh,  23  Barb.  591.. 
84,  92,  159,  343,  346,  347, 

354,  405,  411,  415,  609 
Bank  Comrs.  v.  Bank  of  Buffalo, 

6  Paige,  497 344,  374 

Bank  of  Geneva  v.   Reynolds,  33 

N.  Y.  160 102 

Bank  of  Mississippi  v.  Duncan,  52 

Miss.  740. 8,  54 

Bank  of  Mobile  «.  Planters'  &  M. 

Bank,  1  Ala.  109 571 

Bank  of  Monroe  v.  Scherraerhorn, 

Clarke,  Ch.  214. 

34,  91,  241,  567 
Bank  of  Montreal  v.  Chicago,  C. 
&  W.  R.  Co.  48  Iowa, 
518.. 86,  117,  380,  491, 

502,  523,  524 
V.  Thayer,  7  Fed.  Rep.  622.  230 
Bank  of  Niagara,  Be,  6  Paige,  213 

90,  589,  599 
V.  Johnson,  8  Wend.  645... 

116,  387 
Bank  of  Ogdensburg  v.  Arnold,  5 
Paige,  39 -.277, 278,  280, 

286,  300 
Bank  of  Poughkeepsie  v.  Ibbotson, 

24  Wend.  479 178,  449 

Bank  of  Utica  v.  Finch,  3  Barb. 

Ch.  293. 297 

Bank  of  Washington  v.  Creditors, 

86  N.C.  323.77,  78,  605,  606 
Banks  v.  Potter,  21  How.  Pr.  469. 

73,  75,  257,  258,  376,  605 
Baptist  Church  «.  Hetfield,  46  N. 

J.  Eq.  502 70 

Barber  t.  Barber,  62  U.  S.  21  How. 

582,  16  L.  ed.  226 552 

V.  Spencer,  11  Paige,  517...  181 
Barbour  v.  National  Exch.  Bank, 

45  Ohio  St.  133 

54,  66,  171,  353 


CASES  CITED. 


XXXlll 


Barbour  v.  National  Exch.  Bank,  50 
Ohio  St.  90,  20  L.  R.  A. 

192 - 440 

Barclay  v.  Quicksilver  Min.  Co.  9 

Abb.  Pr.  N.  S.  283....  352 
V.   Quicksilver  Min.    Co.    6 
Lans.  25.. 110,  113,  167, 

168,  260 

Bard  v.  Bingham,  54  Ala.  463 42 

Barings.  Dix,  1  Cox,  Ch.  213....  332 
Barker  v.  Dayton,  28  Wis.  367.-- 

172,  241,  242,  251,  260,  552 
Barkley  v.  Board  of  Levee  Comrs. 
93  U.  S.  258,  23  L.  ed. 

893 -.  246 

Barnard  v.  Darling,  1  Barb.  Ch.  76.  247 

V.  Davis,  54  Ala.  565 42 

Barnes  v.  Jones,  91  Ind.  161 

306,  307,  323,  332 
V.  Morgan,  3  Hun,  703.239,  251 
V.  Newcomb,  89  N.  Y.  108. 

205,  230 
Barnettt).  Nelson,  54 Iowa, 41 -.277,  280 

v.  Pool,  23  Tex.  517 171 

Barney  v.  Griffin,  2  N.  Y.  365 250 

Barrett  v.  Henrietta  Nat.  Bank,  78 

Tex.  222 427,  430 

V.  Mitchell,  5  It.  Eq.  501.295,  296 
Barron  ii.  Mullin,  21  Minn.  374... 

84,  98,  100 

Barry  o.  Briegs,  22  Mich.  201 70 

Barter  v.  Wheeler,  49  N.  H.  9 511 

Barth  v.  American  Ins.  Co.  (Wis.) 

65N.  W.  1035 67 

V.  Backus,  140  N.Y.  230,  23 

L.  R.  A.  47 --  168 

Bartlett  v.  Keim,  50  N.  J.  L.  260. 

194,  504 
V.  McNiel,  49  How.  Pr.  55, 

60  N.  Y.  53- --  241 

V.  West  Metropolitan  Tram- 
way Co.  3  Ch.  437 363 

V.  Wilbur,  53  Md.  485 112 

Barton  v.  Barbour,  3  McArth.  212. 

183.  613 
V.  Barbour,  104  U.  S.  126,  26 
L.  ed.  672.-85,  93,  125, 
127,  153,  183,  184,  189, 
191,  195,  198,  202,  209, 
212,  230,  231,  380,  388, 
418,  476,  483,  489,  521, 

523,  577,  613,  615,  620 
V.  Hosner,  24  Hun,  469.114,  251 
«.  Ridgeway,  92  Va.  163--.  215 

V.  Wheeler,  49  N.  H.  9 396 

Ba.shore  v.  Whisler,  3  Watts,  490.  100 

Bassett  v.  Orr,  7  Biss.  296 244 

V.  St.  Albans  Hotel  Co.  47 

Vt.  313 245 

Bassick  Min.  Co.  v.  Schoolfield,  15 

Colo.  376 595 

G 


Basting  v.  Ankeny  (Minn.)  66  N. 

W.  266 385,  401,  403 

Batchelor  ■p.  Blake,  1  Hog.  98 193 

Bate  V.  Graham,  UN.  Y.  237... 

157,  375 
Bateman  v.  San  Francisco  Super. 

Ct.  54  Cal.  285 552 

Bates  V.  Wiggin,  37  Kan.  44 372 

Battaile  v.  Fisher,  36  Miss.  321 .. . 

23   203   206 
Battershall  v.  Davis,  31  Barb. '323.'    69 

Battle  V.  Davis,  66  N.  C.  252 

22,  32,  92,  153,  159-162, 

310,  383,  399,  401,  611 

Baxter  v.  Moses,  77  Me.  465 244 

V.  Nashville  &  H.  Turnp. 

Co.  10  Lea,  488 454 

V.  Welsh,  1  DeG.  &  S.  173.  333 
V.  Wheeler,  49  N.  H.  9.209,  211 
Bay  V.  Cook,  31  111.  336.. 238,  246,  247 
Bayard  v.  Hoffman,  4  Johns.  Ch. 

450 256,  407 

Bayaud  v.  Fellows,  28  Barb.  451 .  - 

239,  248,  296,  354 
Bavles  a.  Kansas  P.  R.  Co.  13  Colo. 

181,  5L.  R.  A.  480- -88,  391 
Bay  less  v.    Orne,    1    Freem.    Ch. 

(Miss.)  172- - 344 

Bayliss  c.  La  Fayette,  M.  &  B.  R. 

Co.  9  Biss.  90. 579 

Beach  v.  Beston,  45  111.  341 247 

V.  White,  Walk.  Ch.  495...  252 
Beam  v.  Bennett,  51  Mich.  148  .-.  237 
Beard  v.  Arbuckle,  19  W.Va.  145. 

27,  34,  35,  564 
Beardsley  Scythe  Co.  v.  Foster,  36 

N.  Y.  561 244,  248 

Beck  V.  Burdett,  1  Paige.  305 

236,  244,  252,  256 
Becker  v.  Torrance,  31  N.  Y.  631. 
49,   115,  126,   151,   178, 

241  251  258  259 
Beckwith  v.  Carroll,  56  Ala.  12-95,  588 
Beebe  v.  Russell,  60  U.  S.  19  How. 

283.  15  L.  ed.  668 71 

Beecher  v.   Bininger,   7  Blatchf. 
170.. 13,  18,  40,  43,  48, 

56,  121 
V.  Marquette  &  P.   Rolling 
Mill  Co.  40  Mich.  307.- 
72,  271,  283,  293.  358,  469 
Beecher's Estate,  i?e,19 N.Y.  Supp. 

971---- 143 

Beers  v.  Chelsea  Bank,  4  Edw.  Ch. 

277 --  561 

V.  Wabash,  St.  L.  &  P.  R. 
Co.  34  Fed.  Rep.  244-. 

131,  133 
Beford  v.  Mawcatty  (Md.)  2  Am. 
•&  Eng.  Corp.  Cas.  N. 
S.  477 100,  389 


XXXIV 


CASES  CITED. 


Bell  V.  American  Protective 
League,  163  Mass.  558, 

28  L.  R.  A.  453 224 

V.  Cbicao;o,   St.  L.  &  N.  O. 
R.  Co.  34  La.  Ann.  785 

417,  501 
V.  Hanover  Nat.    Bank,  57 

Fed.    Rep.  823 138,  151 

V.  In(iianapoli.s,  C.  &  L.  R. 

Co.  53lnd.  57.. 46.  213,  516 
V.  Shibley,  33  Barb.  610.... 

92,  138,  144,  150 
Bell,  ex  rel.  Foster,  v.  Bell,  L.  R. 

9  Eq.  173 234 

Bell's  Appeal,  115  Pa.  88 363 

Bell's  Estate,  Re,  L.  R.  9  Eq..  172.  202 
Belmont  v.   Erie  R.   Co.  52  Barb. 

637 -.343.  344,347,  460 

Belmont  Nail  Co.  i>.  Columbia 
Iron  &  S.  Co.  46  Fed. 

Rep.   8 363,  567 

Belton,  Re,  47  La.  Ann.  1614,  30 

L.  R.  A.  648.. 350,  360,  363 

Bennesonw.  Bill,  63  111.  408. 

10,  29,  61,  82,  268,  589 
Bennet  v.  Musgrove,  2  Ves.  Sr.  51  249 
Bennett  v.  Bayley,  1  Hayes  &  J. 

400 17 

V.  Chapin,  3  Sandf.  673....  585 

Benson,  Ex  parte,  18  S.  C.  38 85 

Beut-y.  Priest,  86  Mo.  482- 397 

Bentley  v.  Bates,  4  Younge  &  C. 

182. 306 

V.   Shrieve,  4  Md.  Ch.  413 

127,  154,  186 
Bergen  ».  Littell,  41  N.  J.  Eq.  18. 

171,  258 
Bergin  v.  Deering,  70  Hun,  379...  127 
Berlin  «.  Woolen  Mill  Co.  43  Wis. 

434 360 

Berney  «.  Sewell,  1  Jac.  &  W.  647 

279   299 
».  Sewell,  2  Jac.  &  W.  553.'  284 

Berry,  Re,  26  Barb.  55.. 

65,  74,  125,  144,  417 
e.  Brett,  6  Bosw.  627... 138,  180 

Berry  ■«.  Folkes,  60  Miss.  576 307 

».  Gillis,  17  N.  H.  9 

103,  107,  233,  507 
t.  Keen,  51  L.  J.  Ch.  912..     43 
Bertrand  v.  Davies,  31  Beav.  436..  142 
Best  V.  Schermier,  6  N.  J.  Eq.  154 

279,  292,  296 
Besuden  o.  E.  Besuden  Co.  3  Ohio 

N.  P.  165 373 

Beverley  ®.  Brooke.  4  Gratt.  187.. 
2,  4,  31.  24.  25.  49.  66, 
126,  283,  301,  312,  344, 

536,  542 

®.  Scott,  4  Gratt.  212.. 312 

Beverly  v.  Rhodes,  86  Va.  415 240 


Biddulph  V.  Hickman,  1  Hog.  244    29 
Bidlack  ®.  Mason,  36  N.  J.  Eq.  330 

51,  113,  167,  168 

Bid  well  «.  Paul,  5  Baxt.  693 398 

Bieder  v.  Douglas.  35  III.  App.  134  345 
Biers  «.  Wabash.  St.  L.  &  P.  R. 
Co.  34  Fed.   Rep.  244. 
35  Am.  &  Eug.  R.  Cas. 

646 504,   507 

Big   Creek    Stone   Co.   ®.    Seward 

(Ind.)43N.  E.  464.374,  403 
Bigelow  ».  Andress,  31  III.  333... 

239.  244,  354 
B.  Libby,  117  Mass.  359....  391 

B.  Stringer,  40  Mo.  195 250 

t.  Union  Freight  R.  Co.  137 

Mass.  478 471 

Bignell  «.  Chapman  [1892]  1  Ch. 
59,  01  L.  J.  Ch.  334,  66 
L.  T.  36,  40  Week.  Rep. 

305 587 

Bill  0.  New  Albany  &  C.  R.  Co.  2 

Biss.  390 48,  56,  345 

Billings  V.  Robinson,  28  Hun,  133, 

Aflf'd  94  N.  Y.  415 

116,  117,  156,  158,  176, 

177,  403 

•0.  Stewart,  4  Dem.  269 251 

Billingsley  w.  Bunce,  28  Mo.  547..  250 

«.  Pollock,  69  Miss.  759 392 

Bilton  '0.   Blakelv,   6   Grant,    Ch. 

(Ont.)575 322 

Binnie  v.  Walker,  25  111.  App.  82.  247 

Binninger,  Re,  7  Blatchf.  26 57 

Birch  «.  Oldis,  Sauss.  &  S.  146...  179 
Bird  V.  Cockrem,  2  Woods,  32... 

435,  436 
t).  Lamphear,  93  Hun,  567, 

36N.  Y.  Supp.  1069...     32 
u.  Littlehales,  3  Swanst.  299, 

note 186 

Birdsall  v.  Colie,  10  N.  J.  Eq.  63.. 

309,  325,  333 
Birmingham  &  L.   J.  R.  Co.,  Re, 

L.  R.  18  Ch.  Div.  155..  403 
Birt,  Re,  L.  R.  22  Ch.  Div.  604...     53 

Bissell  «.  Saxton,  66  N.  Y.  60 79 

Bisson  ®.  Curry.  35  Iowa,  72 

15,  17,  18,  455,  466,  603 
Bitting  «.  Ten  Eyck,  85  Ind.  357. 

25,  54,  55 

Bivinst).  Marvin,  96  Ga.  268 533 

Black  «.  Gentery  (N.  C.)  26  S.  E.  43  696 
«.  Ore  Knob  Copper  Co.  115 

N.    C.  382 401,  403,  405 

Blackburn  &  D.  B.  B.  Soc,  Re,  L. 

R.  43  Ch.  Div.  343....  224 
Blackett  «.  B'.ackett,  24  L.  T.  N. 

S.   276 18 

Blackwell  v.  Rankin,  7  N.  J.  Eq. 

153 34a 


CASES  CITED. 


XXXV 


Blair  v.  St.  Louis,  11.  &  K.  R.  Co. 

19  Fed.  Rep.  861 574 

V.  St.  Louis,  H.  &  K.  R.  Co. 

20  Fed.  Rep.  348 

89.  90,  359,  469 
V.  St.  Louis,  H.  &  K.  R.  Co. 

22  Fed.  Rep.  471. -.477,  478 
V.  St.  Louis,  H.  &  K.  R.  Co. 

23  Fed.  Rep.  021 -..484,  498 
Blake  v.  Alabama  &  C.  R.  Co.  6 

Nat.  Bankr.  Reg.  332.. 

127,  183 
V.  State  Sav.  Bank,  12  Wash. 

619 571 

V.  Swain,  10  Allen,  340....  407 

«.  Williams.  6  Pick.  386 110 

Blake  Crusher  Co.  v.  New  Haven, 

46  Conn.  473..  112,  122,  372 
Blakeney  o.  Dufaur,  15  Beav.  40. 

307,  312,  322,  339 
Blanck  v.  Sadlier,  5  App.  Div.  81, 

16  Misc.  164 101 

Blandy,  Ex  parte,  1  Deac.  286 106 

Blatchford  v.  Newberry,  100  111. 

484 397 

V.  Ross.  54  Barb.  42.. 

343,  355,  359,  367,  464,  465 

Bliss  «.  Doty,  36  Minn.  168. 376 

V.  Raynor,  91  Hun,  250 251 

Block  V.  Estes,  92  Mo.  318 66 

Blondheim  i\  Moore,  11  Md.  365_. 
12-15,  17,  41,  239,  249, 
293,  324,  466,  469,  603, 

604,  616 
Bloodgood  V.  Clark,  4  Paige,  574. 

14.  34,  237,  241,  331 
Bloomfield  ®,  Van  Slike,  107  Ind. 

480 570 

Blount  V.  Windley,  95  U.   S.  173. 

24L.  ed.  424 383,  440 

Bloxan  v.  Metropolitan  R.  Co.  L. 

R.  3  Ch.  App.  387 409 

Blum  V.  Van  Vechten,  92  Wis.  378  339 
Blumenthal   v.    Brainard,    38   Vt. 
402..  130,  188,  190,  203, 
208,  209,  211,  395,  418, 

509-511,  516,  251 
Blunt  V.  Clitherow,  6  Ves.  Jr.  799 

93,  205,  382 
Rly  V.  United  States,  4  Dill.  464..  155 
Board  of  Public  Works  v.  Colum- 
bia College,  84  U.  S.  17 
Wall.  521,  21  L.  ed.  687  244 
Bock  v.  Perkins,  139  U.  S.  628,  35 

L.  ed.  314 522 

Bocker  v.  Torrance,  31  N.  Y.  631.  147 
Bockes  V.  Halhorn,  78  N.  Y.  222..  377 
f5odkin  v.  Merrit,  102  Ind.  293.-67,  85 

Boggs  V.  Brown,  82  Tex.  41 

204.  518.  505 
Boland  v.  Whitman,  33  Ind.  64...     92 


Bolles  V.   Duff.   54  Barb.  215,  37 

How.  Pr.  162 60,  299 

V.  Duff,  35  How.  Pr.  481,  38 

How.  Pr.  492 

275,  277,  280,  599 
Boltz  V.  Eagan,  34  Fed.  Rep.  447.  124 
Bond  V.  First  Nat.  Bank,  5  Colo. 

83.. 121 

V.  Slate,  68  Miss.  648 

198,  514,  629 
Bonner  v.  Franklin  Co-Operative 
Asso.  4  Tex.  Civ.  App. 

166.. 233,  513 

V.  Hearne,  75  Tex.  242.48,  52,  56 

1).  Mayfield,  82  Tex.  234.203,  213 

Boot  &  Shoe  Mfrs.  Mut.  F.  Ins. 

Co.  V.  Melrose  Orthodox 

Cong.    Soc.    117   Mass. 

199 161,400 

Booth  v.  Brown,  62  Fed.  Rep.  794  131 
V.  Clark,  58  U.  S.  17  How. 

322.  15  L.  ed.  164 

4,  22,  50,    83,  109-112, 

145,  160.  165,  169,  263 
T.  Wells,  43  Fed.  Rep.  11..  392 
Borer  v.  Chapman,  119  U.  S.  587, 

30  L.  ed.  533 133 

Borland  v.   Haven,  37  Fed.  Rep. 

304... 405 

Boston  &  P.  R.  Corp.  v.  New  York 
&  N.  E.  R.  Co.  13  R.  I. 

320.. 275 

Boston,  C.  &  M.  R.  Co.  v.  Boston 
&  L.  R.  Co.  65  N.  H. 

393 366 

Boston  Dlatite  Co.  v.  Florence  Mfg. 

Co.  114  Mass.  69 131 

Bostwick  V.  Brinkerhoff,  106  U.  S. 

3,  27L.  ed.  73 71 

V.  Elton,  25  How.  Pr.  363..  343 

V.  Ishell,  41  Conn.  305 15 

V.  Menck,  40  N.  Y.  383.... 
32,  114,  115,  172,  173, 
198.  241-243,  251,  252, 
255,  258-260,  375,  376, 

387,  608 
Bottsford  V.  Beers,  11  Conn.  369..  247 
Boulware  v.  Davis,  90  Ala.  207,  9 

L.  R.  A.  601. 

51,  112,  167,  412 

Bound  V.  South  Carolina  R.  Co.  47 

Fed.   Rep.  30.  50  Fed. 

Rep.  312,  51  Fed.  Rep. 

58.  58  Fed.  Rep.  480... 

95,  484,  498,  523.  572,  579 

Bourdillon    v.    Dalton,    1    Peake, 

N.  P.  238... 223 

Bourdon  v.  Mantin,  74  Hun,  246. 

203,  219 

Bouton  V.  Dement,  123111.  143 

263,  406,  408 


XXX  VI 


CASES  CITED. 


Bowden  v.  Johnson,  107  U.  S.  251, 

27  L.  ed.  386 119 

V.  Morris,  1  Hughes,  380...  155 
Bowen  v.  First  Nat.  Bank,  34  How. 

Pr.  408 119 

V.  Parkhurst,  24  111.  257 253 

Bowers  v.  Durant,  2  N.  Y.  8.  R. 

127 550 

Bowershank  v.  Collosseau,  3  Ves. 

Jr.   164 62 

Bowerv  Bank  Case,5  Abb.  Pr.  415.  561 
Bowhng  V.  Scales,  2  Tenn.  Ch.  63  42 
Bowling  Green  Sav.  Bank  v.  Todd, 

64  Barb.  146... 25,  126 

Bowman,  Be,  6  S.  C.  R.  Eq.  (New 

So.  Wales)  84 87 

Bowman  v.  Bell,  14  L.  J.  Ch.  N.  S. 

119. 28 

V.  Bell,  14  Sim.  392. 

34,  63,  298.  355 

V.  Tallman,  2  Robt.  385.216,  626 

Bowton«.  Dement,  123  111.  142...  404 

Boyce  «.  Burchard,  21  Ga.  74 

42,  306,  307,  325,  328 
Boyd,  Mc  parte,  105  U.  S.  647,  26 

L.  ed.  1200 237 

T.  Cook,  40  Kan.  675. 71 

V.  Royal  Ins.  Co.  Ill  N.  C. 

372 160,  163.  399,  411 

Boyle  V.  Bettws  Llanluit  Collierv 
Co.   L.   R.  2   Ch.  Div. 

726.. 61 

V.  Townes,  9  Leigh,  158.. 50, 167 

Bovnton  v.  Foster,  7  Met.  415 564 

Bradley  v.  Angel,  3  N.  Y.  475 180 

V.  Converse,  4  Cliff.  375.173,  407 
V.  Farwell,  Holmes,  433.173,  360 

Brady  «.  Fiirlow,  22  Ga.  613 150 

Braham  v.  Stralhmore,  8  Jur.  567.  562 

Bramley  v.  Tyree,  1  Lea,  531 71 

Brande  v.  Bond,  63  Wis.  140.-100,  101 
Brandt  v.  Allen,  76  Iowa,  50,  1  L. 

R.  A.  653 115,  122, 

172,  173,  386 
Brant  v.    Willoughby,   17  Grant, 

Ch.  (Ont.)  627 60 

Brassey  v.  New  York  &  N.  E.  R. 
Co.  19  Fed.  Rep.  663, 
22  Blatchf,   72.... 273, 

358,  461,  464 
Brasted  v.  Sutton,  30  N.  J.  Eq.  462 

278,  280,  292 
Breckenridse  v.   Brooks,  2  A.  K. 

Marsh.  339. 299 

Brenan  v.  Preston,  2  DeG.  M.  & 

G.    813 324,  325 

Brewer    v.    Boston    Theatre,    104 

Mass.  378 114,  351,  365 

Briarfield  Iron  Works  v.  Foster,  54 
Ala.  622. ...15,  17,  28, 
38,  242,  343,  367,  455,  468 


Bridges  v.  Stephens  (Mo.)  34  S.W. 

555 426 

Brien  v.   Harriman,   1  Tenn.  Ch. 

467.. 312,  587 

V.  Paul,  3  Tenn.  Ch.  357... 

24,  73,  84,  129,  153,  184 
Briggs  V.  Penniman,  8  Cow.  387.. 

177,  178,  385 
V.  Spaulding,  141  U.  S.  132, 

35  L.  ed.  662.. 437,  448,  449 
D.  Stroud,  58  Fed.  Rep.  720.  123 
Brigham  v.  Luddington,  12  Blatchf. 

287 112,  145,  165,  262 

Bright  V.  North,  2  Phill.  216. .  ..93,  880 
Brinckerhoflf  v.  Bostwick,  88  N.  Y. 

52 484,436,449,  450,  623 

Brinkerhoff  t).  Brown,  4  Johns.  Ch. 

671. ....244,247 

Brinkman  v.  Ritzinger,  82  Ind.  358 

34,  63,  286,  297,  298 
Brisenden  «.  Chamberlain,  53  Fed. 

Rep.  307. 411 

Bristol,  Re,  16  Abb.  Pr.  184 

110.  167,  168 
Bristowe  v.  Needham,  9  Jur.  N.  S. 

1168. 587 

V.  Needham,  12Phill.  Ch.l90  219 
British  Linen  Co.  v.  South  America 
&  M.  Co.  [1894]  1  Ch. 

108 29 

British  Nat.  L.  Assur.  Asso.,  Re, 

L.  R.  14  Eq.  492 563 

Broad  «.  Wickham,  4  Sim.  511 

122.  128,  129 
Brockert  v.  Central  Iowa  R.  Co.  82 

Iowa,  369 204,  516 

Brocklebank  v.   East  London  R. 
Co.  L.  R.  12  Ch.  Div. 

839 572 

Brodie  v.  Barry,  8  Meriv.  695.. 17,  544 
Bronson  v.  La  Crosse  &  M.  R.  Co. 
67  U.  S.  2  Black,  524, 

17  L.  ed.  359 71 

Brooks  V.  Bigelow,  142  Mass.  6,..  180 
V.  Great  head,   1  Jac.  &  VV. 

322.. 132 

T.  Stone,  19  How.  Pr.  395..  244 

V.  Wisner,  20  Mo.  503 250 

Broome  v.  Robinson,  7  East,  385..  106 
Brouwer    v.    Appleby,    1    Sandf. 

158 114 

V.  Harbeck,  9  N.  Y.  589....  407 
V.  Hill,  1  Sandf.  629....  104, 

157,  171.  172,  256,  260,  397 

Browell®.  Reed,  1  Hare,  434 546 

Brower  v.  Brower,  2  Edw.  Ch.  621 

593,  631 

Brown,  Ex  parte.  58  Ala.  536 861 

Ex  parte,  15  S.  C.  518 

202,  209,  212,  395,  510 
Be,  3  Edw.  Ch.  884 108 


CASES  CITED. 


xxxvn 


Brown  v.  Bank  of  Mississippi,  31 

Miss.  454 245 

V.  Brown,  71  Tex.  355 

195,  395,  511,  516 
V.  Carolina  C.  R.Co.  83  N.  C. 

128 46 

V.  Chase,  Walk.  Ch.  (Mich.) 
43.. -.32,  267,  277,  280, 

281,  285,  290 
V.  Chesapeake  &   O.    Canal 

Co.  73  Md.  567 41 

V.  Gay,  76  Tex.  444.. 

204,  518,  629 
V.  Gilmore,  16  How.  Pr.  527 

115,  158 
V.  Hazlehurst,  54  Md.  26... 

93,  200,  590 
c.  Heathcote,  1  Atk.  162...  383 
V.  Lake  Superior  Iron  Co. 
134  U.  S.  530,  33  L.  ed. 

1021 247,  456 

V.  Lons:,  1  Ired.  Eq.   190...  245 
V.  Maryland,  114  U.  S.  605, 

29  L.  ed.  235... 272 

V.  New  York  &  E.  R.  Co.  19 

How.  Pr.  84 485 

V.  Nichols,  42  N.  Y.  26.240,  251 
V.  Northrup,  15  Abb.  Pr.  N. 

S.  333 21,  60 

V.  Perry,  1  Ch.  (Ont.)  253..  557 

V.  Rauch,  1  Wash.  497 

184, 189,  191,  614 

V.  Ring,  77  Mich.  159. 70 

V.  Toledo,  P.  &  W.  R.  Co. 

35  Fed.  Rep.  444 

222,  393,  394,  590 
V.  Vandermuelen,  41  Mich. 

418 71 

V.  Wabash  R.  Co.  96  111.297 

395,  516,  519.  520,  630 
V.  Warner,  78  Tex.  543,  11 
L.  R.  A.  394... 21,  102, 
103,  204,  205,  225,  375,  396 
Brown,  Bagley  &  Dixon,  Re,  L.  R. 

18  Ch.  Div.  649  ...223, 

393.  497 
Brown's  Estate,  Be,  L.  R.  19  Ir, 

183 569 

Brownell  v.  Curtis,  10  Paige,  210. 

406,  408 

V.  [Manchester,  1  Pick.  232.     50 

Browninir  ».  Bettis,  8  Paige,  568..  262 

V.  Hanfoid,  5  Denio,  586...  254 

V.  Hart,  6  Barb.  91 408 

Bruce  v.  Mancliester  &  K.  R.  Co. 

19  Fed.  Rep.  342... 48, 

56,  57,  122 
Brundred  v.  Paterson  Mach.   Co. 

4  N.  J.  Eq.  294.... 347,  370 
Bruns  v.  Stewart  Mfg.  Co.  31  Hun, 

316 557 


Brush  V.  Joy,  113  N.  Y.  482,  Ov. 

50  Hun,  446  -,    98,  329 

V.  Sweet,  88  Mich.  574 409 

Bryan  v.  Cormick,  1  Cox,  Ch.  422. 

130,  300 
V.  Moring,  94  N.  C.  694..  13, 

42,  43,  536 
Bryan  &  B.  Shoe  Co.   v.  Block,  52 

Ark.  458 102 

Brydon  v.  Stewart,  2  Macq.  H.  L. 

Cas.  30 203 

Bryson  v.  McCreary,  102  Ind.  4..  296 
Buchanan  «.  Berkshire  L.  Ins.  Co. 
96  Ind.  510.63,  70,  286, 

289,  298 
V.  Comstock,  57  Barb.  568.. 

308.  309,  336 

V.  Meisser,  105  111.  638 405 

V.  Smith,  83  U.  S.  16  AVall. 

309,  21  L.  ed.  287 57 

Buck  V.  Colbath,  70  U.  S.  3  Wall. 

334,  18  L.  ed.  257.. 122.  522 
v.  Piedmont&A.  L.  Ins.  Co. 
4Fed.  Rep.849..41,  61, 

352,  367,  657 
Buckeve    Engine    Co.    v.   Donau 
Brew.  Co.  47  Fed.  Rep. 

6 45,  238 

Buckley  v.  Baldwin,  69  Miss.  804. 

15,  41,  603 

V.  George,  71  Miss.  580 616 

Buckworth   «.  Morgan,  Smith  on 

Receivers  (Irish)  82 105 

Buell  V.  Buckingham,  16  Iowa,  284  360 
Bufkin  V.  Boyce,  104  Ind.  53.. 54, 

309,  321,  325,  331,  333 
Buler's  Estate,  Re,  13  Ir.  Ch.  N.  S. 

456... 25 

Bunde  v.  Cocke,  128  U.  S.  125,  32 

L.  ed.  396 441 

Bunn  V.  Fonda,  2  N.  Y.  Code  Rep. 

70 ..:.  257 

Burch  V.  Bramley,  20  S.  C.  503...  245 
Burgwyn    Bros.   Tobacco    Co.  v. 

Bentley,  90Ga.  508....  319 
Burk  V.  McClain,  1  Harr.  &,  McII. 

236 165 

V.  Muskegon  Mach.  &  F.  Co. 

98  Mich.  614 192,417 

Burlingame  v.  Parce,  12  Hun,  144 

274,  294,  458 
Burnhara  v.  Bowen,  111  U.  S.  776, 
28  L.  ed.  596  .218,479, 
483,  489,  495,  523,  575,  576 
Burns  v.  Campbell,  3  Jones  Eq. 

410 42 

Burrall  v.  Leslie,  6  Paige,  445.. 55,  376 
Burroughs  v.  Gaither,  66  Md.  171 

86,  87,  388 
Burrows  v.  Malloy,  2  Jones  &  L. 

521,  8  Ir.  Eq.  Rep.  482  278 


XXX  VIU 


CASES  CITED. 


Burt  V.  Burt,  41  N.  Y.  46 536 

Burton  v.  Burley,  9  Biss.  253 431 

Buswell  v.  Supreme  Silling,  O.  of 
I.  H.  161  Mass.  224,  23 

L.  R.  A.  846 113,  169 

Butcbart  v.  Dresser,  4  DeG.  M.  & 

G.  542 307,  314 

Butcher  v.  Harrison,   4  Barn.  & 

Ad.  129  - 407 

Butler  V.  Aspinwall,  33  Fed.  Rep. 

217 442 

T.  Coleman,  124  U.  S.  721, 

31  L.  ed.  567 448 

V.  Eaton,   141   U.  S.  240,  35 

L.  ed.  713 ....438,  444 

V.  Poole,  44  Fed.  Rep.  586.  443 
V.  Sprague,  66N.  Y.  392... 

202,  219,  392 

«.  Walker,  80  111.  345 177 

Butterworth  v.  O'Brien,  24  How. 
Pr.  438,  39  Barb.  192.. 

114,  171,  387 

Butts  V.  Wood,  38  Barb.  181 360 

Bydon  v.  Innes,  5  W.  W.  &  A'  B, 

(Vict.)  189 47 

Byers  v.  McAuley,  149  U.  S.  608, 

37  L.  ed.  867 122,  123 

Byles  V.  Kellogg,  67  Mich.  318... 

138,  409 
Bywaler's  Estate,  Be,  1  Jur.  N.  S. 

227 34 

C. 

Cadle  V.  Baker,  87  U.  S.  20  Wall. 

650,  22  L.  ed.  448.. 425,  434 
V.  Tracy,  11  Blatchf.  101... 

423,  424,  428,  435 
Cadogan  ®.  Lyric  Theatre,  7  Rep. 

594  [1894]  3  Ch.  338,  63 

L.  J.  Ch.  775,  71  L.  T. 

N.  S.  8.. -  256 

Cagill  V.  Wooldridge,  8  Baxt.  580. 

50,  111,  112,  134,  167,  168 
Cahn  V.  Johnson  (Tex.  Civ.  App.) 

33  S.  W.  1000 3.54 

Caillard  «.  Caillard,  25  Beav.  512.     15 

Cain  V.  Warford,  7  Md.  282 564 

Cairns  v.  Chabert,  3  Edw.  Ch.  312  293 
Caldwell  v.  McWhorter,   84  Ky. 

130 160 

Calhoun  v.  Lanaux,  127  U.  S.  634, 

37L.  ed.  297 57 

California  Nat.  Bank  Stockhold- 
ers, Be,  53  Fed.  Rep.  38  382 
Calkins  v.  Atkinson,  2  Lans.  12.. 

115,  174-176,  384,  386,  403 
Callaghan  v.  Callaghan,  8  Ir.  Eq. 

572 ■  77 

Callan  v.  Wilson,  127  U.  S.  540,  32 

L.  ed.  223 131 


Callanan  v.  Shaw,  19  Iowa,  183.. 

44,  70,  274,  277,  284,  291 
Cameron  v.  Ilavemeyer,  25  Abb. 

N.  C.  438 353,  532,  541 

Cammack  v.  Johnson,  2  N.  J.  Eq. 

163 619 

Cammell  v.  Sewell,  5  Hurlst.  &  N. 

728 ...50,  134,  414 

Camp  V.  Barney,  6  Thomp.  &  C. 
622,  4  1Iun,373  ...188, 
195,  204,  209,  229,  418, 

512,  615 
«.  Niagara  Bank,  2  Paige, 

283  ^03  219 

Campbell  v.  Cook,'86"Tex.'"630..' 

395,  513 
®.  Davis  (Tex.)  22  S.  W.  244  218 
V.  Erie  R.  Co.  46  Barb.  540.  2.59 
V.  Eversole  (Ky.)  38  S.  W.486  696 

V.  Fish,  8  Daly,  162 

179,  257,  258 
«.  Foster,  85  N.  Y.  361  ....  257 
V.  Lloyd's  Bank,   58  L.  J. 

Ch.424 26 

V.  Lloyds,    B.    &    B.    Bank 

[1891]  1  Ch.  136 96 

■V.  McCahan,  41  111.  45 616 

V.  Weiss  (Tex.)  25  S.  W.  1076  233 
Capital  City  Water   Co.   v.  Wea- 

therly  (Ala.)  18  So.  841     68 
Capital  Mut.  F.  Ins.  Co.  v.  Boggs, 

172  Pa.  91 .\.  390 

Cardot  v.  Barney,  63  N.  Y.  2S1... 
198,  202,  204,  209-211, 

229,  395,  512,  516 
Carew  v.  Rutherford,  106  Mass.  1.  131 

Careys.  Carey,  2  Daly,  424. 553 

V.  Houston  &  t.  C.  R.  Co. 

52  Fed.  Rep.  671 345 

Carley®.  Graves,  85  Mich.  483...  628 

Carlin  v.  Jones,  55  Ala.  624 183 

Carlisle  v.  Southeastern  R.  Co.  1 

Macn.  &  G.  689 409 

Carmichael  v.  Vandebur,  51  Iowa, 

225 ---  564 

Carolina  Nat.  Bank,  £Jx  parte,  18 

S.  C.  289 85,  381,  502 

Carper  v.  Hawkins,  8  W.  Va.  291     75 
Can  V.  Hamilton,   129  U.  S.  252, 

32  L.  ed.  669.-369,  383,  400 
v.  Hilton,  1  Curt.  C.  C.  230.  260 

«.  Morris,  85  Va.  21.. 

202,  205,  231 
Carrow  v.  Ferrier,  37  L.   J.    Ch. 

569,  L.  R.  3Ch.  719.. 43,  45 

Carter,  Be.  3  Paice.  146. 203 

V.  Ford  Plate  Glass  Co.  85 

Ind.  180 359 

V.  Hampton,  77  Va.  631....  240 
V.  Hightower,  79  Tex.  135. 

45,  239 


CASES  CITED. 


xxxix 


Cartwright  v.  Dickinson,  88  Tenn. 

476,  7  L.  R.  A.  706 404 

Cartwright's  Case,  114  Mass.  230. 

202,  206,  207 
Caruthers  v.  Humphrey,  12  Mich. 

270 283,  293,  460,  469 

Case  V.  Abeel,  1  Paisce,  393 317 

».  Berwin,  22  La.  Ann.  321. 

163,  436 
«.  Citizens'  Bank,  2  Woods, 
23,  100  U.  S.  446,  25  L. 

ed.  695 446 

V.  Marchand,  23  La.  Ann.  60 

67,  425,  427 
V.  New  Orleans  &  C.  R.  Co. 
("Case  V.  Beaureirard") 
101  U.  S.  688,  25'L.  ed. 

1004 240 

V.  Small,   4  Woods,   78,    10 

Fed.  Rep.  722.427,  443,  449 
V.  Terrell,  78  U.  S.  11  Wall. 

199,  20  L.  ed.  134 429 

Casey  «.  Cincinnati  Typographical 
Union  Co.  No.  3,  45 
Fed.  Rep.  135,  12  L.  R. 

A.  193 131 

V.  Galli,  94  U.  S.  673,  24  L. 

ed.   168 438,  443,  444 

V.  La  Societe  de  Credit  Mo- 

bilier,  2  Woods,  77 

428,  446-448 
CQSserly  v.  Witherbee,  119  N.  Y. 

522... 156,  387 

Cassetty  v.  Capps,  3  Tenn.  Ch.  524  551 
Cassidy  v.  Meacham,  3  Paige,  311 

45,  238,  252 
Cassilear  v.  Simmons,  8  Paige,  273  134 

Castle  V.  Lewis,  78  N.  Y.  137 246 

Cates  V.  Allen,  149  U.  S.  456,  37  L. 

ed.  807 238 

Catlin  V.  Wilcox  Silver  Plate  Co. 
123  Ind.  477,  8  L.  R.  A. 

62.... .111,  167,  168 

Cazet  V.  Hubbell,  36  N.  Y.  677...   102 
Central  Coal  &  C.  Co.  v.  Southern 
Nat.    Bank  (Tex.   Civ. 

App.)34  S.  W.  383 52 

Central  Farmers' Bank  v.  Beaston, 

7  Gill  &  J.  421 53. 

Central  Nat.  Bank  v.  Connecticut 
Mut.  L.  Ins.  Co.  104  U. 
S.  54,  26  L.  ed.  693.423,430 
V.  Hazard,  30  Fed.  Rep.  484  525 
V.  Hazard,  49  Fed.  Rep.  295 

124,  345 
Central  R.  &  Bkg.  Co.  v.  Farmers' 
Loan  &  T.  Co.  56  Fed. 

Rep.  357 - 353 

Central  Trust  Co.  v.  Charlotte,  C. 
&  A.  R.  Co.  65  Fed. 
Rep.  264 506 


Central  Trust  Co.  v.  Chattanooga, 

R.  &  C.  R.  Co.  62  Fed. 

Rep.  950 345 

«.  Chattanooga,  R.  &  C.  R. 

Co.  68  Fed.  Rep.  685,  2 

Am.  &  Eng.  Corp.  Cas. 

N.  S.  493 187 

V.  Chattanooga  S.  R.  Co.  69 

Fed.  Rep.  295 487 

V.  Cincinnati,  I.  &  M.  R.  Co. 

58  Fed.  Rep.  500. 584 

V.  East  Tennessee,  V.  &  G. 

R.  Co.  30  Fed.  Rep.  895  580 
V.  East  Tennessee,  V.  &  G. 

R.  Co.  59  Fed.  Rep.  523 

125,  183.  187,  521 
«.  East  Tennessee,  V.  &  G. 

R.  Co.  69  Fed.  Rep,  353  514 
«.  Ea.st  Tennessee,  V.  &  G. 

R.  Co.  69  Fed.  Rep.  658  488 
V.  Grant  Locomotive  Works, 

135  U.  S.  221,  34  L.  ed. 

104 118 

«.  Marietta  &  N.  G.  R.  Co. 

51  Fed.  Rep.  15,  16  L. 

R.  A.  90_.102,  204,  225,  515 
V.  New  York  C.  &  N.  R.  Co. 

110  N.  Y.  250,  1  L.  R. 

A.  260 137,  388,  574 

V.  Ohio  C.  R.  Co.  23  Fed. 

Rep.  306,23Am.&En2:. 

R.  Cas.  666... 502,  505,  619 
V.  St.  Louis,  A.  &  T.  R.  Co. 

40  Fed.  Rep.  426 521 

V.  St.  Louis.  A.  &  T.  R.  Co. 

41  Fed.  Rep.  551 

476,  477,  570 
V.  Seasongood.  130  U.  S.  482, 

32L.  ed.  985 525 

tj. 'Sloan,  65  Iowa,  655 395 

e.  South  Atlantic  &  O.  R. 

Co.  57  Fed.  Rep.  3....  345 
».  Texas  &  St.  L.  R.  Co.  22 

Fed.  Rep.  135. 476 

V.  Valley   R.    Co.    55   Fed. 

Rep.  903 ....499,  597 

V.  Wabash,  St.  L.  &  P.  R. 

Co.  23  Fed.  Rep.  858.  . 

185,  191 
V.  Wabash,  St.  L.  &  P.  R. 

Co.  25  Fed.  Rep.  69...  599 
V.  Wabash,  St.  L.  &  P.  R. 

Co.  26  Fed.  Rep.  3....  135 
V.  Wabash,  St.   L.  &  P.  R. 

Co.  26  Fed.  Rep.  12.122,  203 
V.  Wabash,  St.  L.  &  P.  R. 

Co.  28  Fed.  Rep.  871..  190 
V.  Wabash,  St.  L.  &  P.  R. 

Co.  29  Fed.  Rep.  618..  355 
V.  Wabash,  St.  L.  &  P.  R. 

Co.  30  Fed.  Rep.  344..     24 


xl 


CASES  CITED. 


Central  Trust  Co.  v.  Waba.sh,  St. 
L.  &  P.  R.  Co.  32  Fed. 

Rep.  187 583 

V.  Wabash,  St.  L.  &  P.  R. 
Co.  33  Fed.  Rep.  566. . 

225,  226,  497 
V.  Wabash,  St.  L.  &  P.  R. 
Co.  46  Fed.  Rep.  29... 

51,  95,  580 
V.  Wabash,  St.  L.  &  P.  R. 

Co.  52  Fed.  Rep.  908.93,  389 
Certain  Stockholders  of  California 
Nat.  Bank,  Be,  53  Fed, 

Rep.  38  -- -.     88 

Chadbourn  v.  Henderson,  2  Baxt. 

460 282 

Chafee  v.  Fourth  Nat.  Bank,  71 

Me.  514. 111,167 

V.  Quidnick  Co.  13  R.  I.  442 
112.  121, 
125,  128,  133,  147,  184,  417 
Chamberlain,  Ex  parte,   55  Fed. 

Rep.  708. 127,  129 

V.  Greenleaf,  4  Abb.  N.  C.  92    60 
V.  Greenleaf,  4Abb.N.C.  178  387 

V.  Marble,  24  Miss.  586 43 

V.  New  York,  L.  E.  &  W. 
R.  Co.  71  Fed.  Rep.  636 

514,  515 

V.  O'Brien,  46  Minn.  80 

239,  259,  375 
V.  Rochester   Seamless    Pa- 
per Vessel  Co.  7  Hun, 

557 126,  357 

Chamberlayne  v.  Temple,  2  Rand. 

384 249 

Chambers  v.  Goldwin,  5  Ves.  Jr. 

834,  note  a 299 

V.  Jones,  72  111.  275... 616 

V.  McDougal,  42  Fed.  Rep. 

694 415 

Chandlers.  Brown,  77  111.  333... 

117,  175,  403-405 
V.  Cushing- Young     Shingle 

Co.  13  Wash.  89 397 

V.  Dore,  84  111.  275 175,  405 

v.  Keith,  4  Iowa,  99.175, 177,  404 
«.  Siddle,  3  Dill.  477...  167,  175 
Chapman  v.  Beach,  1  Jac.  &  W. 

589. 307,  309,  325,  834 

V.  Jeyes,  4  Beav.  503. 325 

V.  White,  6  N.  Y.  412 219 

Chappell  V.  Akin.  39  Ga.  177 530 

V.  Boyd,  56  Ga.  578 42,  548 

Chase  i;.  Dana,  44  111.  262. 616 

V.  Petroleum  Bank,  66  Pa. 

169... 180,  392.  627 

Chase's  Case,  1  Bland,  Ch.  206... 

14,  42,  43,  126 
Chattanooga  T.  R.  Co.  v.  Felton, 

69  Fed.  Rep.  273.--132,  557 


Chautauque  County  Bank  o.  Ris- 

ley,  19  N.  Y.  375 

48,  125,  127,  142,  147, 
148,  184,  188,  256,  257, 
263,  264.  418,  614,  615,  620 
V.  White,  6  Barb.  589,  Rev'd 

6  N.  Y.  236 

83,  250,  260,  263 
Cheatham  v.  Hawkins,  76  N.   C. 

335  250 

Cheever  v.  Rutiand'&  B.  r"  Co'sS 

Vt.  653... 272,  291,  459,  464 
Chemical  Nat.  Bank  v.  Armstrong, 

50  Fed.  Rep.  798 600 

V.  Bailey,  12  Blatchf.  480..  432 
V.  Colwell,  132  N.  Y.  250...  177 
V.  Hartford  Deposit  Co.  161 

U.  S.  1,  40  L.  ed.  595..  422 
Cheney  v.  Fisk,  22  How.  Pr.  236.     92 

Chesnut  v.  Pennell,  92  111.  55 175 

Chetwood  v.  Coffin,  30  N.  J.  Eq. 

450 267,292,  294,  358 

Chew  V.  Carlisle,  Bright.  (Pa.)  36.  131 
Chicago  &  A.  Oil  &  Min.  Co.  v. 
United  States  Petroleum 

Co.  57  Pa.  83 10,  12, 

13,  43,  44,  54,  348,  551 
Chicago  &  S.  E.  R.  Co.  v.  Cason, 
133  Ind.  49.. 15,  18,  19, 

72,  354,  604 
V.  St.   Clair  (Ind.)  42  N.  E. 

225 35 

Chicago,  B.  &  Q.  R.   Co.  v.  Bur- 
lington, C.  R.  &  N.  R. 
Co.  34  Fed.  Rep.  481..  504 
Chicago  Deposit  Vault  Co.  v.  Mc- 
Nulta,  153  U.  S.  554,  38 

L.  ed.  819 

93,  202,  224,  388,  508.  627 
Chicago  Fire  Place  Co.  v.  Tait,  58 

111.  App.  293.. 394 

Chicago,  M.  &  St.   P.  R.  Co.  v. 
Keokuk  N.   L.    Packet 

Co.  108  111.  317 

50,  112,  134,  167,  168,  414 
Chicago  Mut.   L.  Indem.  Asso.  v. 
Hunt,  127  111.  257,  2  L. 

R.  A.  549 361 

Chicago  Title  &  T.  Co.  v.  Caldwell, 

58  111.  App.  219. 72 

1).  Smith,  158  111.  417 51,  52 

Child  V.  Brace,  4  Paige,  309 357 

Childress  v.  State  Trust  Co.  (Tex. 

Civ.  App.)  32  S.W.  330  349 
Childs  V.  Clark,  3  Barb.  Ch.  52...  220 

V.  Hurd,  32  W.  Va.  87 272 

Chinnery  v.  Blackman,  3  Dougl. 

390. 282 

V.  Evans,  11  H.  L.  Cas.  115  278 
Chipman  v.  Sabbaton,  7  Paige,  47 

66,  148 


CASES  CITED. 


Jtli 


Chittenden  v.  Brewster,  69  U.  S.  2 

Wall.  191,  17  L.  ed.  839  345 

Chouteau  v.  Allen,  70  Mo.  290 408 

Christian  Jensen  Co.,  lie,  128  N. 
Y.  550... 24,  53,  65,  68, 
74,  125,  128,  147,  153, 
159,  184,  186,  853,  417, 

556,  620 
Cincinnati  Nat.  Bank  v.  Tilden,  50 

K  Y.  S.  R.  306.. 598 

Cincinnati,  S.  &  C.  R.  Co.  v. 
Sloan,  31  Ohio  St.  1... 

70,  71,  364.  471,  558 
Citizens'   Bank    v.    Levee    Steam 
Cotton  Press  Co.  7  La. 

Ann.   286 346 

Citizens'  Sav.  Bank  v.  Person,  98 

Mich.  173 183 

V.  Wilder,  42  X.  Y.  Supp.481  699 
City  &  County  Invest.  Co.,  Re,  25 

Week.  Rep.  342.. 62 

Re,  L.  R.  13  Ch.  Div.  475..  118 
City  Ins.  Co.  v.  Commercial  Bank, 

68111.348 416 

City  Water  Co.  v.  State,  88  Tex. 

600 361,  373,  374 

Clapp  V.  Clapp,  49  Hun,  195 

133.  212,  587 

Clark,  Re.  4  Ben.  88 48,  56,  121 

V.  Bergenthal,  52  Wis.  103. 

238,  251 
V.  Binninger,  75  N.  Y.  344, 

11  Jones  &  S.  126.. 232,  234 
V.  Brockway,  3  Keve.=;,  13, 1 
Abb.  App.  Dec.  851... 

146,  180 
V.  Clark,  58  U.  S.  17  How. 

315,  15L.  ed.  77 250 

V.  Connecticut  Peat  Co.  35 

Conn.  303 50,  134,  414 

V.  Dew,  1  Russ.  &  M.  103.39,  43 

D.  Dyer,  81  Tex.  339 233,  516 

V.  Fisher,  Sauss.  &  S.  684.83,  153 

V.  Gilbert,  10  Daly,  316 258 

«.  Iselin,  88  U.  S.  21  Wall. 

360,22  L.  ed.  568 

219,  447,  448 
V.  John  A.  Logan  Mut.  L.  & 
Bldg.  Asso.  58  111.  App. 

311 291 

V.  Raymond,  84  Iowa.  257.. 

55,  239,  248 
V.  Raymond,  85  Iowa,  737.  549 
v.  Ridgely.  1  Md.  Ch.  70... 

14,  34.  43,  536 
?;.  Thomas,  34  Ohio  St.  46.. 

115,  116 
Clark  &  Eininger,  Re,  4  Ben.  98..  127 
Clarke  v.  Central  R.  &  Bkg.  Co. 
54   Fed.    Rep.    556,    66 
Fed.  Rep.  16. .501,  559,  619 


Clarke  v.  Hawkins,  5  R.  I.  219. 

180,  181 
V.  Hume,  1  Ryan  &  M.  206.  223 
B. 'Thomas,  34  Ohio  St.  46.. 

174,  177,  403 
Clason  V.  Morris,  10  Johns.  540...  383 
Clavering's  Case,  Prec.  Ch.  535...  201 
Clegg  v.  Edmondson,  8  DeG.  M.  & 

G.  787. 322 

V.  Fishwick,  1  Macn.  &  G. 

264. 308,  323 

Clements  v.  Empire  Lumber  Co, 

96  Ga.  319 591 

v.  Hall,  2  DeG.  &  J.  173...  322 
Cleveland  «.  Marine  Bank,  17  Wis. 

545 354 

Cleveland,    C.    &    C.    R.    Co.    v. 

Kearney,  3  Ohio  St.  201  202 
Cleveland.   C.  C.  &  I.  R.  Co.  v. 
Jewett,  37  Ohio  St.  649 
15,  17,  18,  364,  455,  466, 

471,  603 
Clinkscales  v.  Pendleton  Mfg.  Co. 

9  S.  C.  N.  S.  318 

52,  65,  74,  125 
Clough  V.  Thompson.  7  Gratt.  26. 

261,  407 
Clyburn  v.  Reynolds,  31  S.  C.  91. 

34,  35,  603 
Clyde  V.  Richmond  &  D.  R.  Co.  56 

Fed.  Rep.  541.. 95,  123,217 
V.  Richmond  &  D.  R.  Co.  63 

Fed.  Rep.  21 393 

Coates  V.  Cunningham,  80  111.  467 

71.  142.  596 
Coates  Bros.  v.  Wilkes,  93  N.  C. 

376  237   251 

Coburn  v.  Ames,' 52  CalV385ll.73',  126 

V.  Ames,  57  Cal.  201 

22,  557,  558,  598 
Cochrane,  Ex  parte.  Re  Mead,  L. 
R.  20  Eq.  282... 24,  46, 
121,  128,  129,  132,  184,  620 
Cockburn  v.   Raphael,  2   Sim.  & 

Stu.  453 76,  108,531 

Cocks  V.   Varney,   45  N,  J.   Eq. 

72 246 

Coddington  v.  Bispham,  36  N.  J. 

Eq.  574 240,301 

V.  Tappan,  26  N.  J.  Eq.  141  308 
Codrington  v.  Parker,  16  Ves.  Jr. 

469 ...284,  299 

Coe  V.  Columbus,  P.  &  L.  R.  Co. 

10  Ohio  St.  372 

127,  372,  495 
V.  New  Jersey  M.  R.  Co.  27 

N.  J.  Eq.  37,  30  N.  J. 

Eq.  21 .• 117, 

221,  224,  393,  492.  497,  524 
v.  New  Jersey  M.  R.  Co.  31 

N.  J.  Eq.  105 477,  485 


xlii 


CASES  CITED. 


Coeur  D'Alene  Consol.  &  Min.  Co. 
V.  Miners'  Union  of 
Wardens,  51  Fed.  Rep. 
26U,  19  L.  R.  A.  882.. .  131 

Cofer  T.  Echerson,  6  Iowa,  502 

32.  42-44 
Coffin  V.  Ransdell,  110  Ind.  417.. 

175,  383 

Cohen,  Be.  5  Cal.  ,594 64,  122 

V.  Meyers,  42  Ga.  46 

12.  62,  71,  239 

«.  Morris,  73  Ga.  313 239 

Cole  V.    Cunningham,   133   U.    S. 

107.  33  L.  ed.  538.-113,  170 
V.  Oil  Well  Supply  Co.  57 

Fed.  Rep.  534 123 

V.  O'Neill,  3  Md.  Ch.  174...     43 
Coleman   v.   Glanville,   18   Graut. 

Ch.  (Ont.)42 193 

V.  Hoff.  45  N.  J.  L.  7 258 

v.  White,  14  Wis.  700 354 

Colemore  v.  North,  21  Week.  Rep. 

43.  42  L.  J.  Ch.  4 76 

CoUahan  v.  Reardoa,  Sauss.  &  S. 

682. 153 

Collier  «.  Sapp.  49  Ga.  93 548 

Collins  V.  Barker,  L.  R.  1  Ch.  Div. 

578 313,529 

V.  Gooch,  97  N.  C.  186 391 

V.  Stewart,  2  App.  Div.  271.  533 
Colorado  Nat.  Bank  v.   Scott,   19 

Abb.  N.   C.  348 374 

Colt  B.Brown,  12  Gray,  233 

138.  180,  384,  440 
Columbia  Book  Co.  v.  DeGolyer, 
115  Mass.  67..  122,  190, 
372,  373,  416,  417,  621,  022 
Columbian  Ins.  Co.,  Be,  30  Hun, 

342.. 234 

Colvin's  Estate,  Be,  3  Md.  Ch.  278 

22,  82,  119,  142,  527,  547,  561 
Colwell  V.  Garfield  Nat.  Bank,  119 

N.  Y.  408 72 

Combs  t).  Smith,  78  Mo.  32 

192,  195,  203,  209 

Comer  v.  Belden,  8  Daly.  257 567 

V.  Bray,  83  Ala.  217 

67,  68,  163,  181,  399 
Commercial   &  F.  Nat.    Bank  v. 

Davis,  115  N.  C.  226...  392 
Commercial  &  S.  Bank  o.  Corbett, 

5  Sawy.  172.. .267,  288,  355 
Commercial  Nat.    Bank  v.    Arm- 
stronc.  148  U.  8.  50,  37 
L.  edr363,  39  Fed.  Rep. 

684 392,  432 

«.  Burch,  141  111.  519 

66,  85,  261,  408,  616 
V.  Motherwell  Iron  &  S.  Co. 
95  Tenn.  172,  29  L.  R. 
A.    164 112,  414 


Commissioners  v.   Lockhart,  3  Ir. 

Eq.   Re,p.  515 42,  44 

Com.  1).  Eacle  F.  Ins.  Co.  14  Allen, 

344.. .203,206 

V.  Franklin  Ins.  Co.  115 
Mass.  278 -.21,  203,  204, 
221,  223,  373,  375,  387, 

393,  396,  493,  496,  507 
V.  Gould,  118  Mass.  300.. 78,  79 
V.  Hide  &  L.   Ins.   Co.  119 

Mass.  155 122 

«).  Hunt,  4  Met.  Ill 131 

«.  Lanca.ster  Sav.  Bank,  123 

Mass.  493 388 

V.  Massachusetts     Mut.     F. 

Ins.  Co.  112  Mass.  116.  390 
«.  Order  of  Vesta,    156  Fa. 

531.... 134,  346,  356,  358 
V.  Phcenix  Bank,  11  Met.  129  180 
V.  Ruuk,  26  Pa.  235.192,  195,  229 
T.  Shoe&  L.  Dealers'  F.  Ins. 

Co.  112  Mass.  131..  180,  618 
«.  Young,  11  Fliila.  606.121,  128 
Commonwealth  F.  Ins.  Co.,  Be,  32 

Hun,  78 203,214. 

215,  394,  573,  583 
Comstock     v.     Frederickson,     51 

Minn.  350 111,  167 

Cone  V.  Combs,  18  Fed.  Rep.  576. 

276,  281,  287,  290,  291,  294 
V.  Paute,12Heisk.  506.11.70,  349 
Coney,  Be,  L.  R.  29  Ch.  Div.  993.  545 
V.  Bennett,  54  L.  J.  Ch.  1130 

531,  541 
Congden  v  Lee,  3  Edw,  Ch.  304. 

45,  238,  241 
Conger  «.  Sands,  19  How.  Pr.  8.75,  257 

Conkling  v.  Butler,  4  Biss.  22 

48,  56,  345,  593 
Conley  v.  Deere,  11  Lea,  274.. .25,  612 
Connah  v.  Sedgwick,  1  Barb.  210. 

242.  249 
Connelly  ».  Dickson,  76  Ind.  440.. 

26,  34,  35,  63,  298,  603 
Conner  v.  Belden,  8  Daly,  257.31.3,  314 
Connor  v.  Allen,  Harr.  Ch.  (Mich.) 

371 317 

Conover  v.  Grover,  31  N.  J.  Eq. 

539 296 

Conro  V.  Gray,  4  How.  Pr.  166.-. 

347,  355,  359,  362,  465 
T.  Port  Henry  Iron  Co.  12 

Barb.  27 240,362 

Conroy«.  Woods,  13  Cal.  626 246 

Consolidated    Tank    Line   Co.    v. 
Kansas  City  Varnish  Co. 

43  Fed.  Rep.  204 

362.  363,  367 
Const.  V.  Harris,  Turn.  &  R.  496.. 
306,   307,  315,  322,  323. 

325,  326,  332,  340 


CASES  CITED. 


xliii 


Continental  Trust  Co,  v.  Toledo, 
St.  L.  &  K.  C.  R.  Co. 

59   Fed.   Rt'p.  514 

217.  502,  619 
Converse  v.  Dimock,  22  Fed.  Rep. 

573-. 344 

Conway,  Ex  parte,  48  Fed.  Rep.  78  124 
V.  Halsey,  44  N.  J.  L.  402..  450 
Conwell  V.  Lawrence,  46  Kan.  83. 

183,  185 
Conyers  ®.  Crosbie,  6  Ir.  Eq.  657. 

153.  195.  219 
Cook  D.  Citicens'  Nat.  Bank,  73 

Ind.  256 85,  124,616 

V.  Cole,  55  Iowa,  70.72,  180,  230 

V.  Cook,  56  Wis.  195 172 

V.  Detroit  &  M.  R.  Co.  45 
Mich.  453... 15,  17.  18, 

321,  455,  466,  603 
V.  Johnson,  12  N.  J.  Eq.  51  247 
D.  Tullis,  85  U.  S.  18  Wall. 

332,  21  L.  ed.  933 

..219,  447 

«J.  Van  Horn,  81  Wis.  291..  413 
Cook  &  Gleason,  i?^.  3  Biss.  119..  127 
Cook  County  Nat.  Bank  v.  United 
States,  107  U.S.  445,27 

L.  ed.  537 447 

Cooke  v.  Gwyn,  3  Atk.  690 34,  298 

r.  Orange,  48  Conn.  401... 

112.  113,  122,  167 
Cookes  V.  Cookes.  2  DeG.  J.  &  S. 

526 12,  60,  62 

Coolev  v.  Essex  Chosen  Freehold- 
ers, 27  N.  J.L.  415....  210 
Cooney  v.  Cooney,  65  Barb.  524.. 
65,   66,    139,    239.    256, 

257,  261,  608 
Coope  V.  Bowles,  42  Barb.  87.  28 
How.  Pr.  10. ..92,  114, 
138,  154,  156,   157.  159, 

383, 389.  396,  611 
Cooper  V.  Berney  Nat.  Bank,  99 

Ala.  119. 303 

Copeland  v.  Johnson  Mfg.  Co.  47 

Hun.  235 359 

V.  Stephens,  1  Barn  &  Aid, 

593.. 223,  496 

Copper  Hill  Min.  Co.  v.  Spencer, 

25Cal.  11 599 

Corbet  «.  Johnson,  1  Brock.  77...     64 
Corhelt  v.  Woodward,  5  Sawy.  403  360 
Cor  bin  v.  Berry,  83  N.  C.  27...  55,  68 
V.  De  la  Vergne,  44  N.  J. 

L.  70 87 

Corcoran  v.  Doll,  35  Cal.  476 39 

Corey  «.  Greene,  51  Me.  114 244 

V.  LoTitr,  43  How.  Pr.  497, 
12  Abb.  Pr.  N.  S.  427.. 
14,21,22,  32,  45,  60,81, 

89,  90,  205,  553 


Cornell  v.  Radway,  22  Wis.  260..  247 
Corn  Exch.  Bank  v.  Blye,  101  N. 

Y.  303 ..142.  429,430 

V.  Rockwell,  58  111.  App.  506  414 
Corning  v.  White,  2  Paige,  567... 

241,  256,  376 
Corran.  Ex  parte  (Cal.)  41  Pac.  464  133 
Corser  v.  Russell,  20  Abb.  N.  C. 

316 233 

Cortleyeu  v.  Hathaway,  11  N.  J. 

Eq.  43 267. 

269,  278,  279,  292,  294,  297 

Corwith?).  Culver,  69  111.  502 

175,  178,  385,  405 
Coughron  v.  Swift,  18  111.  414.14,  32,  45 
Covell  V.  Heyman.  Ill  U.  S.  176. 

28  L.  ed,390 122,  123 

Covington  Drawbridge  Co.  v.  Shep- 
herd, 62  U.  S.  21  How. 

112,  16  L.  ed.  38 

40.  157,  353 
Cowdrey  v.  Galveston,  H.  &  H.  R. 
Co.  1  Woods,  331.. 85, 
86,  94,  95.  484,  587,  593,  594 
<0.  Galveston,  H.  &  H.  R.  Co. 
93U.  S.3o2,23L.ed.951 
86,93,190,209,  210,212, 

395,  508,  516,  626,  631 
Cowles  v.  Andrews,  39  Ala.  130..  185 

CoxD.  Peters,  13  N.  J.  Eq.  39 

42,  309,  325,  333 

V.  Volkert,  86  Mo.  505 

51,    66,    119,    155,    172, 

180,  181,  337,  383,  384 

Craft  V.  Bloom,  59  Miss.  69 250 

Cragiew.  Hadley,  99  N.  Y.  131.431,  450 
V.  Smith,  14  Abb.  N.  C.  409  450 
Craighead  v.  Wilson,  59  U.  S.  18 

How.  199,  15  L.  ed.  332    71 
Crandall  v.  Lincoln,  52  Conn.  73.. 

114.  171,  237 
Crane©.  Ford,  Hopk.  Ch.  114.. 98,  340 
v.  McCoy,  1  Bond,  422.... 

10.  57,  123 
Crapo  V.  Kelly,  83  U.  S.  16  Wall. 

610,  21  L.  ed.  430 

50,  111,  134,  414 
Crawford  ®.    Fickey  (W.  Va.)  2 
Am.  ife  Enij.  Corp.  Cas. 
N.  S.  417,  23  S.  E.  662. 

215,  231,  394,  397 

«.  Ross,  39  Ga.  44.. 13,  563 

V.  Spurling,  56  Ga.  611.12,  62,  71 
Crawshay  v.  Maule,  1  Swanst.  507 

306,  327 
CraycrofiE  v.  Morehead,  67  N.  C. 

422 13,  544 

Crease®.  Babcock,  10  Met.  532.178,  385 
Credit  Co.  «.  Arkansas  C.  R.  Co. 

15  Fed.  Rep.  46 86 

Cremen  v.  Hawkes,  8  Ir,  Eq.  153    45 


XllV 


CASES  CITED. 


Creuze  v.  London,  2  Bro.   C.  C. 

253 -.56,  62 

Crews    V.    Biircham,    66   U.    S.  1 

Black,  352,  17  L.  ed.  91  178 

Crine  v.  Davis,  68  Ga.  138 49,  151 

Crippen  v.  Hudson,  13  N.  Y.  161.  244 
V.  Morrison.  13  Mich.  23...  293 
Crittenden  v.  Coleman,  70  Ga.  295 

239,  319 
Crocker  v.  Marine  Nat.  Bank,  101 

]Mass.  240 435 

Crofts  ».  Okitield,  3  Swanst.  278, 

note 186 

Crombie  v.  Order  of  Solon,  157  Pa. 

588 .-     34 

Cronin  v.  McCarthy,  Flan.  &  K.  49  155 
Croustown  v.  Johnston,  3  Ves.  Jr. 

170,  5  Ves.  Jr.  277 147 

Crook  V.  Findlev,  60  How.  Pr.  375  562 
V.  Rindskopf,  105  N.  Y.  476  250 

Croone  v.  Bivins,  2  Head,  339 247 

Crosby  v.  Buchanan,  90  U.  S.  23 

Wall.  420,  23  L.  ed.  138     71 
Croton  Ins.  Co.,  Be,  3  Barb.  Ch. 

642 88.  382,  623 

Crow  V.  Red  River  County  Bank, 

52  Tex.  362. 296 

V.  Wood,  13  Beav.  271.53,  63,  607 
Crowder  v.  Moone,  52  Ala.  220... 

15,  17,  36,  603 

Crown  V.  Brainard,  57  Vt.  625 449 

Cubbedgei\  Adams,  42  Ga.  124..  245 
Culver  V.  Third  Nat.  Bank.  64  111. 

528..  175,  178,  385,  405,  449 
Cumberland  Bank  v.  Haun,  18  N. 

J.  L.  222 384 

Cumberland  Coal  &  I.  Co.  v.  Par- 
ish, 42  Md.  598 408 

V.  Sherman,  30  Barb.  553..  359 
Camming  v.    Edgerton,    9  Bosw. 

684 376 

Cummings  v.  Cummings,  75  Cal. 

434.. 302,  303 

Cumpston  v.  McNair,  1  Wend.  457.  315 
Cupp».  Campbell,  103  Ind.  213..  302 
Currau  v.   Arkansas,   56  U.  S.  15 
How.  306,  14  L.  ed.  706 

360,  361,  428 
V.  Craig,  22  Fed.  Rep.  101.. 

189,  194,  202,  230,  231,  395 
Currey  v.  Spencer,  5  Inters.  Com. 

Rep.66,72N.Y.S.R.108  185 
Currier  v.  New  York,  W.  S.  &  B. 

R.  Co.  35  Hun,  355....  359 

Curtis  V.  Leavitt,  15  N.  Y.  9 

114,  149, 
157,  171,  375,  376,  410,  610 
V.  Leavitt,  1  Abb.  Pr.  274.. 

21,  60,  82,  83 
«.  Mcllhenny,  5  Jones,  Eq. 

290 92,  611 


Curtiss  V.  Brown,  29  111.  229 615 

Cutting  V.  Damerel,  88  N.  Y.  410. 

177,  376.  445 
V.  Florida  R.  &  Nav.  Co.  43 

Fed.  Rep.  737.120,  203,  233 
Cuykendall  v.  Corning,  88  N.  Y. 

129 177.  385 

Cuyler  v.  Moreland,   6  Paige,   273 

118,  244 


D. 


Dacie©.  John,  McClel.  575. ..156,  160 
Daggen».  Collins,  69  Ala.  324...   127 

Daggett  «.  Davis,  53  Mich.  35 622 

Dale  V.  Cooke,  4  Johns.  Ch.  11...   181 
V.  Kent,  58  Ind.  584.70,  332.  603 
Dallard  v.  Taylor,  1  Jones  &  S.  496  251 
Dalmer  v.  Dashwood,  2  Cox,  Ch. 

378 300,  303 

Dalton  V.   Atlantic,   M.  &  O.   R. 

Co.  4  Hughes,  180 213 

Dalyell  v.  Tyrer,  1  El.   Bl.  &  El. 

906 211 

Dambman  v.  Empire  Mill,  12  Barb. 

341 352 

Dane  v.  Young,  61  Me.  160 157 

Daniel ».  Wharton,  90  Va.  584...  394 
Daniel  Kaine,  The,  35  Fed.  Rep. 

788 123 

Dann  Mfg.  Co.  v.  Parkhurst,  125 

Ind.  317 67 

Danville  v.  Ashbrooke,  3  Russ.  99, 

note  c 462 

Darby  v.  Gilligan,  37  W.  Va.  59.. 

87,  394 
Darcin  v.  Wells,  61  How.  Pr.  259 

20,  550,  604 
Darusraont  v.  Patton,  4  Lea,  597..  551 
Davenport  v.  Alabama  &  C.  R.  Co. 

2  Woods,  519,  579 

202,  209,  211,  212.  229,  395 
«.    Buffalo    City   Bank,     9 

Paige,  15 374,  399 

V.  Davenport,  7  Hare,  217..     13 

V.  Kelly,  42  N.  Y.  193 

49,  126,   151,  251.  338 
V.  McChesney,  86  N.  Y.  242  259 
Davies  v.  Cracroft,  14  Ves.  Jr.  143 

2u2,  234 
V.  Lathrop,  20  Blatchf.  397.  125 
Davis  V.  Alabama  &  F.  R.  Co.  1 

Woods,  661 48,  56,  121 

V.  Amer,  3Drew.  64 317,330 

V.  Barrett,  13  L.  J.  Ch.  N. 

S.  304 295 

V.  Bonney,  89  Va.  755 49 

V.  Chapman.  83  Va.  67 47 

V.  Duncan,  19  Fed.  Rep.  477 
195,  213, 
229.  395.  396,  516,  518.  630 
Davis  V.  Dale,  150  111.  239.... 294,  562 


CASES  CITED. 


xlv 


Davis  V.  Duke  of  Marlborough,  2 

Swanst.  118, 4  21, 

279,  300,  836,  562 
V.  Elmira  Sav.  Bank,  161  U. 

S.  275,  40  L.  ed.  700...  446 
T.  Fiaeslaff  Silver  Min.  Co. 

2  Utah,  91, 26,  36.  603 

V.  Gray,  83  U. S.  16  Wall.  203, 

21  L.  ed.  447, .21, 

82,  129,    177,  183.  207, 
344,  399,  401,  503,  560,  615 

V.  Grove,  2  Robt.  134 307 

«,  Ladoga  Creamery  Co.  128 

Ind.  222 92,  135, 

153,  159,  183,  383,  384,  399 
V.  Memphis  City  R.  Co.  22 

Fed.  Rep.  883 359,  867 

«.  Michelbacher  (Wis.)  31  N. 

W.  160 191 

V.  Newcomb,  72  Ind.  413..  298 
V.  Parcher,  82  Wis.  495.390,  391 

V.  Reaves,  2  Lea,  649. 44 

«.  Shearer,  90  Wis.  250 

67,  356,  390,  415 

c.  Snead,  33  Gratt,  705 

153,  159,  184,  383,  399 
V.  Stevens,  17  Blatchf.  259.  444 
V.  Stover,  58  N.  J.  L.  473..  180 
V.  Stover,  16  Abb.  Pr.  N.  S. 

225 ..216,  626 

V.  Talbot,  137  Ind.  235 399 

V.  Taylor,  86  Ga.  506 552 

V.  United  States  Electric  P. 
&L.  Co.  77  Md.  35.... 

10,  84,  346 

V.  Weed,  44  Conn.  569 437 

Dawson  v.  Raynes,  2    Russ.   Ch. 

466.. 79 

«.  Sims,  14  Or.  561 246 

Dawson  Bank  v.  Harris,  84  N.  C. 

206. 245 

Dawson   Mfg.    Co.    v.   Brunswick 
&  A.  R.  Co.  51  Ga.  136. 

397   507 
Day,  Re,  34  Wis.  638.. 24,  46,  121^  631 
V.  Brownrigg,  L.  R.  10  Ch. 

Div.  294 131 

v.  Postal  Teleg.  Co.  66  Md. 

354.... 21,  25,  112,  127, 

132,  165,  169,  183.  393.  412 

•0.  Washburn,   65  U.    S.    24 

How.  352,  16  L.  ed.  712 

238.  244 
Dayton  v.  Rorst,  7  Bosw.  115.  31 
N.Y.435..17,  168,  174. 

175.  177,  403 
».  Connah,  18  How.  Pr.  326 

92,  159 
W.Wilkes, 17  How.  Pr.  510.97,  340 

Dean  v.  Biggs,  25  Hun,  122 403 

V.  Thatcher,  32  N.  J.  L.  470.     85 


Deane  v.  Caldwell,  127  Mass.  242.  894 
Dease  v.  O'Reilly,  2  Connor,  &  L. 

441  587 

Decker*.  Gardner,  124  N.  Y.  334, 

11  L.  R.  A.  480,  Rev'g 

33N.  Y.  S.  R.  541.. 26, 

141,  144,  192,  197,  204. 

456,  514 
Deelan,  Re,  2  Connor  &  L.  232...  83 
De  Fries  v.  Creed,  34  L.  J.  Ch.  N. 

S.  607.. -.53.  65,  73,  74,  126 
Degener  v.  Stiles,  6  N.  Y.  Supp.  474  469 
De  Graffenried  «.  Brunswick  &  A. 

R.  Co.  57  Ga.  22 

129.  183,  417 

De  Groot  v.  Jay,  30  Barb.  483 

128,  129,  184,  613 

Dehon  v.  Foster,  4  Allen,  545 147 

Delaney  «.Tipton,  8  Hay w.  (Tenn.) 

14.. 532 

Delano  d.  Butler,  118  U.  S.  634,  30 

L.  ed.  260 443,444 

V.  Case,  17  111.  App.  531...  450 
De  La  Vergne  Refrigerating  Mach. 

Co.  V.  Palmetto   Brew. 

Co.  72  Fed.  Rep.  579..  58 
Delaware,  L.  &  W.  R.  Co.  v.  Erie 

R,  Co.  21  N.  J.Eq.  299. 

7,  457,  471 
Demain  v.  Cassidy,  55  Minn.  320. 

295,  212 
Deming  v.  Colt,  3  Sandf.  Ch.  284.  321 
■c.  New  York  Marble  Co.  12 

Abb.  Pr.  66_-65,  74,  121,  125 
De  Mott  V.  Starkey,  3  Barb.  Ch. 

403... 157,  260 

Denike  v.  New  York  &  R.  Lime 

&C.  Co.  80N.Y.  599..11,  12 

Denison,  Re,  114N.  Y.  621. 101 

Deniston  v.  Chicago.  A.  &  St.  L. 

R.  Co.  4  Biss.  414 485 

Denny  v.  Bennett,  128  U.  S.  503, 

32  L.  ed.  496 123,  124 

Derby  v.  Athol,  1  Ves.  Sr.  203  ...  147 
Des  Moines  Gas  Co.  v.  West,  44 

Iowa,  23 270,  358,  464 

De  Taset  v.  Bordieu,  2  Bro.  C.  C. 

272.  note. 325 

Detroit  First  Nat.  Bank  v.  Barnum 

Wire  &   I.  Works.    60 

Mich.  487... 21,  29,  49. 

70,  376.  377,  560 
Devendorf  v.  Beardsley,  23  Barb. 

656 180 

«.  Dickinson,  21  How.  Pr. 

275 4,   21-23,  60, 

83.  118,  200,  219 
De  Visser  v.  Blackstone,  6  Blatchf. 

235... 25,  128 

Devlin  v.  Hope,  16  Abb.  Pr.314.335,  343 
V.  New  York,  4  Misc.  106..  142 


xlvi 


CASES  CITED. 


Devoe  «.  Ithaca  &  O.    R.    Co.   5 

Paige,  521 15.  16,  371 

De  Walt  v.  Kinard,  19  S.  C.  286..     43 

Dewey  v.  Eckert,  02  111.  218 242 

De  Wiuton  v.   Brecon,   28  Beav. 

200 121.  132,  133 

Diamond  State  Iron  Co.  v.  San  An- 
tonio &  A.   P.  R.  Co. 

(Tex.  Civ.  App.)  33  S. 

W.  9S7. .498,  517,  520 

Dick  V.  Bailey,  2  La.  Ann.  974... 

50,  112,  134,  168 
».  Laird,4Crancb.C.  C.G67-  319 
V.   Striithers,  35  Fed.  Rep. 

103 ..161,  400 

Dickerson   v.  Cass   County  Bank 

(Iowa)  64  N.  W.  395... 

422,  559,  566 
Dickey  v.  McCaul,  14  Ont.  App. 

166.. 160 

Dickinson  v.  Legare,  1   Desauss. 

Eq.  537...- 316 

v.  Seaver,  44  Mich.  624 409 

Dilling  V.  Foster,  21  S.  C.  334.. 73,  262 
Dillingham  v.  Russell,  73  Tex.  47. 

3  L.  R.  A.  634 187,  521 

V.  Scales  (Tex.  Civ.  App.)  24 

S.W.  975 211 

Dillon  V.  Lady  Mount  Cashell,  4 

Bro.  P.  C.  306 529,  546 

Dixon  V.  Rutherford,  26  Ga.  149..  99 
Doane  v.  Corbin,  44  111.  App.  463.  596 
Dobbin  v.  Adams,  8  Ir.  Eq.  157  ..  43 
Dobson  V.  Simonton,  78  IS.  C.  63.  465 

Dockray  v.  Mason,  48  Me.  178 244 

Dodd  V.  Wilkinson,  41  N.  J.  Eq. 

566.. 88 

Dodge   V.    Pyrolusite    Manganese 

Co.  69  Ga.  660.239,  248,  354 
®.  Woolsey,  59  U.  S.  18  How. 

331,  15  L.  ed.  401 351 

Doe  ®.  Northwest  Coal  &  T.  Co.  64 

Fed.  Rep.  928. 465 

Doe,  Grimsby,  v.  Ball,  11  Mees.  & 

W.  531 92,  407 

Dollard  v.  Taylor,  1  Jones  &  S. 

490 70,  256 

Dollins  V.  Lindsey,  89  Ala.  217..-  303 
Dolphin  V.  Steell,  2 Lack.  L.  News, 

111 324 

Donald  v.  Ross-Lewin,  29  Hun.  87.  115 
Donaldson  v.  Farwell,  93  U.  S.  633. 

23  L.  ed.  994 319 

Donlon  &  M.  Mfg.  Co.  v.  Cannella, 

89  Hun,  21.. 293 

Donnell  v.  While,  11  H.  L.  Cas. 

570 47 

Donnelly  r.  West,  24  Hun,  564...  172 
Dooliltle,  lie.  23  Fed.  Rep.  545.131.  132 
V.  Bridgman,  1  G.  Greene, 

265 246 


Dormueil  w.Ward,  108  111.  216.244,  249^ 

Dorn  V.  Crank,  96  Cal.  383 524 

Dorr  «.  Noxon,  5  How.  Pr.  29 114 

Dorrance  v.  Jones,  27  Ala.  630  ...  506 
Dorris  v.  French,  4  Hun,  292.. 175,  403 
Dorsey  v.  Morrison,  48  Md.  401...   162 

v.  Sibert,93  Ala.  312 118 

Dougherty  v.  Jones,  37  Ga.  348...  558 
V.  McDougald.  10  Ga.  121..  531 
Douglass  V.  Cline,  12  Bush,  608.. 

267,  301,  476-478 
V.  Rowland,  24  Wend.  35..     78 
Doupe  V.  Stewart,  13  Grant  Ch. 

(Ont.)  637 32a 

Dow  v.  Mempliis  &  L.  R.  R.  Co. 

20  Fed.  Rep.  260..  125, 

271-273,  282,  358,  373, 

391,  458,  461,  464,  476,  493 

Dowd  V.    Stephenson,  105  N.  C. 

467.. 428 

Dowell«.  Applegate,  153  U.  S.  337, 

38  L.  ed.  403... 357 

Dowling  V.  Hudson,  14  Beav.  423.     17 

Downs  V.  Allen,  10  Lea,  652 

203,  214,  321 
V.  Hammond,  47  Ind.  131.. 

115,  391,  624 
Downshire  v.  Tyrell,  Haves,  354.29,  61 
Dows  V.  Congdon,  28  N.' Y.  123..  102 

Doyle  V.  Peckham,  9  R.  L  21 407 

Drake  v.  Thyng,  37  Ark.  228 572 

Drever  v.  Maudesley,  13  L.  J.  Ch. 

N.  S.  433 201 

Drewry  v.  Barnes,  3  Russ.  106.-32,  46a 
V.  Darwin,  34  L.  J.  Ch.  N.  S. 

121. 108 

Dreyspring  ■».  Loed  (Ala.)  21  So.  73 
Dronfield  S.  Coal  Co.,  Re,  L.  R.  33 

Ch.  Div.  511 586 

Drury  v.  Milwaukee  &  S.  R.  Co. 
74  U.  S.  7  Wall.  299.  19 

L.  ed.  40 .360,  407 

V.  Roberts,  3  Md.  Ch.  157.. 

307,  313,  315 
Duchess  of  Norfolk's  Case,  cited 
in  Shelford  on  Lunacy, 

p.  210 547 

Duckworth,  i?e,  L.  R.  3  Ch.  App. 

Cas.  577 ...114,  157 

V.  Trallord,  18  Ves.  Jr.  283 

17,  33,  545 
Dudgeon  ■».   Bowen,  Hayes  &  J. 

717 .203,219 

Duerson  v.  Alsop,  27  Gratt.  229..  240 
Duflfield^.  Elwes,  11  Beav.  590...  105 
Duflfy  V.   Duncan,  32   Barb.   593, 

Aff'd  35N.  Y.  191 215 

Dagger  v.  Collins,  69  Ala.  324 

25,  121.  154,  186,  417 
Duncan  v.  Campau,  15  Mich.  415. 

71,  550 


CASES  CITED. 


xl^ 


Duncan  v.  Findlater,  6  Clark  &  F. 

894. 211 

V.  Mobile    &    O.    R.    Co.    3 

Woods,  542 485 

Dunham  v.  Byrnes,  36  Minn.  lOfi. 

342,  243.  251,  260 
V.  Cincinnati,  C.  •&  C.  R.  Co. 
68  U.  S.  1  Wall.  2-)4,  17 

L.  ed.584 485 

V.  Jarvis,  8  Barb.  88 306 

Dunlap  V.  Hedges,  35  W.  Va.  287 

42,  289,  394 
Dunlevy  v.  Tallmadge,  32  N.  Y. 

457 244,248 

Dunlop  v.  Patei-son  F.  Ins.  Co.  12 
Hiin,627,AfE'd74N.Y. 

145 410 

Dunn,  Ex  parte.  8  S.  C.  207 25,  49 

V.  McNaught,  38  Ga.  179... 

307,  331 
Dunn  Mfg.  Co.  v.  Parkhurst,  125 

Ind.  317 101 

Dunphy   v.    Traveller  Newspaper 

Asso.  146  Mass.  495 351 

Durand  v.  Curtis,  57  N.  Y.  7 220 

?;.  Gray,  124  111.  9 

239,  344,  248,  253 
DurantD,  Crowell,  97  N.  C.  367.. 

43,  276,  281,  389 
V.  Washington   County   Su- 
pers. 1  Woolw.  377 207 

Durbin  v.  Barber,  14  Ohio,  311...  312 
Durkin  v.  Sharp,  88  N.  Y.  225...  209 
Dulton  V.  Thomas,  97  Mich.  93...  34 
Duval  V.  Marshall,  30  Ark,  230...  539 
Dyer  ».  Power,  39  N.  Y.  S.  R.  186 

113,  167 
E. 

EadsD.  Ma.son,  16  111.  App.  545..  346 
Eagle  Iron  Works,   Be,   8  Paige, 

385 55,56,  60-62, 

73,  74,  141,  608 

Earnest.  Doris,  103  111.  350 

178,  385,  405 
Earl  of  Fingal  v.  Blake,  3  Moll.  50    44 
East  &  West  Texas  L.  Co.  v.  Will- 
iams, 71  Tex.  444 71 

Eastern  &  M.  R.  Co.,  Ee,  45  Am. 
&  Eng.  R.  Cas.  71,  L.  R. 

45  Ch.  Div.  367 483,  579 

Eastern  Bank  v.  Capron,  33  Conn. 

639 .876,  610 

Eastern  Nat.  Bank  ».  Vermont  Nat. 

Bank,  33  Fed.  Rep.  186  433 
Easton  v.  Houston  &  T.  C.  R.  Co. 

38  Fed.  Rep.  12 

203.  321,  222 
V.  Houston  &  T.  C.  R.  Co. 

38  Fed.  Rep.  784 

106,  498.  506 


Easton  v.  Houston  &  T.  C.  R.  Co. 

40  Fed.  Rep.  189 597 

East  Tennessee,  V.  &  G.  R.  Co.  v. 
Atlanta  &  F.  R.  Co.  49 
Fed.  Rep.  608,  15  L.  R. 

A.  109 48.56,  57, 

123,  124,  344 
V.  Southern   Teleg.  Co.  112 

U.  S.  806,  28  L.  ed.  746  357 

Eaton  V.  Smith,  2  Beav.  336 276 

Eaton  &  H.  R.  Co.  v.  Varnum,  10 

Ohio  St.  622 12.  71 

Eddy,  Re,  15  R.  I.  474.. 569 

V.  Laf;iyette,   49  Fed.    Rep. 

807 521 

V.  Powell,  49  Fed.  Rep.  814  395 

Edee  v.  Strunk,  35  Neb.  307 

200,  405,  411,  415 
Edgellv.  Haywood,  3  Atk.  352...  356 
Edraeston  v.  Lyde.  1  Paige,  637...  244 
Edmunds  v.   Bird,    1    Ves.  &  B. 

88-.. 547 

Edrington  v.  Pridhara,  65  Tex.  613 

67,  85, 139 
Edwards  v.  Edwards,  L.  R.  2  Ch. 

Div.  291 

53,  65,  73,  74,  125,  297 

v.  Norton,  55  Tex.  405 

24,  46,  121,  125,  127,  417 
V.  Standard    Rolling    Stock 
Syndicate,  1  Ch.  574...  358 
Egan    V.    Rooney,  38    How.    Pr. 

121.. 91 

Egberts  v.  Wood,  3  Paige,  517 316 

Eisemann  v.  Thiel,  1  Cin.  Sup.  Ct. 

188. 48 

E.  L.  Cain,  The,  45  Fed.  Rep.  309  124 
Elderkin  ».  Peterson,  8  Wash.  674 

67,85,115.116.123,  177,403 
Eldred  v.  Hall.  9  Paige,  640- ..141,  148 
Elgin  Lumber  Co.  v.  Laugman,  23 

111.  App.  250 564 

Elkhart  Car  Works  Co,  v.  Ellis, 

113  Ind.  215 

125,  153,  183,  189,  418.  613 
Ellershank  ®.  Russell,  6  Australian 

L.  T.  (Vict.)  140 44 

Ellett  V.  Newman,  92  N.  C.  519... 

13,  41,  544,  549 
Ellicott  V.  United  States  Ins.  Co.  7 

Gill,  307 49,  373 

«.  Warford,  4  Md.  80 

22,  35,  60,  142,  564 
Elliott    V.    Trahern,    35    W.    Va. 

634 155 

Ellis  V.  Boston,  H.  &  E.  R.  Co.  107 

Mass.  1 24,  49,  103. 

136,  141,  147,  325,  276, 

373,  396,  478,  489,  507 
V.  Davis,  109  U.  S.  485.  27  . 
L.  ed.  1006 122 


jilviii 


CASES  CITED. 


Ellis  V.  Little.  27  Kan.  707 98, 

101.  42G-4-28,  430 
V.  Vernon,  4  Tex.  Civ.  App. 

66 220 

T.  Vernon  Ice,  L.  &  W.  Co. 

86  Tex.  109.. 24,  25.46, 

48,  9."),  96,  125.  127,  184,  417 

V.  AVuid,  137  111.  509 367 

Elmira  Iron  &  S.  Roll.  Mill  Co.  v. 

Erie  R.  Co.  26  N.J.  Eq. 

284. ...104,225 

Elmira  Sav.  Bank  v.  Davis,  142  N. 

Y.  590,  25  L.  R.  A.  546, 

73  Hun,  357 447 

Elwood  V.  First  Nat.  Bank,  41  Kan. 

475 43,  421,  609 

Emack  v.  Kane,  34  Fed.  Rep.  46_. 

130,  131 

Embree  v.  Shideler,  36  Ind.  423.. 

115,  158,  369 
Enieric  v.  Alvarada,  64  Cal.  529.12,  71 
Emerson  v.  Partridge,  27  Vt.  8...  500 
Emerson  &  Wall's  Appeal,  95  Pa. 

250.. .43,  366 

Emmons    «.    Garnett,   7  Mackey, 

52.. 12.  71 

Empire  City  Bank,  Ee,  10  How. 

Pr.  498 60,  347 

England  v.  Clark,  5  111.  486 100 

En^le  V.  Bonneau,  2  Sandf.  279  ..  252 
Eiipright  1).  Nickerson,  78  Mo.  482  406 
Ericsson  v.  Brown,  38  Barb.  390.  481 
Erie  R.  Co.  v.  Delaware,  L.  &  W. 

R.  Co.  21  N.  J.  Eq.  282  469 
T.  Ramsey,  45  N.  Y.  637...  232 
Ervin  v.  Oregon  R.  &  Nav.  Co.  27 

Fed.  Rep.  625 351 

Erwin  v.  Davenport,  9  Heisk.  44.. 

201,  211,  229,  395,  510,  515 
Eskridge  v.  Rush  worth,   3  Colo. 

App.  562 380 

Eslava®.  Crampton,  61  Ala.  507.. 

267,  269,  277 
Espuella  Land  &  C.  Co.  v.  Bindle 

(Tex.  Civ.  App.)  32  S. 

W.  582 591 

Estabrook  «.  Messersmith,  18  Wis. 

545 ...406,  408 

Esterland  v.  Dye,  56  Ga.  284 98 

E.-,tes®.  Wilcox,  67  N.  Y.  264 248 

Estwick   V.   Conniugsby,  1    Vern. 

118 .'.306,  324-328, 

330,  335 
Ettlinger  v.  Persian  Rug  &  C.  Co. 

66  Hun,  94 15 

EuroDean  &  N.  A.  R.  Co.  v.  Poor, 

59  Me.  277 360,407,503 

Evani>,  Ex  parte.  L.  R.  13  (Jh.  Div. 

252.. 52,  53,  63,  74,  125,  417 
V.  Coventry,  5  DeG.  M.  &  G. 

911 41,325.  352,  359 


Evans  «.  Evans,  9  Paige,  178 

308,  317,  336 
Evelyn  v.  Evelyn,  2  Diek.  Ch.  800  550 
V.  Lewis,  3  Hare,  472.. 129, 

184,  193,  620 
Everett  v.  State,  McKaig,  28  Md. 

190 92.  154,  411,  617 

Eversmann  v.  Schmilt,  53  Ohio  St. 

174,  29  L.  R.  A.  184...  390 

Eyre^).  Eyre.  1  Hog.  252 179 

Eyton  V.  Denbigh,  H.  &  C.  R.  Co. 

L.  Rr6Eq.  488 157 


P. 


Fagan  v.  Boyle  Ice  Mach.  Co.  65 

Tex.  324 100 

Fairbairn  v.  Fisher,  4  Jones,  Eq. 

390. ...529,  532 

Fairbanks  v.  Farwell,  141  111.  354  409 
Fairburn  v.  Pearson,  2  Macn.  &  G. 

144. .330,  334 

Fairfield  v.  Irvine,  2  Russ.  249 300 

V.  Weston,  2  Sim.  &  Slu.  96 

65,  73,  74 
Falk  v.  Janes,  49  K  J.  Eq.  484... 

167,  168 
Falkenback  v.  Patterson,  43  Ohio 

St.  359 92.  138,  611 

Falliott  V.  Ogden,  1  H.  Bl.  123...  112 
Fannin  v.  Malloy,  1  Jones  &  S.  382  257 
Farley  v.  McConnell,  7  Lans.  428.     76 
v.  St.  Paul,  M.  &  M.  R.  Co. 

4McCrary,  138 507 

Farley  v.  Shippen,  Wythe,  135...  147 
Farlow  v.  Kelly,  Reported  only  in 

U.  S.  Sup.  Ct.  Rep.  26 

L.  ed.  427 118 

Farmers'  &  M.  Bank  v.  Jenks,  7 

Met.  592. .115.  161.  400,  403 
Farmers'  &  M.  Ins.  Co.  v.  Needles. 

52  Mo.  17 50.  110- 

112,  165,  169,  412 
Farmers'  &  M.  Nat.  Bank  v.  Phila- 
delphia &  R.  R.  Co.  7 

Fed.  Rep.  379 485 

Farmers'  Bank  v.  Beaston,  7  Gill 

&  J.  421.... 53,  74,  122,  125 
Farmers'  Co-Op.  Mfg.  Co.  v.  Drake 

(Ga.)  22  S.  E.  1004 98 

Farmers'  Loan  &  T.  Co.,  Ex  parte, 

129  U.  S.  209,  32  L.  ed. 

656 119,  524 

V.  Burlington  &  S.   W.  R. 

Co.  32  Fed.  Rep.  805..  226 
v.  Central  R.  Co.  1  McCrary, 

352 593 

V.  Central  R.  Co.  2  McCrary, 

181 183.  198,  2-29, 

233,  395,  586 


CASES  CITED. 


xlix 


Farmers'  Loan  &  T.  Co.  v.  Central 

R.  Co.  7  Fed.  Pt.']i.  ^'47 

204,  b96,  518,  617 

«.  Central    R.    Co.   8    Fed. 

Rep.  60 --..  587 

V.  Central    R.   Co.   17   Fed. 

Rep.  758. 518,  520.  629 

V.  Chicago  &  A.   R.  Co.  27 

Fed.  Rep.  146. .11.  269.  467 
V.  Cliicago  &  A.   R.   Co.  42 

Fed.  Rep.  6.. .221.  ?,98. 

477,  492,  495,  497,  507 
V.  Detroit,  B.  C.  &  A.  R.  Co. 

71  Fed.  Rep.  29 491 

V.  Grape  Creek  Coal  Co.  50 

Fed.  Rep.  482,  16  L.  R. 

A.  603 --..388,  475.  484,523 
V.  Green  Bay,  W.  &  St.  P. 

R.  Co.  45  Fed.  Rep.  664  579 
v.  Hotel  Brunswick  Co.   42 

N.  Y.  Supp.  350 694 

V.  Kan.sa.s  City.  W.  &  N.  W. 

R.  Co.  53  Fed.  Rep.  182 

268,  349,  359,  476-477, 

478,  576 
V.  Minneapolis     Engine     & 

Mach.  Works,  35  Minn. 

543.-171,  243,  375,  407,  408 
V.  Missouri,  I.  &  N.  R.  Co. 

21  Fed.  Rep.  271 272 

V.  Northern   P.    R.    Co.    58 

Fed.  Rep.  257 106, 

393,  497,  498 
P.  Northern   P.    R.    Co.   69 

Fed.  Rep.  871 58,  59 

V.  Northern    P.    R.    Co.    71 

Fed.  Rep.  245... 490 

«.  San  Diego  Street  Car  Co. 

49  Fed.  Rep.  197 

123,  177,  507 
«.  Toledo  &  S.  H.  R.   Co. 

43  Fed.  Rep.  223 373 

Farmers'    Nat.    Bank    v.   Backus 

(Minn.)  65  N.  W.  255. 

2  Am.   &    Eng.    Corp. 

Cas.  N.  S.  397 72 

«.  Backus  (Minn.)  66  N.  W. 

5 32,  298 

V.  Backus  (Minn.)  69  N.  W. 

638 696 

Farnham  u Campbell,  10  Pai£e,598    35 
Farusworth  v.  Western  U.  Teleg. 

Co.  25  N.  Y.  S.  R.  393, 

6  N.  Y.  Supp.  735.345,  410 

V.  Wood,  91  N.  Y.  308 

178,  385,  404 
Farquaharson  v.  Kimball,  9  Abb. 

Pr.  385,  note 252,  253 

Farrar  ®.  Ha.selden,  9  Rich.  Eq.  331  247 
V.  United  Slates,  30  U.  S.  5 

Pet.  373,  8L.  ed.  159..     79 


Farrington  v.  Sexton,  43  Mich.  4')4 

138,  149 
Farson  v.  Gorham,  117  111.  137...  71 
Farweil  v.  Metcalf,  63  N.  H.  276. 

376,  887 
Fassett  v.  Tallmadge,  13  Abb.  Pr. 

12.. 566 

Faulkner  v.  Daniel,  10  L.  J.  Ch.N. 

S.33 303 

V.  Hyman,  142  Mass.  53 111 

Favorite  «.  Deardorfif,  84  Ind.  555 

126,  296,  301 
Fawcett  v.  Supreme  Sitting,  O.  of 

I.   H.  64  Conn.  170,  24 

L.  R.  A.  815 113 

Faxon,  Ex  parte,  1  Low.  Dec.  404 

223,  496 
Fay  V.  Erie  &  K.  R.  Bank,  Harr. 

Ch.  194... 347 

Featherstone  v.  Cooke,   L.  R.  16 

Eq.301 355 

Fecliheimer  v.  Baum,  37  Fed.  Rep. 

167,  2  L.  R.  A   153..-.  318 
Feibelman  v.  Pacliard,  109  U.  S. 

421,  27  L.  ed.984 S?"" 

Feldenheimer  v.  Tressel,  6  Dak.  265  244 
Fellows  V.  Ileermans,  13  Abb.  Pr. 

N.  S.  1 70,  71 

Fenn  v.  Bolles,  7  Abb.  Pr.  202. ...  61 
Fenner  v.  Sanborn,  37  Barb.  610. 

146,  147 
Fenton  v.  Dublin  Steam  Packet  Co. 

8  Ad.  &  El.  835 210 

V.  Flatrg,  24  How.  Pr.  499. 

252,  253 
T.  Lumbermans'    Bank,      1 

Clarke  Ch.  286.. 543 

Ferguson  v.  Dent,  46  Fed.  Rep.  88  587 
Ferrior,  Be,  L.  R.  3  Ch.  App.  175.  547 
Fessenden  v.  Woods,  3  Bosw.  550 

66,  127 
Fetnam  v.  Kirby,  4  Ir.  Eq.  320.202,  215 
Fidelity  Ins.  &  S.  D.  Co.  v.  Shen- 
andoah Iron  Co.  42  Fed. 

Rep.  372 484,  523 

Fidelity  Ins.  &  T.  Co.  v.  Huber, 

13Phi]a.  52 541 

Fidelity  Ins.  T.  &  S.   D.   Co.  v. 

Norfolk  &W.R.  Co.  72 

Fed.  Rep.  704 517 

V.  Roanoke  Iron  Co.  68  Fed. 

Rep.  623 388 

Fidelity  Safe  Deposit  &  T.  Co.  v. 

Armstrong,      35     Fed. 

Rep.  567 

103,  204,  221,  222,  394 
Fidelity  Trust  &  S.  V.  Co.  v.  Mo- 
bile   Street   U.    Co.    53 

Fed.  Rep.  687 129,  419 

Field  V.  Chapman,   15  Abb.    Pr. 

434 253 


1 


CASES  CITED. 


Field  V.  Jones,  11  Ga.  413 

122,  127,  197,  417 
V.  Ripley,  20  How.  Pr.  26. . 

15,  Ki.  18,  33,  45,  4G6,  603 

r.  Sands.  8  Bosw.  685 115 

Fifield  V.  Nortlieru  R.  Co.  42  N. 

H.  225 202 

Fif  Ih  Nat.  Bank  v.  Pittsburgh  &  C. 

S.R.Co.  iFed.Ri'p.  190  560 
Fifty-four  First  Mortgage  Bonds, 

i?c,15S.  C.  304 61,  85 

Filkins  v.  Adams,  60  111.  App.  410 

133,  490,  586 
V.  Nunnemacher.  81  Wis.  91 

50.  no,  112,  167,  413 
Fillmore  t).IIorton,31  How.  Pr.  424  258 
Finance  Co.  v.  Charleston,  C.  &  C. 
R.  Co.  45  Fed.  Rep.  436, 

48  Fed.    Rep.    190.    52 
Fed.   Rep.  679 60,  95 

V.  Charleston.  C.  &C.  R.  Co 

46  Fed.  Rep.  428 95 

Finch  T.  Houghton,  19  Wis.  150.. 

267,  275,  281,  297 
Fincke  v.  Funke.  25  Hun.  616. .  142,  336 

Fingal  v.  Blake.  2  Moll.  78 44 

Finnin  v.  Malloy,  1  Jones  &  S.  382 

66,  139 
First  Nat.  Bank,  Re,  49  Fed.  Rep. 

120 441 

V.  Armstrong,  36  Fed.  Rep. 

59,  42  Fed.  Rep.  193...  432 
V.  Colby,  88  U.  S.  21  Wall. 

609,  22  L.  ed.  687 

398,  428,  448 
e.  Davijs,  114  N.  C.  343....  392 
«.  Dering,   8  N.  Y.  Week. 

Dig.  261... 253 

V.  Gage,  79  111.  207 

244,  253,  269,  277 
V.  Morgan,  132  U.  S.  441,  33 

L.  ed.  282 424 

V.  National         Pahquoique 
Bank,  81  U.  S.  14  Wall. 

383,  20L.  ed.  840 

401.  422,  429.  433,  436.  437 
V.  Navarro,  43  N.  Y.  S.  R. 

813. 91 

V.  Shedd,  121  U.   S.  74,  30 

L.ed.  877 98 

v.  United  States  Encaustic 
Tile  Co.  105  Ind.  227.. 
67.  85,  355,  361,  362,  616 
First  Nat.  Bank  of  St.  Albans,  He, 

49  Fed.  Rep.  120 89 

First  Nat.  L.  Ins.  Co.  v.  Salisbury, 

130  Mass.  303 273,461 

Fischer  v.  San  Francisco  Super. 
Ct.  110  Cal.  129,  2  Am. 
&  Eng.  Corp.  Cas.  N. 
8.  339 36,  344,379 


Fischer     v.     Tuolumne     County 

Super.Cl.  98  Cal.  67.330,  380 
Fisher  v.  Andrews,  37  Hun,  176..  622 
Fitch  ^.Wetherbee,  110  111.  475.100, 148 
Fithian  v.  New  York  &  E.  R.  Co. 

31   Pa.  114 188 

Fitzgerald  v.  Hill.  2  Ir.  Eq.  398...     77 
Fitzpatrick  «.  Hawkshaw,  1  Hog. 

82.. 17 

Flagler  v.  Hunt,  32  N.  J.  Eq.  518. 

13,  14,  18,  42.  537 
Flanders?).  Batten,  50  Hun,  542..  253 
Fleischaeur    v.    Dittenboefer,    17 

Jones  &  S.  311 185,  192 

Fletcher,  Ex  parte,  6  Ves.  Jr.  427 

54,  61,  547 

Ex  parte,  1  Deac.  &  Ch.  318  106- 

v.  Dodd.  1  Ves.  Jr.  85.-203,  215 

Flint?). Webb,  25  Hun,  263.251,254,  608 

Flint  &  P.  M.  R.  Co.  v.  Dewey,  14 

Mich.  477 408.  503 

Floods.  Aldborough.  8  Ir.  Eq.  103  587 
Florence  Gas,  E.  L.  &  P.  Co.  v. 

Ilanby.  101  Ala.  15.. 67.  104 
Florida  v.  Anderson,  91  U.  8.  667, 

23L.  ed.  290... 99.  389 

Florida  Const.  Co.  v.  Young,  11 

U.  S.  App.  683... 71 

Flower  C.Cornish,  25Minn.473-406,  408 
Fluker  v.  Emporia  City  R.  Co.  48 

Kan.  577 365 

Fogarty  v.  Burke,  2  Drury  &  W. 

580 238 

Fogg  V.  Supreme  Lodge.  U.  O.  of 

G.  L.  159  Mass.  9.53, 387,  570 
Folger  v.   Columbian  Ins.  Co.  99 

Mass.  276 188,  343,  412 

V.  Hoagland,  5  Johns.  235..  207 
Folliott®.  Ogden,  1  H.  Bl.  123...  164 

Folsom  V.  Evans.  5  Minn.  418 54 

Foot  V.  Glenn,  52  Fed.  Rep.  529..  177 

Ford  V.  Cobb,  20  N.  Y.  348 144 

V.  Judsonia  Mercantile  Co. 

52  Ark.  426.  6  L.  R.  A. 

714 372 

V.  Kansas  City  &  I.  S.  L.  R. 

Co.  52  Mo.  App.  439.. 

346,  360 
Fordyce  v.  Dixon,  70  Tex.  694...  565 
V.  Withers,  1  Tex.  Civ.  App. 

540 187 

Foreman  v.  Central  Trust  Co.  30 

U.  S.  App.  653,  71  Fed. 

Rep.  776 490 

Forgay  v.  Conrad,  47  U.  S.  6  How. 

201,  12  L.  ed.  404 71 

Forsaith  Mach.  Co.  v.  Hope  Mills 

L.  Co.  109  N.  C.  576.- 

68,  99,  595 
Fort  Dodge  v.  Minneapolis  &  St. 

L.  R.  Co.  87  Iowa,  389.  381 


CASES  CITED. 


Fort  Payne  Furnace  Co.  v.  Fort 
Pavne  Coal  &  I.  Co.  96 

Ala.  472 38, 

39,  242,    347,  364,  367,  542 

Fort  Wayne,    M.  &  C.  R.  Co.  v. 

Mellett,  92  Ind.  535... 

24,46,  121, 

126,  127.  132,  183,  345,  622 

Fosdick  V.  Schall,  99  U.  S.  235,  25 

L.  ed.  339 

95,  107,  119,  212,  217, 
268,  272.  348,  349,  388, 
476,  477,  479,  484,  489, 
492,  497.  500,  523,  575,  576 
v.  Southwestern  Car  Co.  99 
U.  S.  256,  25  L.  ed.  344 

494,  497 

Foster,  Be,  7  Hun,  129- 234 

V.  Barnes.  81  Pa.  377 101 

V.  Fowler,  60  Pa.  27 454 

V.  Townshend,  2  Abb.  N.  C. 

29 114,  172 

Fountain  Ferry  Turnp.  Road  Co. 

V.  Jewell,  8  B.  Mon.  142  344 
Fowler,  Be,  L.  R.  16  Ch.  Div.  723  545 
V.  Jarvis-Conklin  M.  T.  Co. 
2   Am.   &  Eng.    Corp. 

Cas.  N.  S.  391 36 

Fox,  Be,  51  Fed.  Rep.  427 124 

V.  Adams,  5  Me.  245. 165 

V.  Hale&  N.  Silver  Min.  Co. 

(No.  l)108Cal.475 353 

V.  Hempfield  R.  Co.  2  Abb. 

U.  S.  155 127 

».  Mensch,  3  Watts  &  S.  444  100 
V.  Toronto  &  N.  R.  Co.   29 

Ch.  (Ont.)  11 134,  162 

Francis  v.  Lawrence,  48  N.  J.  Eq. 

508 246 

Frank  v.  Morrison,  58  Md.  423. .. 

92   115 

116,  162,  174,  175,  399,  403 

V.  New  York,   L.  E.  &  W. 

R.  Co.  122  N.  Y.  197.. 

203,  204,  222,  224,  393 
V.  Robinson,  96  N.  C.  32...  250 

V.  Stapler,  83  Ga.  429 64 

Frankle  v.  Jackson,  30  Fed.  Rep. 

398.. 162,  515 

Franklin  Bank,  Be,  1  Paige,  85...  607 

Be,  1  Paige,  249 219 

Franklin   Trust  Co.  v.   Northern 
Adirondack   R.  Co.  42 

N.  Y.  Supp.  211 697 

Franklyn  v.  Sprague,  10  Hun,  589  202 
Fraser  v.  Kershaw,  2  Kay  &  J.  496 

325,   328 
Frayser  v.  Richmond  &  A.  R.  Co. 

81  Va.  388 125,  297.  417 

Frazier  v.  Fredericks,  24  N.  J.  L. 

162 110 


Fredenbeim  v.  Rohr,  87  Va.  764  . 

15.  17,  54,  603 
Freedmau's  Sav.  &  T.  Cu.  t\  Earle, 
110  U.  S.  710,  28  L.  ed. 

301 __  251 

V.  Shepherd,  127  U.  S.  500, 

32  L.  ed.  166 

271,  276,  281.  479',  575 
Freeland  ».  Freeland,  102  Mass.  475  407 
•y.  Stansfeld.  2  Smale  &  G. 

479.. 325,  328 

Freeman  v.  Howe,  65  U.  S.  24  How. 

450,  16  L.  ed.  749 122 

V.  Winchester,    10    Smedes 

&  M.  577.-92,  161,  400,  401 
Freiberg  v.  Stoddard,  161  Pa.  259.  392 
Frelinghuysen  v.  Baldwin,  12  Fed. 

Rep.  395- 424,  435,  436 

v.  Colden,  4  Paige,  204 274 

French  v.  Dauchy,  57  Hun,  100.77,  606 
V.  Gifford,  30  Iowa,  148.15, 
17-19,343,344,346,361, 

371,  455,  466,  602,  603 

V.  Gifford,  31  Iowa,  428 587 

Fricker  v.  Peters,  21  Fia.  254 

15,  17-19,  603,  604 
Frisbee^J.  Timanus,  12  Fla.  SOU..  552 
Frisbie  v.  Bateman,  24  N.  J.  Eq. 

28. 279,  292,  297 

Frost  V.  Spitley,  121  U.  S.  556.  30 

L.  ed.  1012 178 

Frostburg  Bldg.  Asso.  ■».  Stark,  47 

Md.  338 556 

Fry  V.  Charter  Oak  L.  Ins.  Co.  31 

Fed.  Rep.  197 169 

V.  Evans,  8  Wend.  530 440 

Fullers.  Jewett,  80  N.  Y.  46 

204,  209,  210 

V.  Ledden,  87  111.  310 

175,  178,  385,  405 
v.  Stilglitz,  27  Ohio  St.  355.  167 
Fullerton  v.  Fordyce,  121  Mo.  1.. 

187.  395 

Furlong  v.  Edwards,  3  Md.  99 

13,  264,  296.  303 
Fussell  V.  Gregg,  113  U.  S.  550,  28 

L.  ed.  993 179 

Fuszez).  Stern,  17111.  App.  429.236,  247 


a 


Gabert  v.  Olcott  (Tex.)  22  S.  W. 

286- 144 

Gadsden  v.  Whaley,  14  S.  C.  210. 

92,  119.  158 

Gage«.  Smith,  79  111.  219 241 

Gailher  v.  Stockbridge,  67  Md.  222 
103.  106,  204,  221,  222, 

224,  393 
Galen  v.  Brown,  22  N.  Y.  37 150 


lii 


CASES  CITED. 


Gall  V.  Balis.  72  Mo.  429. 397 

Giillagher  v.  Rosenfielil,  47  Minn. 

507 171 

Galloway  v.  Campbell,  142  I  nil.  324 

08.  551 
Gall  achat,  Ex  parte.  1  Hill,  Eq.  148  530 
Galvestou,  H.  &  II.  R.  Co.  v.  Cow- 
drey,  78  U.  S.  11  AVall. 

459,  20  L.  ed.  199 

270.  282,  479 
Galway  v.    United    States   Steam 
Sugar  Ref.  Co.  36  Barb. 

286 347 

V.  United  Slates  Steam  Sugar 

Ref.  Co.  13  Abb.  Pr.  211  352 
Garden  City  Bkg.  &  T.  Co.  v.  Geil- 

fuss,  86  Wis.  622..  128,  184 

Gardiner  v.  Howell,  60  Ga.  11 62 

V.  Tyler,  2  Abb.  App.  Dec. 

247 583 

Gardner  v.  Commercial  Nat.  Bank, 

95  111.  298 250 

V.  Howell,  00  Ga.  11 12,  71 

V.  London,  C.  &  D.  R.  Co. 
L.  R.  2  Ch.  App.  201 . . 

379,  452,  457 
V.  Ogden,  22  N.  Y.  327.. ..  147 
V.  Smith,  29  Barb.  08_..171,  257 
Garland  v.  Garland,  2  Ves.  Jr.  137 

59,  01,  62,  90 
Garretson  v.  Weaver,  3  Etlw.  Ch. 

385 307,  309,325,  333 

Garver  v.  Kent,  70  Ind.  428. 

125,  153,  158,  159, 
161,  162,  183,  399,  400,  Oil 
Gaskins  v.  Balls,  L.  R.  13  Ch.  Div. 

324 131 

Gaslight  &  Bkg.  Co.  v.  Haynes,  7 

La.  Ann.  114 _ 

115,  116,  176.  397,  403 
Gaslight  Improv.  Co.  v.  Terrell,  L. 

R.  10  Eq.  Cas.  168 360 

Gaich  V.  Fitch,  34  Fed.  Rep.  566.  438 
Gates  V.  Bucki,  53  Fed.  Rep.  966. 

123,   124 
V.  Chicago,   St.   P.  &  K.  C. 

R.  Co.  82  Iowa,  528...   381 
Gay  V.  Briarfield  Coal  &  I.  Co.  94 
Ala.  312, 16  L.R.  A.  564 

123,  124,  127 

Gayle  v.  Johnson,  80  Ala.  388 22 

Gaylord  v.  Fort  Wavne,  M.  &  C. 

R.  Co.  6  Biss.  286 

48,  56.  345 
Gelpecke  v.  Milwaukee  &  H.  R. 

Co.  11  Wis.  454.. 

121,  179,  345 
Genet  v.  Foster,  18  How.  Pr.  50..  257 
George  v.  St.  Louis  Cable  &  VV.  R. 

Co.  44  Fed.  Rep  117...  573 
V.  Williamson,  26  Mo.  190..  240 


Georgia  u.  Atlantic  &  G.  R.  Co.  3 

Woods,  434 388 

Geortner  v.  Canajoharie,  2  Barb.  , 

625.. .315,  318 

Gephart  v.  Starrett,  47  Md.  396-..  75 
Gere  v.  Dibble.  17  How.  Pr.  31... 

25.  49,  126,  127,  151,  244 
Germania  Nat.    Bunk  v.   Case,  99 
U.  S.  028,  25  L.  ed.  448 

425.  438,  444,  445 
Germantown  Pass.  R.   Co.  v.  Fit- 

ler,  60Pa.  124 406 

Gerould  v.  Wilson,  81  N.  Y.  573. 

76,  77 
Gest  V.  New  Orleans,  St.  L.  &  C. 
R.  Co.  30  La.   Ann.  pt. 
I.  28.... 48,  57,  372,  375,  416 
Getsch  V.   Mclihargey,    09  Mich. 

377. 232 

Getzlerw.  Saroni,  18  111.511 239 

Gibbes  «.  Greenville  &  C.  R.  Co. 

15  S.  C.  304,  518 

...61,  66,209 

Gibbins  v.  Mainwaring,  9  Sim.  77.  17 
Gibbons  v.  Farwell,  63  Mich.  344.  622 
Gibbs».  David,  L.  R.  20  Eq.  373.  551 

V.  Thayer,  6  Cush.  30 407 

Gibert  v.  Washington  City,  V.  M. 
&  G.  S.  R.  Co.  33  Gratt. 

586,  645 ...63,  524,  574 

Gibson  V.   Lowell,  19  Grant,  Ch. 

197. 137 

V.  Martin,  8  Paige,  481 

15,  16,  18,  33 
V.  Peters,  150  U.  S.  342,  37 

L.  ed.  1104 433 

Gilbert  v.    Mickle,   4  Sandf.    Ch. 

357 131 

Gildersleeve  v.  Lester,  68  Hun,  532 

529.  540 

Giles  w.  Stanton,  86  Tex.  620 483 

Gill  V.  Balis,  72  Mo.  424 

114,  155,  163.  399.  409,  411 

Gillet  V.  Fairchild,  4  Denio.  80 • 

92,  119,  159,  171,  172,  411 

V.  Moody,  3  N.  Y.  479 

104.   114,  149,  157,  171- 
173,  250.  2f>0,  375,  406,   410 
Gillett  V.  Phillips,  13  N.  Y.  114... 

114,  171,  173,  180.  387 
Gilman  v.  Illinois  &  M.  Teleg.  Co. 
91  U.  S.  603,  23  L.  ed. 

405 270- 

272,  282,  297,  479,  575 
V.  Ketch um,  84  Wis.  60,  23 

L.  R.  A.  52 113,  167,  412 

Gindratw.  Dane,  4  Cliff.  200_-172,  397 
Girard  L.    Ins.    A.    &   T.    Co.    v. 
Cooper,    51   Fed.    Rep. 
332,  4  U.  S.  App.  031.. 

104,  594,  598 


CASES  CITED. 


liii 


Girard  L.  Ins.  Co.  v.  Cooper,  162 
U.  S.  529,  40L.  e(1.10G3 

93,  891,  394 
Gladden  v.  Stoneman,  1  Madd,  142, 

note. ...--529-532 

Glenn  v.   Biisey  (D.   C.)   3   Cent. 

Kep   288,  note 883 

V.  Bussev,  5  Mackey,  283--.  158 

V.  Gill,  2  jMd.  1 127 

V.  Liggett,  47  Fed.  Rep.  478 

123,  127 
V.  Marbury,   145  U.  S.  499, 

36  L.  ed.  790 401,  404 

V.  Reniple,  80  Ala.  159 404 

V.  Williams,  60  Md.  98 404 

Glenny  v.  Langdon,  98  U.  S.  20, 

25  L.  fd.  43 

103,  106,  107.  204.  221, 

223,  252,  260,  506 
Gleuville  Woolen  Co.  v.  liipley,  48 

N.  Y.  206 91 

Glinest).  BiiigliamplonTrustCo.68 

Hun,   511 70 

V.  Supreme  Silting,  O.  of  I. 

H.  50  N.  Y.  S.  R.  743-  600 
Globe  Ins.  Co.  Be,  6  Paise,  102- -  406 
Goddard  v.  Sliles,  90  N.  Y.  199-.-  876 
Godfrey  v.  Ohio  &  M.  R.  Co.  116 

Ind.  30.. 516,  566 

Goisset).  Beall,  5  Wis.  224 --  122 

Gold   Hunter    Min.   &   S.    Co.   v. 
Holleman,  2  Idaho,  839 

36,  603 

Gooch  V.  McGee,  83  K  C.  59 454 

Goodale  v.   15th  Dist.   Ct.  of  San 

Francisco,  56  Cal.  26.-  550 
Gooderham   v.   Toronto  &  N.  R. 

Co.  29  Ch.  (Ont.)ll..-  162 
Good  heart  v.  Raritan  Min.  Co.  8 

N.  J.  Eq.  78 370 

Goodman  v.  Jedidjah  Lodge  No. 
7,  L  O.  of  B.  B.  67Md. 

117.-- 346 

V.  Whitcomb,  1  Jac.  &  W. 

589-- ---306,  809, 

822,  825,  334,  340 

Goodwin  v.  Jones,  3  Mass.  517 109 

Goodyear  v.  Betts,  7  How.  Pr.  187 

13,  18,  242,  243 
Gordon  v.  Newman,  62  Fed.  Rep. 

686 - 525 

Gorton  t\  M)i.s.sey,  12 Minn.  147 239 

Gottlieb  V.  Miller,  154  111.  44 409 

Gould  t).  Tryon,  Walk.  Ch.  353--  238 
Goulding  v.  Bain,  4  Sandf.  716--. 

808,  309,  323,  884 
Gouthwaile  v.  Rippon,  1  Beav.  54    28 
V.  Rippon,  8  L.  J.  Cli.  N.  S. 

139 -.-  264 

Gouverneur  v.  Warner,   2  Sandf. 

624 122,127 


Gowan  v.  Jeffries,  2  Ashm.  296... 

306,  807,  322 
Graff  V.  Bonnett,   31   N.   Y.  9,  25 

How.  Pr.  470 257 

Graham  v.  Chapman,  83  N.  Y.  S. 

R.  849 - 209 

V.  Fuller  Electrical  Co.    75 

Ga.  878 12.  48,  66 

V.  Graham,  2  Vict.  Rep.  (E.) 

145 61,  97,  536 

V.  La  Crosse  &  M.  R.  Co.  10 

Wis.  459  251 

«.  Nonkes  [1895i"i'ChV  66^  " 
64  L.  J.  Ch.  N.  S.  98-.     78 
Graham  Button  Co.  v.  Spielmann, 

15  N.  J.  Eq.  120 92,  407 

Grandln  v.  La  Bar,  2  N.  D.  206.-. 

15,  17,  6'03 
Grand  Tower  Min.  &  T.    Co.   v. 

Sfhirmer,  64  III.  106 616 

Grant  v.  Bryant,  101  Mass.  567. -_  586 
v.  Davenport   18  Iowa,  179- 

82,  121,  410 
V.  Phoenix  Mut.  L.  Ins.  Co. 
106  U.  S.  429,  27  L.  ed. 

257 71,  118 

«.  Ph(jsnix  Mut.  L.  Ins.  Co. 
121  U.  S.  105,  30  L.  ed. 

905 

274,  276,  281,282,  289,  298 

V.  Walsh,  81  Hun,  449 392 

V.  Webb,  21  Minn.  39 70 

Grantham  v.  Lucas,  15  W.  Va.  425 

10,  12,  261 
Gratz  V.  Bavard,  11  Serg.  &  R.  41.  308 

Grave  «.  Bunch,  83  Ind.  4 802 

Gravenstine's  Appeal,  49  Pa.  310. 

361,  602 
Gray  v.  Davis,  1  Woods,  420,  Aff'd 
83  U.  S.  16  Wall.  203, 

21  L.  ed.  447 173 

V.  Gaither,  74  N.  C.  237-.- 

529-531 

V.  Lewis,  94  N.  C.  392 

153.  160,  168,  399,  411 
c.  Oxnard  Bros.  Co.  31  N. 

Y.  S.  R.  968 297 

Graydon  v.  Church,  7  Mich.  36-.- 

112,  167,  170 
Great  Luxembourg  R.  Co.  «.  Mag- 
nay.  25  Beav.  586.. 360,  503 
Great  Western  Teleg.  Co.  v.  Burn- 
ham,  79  Wis.  47. -.390,  414 
V.  Gray,  122  111.  630.. .115- 

117,  175,  176,  408,  407 
Greaves©.  Gouge,  69  N.  Y.  154- - 

851,  865,  623 
Greeley  v.  Provident  Sav.   Bank, 

98  Mo.  458  -- 187,  573 

V.   Providcpt  Sav.  Bank,  103 

Mo.  212 66,  586 


liv 


CASES  CITED. 


Green  v.  Bostwick,  1  Sandf.  Ch. 

185.21.22,143,  154,  33G.  337 

V.  Green,  2  Sim.  430. 122 

«.  Gross.  12  Neb.  117. 167 

V.  llanbcrry.  2  Brock.  403..  534 
V.  Hicks,  1  Baib.  Ch.  309..  114 
V.  Van  Buskirk,  72  U.  S.  5 
Wall.  307,  18  L.  cd.  599 

499,  500 
V.  Van  Buskirk,  74  U.  S.  7 

Wall.  139,  19  L.  ed.  109  111 
«.Walkill  Nat.  Bank,  7  Hun, 

63 373,423 

«.  Winter,  1  Johns.  Ch.  60. 

92,  153,  159,  383 
Greenawalt  «.  Wilson,  52  Kan.  109 

67,  85.  616 
Greene  v.  Kernan,  1  Hayes  &  J. 

401 -     17 

V.    Sprague    Mfg.    Co.    52 

Conn.  330 389,  396 

Greenway  v.  Thomas,  14  111.  271. 

239,  242 
Greenwood  v.   Algesiras   R.   Co. 
[1894]  2  Ch.  205,  63  L. 
J.  Ch.  N.  S.  670  ....85,  380 
«.  Brodhead,  8  Barb.  593...  319 

V.  Curtis,  6  Mass.  358 165 

Gregory  v.   Gregory,    1    Sweeny, 

613 310,  339 

V.  Gregory,  1  Jones  &  S.  86. 

42-44 
V.  Patchett,  33  Beav.  595...  351 
Gresley  v.  Adderly,  1  Swanst.  573 _ 

142,  337 
Greville  v.  Fleming,  2  Jones  &  L. 

335 11 

Gridley  v.  Connor,  2  La.  Ann.  87.  311 
Griesel  v.  Schmal,  55  Ind.  475.181,  415 

Griffin  v.  Cha.se,  36  Neb.  328 392 

V.  Nitcber,  57  Me.  260 244 

Griffith  V.  Griffith,  2  Ves.  Jr.  400. 

77,  122 

Griggs  V.  Becker,  87  Wis.  213 414 

Grinaston  v.  Turner,  22  L.  T.  N. 

S.  292_... 37 

Griswold,  Be,  13  Barb.  412 160 

Gross  V.  Daly,  5  Daly,  542 246 

Grote«.  Bury,  1  Week.  Rep.  92...     27 
Guardian  Sav.  Inst.  Be,  78  N.  Y. 

408 632 

V.     Bowling     Green     Sav. 

Bank,  65  Barb.  275....  119 
Gue  V.  Tide  Water  Canal  Co.  65 
U.  S.  24  How.  257,  16 

L.  ed.  635 454 

Guerrant  v.  Fowler,  1  Hen.  &  M. 

5 147 

Guillander  v.  Howell.  35  N.  Y.  657  111 
Guinness  i).  Land  Corp.  of  Ireland, 

L.  R.  22  Ch.  Div.  349.  409 


Gumbel  v.  Pitkin,  124  U.  S.  131, 

31  L.  ed.  378..  123.  124,  597 

Gunby  v.  Thompson,  56  Ga.  316.. 

12,  42,  62,  71,  548 

Gunn  ®.  Blair,  9  Wis.  352 41 

Gurden  v.  Badcock,  6  Beav.  157..  234 

Gurney  v.  Atlantic  &  G.  W.  R.  Co. 

58  N.  Y.  358 485 

Gutsch  V.  Mcllhargey,  69  Mich. 

377 202.622 

Guy  V.  Doak,  47  Kan.  236.. 26,  36,  603 
®.  Ide,  6  Cal.  99 283,  292 

H. 

H's  Estate,  Be,  Bv.  H,  L.  R.  1  Ch. 
Div.  270,  45L.J.Ch.  749 

18,  33 
Haar  v.  Consolidated  Carson  River 
Dredging  Co.  43  N.  Y. 

S.  R.  1 366 

Haas  V.  Chicago  Bldg.  Soc.  89  111. 

498 15,  35,  63,  277, 

280,  281,  298,  358,  603,  604 
Haben  v.  Harshaw,  49  Wis.  379..  387 
Hackensack  Water  Co.  i).  DeKay, 

36  N.  J.  Eq.  548 100 

Hackett  v.  Snow,  10  Ir.  Eq.  Rep. 

220 .277,297 

Hackley  7) .  Draper,  4  Thomp.  &  C. 

614." 102,  189 

V.  Draper,  60  N.  Y.  88,  2 

Hun,  523.-101,102.157,171 
V.  Swigert,  5  B.  Mon.  86  ..  125 
Hade  v.  McVay,  31  Ohio  St.  231.. 

138,  180,  383,  440 
Hagan  v.  Lucas,  35  U.  S.  10  Pet. 

400,  9  L.  ed.  470 122 

V.  Walker,  55  U.  S.  14  How. 

29,  17  L.  ed.  312 240 

Hagedon  v.  Bank  of  Wisconsin,  1 

Pinney,  61 372,  416 

Hagenbeck  v.  Hagenbeck  Zoologi- 
cal Arena  Co.  59  Fed. 

Rep.  14 542,  545 

Hager  v.  Stevens,  6  N.  J.  Eq.  374. 

39,  41,  347 
Haggarty  v.  Pittman,  1  Paige,  298 

239,  536 
Haggerty  v.  Byrne,  75  Ind.  499...  302 

Haight  V.  Burr,  19  Md.  130 

39,  40.  307,  323,  466 
Haines  v.  Carpenter,  1  Woods,  262 

534,  536 

Hake  v.  Buell,  50  Mich.  89 622 

Hale  V.  Clauson,  60  N.  Y.  339 101 

V.  Frost,  99  U.  S.  389.  25  L. 

ed.  419 212,  477,  576 

1).  Hale,  4  Beav.  369 311 

V.  Nashua  &  L.   R.   Co.  60 
N.  H.  333 489 


CASES  CITED. 


iv 


Haley,  Ex  parte,  99  Mo.  150 55 

Hall  V.  Astoria  Veneer  Mills  &  L. 

Co.  5  Ry.  &  Corp.  L.  J. 

412 358 

V.  Donovon  (Mich.)  69  N.  W. 

643. 695 

V.  Hall,  3Macn.  &  G.  79... 

308,  309.  340 
V.  Kirby,    Exch.    11   (June, 

1831,  unreported) 28 

V.  Merrill,  9  Abb.  Pr.  121..  126 
V.  Sampson,  35  N.  Y.  274..  150 
1).  Slipp,  1  N.  B.  Eq.  37....  585 
V.  Sullivan  R.  Co.  2  Redf. 

Ry.  Cas.  621 461 

V.  United  States  Ins.  Co.  5 

Gill,  484... .175.  403 

Hall  &  S.  Co. ,  lie,  69  Fed.  Rep.  425    52 
Halletl's  Estate,  lie,  L.  R.  13  Cli. 

Div.  696... 628 

Hallowell  v.  Bayliss,  10  Ohio  St.537  407 
Halpin  v.   Mutual   Brew.    Co.    91 

Hun,  220. .359,  567 

Hamburgh  Mfg.  Co.  v.  Edsall,  8 

N.  J.  Eq.  141 11,  12 

Hamill  v.  Hamill,  27  Md.  679 331 

Hamilton  v.  Accessory  Transit  Co. 

B  Abb.  Pr.  255 343 

1).  Accessory  Transit  Co.  26 

Barb.  46_ 470 

T.  Austin,  36  Hun,  138 272 

T.  Brewster,  2  Moll.  407 77 

v.  Choteau,  6  Fed.  Rep.  339.  123 
Hamilton-Brown  Shoe  Co.  v.  Mer- 
cer, 84  Iowa,  239 123 

Hamlin  v.  McGillicuddy,   82  Me. 

268 244 

©.Wright,  23  Wis.  491  ..114, 

242,  251,  259,  260,  376,  387 
Hammer  v.  Kaufman,  39  111.  87..     62 
Hammock  v.  Farmers'  Loan  &  T. 
Co.  105  U.  S.  77,  26  L. 

ed.  1111 54.  55,  492 

Hancock  «.  Sears,  93  N.  Y.  79.  ..  257 
«.Wooten,  107  N.  C.  9,11  L. 

R.  A.  466 245 

Hand  v.  Dexter,  41  Ga.  454.. .344,  362 
V.  Savannah  &  C.  R.  Co.  10 

S.  C.  406- 381 

V.  Savannah  &  C.  R.  Co.  17 

8.  C.  219.... .502,  508 

Handy  v.  Cleveland  &  M.  R.  Co. 

31  Fed.  Rep.  689 507 

Hanker.  Blattner,  34 III.  App.  394.  625 
Hanna  v.  Hanna,  89  N.  C.  68... 11,  28 
V.  State  Trust  Co.   70  Fed. 
Rep.  2,  30  L.  R.  A.  201 . 

388,  490 
Hannah  v.  Moberly  Bank,  67  Mo. 

678 ...172,  404,  405 

V.  Chase,  1  Bland,  Ch.  213.  338 


Hanon  v.  Weil,  G9  Miss.  476 71 

Hanover  F.  Ins.   Co.  v.  Germania 
F.    Ins.    Co.    33   Hun, 

539 61,62 

Hanson  v.  Stevenson,   1  Barn.  & 

Aid.  303  _. .223,  496 

Hardee  v.  Sunset  Oil  Co.  56  Fed. 

Rep.  51 359,  365 

Hardin  v.  Hardin,  34  S.  C.  77 292 

V.  Sweeney  (Wash.)  44  Pac. 

138 399 

Harding  v.  Glover,  18  Ves.  Jr.  281 
306.  307,  314,  315,  318, 

325,  327,  330,  333 

V.  Nettleton,  86  Mo.  658 

183,  192,  511 

Hardt  w.  Levy,  72  Hun,  225 319 

Hardy  v.  McClellan,  53  Miss.  507. 

26,  36,  602 

V.  Tilton,  68  Me.  195 373 

Hardwickt).  Hook,  8Ga.  354_.161, 

162,  399,  401 
Hargrave  v.  Hargrave,  9  Beav.  549.  550 
Hariand  v.  Bankers'  &  M.  Teleg. 
Co.  33  Fed.   Rep.  199, 
contra,    32    Fed.    Rep. 
305. .141,  142,  153,  161, 
178,  179.  386.  400,  611,  612 
Harman  v.  Foster,  1   Hog.  318... 

202,  215 

v.  Hoskins,  56  Miss.  142 250 

■».  McMullin,  85  Va.  187.. 4,  120 
w.Wagener,  33  S.  C.  487.528,  535 
Harmon  v.  Kentucky  Coal,   I.  & 
D.  Co.  15  Ky.  L.  Rep. 

12 365 

Harper  v.  Union  Mfg.  Co.  100  111. 

225 178,  385,  405 

Harrell  v.  Kent,  71  Ind.  602..  159, 

161,  383,  400,  611 
Harris,  Ex  parte  (Be  Lewis),  45  L. 

J.  Bkr.  71 155 

V.  Beauchamp  [1894]  1  Q.  B. 
801,  63  L.  J.  Q.  B.  480. 

45,  59,  238 
V.  Hicks  (Tex.  Civ.  App.)  34 

S.W.  983.... 533 

V.  Lester,  80  111.  307.... 261,  616 
V.  People  (111.  App.)  13  Nat. 

Corp.  Rep.  31. 564 

V.  Rivers,  53  Ind.  216 181 

V.  Summer,  2  Pick.  129 250 

Harrison  v.  Boydell,  6  Sim.  211..  215 
V.  Maxtell,  44  N.  J.  L.  316.  256 
V.  Slerry,  9  U.  S.  5  Cranch, 

289,  3  L.  ed.  104 

165,  170,  316 

V.  Tenant,  21  Beav.  482 333 

Harrison  Wire  Co.  v.  Wheeler,  11 

Fed.  Rep.  206 123 

Harrup  v.  Winslet,  37  Ga.  655.. 39,  44 


Ivi 


CASES  CITED. 


Hart  V.  Clfirke,  19  Rcav.  ^49 306 

1).  lU'spess,  89  (la.  87 41 

V.   SI  earns,   4  N.  Y.  Week. 

l)il,^  510.. 254 

V.  Tiinnis.  3  E<lw.  Ch.  226.  288 
Hartell  v.  Tili,^liMian,  99  U.  S.  547, 

25  L.  ed.  357._202,  2:50,  231 
Hartford  Deposit  Co.  «.  Clieinical 
Nat.  Bank,  58  111.  App. 

256 394 

Hartz^.  Schrader,  8  Ves.  Jr.  317.  317 
Harvey  v.  Allen,  16Blat(;hf  .29.428,  448 

?).  Lord,  11  Biss.  144 427,489 

V.  Lord,  10  Fed.  Rep.  237..   155 
V.  Varney,  104  Mass.  436--. 

145,  262,  336 
Harwell  v.  Potts,  80  Ala.  70.... 36,  602 
Hastings  fl.  Wilson,  Holt,  N.  P.290.  106 
Hatch  V.  Bancroft-Thompson  Co. 

67  Fed.  Kep.  802 345 

Hatcher  v.  jNIat-sey,  66  Ga.  66 543 

Platfield^J.Cumniings,  140Ind.547.  357 
Haugan  ©.Netland,  51  Minn.  552. 

15,  17,  358 
Havemeyer  w.San  Francisco  Super. 
Ct.  84  Cal.  327.352,  354, 

357,  361 

Havens  v.  Hussy,  5  Paige,  30 316 

Hawes  v.  Contra  Ccsta  VVater  Co. 
("Hawes  v.  Oakland"), 
104  U.  S.  450,  26  L.  ed. 

828 343,  351,  365 

Hawkins  v.  Glenn,  131  U.  S.  319, 

33  L.  ed.  185 390,  414 

Haxtun  v.  Bishop,  3  Wend.  13.376,401 
Hay  V.  Alexandria  &  W.  R.  Co.  4 

Hughes,   373 272 

Hayden  v.  Chicago  Title  &  T.  Co. 

55  111.  App.  24! 631 

Hayden  v.  Thompson.  71  Fed.  Rep. 
60,  2  Am.  &  Eng.  Corp. 

Cas.N.  S.  511 

398,   399,  402,  408.  409,  435 
Hayes  v.  Beardsley,  136  N.  Y.  299  447 
V.  Brolzman,  46  j\Id.  519..;. 

92,  154,  155,  399 
V.  Buckley,  53  How.  Pr.  173  256 
V.  Dickinson,  9  Hun,  277..  296 
V.  Heyer.  3  Sandf.  284  .220,  307 
V.  Heyer,  4  Sandf.  (^h.  485. 

308,  313,  315 

V.  Kenyon,  7  R.  I.  136 

173,  383,  384,  387,  397,  407 
V.  Shoemaker,  39  Fed.  Rep. 

219 442 

Haynes  v.  Brooks,  116  N.  Y.  487.  259 
V.  Mc  Dermott,  3  N.  Y.  S.  R.  582    91 
Haywood  v.  Collins,  60  111.  328...  616 
».  Lincoln    Lumber  Co.    64 

Wis.  639 172,  173. 

355.  359,  360,  362,  367,  408 


Hazard  v.   Durant,  19  Fed.  Rep. 

471.. 112,  160,  165 

Hazelrigg  v.  Bronaugh,  78  Ky.  62 

121, 'l32,  147,  183,  416 
Hazeltine  v.  Granger,  44  Mich.  503 

271,  283,  293,  469 
Hazleton  v.  Wakemau,  3  How.  Pr. 

357  102 

Heacock  v.  Durand,  43  111.  230...  244 

Mead  v.  Miller,  45  Minn.  446 383 

Heard  v.  Murray,  93  Ala.  127... 15,  40 
Heath  v.  Missouri.  K.  C.  &  T.  R. 

Co.  83  Mo.  617.184,  374,  375 
Heathcot  v.  Ravenscroft,  6  N.  .T. 

Eq.  113 42,  306,  316 

Heatherton  v.  Hastings,  5  Hun,  459 

97,  340,  619 
Heavilon  v.  Farmers'  Bank, 81  Ind. 

249 32,  274,  277,  608 

Hedges  v.  Paquett,  3  Or.  77 

346,  363,  367 

Heermans  v.  Clarkson,  64  N.  Y.  171  120' 

Heffron  v.  Flower,  35  111.  App.  200  589 

V.  Milligan,  40  111.  App.  291     93 

V.  Rice,  40  111.  App.  244 

201,  583,  631,  632 
V.  Rice,  149  111.  216. .  .86,  87,  584 
Hoflebower  v.  Buck,  64  Md.  15...  308 
Hefner  «.   Northwestern   Mut.  L. 
Ins.  Co.  123  U.   S.  747, 

31L.  ed.  309...   'J4 

Hegewisch  v.  Silver,  140  N.  Y.  414 

53,  75,  411 
v.  Silver,  50  N.  Y.  S.  R.  448  159 
Heidritter  v.  Elizabeth  Oil  Cloth 
Co.  112  U.  S.  294,  28  L. 

ed.  729... 57,123,  127 

Heiman  v.  Fisher,  11  Mo.  App.  275 

141.  148 
Heine  «.  Board  of  Levee  Comrs. 
86  U.  S.  19  Wall.  655,  22 

L.  ed.  223 2-16 

Heineman  v.  Hart,  55  Mich.  64,..  406 
Heiusheimer  «.   Dayton  R.  Co.  3 

Rv.  &  Corp.  L.  J.  268.  273 
Heise  v.  Starr,  44  111.  App.  406.588,  593 
Heisen  v.  Binz  (Ind.)  45  N.  E.  104  6!i8 
Heiman  v.  FisLer,  11  Mo.  App  275  126 
tlelme  v.  Littlejohn,  12  La.  Ann. 

208 92, 153-155,159,  317 

Helmore  v.   Smith,  L.  R.  35  Ch. 

Div.  449 .122,  135 

Heman  B.  Britton,  88  Mo.  549 115 

Hendee  v.  Connecticut  &,  P.  R.  R. 

Co.  26  Fed.  Rep.  677..  435 
V.  Conned icut  &   P.   R.  R. 

Co.  23  Blatchf.  453.424,  436 
Henderson  v.  McVay,  32  Ala.  471.  245 
V.  Meyers,  11  Phila.  616....     88 
V.  Walker,  55  Ga.  481  ..183. 

191,  202,  209,  211,  395,  512 


CASES  CITED. 


Hendricks  v.  Robinson,  2  Johns. 

Ch.  296 'j:',9,l'44 

Hendrix  v.  American  Mortg.  F.  L. 

Co.  95  Ala.  313 17 

Henn  v.  Walsh,  2  Edw.  Ch.  129.. 

97,  306-309,  325,  333 
Henningw.  Raymond,  35  Minn.  303 

51,  161,  162,  167,  337,  401 
Henry  v.  Henry,  10  Paige,  314.314,  319 

V.  Henry,  103  Ala.  582 

219,  230,  410,  584,  590 

V.  Kaufman,  24  Md.  1 23 

v.  Martin,  88  Wis.  367 628 

Henshaw  v.  Wells,  9  Humph.  568 

27,  267,  281,  301,  354,  355 

Herbst,  Re,  63  Hun,  247 186 

Herman  v.   Fisher,    11  Mo.  App. 

275  25   49 

Hermanos,  Re.  L.  R.  24  Q.  B.  Div.  ' 

640... 330 

Hermandez  v.  Drake,  81  111.  34  — 

261,  616 
Herndon  v.  Hurler,  19  Fla.  397...   118 

Herrick  v.  Miller,  123  Ind.  304 

294,  375,  389.  568 
Herring  ».  New  York,  L.  E.  &  W. 
R.  Co.    105  N.  Y.  340. 
26,  82,  142, 145,  198, 352, 454 

Herron  v.  Vance,  17  Ind.  595 

153,  159,  183,  383,  400 

Hersey  v.  Veazie,  24  Me.  9. 351 

Hervey  v.  Filzpatrick,  Kay,  421   .  531 
V.  Illinois  M.  R.  Co.  28  Fed. 

Rep.  169 ...363,  476 

v.  Rhode  Island  Locomotive 
Works,  93  U.  S.  664,  23 

L.  ed.  1003 500 

Hesing  v.  Attv.  Gen.  104  111.  292.  397 

Hewett?).  Adams,  50  Me.  271 158 

V.  Adams,  54  Me.  208„.-403,  405 
V.  Murray,  54  L.  J.  Ch.  572, 

go  T     'p    380  75 

Heyert).  Alexander,  108  ill".  385 1.  413 
Hibernia  Nat.  Bank  v.  Lacombe, 

84  N.  Y.  367 

110,  113,  167,  168,  412 
Hickling®.  Wilson,  104  111.  54...  405 
Hicks  t).  Hicks.  3  Atk.  274...  .202,  215 
V.  International  &  G.  N.  R. 

Co.  62  Tex.  38.. 46,  518,  520 
Higgins,  Re,  27  Fed.   Rep.  443... 

122,  131,132 

».  Bailey,  7  Robt.  613 339 

V.  Gillesheimer,    26    N.    J. 

Eq.   308. 113,   115, 

149,  251,  259 

V.  Taft.  4  App.  Div.  62 

400,  402,  410,  435 

V.  Wright,  43  Barb.  461... _   613 

Rinrlitower  v.  Thornton,  8  Ga.  486  362 

Hilbert,  Bkc  parte,  11  Vcs.  Jr.  397    93 


lliles  V.  Cn.se,  14  Fed.  Rep.  141...  498 

V.  (Jase,  9  Biss.  549 580 

V.  Moore,  15  Beav.  175 299 

Hill®.  Arnold,  79  Ga.  367. 534 

V.  Boston,  122  Mass.  344...  210 
V.  Corcoran,  15  Colo.  272..  124 
V.  Dobie.  8  Taunt.  325,. 223,  496 
V.  Hart-Davis,  L.  R.  21  Ch. 

Div.  798 131 

V.  Nautilus  Ins.  Co.  4Sandf. 

Ch.  577 352,  355 

V  Parker,  111  Mass.  508... 
128,  185.  188,  1S9, 
202,  207,  231,  417,  418.  621 
«.  Robertson,  24  Mis.«.  368.. 

41,  267,  281 
V.  Thompson,  3  Meriv.  622.  13 
V.  Western  &  A.  R.  Co.  86 

Ga.284 41,  146, 

153.  155,  259,  355,  376,  409 
Hillier  ®.  Allegheny  County  Mut. 

Ins.  Co.  3  Pa.  470 180 

Hilton  ®.  Guyot,  159  U.  S.  113,  40 

L.  ed.  95 113 

Hinkley  v.  Blethen,  78  Me.  221.  _. 

366,   471 
Hinckley  v.  Gilman,  C.  &  S.  R. 
Co.  100  U.  S.  153,  25  L. 
ed.  591... 118,  203,  206, 
207,  218,  394,  583,  594,  631 

V.  Pfister,  83  Wis.  64 

343,  353.  354 
Hinton  v.  Galli,  24  L.   J.  Ch.  121, 

2Eq.  479 108 

Hirshfeld   v.   Kalischer,   81    Hun, 

606 418 

Hitchcock  V.  St.  John,   1   Hoffm. 

Ch.  511 316 

Hitchcock  Mfg.   Co.,  Re,   1   App. 

Div.  164 360,  361 

Hitchen   v.    Birks,    L.   R.  10   Eq. 

471... 536 

Hitz  V.  Jenks,  123  U.  S.  297.  31  L. 

ed.  156 432,  433 

Mlawaceki  v.  Bohman,  51  Wis.  92  43 
Ihmrv.  Harshow,  49  Wis.  379...  376 
Hoare  v.  Stephens,   L.   R.  32  Ch. 

Div.  194. 294 

Hobart®.  Ballard,  31  Iowa,  521.. 

308,  309,  334 

T.  Bennett,  77  Me.  401 399 

V.  Frost,  5  Duer,  672 159 

■V.  Gould,  8  Fed.  Rep.  57...  440 
V.  John.son,  8  Fed.  Rep.  493  443 
Hobhouse  v.  Hollcombe,  2  DeG.& 

S.  208 .  136 

Hoboken  Bldg.  Asso.  v.  Martin,  13 

N.'J.  Eq.  427.. 556 

Hodges    V.   New   Eniiland  Screw 

Co.  1  R.  I.  312 397 

Hodson  V.  Warner,  60  Ind.  214...  549 


Vlll 


CASES  CITED. 


Hoerle  ».  IMcIllmrgy,  29  Jones  & 

S.  184.. 600 

Hoffman  v.  Duncan,  17  Jur.   825.  308 

V.  Schoyer,  143  111.  598 51 

Hoge  V.  liollister.  8  Baxt.  533....  287 
Hogg  V.  Ellis.  8  How.  Pr.  473.321,  331 
Hogsett®.  Ellis,  17  Mich.  363.... 

283.  293,  460,  469 
Holbrook  v.  American  F.  Ins.  Co. 

6  Paige,  220.... 

138.  180,  377,  395,  589 
t).  Ford,  153  111.  633.... 413,  417 
Holcomb   V.   Johnson,   27    Minn. 

353 204,205,261,  615 

Holden  v.  MciVIakin,  1  Par.  Sel. 

Eq.  Cas.  270. 71 

V.  Upton.  134  Mass.  177 173 

Holdredge  v.   Gwynne,  18  N.  J. 

Eq.  26.. 239,  354 

Holland  v.  Cork  &  K.  R.  Co.  2  Ir. 

Eq.  Rep.  417. 264 

V.  Levviston  Falls  Bank,  52 

Me.  564 367 

Hollenbeck  v.  Donnell,  94  N.  Y. 
342,  Rev'g  29  Hun,  94. 
270, 
272,  273,  276,  278,  280, 
285,  286,  288,  293.  457,  608 
HoUins  V.  Brierfield  Coal  &  I.  Co. 
150  U.  S.  371,  37  L.  ed. 

1113 238 

Holme  V.  Littlejohn,  12  La.   Ann. 

298.... -899,  401,  410 

Holmes  t).  Bell,  2  Beav.  298 296 

V.  Holmes,  29  N.  J.  Eq.  9..  553 
V.  Knapp  Electrical  Works, 

59  111.  App.  58 67 

V.  Marshal],  78  N.  C.  262..  250 
T.  Millage  [1893]  1  Q.  B.  551     45 
v.  Newcastle-upon  Tyne  Ab- 
batoir  Co.  L.  R.  1   Ch. 

Div.  682.. 409 

V.  Penney.  3  Kay  &  J.  90..  407 
V.  Remsen,  4  Johns.  Ch.  460, 

20  Johns.  229..  109,  112,  167 
D.  Sherwood,     3     McCrary, 
405,  16  Fed.  Rep.  725..     51 

Holt  7).  Thomas,  105  Cal.  273 445 

Home  Provident  Safety  Fund 
Asso.,  Be,  129  N.  Y. 
288,  Rev'g  39  N.  Y.  S. 

R.  437 

134,  200,  371,  395,  597 
Honegger  v.  Wettstein,  15  Jones  & 

S.  125,94N.Y.252..194,  197 
Hood,  JEx  parte  (Ala.)  18  So.  176.  560 
V.  First  Nat.  Bank,  29  Fed. 

Rep.55 .-     28 

Hooper  x.  Central  Trust  Co.  81 
Md.  559.  29  L.  R.  A. 
262 ..388,  523 


Hooper  v.  Winston,  24  111.  353.  .22, 

60,  82.  83.  93,  203,  205.  632 
Hoopes  V.  Tuckerman,  3   Sandf. 

311 110.  167,  168 

Hoover  v.  Montclair  &  G.   L.   R. 

Co.  29  N.  J.  Eq.  4.... 

86,  93, 

117.  380,  475,  489,  491.  524 

Hope  Mut.  L.  Ins.  Co.  v.  Taylor, 

2  Kobt.  278 112.  165 

Hopfensack    v.    Ilopfensack,    61 

How.  Pr.  498 588 

Hopkins  v.  Connel,  2  Tenn.  Ch. 

323 211,  229,  395 

V.  Taylor,  87  111.  436 388 

«.  Worcester  &  B.  Canal  Co. 

L.  R.  6  Eq.  437 2,  461 

Hopkins'  Appeal,  90  Pa.  69.. 360 

Hopper  «.  Lovejoy,  47  N.  J.   Eq. 

573,  12  L.  R.  A.  588...  92 
Hoppes«.  Hoppes.  123  Ind.  397..  302 
Horner  v.  Henuiug,  93  U.  S.  228, 

23  L.  ed.  879 

178,  395.  398.  399,  405,  449 
V.  Zimmerman.  45  111.  14  ..  244 
Hornsby  v.  Eddy,  56  Fed.   Rep. 

461 29.203,  512,  514 

Horn  Silver  Min.  Co.  ».  Ryan,  42 

Minn.  198 397 

Horton  v.  White,  84  N.  C.  297.. 27,  43 
Hospes  V.  Almstedt,  13  Mo.  App. 

270,  Aff'd83  Mo.  473..  205 
Hottenstein  v.  Conrad,  5  Kan.  249     71 

V.  Conrad,  9  Kan.  435 

54,  159,  308 

Houchin  v.  Turner,  89  Ga.  26 366 

Houlditch    V.    Lord    Donegal,    1 

Realty,  402.  890 33,  536 

Houston  «.  Levy,  44  N.  J.  Eq.  6..  240 
Houston  &  T.  C.  R.  Co.   «.  Kelly, 
(Tex.  Civ.  App.)  35  S. 

W.  878. 520 

V.  Roberts  (Tex.)  19  S.  W. 

512 192 

Hovey  v.    Blakeman,   4  Ves.    Jr. 

606... 234 

V.  McDonald,  109  U.  S.  150, 

27  L.  ed.  888-. ..70,  73,  119 

How  «.  Jones,  60  Iowa,  70 . 

282.  594,  632 
Howard  v.  Glenn,  85  Ga.  238.362,  403 
V.  LaCrosse  &  M.    R.    Co. 

Woolw.  49 363 

V.  Lowell  Mach.  Co.  75  Ga. 

325 .70,  558 

e.  Papera,  1  Madd.  142  (Am. 

ed.  86) 529,  532 

».  Turner,  155  Pa.  349 391 

v.  Whitman.  29  Ind.  557.. . 

359,  616 
Howe  V.  Deuel,  43  Barb.  504.. 343,  344 


CASES  CITED. 


lix 


Ho\?e  V.  Gibson,  3  Tex.  Civ.  App. 

263 ._202.211 

V.  Hardin.ir,  76  Tex.  17.102,  225 

V.  Joues,  57  Iowa,  130 

15,  17,  18,  455,  466,  603 

V.  Jones,  60  Iowa,  70. 117 

V.  Jones,  71  Iowa,  92 117 

V.  Wiiimey,  66  Me.  17 244 

Howell  V.  Harvey,  5  Ark.  270 323 

V.  Hough,  46  Kan.  152 46 

V.  McDowell,  47  N.  J.  L.  359  257 
V.  Ripley,  10  Paige,  43._22, 

49,  63,  267,  296,  300,  376 
Howes  «.  Davis,  4  Abb.  Pr.  71...  591 
Howlett  v.  Central  Carolina  Land 
&  Improv.  Co.  56  Fed. 

Rep.  161 123,  124,  345 

V.  New  York,  W.  S.  &  B. 
R.  Co.  14  Abb.  N.  C. 

328 508 

Hoyle  V.  Plattsburg  &  M.  R.  Co. 

54  N.  Y.  314 360, 

407,  492,  503 
Hoyt  V.  Stoddard,  2  Allen,  442... 

103,  107,  224 
0.  Thompson,  5  N.  Y.  320, 
19  N.  Y.  207,  3  Sandf. 
416._.50,  114,  142,  168,  173 
Hubbard  v.  Camperdown  Mills,  25 

S.  C.  496 89.  90 

V.  Guild,  1  Duer,  662 

61,  308,  315 
«.  Hamilton  Bank,    7  Met. 

340 371 

V.  Hubbard,  14  Md.  356.... 

239,  243,  354 
V.  New  York,  N.  E.  &  W. 
Invest.  Co.  14  Fed.  Rep. 

675 359 

Hubbell  V.     Avenue    Invest.    Co. 

(Iowa)  66  N.  W.  85....  298 
V.  Dana,  9  How.  Pr.  424... 

189,  418,  613 
V.  Moulson,  53  N.  Y.  228  ..  276 
7).  Syracuse  Iron  Works,  42 

Hun,  182. 171,  179 

Hudson  V.  Piets,  11  Paige,  180  ... 

66,  139,  256 
Hugh  V.  McRae,  Chase  Dec.  466.. 

353,  354,  371 

Hughes  V.  Hall,  5  Munf.  431 147 

p.  Hatchett,  55  Ala.  631 

38,  39,  548 
V.  Williams,  6  Ves.  Jr.  459.     62 
Hughitt  V.  Hayes,  136  N.  Y.  163.. 

440,  618 
Hugonin  v.  Basely,  13  Ves.  Jr.  105 

26,  33,  41,  43,  44,  536,  545 
Huidekoper    v.    Hinckley    Loco- 
motive Works,  99  U.  S. 
258,  25  L.  ed.  344..  107,  576 


Huiskamp  v.  Moline  Wagon   Co. 
121  U.  S.  310,  30  L.  ed. 

971 376,  387 

Hulbert  v.  Young,  13   How.  Pr. 

413 159 

Huling  V.  Farwell,  33  111.  App.  238  631 
Hull  V.  Carnley,  11  N.  Y.  502....   150 

v.  Caughy,  66  Md.  104 71 

V.  Thomas,  3  Edw.  Ch.  236  128 

Hulse  1).  Wrieht  (Ohio)  61 239 

Hulst,  Re,  7  Ben.  17 56,  121 

Humphrey  v.  Hurd,  29  Mich.  44_.  293 
Humphreys  v.  Allen,  101  III.  490.. 

117,  474, 525 
«.  Hopkins,  81  Cal.  551,  6 
L.  R.  A.  792.... 49,  50, 

110,  112,  135,  168,  414 

Hun  v.  Cary,  82  N.  Y.  70 397 

Hungerford  v.  Gushing,  8  Wis.  320     15 
Hunt  v.  Columbia  Ins.  Co.  55  Me. 

290... 50,  110-112,  167,  169 
V.  Fields,  9  N.  J.  Eq.  36...  246 
D.  Jackson,  5  Blatchf.  349..  110 
V.  Le  Grand  Roller  Skating 

Rink  Co.  143  111.  118..  356 
«.  Wolfe,  2  Daly,  303  ...22,  344 
Hunter  v.  Hunter,  4  W".  W.  &  A'B 

(E.)17 60,  61 

V.  Peaks,  74  Me.  363 4 

v.  Potts.  4  T.  R.  182... -109,  164 
Hupfeld  V.  Automaton  Piano  Co. 

66  Fed.  Rep.  788 187 

Hurd  V.  Elizabeth,  41  N.  J.  L.  1.. 

50,  111,  112,  167,  169 
Hurlbut  V.  Marshall,  62  Wis.  590.  354 

Hurn  V.  Keller,  79  Va.  415 240 

Hursh  V.  Hursh,  99  Ind.  500.. 267,  280 

Hurt  V.  Clarke,  56  Ala.  19 387 

Hutchinson  v.  Brand,  9  N.  Y.  208  253 
V.  Green,  6  Fed.  Rep.  833.48.  56 

V.  Hampton,  1  Mont.  39 588 

V.  Massareene,  2Ball&B.  54  336 
Hutton  V.  Hey  wood,  L.  R.  9  Ch.229    65 
V.  Lockridge,  27  W.  Va.  428 

17,  34,  564 
Hybart,  Re,  (N.  C.)  25S.  E.  963..  695 
Hyde  v.  Lynde,  4  N.  Y.  387..  104, 
"113,  114,  144,  149,  157, 
172,  180,  256,  260,  283,  397 
«.  Warden,   L.   R.   1  Exch. 

Div.  399 61 

Hyde  Park  Gas  Co.  v.  Kerber,  5 

111.  App.  132... 41,  354,  367 
Hyman  v.  Kelly,  1  Nev.  179... 63, 

267,  281,  283,  285 


Iddings  v.  Bruen,  4  Sandf.  Ch.  417, 
223  

22,  23,  47,  66,  149,  154.  336 


Ix 


CASES  CITED. 


Iglehart  v.  Bierce,  3G  III.  133 

112,  101.  1(J7,  401 
Illinois  C.  R.  Co.  v.  Tin  rill  ("Ca- 
wdod  Patent"),  {>4  U.  8. 

695,  24  L.  ed.  238 191 

Illinois  Trust  &  Sav.  Bank  v.  First 
Nat.  Bank,  15  Fed.  Rep. 

858 - -  432 

V.  Pacific  R.  Co.  99  Cal.  407 

118,  594 
v.  Pacific  R.  Co.   (Cal.)  47 

Pac.  GO. 696 

».  Smith,  21  Blatcbf.  275...  202 
Importers'   &    T.    Nat.    Bank    v. 
Peters,  123  N.  Y.  272. 

392,  628 
Ind  V.  Kidd,  63  L.  J.  Q.  B.  726...  569 
Ingersoll  v.  Cooper,  5  Blackf.  426. 

161,  399,  400 

Ingraham  v.  Geyer,  13  Mass.  146.  165 

Innes  «.  Latisintr,  7  Paige.  583.319,320 

International  &  G.  N.   R.  Co.  v. 

Herndon      (Tex.      Civ. 

App.)33S.  W.  377....  573 

V.  Ormond,  62  Tex.  274 

518,  520,  565 
International    Improv.    Fund    v. 
Greenough,   105    U.   S. 

527,  26  L.  ed.  1157 

118,  230,  572,  583 
International  Trust  Co.  v.  Ameri- 
can   Loan    &    T.    Co. 
(Minn.)   65   N.   W.    78, 
Rev'd  on  Rehearing  in 

65  N.  W.  632 356.  402 

Interstate  Nat.  Bank  v.  O'Dwyer 

(Tex.)  38  S.  W.  368-...  698 
Investment  Co.  v.  Ohio  &  N.  W. 

R.  Co.  36  Fed.  Rep.  48  524 

Ireland  v.  Eade,  7   Beav.  55 153 

V.  Nichols,  37  How.  Pr.  222  552 
Ireland,    Fitzpatrick,   v.   Eyre,    1 

Hog.   171 129 

Irons  V.  Manufacturers'  Nat.  Bank, 

6  Biss.  301.421.  422.  446,  609 
e.  Manufacturers' Nat.  Bank, 
17   Fed.    Rep.    308,    27 

Fed.  Rep.  591. 443 

Irwin  V.  Everson,  95  Ala.  64 

308,  334,  335 
Isham  V.  Ketchum,  46  Barb.  43...  160 
Ishmael  v.  Parker,  13  111.  324.239,  244 

J. 

Jackson  v.  Cadwell,  1  Cow.  622.157, 260 
V.  DeForest,  14  How.  Pr.  81 
97,  307,    309,  325,  333, 

340,  619 
e.  Garnsey,  16  Johns.  184.. 

157.  260 


Jackson   v.  Hooper  (Ala.)  18   So. 

251 36,  290,  298 

V.  Laheu,  114  111.  287,  0-7.. 

121,  122,  339,  416 
V.  McLean,  36  Fed.  Rep.  213  359 
V.  Roberts,  31  N.  Y.  304.1 15,  391 
V.  Sheldon,  9  Abb.  Pr.  127. 

239.  300,  307,  320 
Jackson   Marine  Jns.    Co.,    Ee,   4 

Sandf.  Ch.  559.. 347 

Jacobs  «.  Gibson.  9  Neb.  380 

11,  267,  349 

V.  Turpin,83Ill.  424 610 

Jacobsous.  Allen,  20  Blalchf.  525. 

177   385 

V.  Landolt,  73  Wis.  142 ' 

24,  132,  372,  558 
Jacquin  v.  Buisson,  11  How.  Pr. 

385 308,  317 

Jaflfrey  v.  Brown,  29  Fed.  Rep.  477 

318,  319 

V.  Raab,  72  Iowa,  335 588 

James  v.  James  Clement  Co.  8  N. 

Y.  S.  R.  490 184 

James  River  &  K.  Co.  v.  Little- 

john,  18  Graft.  53 35 

Janeway  v.  Green,  16  Abb.  Pr.  215  540 
Jay,  Ex  parte,  L.  R.  9  Ch.  133...       4 

V.  DeGroot,  2  Hun,  205 391 

Jay's  Case,  6  Abb.  Pr.  2y3..._189,  194 
Jefferys  v.  Smith,  1  Jac.  &  W.  298 

61,  306 
Jeffreys  v.  Coleman,  20  Fla.  536..  118 

Jenkins  ®.  Briant,  7  Sim.  171 234 

«.  Hinman,  5  Paige,  309.277,280 

V.  Jenkins,  1  Paige,  243 

42,  462,  529 

Jenks  V.  Horton.  96  Mich.  13 293 

Jenner-Fust  v.  Needham,  L.  R.  31 
Ch.   Div.  500,  Aff'd  L. 
R.  32  Ch.  Div.  .')82.293,  294 
Jennings  v.  Baddeley,  3  Kay  &  J. 

78.. 332 

V.  Philadelphia  &  R.  R.  Co. 

23  Fed.  Rep.  569 57,  169 

V.  Simpson,  12  Neb.  558 595 

Jerome  v.  ]\IcCarter,  94  U.  S.  737 

24  L.  ed.  138 64, 

86,  93,  345,  380,  485,  523,  524 
Jervis  v.  White,  6  Ves.  Jr.  738,  note  33 
Jessup  V.  Atlantic  &  G.  R.  Co.  3 

Woods,  441 477 

Jewett  V.  Miller,  10  N.  Y.  402....  389 
V.  Palmer,  7  Johns.  Ch.  65 

157,  260 
V.  Valley  R.  Co.  34  Ohio  St. 

601 177 

Johns  V.  Johns,  23  Ga.  31 

18,  34,  42.  73,  532,  604 
Johnson,  Ex  parte,  19  S.  C.  492.. 

202,  209,  510 


CASES  CITED. 


Ixi 


Johnson,  Ee,  46  Fed.  Rep.  480...  124 

V.  Bilker,  38  III.  98 61(5 

V.  Cochrane,  91    Hun,  163.-     35 

V.  Farnum,  56  Ga.  144 

239.  248,  354 
V.  Gunter,  6  Bush,  524.139,  205 
V.  LHllin,  5  Dill.  65,  103  U. 

S.  800,  26  L.  ed.  533.-.  442 
V.  Martin,    1  Thomp.  &   C. 

504... 58,73-75 

v.  Parker,  4  Bush,  149 51 

V.  Powers,  21   Neb.  292 

15,  198,  200,  203,  231,  610 
V.  Powers,  13  Fed.  Rep.  315, 
Aff'd  136  U.  S.  156,  35 

L.  ed.  112 239 

V.  Stewart,  41  Ga.  549 139 

V.  Tucker,  2  Tenn.  Ch.  398  278 
Johnston    v.    Charlottesville   Nat. 

Bank,  3  Hughes,  657..  428 

1).  Hanner,  3  Lea,  8 71 

■B.  Keener,  23  111.  App.  220.  337 

».  Riddle,  70  Ala.  219 296 

Jollet  V.  Deponthieu,  1  H.  Bl.  132, 

note 109 

Jolly  t\  Arbuthnot,  4  DeG.  &  J.  224  154 
Jones  V.    Bank   of    Leadville,    10 

Colo.  464 

26,  36,  354,  371,  603 
V.  Browse,  32  W.  Va.  444.. 

125,  184,  417 
V.  Dougherty,  10  Ga.  273... 

34,  73,  250,  462 

V.  Graves,  20  Iowa,  596 17 

V.  Green,  68  U.   S.   1   Wall. 

330,  17  L.  ed.  553.. 238,  244 
V.  Kilbrelh,  49  Ohio  St.  401  392 
V.  La  Touche,    2   Sugden's 

Dec.  671 262 

V.  Lisson,  6  Gray,  296 390 

«.  Keen,  115  Mass.  170 583 

V.  Schael,  45  Minn,  379 

26,  36,  321,  602 

V.  Smith,  10  Hare,  71 531 

V.  Smith,  40  Fed.  Rep.  314.  562 

Jordan  t-.  Real,  57  Ga.  602 548 

V.  Miller.  75  Va.  442.   .307,  311 
V.  National  Shoe&L.  Bank, 

74  N.  Y.  467 440 

V.  Sharlock,  84  Pa.  366..  180,  439 

V.  Wells,  3  Woods,  527 

183,  185,  194,  209,  213 

Joseph  V.  Levi,  58  Miss.  843 250 

Joslyn  V.  Athens  Coach  &  C.  Co. 

43  Minn.  534 567 

Jourdan  v.  Long  Island  R.  Co.  42 

Hun,  657 93 

«.  Long  Island  R.  Co.  6  N. 

Y.  S.  R.  89 389 

Journeay  v.  Brown,  26  N.  J.  L.  Ill 

71,  243 


Joy  V.  St.  Louis,  138  U.  S.  1,  34  L. 

ed.  843 453 

Judd  V.  Bankers'  &  M.  Teleg.  Co. 

31  Fed.  Rep.  182 

48,  56,  121,  252 
T.  Bankers'  &  M.  Teleg.  Co. 

24  Blatchf.  420 345 

Julliard  ^).  May,  130  111.  87 413 

Justice  V.  Kirlin,  17  Ind.  588.  161,  400 
J.  W.  D^nn  Mfg.  Co.  v.  Parkhurst, 

125  ind.  317... 136 

J.  W.  French,  The,  13  Fed.  Rep. 

916 123 


K. 


Kain  v.  Larkin,  131  N.  Y.  300 243 

®.  Smith,    80    N.     Y.     458, 

Rev'g  11  Hun,  552 

204,  209-212,   228,  229, 

395.  412,  516 

Kaiser  t).  Kellar,  21  Iowa,  95 

22,  23,  60,  214 
Kanaga  v.  Taylor,  7  Ohio  St.  134.  167 
Kansas  &  G.  S.  L.  R.  Co.  v.  Dor- 

ough,  72  Tex.  108 516 

Kansas  P.   R.   Co.   v.    Bayles,    19 

Colo.  348 373 

1).  Wood,  24  Kan.  619.. 204,  513 
Kansas  Rolling  Mill  Co.  v.  Atchi- 
son, T.  &  S.  F.  R.  Co. 

31  Kan.  90 71 

Karn  v.  Rorer  Iron  Co.  86  Va.  754 

117,  484,  523,  586 
Katsch  v.  Schenck,  18  L.  J.  Ch. 

N.  S.  386 -307-309 

Katz®.  Brewington,  71  Md.  79...  307 
Kean  v.  Colt,  5  N.  J.  Eq.  365...  18,  40 
Kearnev,    Ex   parte,    20   U.    S.    7 

Wheat.  38,  5  L.  ed.  391 207 

Kedian  v.  Hoyt,  33  Hun,  145.. 216,  626 
Keeler  v.  Brooklyn  Elev.  R.  Co.  9 

Abb.  N.  C.  166 465 

Keen  v.  Breckenridge,  96  Ind.  69 
125,  153,  159,  183,   184. 

189,  383,  417,  613 
Keene  v.  Gaehle,  56  Tex.  343... 

204,  229 

V.  Snowden,  56  Me.  343 195 

Keeney  v.  Home  Ins.  Co.  71  N.  Y. 

396 ...26,  142,  145,  337 

Keep  V.  Michigan  L.  S.  R.  Co.  6 

Chicago  L.  N.  101 

270,  273.  359 
Kehler  v.  Jack  Mfg.  Co.   55  Ga. 

639 239 

Kcllett«,  Ralhbun,  4  Paige,  110..  215 
Kelly  V.  Alabama  &  G.  R.  Co.  58 

Ala.  489. 

272.  361,  453,  457,  463 


Ixii 


CASES  CITED. 


Kelly  p.  Crapo,  45  N.  Y.  86 

110,  167.  168 
V.  Green  Bay  &  M.  R.  Co.  5 

Feci.  Rep.  846 498 

V.  Rutledge,  8  Ir.  Eq.  238--  29 
Kellopg  v_  Culler,  47  Wis.  649  ...  251 
Kenedy  v.  Benson,  54   Fed.   Rep. 

836 161 

Kennebec  &  P.  R.  Co.  v.  Portland 

&  R.  R.  Co.  54  Me.  181  114 
Kennedy  v.   Cresweli,    101  U.    S. 

641,  25L.  ed.  1075 240 

V.  Gibson,  75  U.  S.  8  Wall. 

498,  19  L.  ed.476 

88,    155,   382,  399,  401. 
411,  423,  424,  426,  427, 

429,  434-438,  443 
V.  Indianapolis,  C.  &  L.  R. 
Co.  3  Fed.  Rep.  99.... 

127,  183,  190,  191 
V.  St.   Paul  &  P.  R.   Co.  2 
Dill.  448,  5  Dill.  519... 

39,  86,  381,  475,  523 

«.  Thorp,  51  N.  Y.  174 

115,  256,  260 
Kennesaw  Mills  Co.  v.  Walker,  19 

S.  C.  104 251 

Kenney  v.  Ranney,  96  Mich.  617. 

183,  189,  202,  622 
Keokuk  N.  L.  Packet  Co.  v.  Dav- 
idson, 13  Mo.  App.  561 

66,  85,  372,  567 
Kerchner  v.  Fairley,  80  N.  C.  24 

267,  276,  281,  289 

Kerlin  v.  Ewen,  149  Pa.  58. 585 

Kerr  v.  Brandon,  84  N.  C.  128 61 

«.  Little,  39  N.  J.  Eq.  83...     95 
V.  Little,  42  N.  J.  Eq.  538..  226 

V.  Porter,  6  Gill,  404 308,  309 

®.  White,  7  Baxt.  294 54 

Kershaw  v.  IMatthews,  2  Russ.  62.  322 
Ketchum  v.  Durkee,  1  Barb.  Ch. 

480 249 

V.  Ketchum,  1  Abb.  Pr.  N.S. 

157 160 

Keyser®.  Hitz,  57  N.  Y.  339 437 

V.  Hitz,  133  U.  S.  138,  33  L. 

ed.  531 441,  443 

Kilbourne  v.  Fay,  29  Ohio  St.  264 

261.  407 
Kilbreth  v.  Root,  33  W.  Va.  600..  308 

Kildare  v.  Eustace,  1  Vern.  419 147 

Kilgore  v.  Hair,  19  S.  C.  486 61 

Killmer  v.  Hobart,  8  Abb.  N.  C. 

426 122 

».  Hobart,  58  How.  Pr.  452 

50,  112,  134,  168 
Kimball  v.  Gafford,  78  Iowa,  65..  392 
V.  Goodburn,  32  Mich.  10.. 

26,  354,  371 
V.  Lee,  40 N.  J.  Eq.  403.. 88,  572 


Kincaid  v.  Dwindle,  59  N.  Y.  553  374 
Kingi).  Armstrong,  50  Ohio  St.  222  440 
V.  Barnes,  51  Hun,  550.310,  347 
V.  Cutts,  24  Wis.  627...  22, 

153,  161,  162,  399,  400,  410 

V.  Donnelly,  5  Paitre,  46 544 

V.  Goodwin,  130  IlT.  102...  376 

V.  Gunnison.  4  Pa.  171 100 

V.  King,  6  Ves.  Jr.  172....  547 
V.  Ohio  &  M.  R.  Co.  7  Biss. 

529 128 

D.  Wooten,  54  Fed.  Rep.  612, 

2  U.  S.  App.  651  ..122,  137 
Kingsley  v.  First   Nat.  Bank,    31 

Hun,  329 407 

Kinney  v.  Crocker,  18  Wis.  74.57, 
125,  130,  188,  190,  191, 
209,  418,  511,  521,  613,  615 

V.  Paine,  68  Miss.  258 392 

Kinsela  v.  Cataract  City  Bank,  18 

N.  J.  Eq.  159 392,  624 

Kipp  V.  Hanna,  2  Bland,  Ch.  28.  44 
Kipper  «.  Glancey,  2  Blackf.  356.  247 
Kirby  v.  Ingersoll,l  Dougl.  (Mich.) 

477 -307,  315,  316,  332 

■».  Kirby,  1  Paige,  261 552 

V.  Schoonmaker,  3  Barb.  Ch. 

46.. 315 

Kirchner  v.  Fairley,  80  N.  C.  24..  358 
Kirkpatrick  v.  Corning,  37  N.  J. 

Eq.  54 196 

V.  Corning,  38  N.  J.  Eq.  234  337 
V.  McElroy,  41   N.    .J.   Eq. 

539 51,  317,  318 

Kitchen  v.  St.  Louis.  K.  C,  &  N. 

R.  Co.  69  Mo.  324.-408,503 
Kittanning  Ins.  Co.,  He,  146  Pa. 

102  355    371 

Klebisch».  Seidlerrs?  K  Y.' S.  R. 

503  229 

Klee  ».  E.  h' Ste'e"le'CoV"(Minn.) 

62  N.  W.  399 356 

Klein  v.  Jewett,  26  N.  J.  Eq.  474. 
202,  209,  211-313,  395, 

509,  516 
Kneeland  v.  American  Loan  &  T. 
Co.  136  U.  S.  89,  34  L. 

ed.  379 51,  95,  151, 

217,  221.  226,  371,372, 
393.  481,  484,  487,  491, 
493,  496,  497,  523,  576,  580 
V.  Bass    Foundry  &  Mach. 
Works,  140  U.  S.  592, 

35  L.  ed.  543 

95,  203,  217,  577,  578 
V.  Luce,  141  U.  S.  491,  35  L. 

ed.  830- -.117,  523,  525,  578 
Knight  V.    Duplessis,  1  Ves.    Sr. 

334 539 

V.  Duplessis,  3  Ves.  Sr.  360. 

43,  274,  284 


CASES  CITED. 


Ixiii 


Knight  V.  Knight,  3  P.  Wms.  331.     64 
V.  Lord   Plymouth,  3  Atk. 

480 301.  204,  218 

V.  Plymouth,  1  Dick.  120...  391 

V.  Nash,  22  Minn.  452 70 

Kniffhton  v.  Young,  22  Md.  359..  32 
Kuolie  V.  Baldridge,  73  Ind.  54-..  338 
Knott  V.  Morris  Canal  &  Bkg.  Co. 

4  N.  J.  Eq.  423 84 

Knowles  v.  Clayton,  3  L.  J.  Ch. 

181  550 

V.  Scott.'ei'fi"  t"'n."  S.  135  229 
Koehler  v.  Black  River  Falls  Iron 
Co.  67   U.  S.  2  Black, 

715,  17  L.  ed.  339 360 

Koontz  V.  Northern  Bank,  83  U. 
S.  16  Wall.  196,  21  L. 

ed.  465 100,  625,  633 

Kortright  v.  Cady,  21  N.  Y.  366..  276 
Kounze  v.  Omaha  Hotel  Co.  107 
U.  S.  378,  27  L.  ed.  610 

276,  281,  289 
Kreisle  v.  Campbell  (Tex.)  33  S. 

W.  852 187 

Krippendorf  v.  Hyde,  110  U.  S. 

276,  28  L.  ed.  145 123 

Kron  V.  Dennis,  90  N.  C.  327 552 

?j.  Smith,  96  N.  C.  386 66 

Kronbergw.  Elder,  18  Kan.  150.. 

50,  110,  112 
Kuhl  V.  Martin,  26  N.  J.  Eq.  60..  263 


La  Chaise  v.  Lord,  1  Abb.  Pr.  213.  319 
V.  Lord,  10   How.  Pr.  461..  239 
Lacombe  v.  Millikin,  36  La.  Ann. 

367.. 387 

Ladd  v.  Harvey,  21  N.  H.  514... 

355,  545,  603 
Ladue  v.  Detroit  &  M.  R.  Co.  13 

Mich.  380.283,  293,  460,  469 
La  Follett«.  Aiken,  36  Ind.  1_.156, 180 
Lake  v.  De  Lambert,  4  Ves.  Jr. 

593 539 

Lake  Superior  Iron  Co.  v.  Brown, 

44  Fed.  Rep.  539 345 

Lamar  Ins.  Co.  v.  Gulick,  103  111. 

41 ...117,  175,403,  405 

Lamb  v.  Ewing,  54  Fed.  Rep.  273.  127 
Lammon   ■».  Giles,  3  Wash.  Terr. 

117 15,  291,  588.603 

Lamphear     v.     Buckingham,     33 

Conn.  238 209,229,  511 

Lancashire  v.  Lancashire,  9  Beav. 

120 43 

Land  Financiers'  Asso.  Re,  L.  R. 

10  Ch.  Div.  269 560 

Lane«  Capscy,  3  Ch.  411.156, 184,  185 
V.  Cotton,  1  Ld.  Raym.  646.  211 


Lane  v.  Jilacon  &  A.  R.  Co.  96  Ga. 

630... 237 

V.  Morris,  8  Ga.  468 177 

V.  Sterne,  3  Giff.  629  ...121,  128 

Lane's  Appeal,  105  Pa.  49 362 

Lanfear  ».  Summer,  17  Mass.  110.  500 
Langdon  v.  Lockelt,  6  Ala.  737...  137 
V.  Vermont  &  C.  R.  Co.  53 

Vt.  328 525 

V.  Vermont  &  C.  R.  Co.  54 

Vt.  593 355,  503,  619 

Langford,  Me,  57  Fed.  Rep.  570_.   133 
V.  Langford,  5  L.  J.  Ch.  N. 

S.  60 128,  147,  295,  417 

Langham  Skating  Rink   Co.,  Re, 

L.  R.  6  Ch.  Div.   102..     25 

Langley  v.  Hawk,  5  Madd.  46 531 

Langstaff  v.  Fenwick,  10  Ves.  Jr. 

405 299 

Lanier    -v.    Gayoso    Sav.    Inst.    9 

Heisk.  506 138,  180 

Lansing  v.  Lansing,  45  Barb.  182.  215 
Largan  v.  Bowen,  1  Sch.  &  Lef. 

296 560 

La  Societe  Francaise  v.  15th  Judi- 
cial  Dist.    Ct.   53   Cal. 

495 11,  12,  343, 

344,  346,  347,  352,  371,  495 
Latham  v.  Chaffee,  7  Fed.  Rep.  525  13 
Lathrop  v.  Knapp,  37  Wis.  215.. 

401,  403 
V.  Knapp,  37  Wis.  307.153,  155 
Laughlin  v.  United  States  Rolling- 
Stock  Co.  64  Fed.  Rep. 

25.. 388,  525 

Laurel  Springs  Land  Co.  v.  Foug- 

eray,  50  N.  J.  Eq.  756.  367 
Law  V.  Ford,  2  Paige,  210.306- 

308,  314,  317,  325,  331.  333 
V.  Garrett,  L.  R.  8  Ch.  Div. 

26 ...310,  330 

V.  Mills,  18  Pa.  185... .110,  111 
Lawrence  v.  Bank  of  the  Repub- 
lic. 35  N.  Y.  320 259 

V.  Greenwich  F.  Ins.   Co.   1 

Paige,  587.352,  353,  362,  465 
V.  Nelson,  21  N.  Y.  158....   180 
Lawrence  Iron  Works  Co.  v.  Rock- 
bridge Co.  47  Fed.  Rep. 

755 42 

Leach  v.  Kelsey,  7  Barb.  466.  .157, 

260,  406,  408 
Leadbetter  ®.  Leadbetter,   135  N. 

Y.290....- 150 

Leadville  Coal  Co.  v.  McCreery, 
141  U.  S.  475,  35  L.  ed. 

824 344 

Leary  v.  ShalTer,  79  Ind.  567 302 

Leather  Mf rs.  Nat.  liank  v.  Cooper, 
120  U.  S.  778,  30  L.  ed. 
816 434 


Ixiv 


C'ASEiJ  CITED. 


Leathers  v.  Shiphiiilders'  Bank,  40 

Me.  3SG a?;},  374 

Lcalhes  ».  Lealhes,  Weekly  Notes, 

1882.  p.  71.._.531.  r)41,  545 
Leavitt  v.  DcLuunay,  4  Saiulf.  Ch. 

'-'81 407 

V.  Palmer,  3  N.  Y.  19.. 104, 

157.  172,  256,  260 
V.  Yates,4Edw.  Ch.  134.18, 

18, 25,  163,  173,  352,  375, 610 
Lebanon   Trust  &   S.   D.    Bank's 
Assigned  Estate,  Ee,  166 

Pa.  622 302 

Leddell  v.  iStarr,  19  N.  J.  Eq.  159  354 

Lee  V.  Clarv,  38  Mich.  223 271,  283 

Leeds  v.  Gi'flord,  41  N.  J.  Eq.  464  301 
Leeming,   Be,  20  L.  J.  Ch.  N.  S. 

550  .- 37 

Lehigh  Coal  &  Nav.  Co.  v.  Central 

R.  Co.  43  Hun,  546 

346,  352.  353,  363 
V.  Central  R.  Co.  29  N.  J. 

Eq.252 481 

V.  Central   R.   Co.  41  N.  J. 

Eq.  167,   35  N.   J.    Eq. 

426,  38  N.  J.  Eq.  175.. 

84.    95,    101,    185,    197, 

205,  226,  373,  502,  613,  619 

Lehman    v.    McQuowu,   31    Fed. 

Kep.  138 594 

V.  Tallaha,ssee   Mfs:.  Co.  64 
Ala.  567-. 267,^272,  276, 

280,  359 
Leifchild's  Case,  L.  R.  1  Eq.  231. 

114,  157 
Leighton  v.  Harwood,  111  Mass.  67  622 
Lei'tch  V.  Hollister,  4  N.  Y.  211  ..  250 
L'Engle  v.  Florida  C.  R.   Co.  14 

Fla.  266... .118.  561 

Lenoir  v.  Linville  Improv.  Co.  117 

N.  C.  471  - .354,  394 

Lenox  v.  Notrebe,  Hempst.  225.. 

10,  13.  18,  43 
Lent  V.  McQueen,  15  How.  Pr.  313  247 
Leniz  V.  Flint  &  P.  M.  R.  Co.  53 

Mich.  444.. 138,  149 

Leonard  v.  Brooklyn,  71  N.  Y.  498  454 

V.  blorrs,  31  Ala.  488 

161,  162.  399,  400 
v.  Wallace,  44  N.  Y.  294...  142 
V.  Whaley,  91  Hun,  304  ...  551 
LeRoy  v.  IJogers,  3  Paiu;e.  237  ...  147 
Leslie  v.  Goodhue,  69  Hun,  71  ...  99 
Levenson  v.  ELson,  88  N.  C.  184.13,  43 
Levi  V.  Columbia  L.    Ins.    Co.   1 

Fed.  Rep.  206.... 123 

V.  Karrick,  13  Iowa,  344 45 

V.  Karrick,  15  Iowa,  444...  564 

Levy  V.  Cavauagh,  2  Bosw.  100  ..     49 

V.  Ely,  15  How.  Pr.  3v.5  ...  239 

Lewis  V.  Adams,  70  Cal.  403... 50,  135 


Lewis  V.  Campau,  14  Mich.  458...     70 
V.  Gnmiiard,   17  N.   J.   Eq. 

425 167 

®.  Lanphere,  79  111.  187 242 

V.  Lewis,  20  Mo.  App.  546.  564 
V.  Rol)eri8on,  13  Smedes  & 

M.  558 403 

V.  Singleton,  61  Ga.  161 47 

Lewis's  Petition,  lie,  52  Kan.  660. 

41,  362 
Lewis  &  F.  Mfg.  Co..  Re,  34  N.Y. 

Sunp.  983 52 

Lexington  Life,  F.  &  M.  Ins.  (!o. 

».  Page,  17  B.  Mon.  412  403 
Lloyd,  He,  L.  R.  12  Ch.  Div.  447.     61 
V.  Passingham,  16  Ves.  Jr. 
59....  14,  33,41,  43,44. 
64.  264,  274,  284,  348,  537 
t).  Trimleston,  2  Moll.  78...     44 
Libby  v.  Rosekrans,  55  Barb.  202. 

4,  100,  114,  375,  377 
Liberty  Female  Collesje  Asso.   v. 

VVatkins,  70  Mo.  13  ...  177 
Lichtenstein  v.  Dial,  68  Miss.  54..  582 
Life  Asso.  of  America,  lie,  96  Mo. 

63o 272 

V.  Rundle   ("Relfe  v.   Run- 
die"),  103  U.  S.  222,  26 

L.  ed.  337 170,  412 

Liggett  v.  Glenn,  4  U.  S.  App.  438, 

51  Fed.  Rep.  381 

48,  56,  345,  404 

Lilly  ».  Dunn,  96  Ind.  220 296 

Lincoln  v.  Filch,  42  Me.  256,  456. 

138,  376 
Lindsay  v.  American  Mortg.  Co.  97 

Ala.  411 10,  293,  604 

V.  Jackson,  2  Paige,  581  ...  180 
Lionberger  v.  Broadway  Sav.  Bank, 

10  Mo.  App.  499 404 

V.  Rowse,  43  Mo.  67. 388 

Litchfield  Bank  v.  Peck.  29  Conn. 

384... 92,  177,  180,  383,  610 
Little  V.  Dusenberry,  46  N.  J.  L. 
614.. 184,  192,  193,  209, 

210,  229,  395,  516 
V.  Garahrant,  90  Hun,  404..  408 
Littlejohn  v.  Turner,  73  Wis.  124. 

128,  184 
Little  Rock    Waterworks  Co.    v. 
Barrett,  103  U.  S.  576, 

26L.  ed.  523 34 

Little  Warrior  Coal  Co.  v.  Hooper 
(Ala.)  2  Am.  &  Eng. 
Corp.  Cas.  N.  S.365... 

357,  361 
Litzenberger    «.    Jarvis  Conkling 
Trust  Co.  8  Utah,  15.. 

483.  568.  573 
Livermore  v.  Bainbridge,  49  N.  Y. 

130 234 


CASES  CITED. 


Ixv 


Livermore     w.     Camden     County 

Chosen  Freeholders,  29 

N.  J.  L.  24', 210 

Livingston  v.  Bank  of  New  York, 

5  Abb   Pr.  338. 370 

■V.  Cleaveland,  5   How.    Pr. 

396- 252,  253 

V.  Peltitrrew,  7  Lans.  405  ..   202 
Loaiza  v.  San  Francisco  Super.  Ct. 

85  Cal.  11,  9  L.  R.  A.  37 

126,  355 
Locke  V.  Covert,  42  Hnn,  484.  .203,  219 
Lockey,  He,  1  Pliill.  Ch.  508,  14  L. 

J.  Cb.  N.  S.  164 79 

Lockhart  v.  Gee,  3  Tenn.  Ch.  332.     70 
Lofsky  V.  Monjer,  3  Saudf.  Ch.  69 

267,  296,  301 
Log  V.  Bean,  L.  R.  26  Ch.  Div.  306  131 

Logan  V.  Logan,  22  Fla.  561 247 

V.  McCall  Pub.  Co.  140  N. 

Y.  447 263 

London  &  M.   Bank,  Be,   L.  R.  6 

Ch.   App.  206 120 

London  &  S.  W.  Bank  v.  Facey, 

19  Week.  Rep.  676,  24 

L.  T.  N.  S.  126 17 

Long  V.  Forest,  150  Pa.  413,  23  L. 

R.  A.  33 ..170,  413 

V.  Majfstre,    1    Johns.    Ch. 

3i5-.. 268 

V.  San  Francisco  Super.  Ct. 

102  Cal.  449 '.  357 

Long  Dock  Co.  v.  Mallery,  12  N. 

J.  Eq.  431-. ..358,  461 

Longshore  Priming  &  Pub.  Co.  v. 

Howell  (Or.)  28 L.R.  A. 

464 132 

Lonsdale  v.  Church,  3  Brace,  41..  315 
Loomis  V.  McKenzie,  31  Iowa,  425 

306,  308,  334 

Loos,  Be,  50  Hun,  67 184,  417 

V.  Wilkinson,  HON.  Y.  195, 

1  L.  R.  A.  250. 259 

Lorch  V.  Aultman,  75  Ind.  162... 

25,  101,  126,  137 
Lore  V.  Dlerkes,  16  Abb.  N.  C.  47  259 

Losconibe  v.  Russell,  4  Sim.  11 334 

Loltimer  v.  Lord,  4  E.  D.  Smith, 

183 4,  11,  22, 

73,  74,  89,  125,  258,  307,  321 
Louisiana  Nat.  Bank  v.  Whitney, 

121  U.  S.  284.  30  L.  ed. 

961 118 

Louisiana  Sav.  Bank  &  S.  D.  Co., 

Be,  35  La.  Ann.  196...  465 
Louis  Snyder's  Sons  Co.   ®.  Arm- 
strong, 37  Fed.  Rep.  18 

384,   440 
Loui.sville  &  St.  L.  R.  Co.  v.  South- 
worth,  38  111.  App.  225 

69,  589 

B 


Louisville  Bkg.   Co.  v.  Paine,  67 

Miss.  678. 392 

Louisville,   E.   &  St.  L.  R.  Co.  v 

Wilson,  138  U.  S.   501, 

34  L.  ed.  1023.. 

201.  205,  572,  579 
Louisville,  N.  A.   &  C.  R.  Co.  v. 

Cauble,  46  Ind.  277 

204,  513,  516 
Louisville  Nat.  Bank  v.  Loving,  82 

Ky.   370 397 

Louisville  Water  Co.  v.  Hamilton. 

81  Ky.  517 454 

Loveday  v.  D'Esterre,  1  Hayes  & 

J.  151 28 

Lovenson  v.  Elson,  88  N.  C.  183..  544 
Lovettw.  Slocumb,  109  N.  C.  110.  13 
Low  V.  Buchanan,  94  111.  81 

50,  173,  174,  179,  385',  405 

V.  Burrows,  13  Cal.  188 135 

V.  Holmes,  17  N.  J.  Eq.  148  550 

Lowe  V.  Pioneer  Threshing  Co.  70 

Fed.  Rep.  646 354 

V.  Stephens,  66  Ga.  607.597,  600 

Lowells.  Doe,  44  Minn.  144 

11,  295,  349,  358 
Lowenstein  v.  Finney,  54  Ark.  124  67 
Lowry  v.  Hall,  2  Watts  &  S.  129..  Ill 

V.  Smith,  9  Hun,  514 101 

Low  Street  Bldg.  Asso.   No.  6  v. 

Zucker.  48  Md.  448 556 

Lucas  V.  Harris,  L.  R.  18  Q.  B. 
Div.  127,  56  L.  J.  Q.  B. 
N.  S.  15,55L.  T.  685.- 

15,  18,  45 
Ludgater  v.  Channel!,  15  Sim.  479, 

3Macn.  &G  175 

77.  78,  234,  606 
Lund  V.  SkanesEnskildaBank,  96 

111.  181 406 

Luudy  Granite  Co.,  Be,   L.   R.  6 

Ch.  463 .233,  497 

Lupton  V.  Stephenson,  11  Ir.  Eq. 

484.. 59,  60 

Lusk  V.  Hastings,  1  Hill,  656 91 

Lutt  «.  Grimont,  17  111.  App.  308. 

85,  533,  541 
Lycoming  F.  Ins.  Co.  v.  Langley, 

63  Md.  211 !;390,  414 

V.  Wright,  55  Vt.  526 

51,  111,  112,  167,  369,  413 
Lyman  v.  Central  Vermont  R.  Co. 

59  Vt.   167 

125.  188,  190,  203,  209, 
229,  395,  418,  510,  521,  614 
Lyme  v.  Lockwood,  2  Moll.  498..     03 
Lynch  v.  Johnson,  48  N.  Y.  27... 

240,  241,  251 
Lynde  v.  McGregor,  13  Allen,  173  407 


Ixvi 


CASES  CITED 


M. 

Mabry  v.  Harrison,  44  Tex.  286..  593 

».  Ross.  1  IIei.sk.  709 70 

McAlpin  V.  Jones,  10  La.  Ann.  552 

50.  Ill,  112,  lU,  167 
McArdle  v.  Barney,  50  How.  Pr. 

97 - -.  564 

McArthur  v.  Montclair  R.  Co.  27 

N.  J.  Eq.  77 580,  591 

McCann®.  Randall,  147  Mass.  81.  146 
McCarthy  v.  Lavasche,  89  111.  270 

175.  178,  385,  405 
V.  Peake,  9  Abb.  Pr.  164,  18 

How.  Pr.  138 15, 

16,  18,  33,  48,  56,  466,  599 
Macartney  v.   Walsh,    Hayes,  29 

note 93,  382 

McCarty  v.  Stanwix,  16  Misc.  132.  310 
McCarty's  Appeal,  110  Pa.  379__. 

115,  172,  397 

McCaslin  v.  State,  44  Ind.  151 548 

McCay«.  Black,  14  Phila.  635  .. 

202  205 
McClure  v.  Campbell.  71  Wis.  350 

50,  11],  112,  167 

V.  McLane,  39  Tex.  81 100 

McCombs  V.  Mcrryhew,  40  Mich. 

721 119 

McConnel  v.  Dickson,  43  111.  109.. 

244,  248 
McConnell  v.  Scott.  15  Ohio,  401.  353 
McCord  V.  Weil,  33  Neb.  868,  29 

Neb.  682 28,  42,  70 

McCormick  v.  Hadden.  37  111.  370.  500 
McCosker  v.  Brady,  1  Barb.  Ch. 

329 562 

McCracken  v.  Ware,  3  Sandf.  688. 

306,  307.  334 
McCrasker  v.  Brady,  1  Barb.  Ch. 

329 544 

Macready  v.  Schenck,  41  La.  Ann. 

456 79 

McCulloch  V.  Norwood,  58  N.  Y. 
562,  Modifying  4  Jones 

&  S.  180 196,  374 

McCullough  V.  Clark,  41  Cal.  298.  251 
V.  Merchants  Loan  &  T.  Co. 

29  N.  J.  Eq.  217.. ..61,  562 
McDermott  v.  Clary,  107  Mass.  501  207 
McDermutt ».  Strong,  4  Johns.  Ch. 

687.. ..237,  244 

McDonald  v.  Dougherty,  11   Ga. 

570 73 

V.  RossLewin,  29  Hun,  87. 

309,  385 
V.    Trojan,    56    Hun,    648, 

(mem.) 336 

V.  Webster,  2  Mass.  498 384 

McDonough  v.  Phelps,   15   How. 

Pr.  372 404 


McDougald  v.  Dougherty,  11  Ga. 

586 462 

McDowell  V.  Cochran,  11  HI.  31.. 

238.  244,  246,  247 
McElvey  v.  Lewis.  76  N.  Y.  373.. 

307,  331 
McElwain  v.  Willis,  9  AVcnd.  548. 

238,  248,  252 
McEvers  v.  Lawrence,  Hoffm.  Ch. 

172. 195 

McGean  v.  Metropolitan  Elev.  R. 

Co.  133  N.  Y.  9 46 

McGee  v.  Cowperthwaite,  10  Ala. 

966  - 932 

McGeorge  «.  Big  Slone  Gap  Im- 

prov.  Co.  57  Fed.  Rep. 

262.. 344.348,349,  366 

McGoldrick  v.  Slevin,  43  Ind.  522. 

239,  354 
McGowan  v.  Myers,  66  Iowa,  99.. 

122,  339,  416 
McGuin  V.   Fretts,   13  Ont.    Rep. 

699_ 160 

McHenry  v.  New  York,  P.  &  O.  R. 

Co.  25  Fed.  Rep.  114..  268 
Mcllhenny  ®.  Binz.  80  Tex.  1 

95,99.354,371,389,478, 

482,  483,  577 
Mcllrath  v.  Snure,  22  Minn.  391.. 

148,  383 
Mcintosh  V.  Elliott,  2  Grant  Ch. 

396... 234 

V.  Perkins.  13  Mont.  143...  335 
Mack  ».DeBardeleben  Coal  &  I. Co. 

90  Ala.  396,  9  L.  R.  A. 

650 365 

McKaig  V.  James,  66  Md.  583.255,  537 

Miickie  V.  Cairns,  5  Cow.  547 250 

McKellar  ».  Rogers,  20  Jones  &  S. 

360 286 

McKinney  v.  Ohio  &  M.  R.  Co.  22 

Ind.  99 204,  512 

McKinnon  v.  Wolfenden,  78  Wis. 

237 ..  118 

McLain  v.  Wallace,  103  Ind.  562.  392 
McLane  v.  Placerville  &  S.  V.  R. 

Co.  66  Cal.  606. _ 95,  96, 

459,  462,  465,  483.  489, 

491,  502 
McLaren  v.  Milwaukee  First  Nat. 

Bank,  76  Wis.  259.. 376,  387 
McLean  v.  Lafayette  Bank,  3  Mc- 
Lean, 503 17,  467 

V.  Presley,  56  Ala.  211 278 

McLean   County   Precinct  v.  De- 
posit Bank,  81  Ky.  254.  246 
McLeod  V.  Evans,  66  Wis.  401...  628 
McMahon  v.  Allen,  35  N.  Y.  403.  407 
V.   McClernan,    10  W.    Va. 

419 ..-.312,  340 

V.  Macy,  51  N.  Y.  155 444 


CASES  CITED. 


Ixvii 


McMabon  v.  North  Kent  Iron- 
works Co.  [1891]  2  Ch. 
148 41 

McMasters  v.  Campbell,  41  Mich. 

513 ---  409 

McMillan  v.  Richards,  9  Cal.  410.  292 
McMinnville  &  M.  R.  Co.  v.  Hug- 
gins,  7  Coldw.  217 70 

V.  Huggins,  3  Baxt.  177 

104,  105,  107,  388.  508 

McNab«.  Heald,  41  111.  326 244 

McNair  v.  Pope,  96  N.  C.  502.  ..42,  43 
McNairy  v.   Eastland,    10    Yerg. 

310 245 

i).  Pope,  96  N.  C.  502 13 

McNeil  V.    Colquhoon,   2   Hayw. 

(N.  C.)24 105 

McNulta  V.  Ensch,  134  111.  46.. 

396,  516 
V.  Lochridge,  141  U.  S.  327, 

35  L.  ed.  796 187, 

192,  195,  395 
V.  Lockridge,   137  111.  270, 
Aff'g   32   111.  App.    36, 
Aff'd  141  U.  S.  327,  35 

L.  ed.796 192,203. 

396,  516,  522 
.^laders  v.  Whallon,  74  Hun,  372-. 

241,  242 
Madgwick  t).  Wimble,  6  Beav.  495. 

305,  308 
Magan  v.  Fallan.  5  Ir.  Eq.  490 ... .  234 
Magee  v.  Cowperthwaite,  10  Ala. 

966 118,  584 

Magrath  v.  Veitch,  1  Hog.  110 53 

Maguire  v.  Allen,  1  Ball.  &  B.  75. 

17,  19,  465 
Mahon  v.  Crothers,  28  N.J.  Eq. 

567 ..279,  358 

Maiders  v.  Culver,  1  Duv.  164 408 

Main  v.  Ginthart,  92  Ind.  180 302 

Maish  v.  Bird,  59  Iowa,  307 17,  296 

Makins  v.  Ibotson  [1891]  1  Ch. 
130,  60  L.  J.   Ch.  164, 

63L.  T.  515 26,  96,  358 

Malaney  v.   Atkins,    1    Lack.   L. 

News,  252 184 

Malcolm  v.  ISIontgomery,  2  Moll. 

500 28 

Malone  v.  Buice,  60  Ga.  152 545 

Mallory,  lie,  18  N.  Y.  S.  R.  88...  125 
V.  Craige,  15  N.  J.  Eq.  73. .  240 
Manchester  v.  McKee,  9  111.  511..  244 
V.  Parkinson,  58  L.  J.  Q.  B. 

262 44 

V.  Tibhitts,  121  N.  Y.  223..  150 
Manchester  &  L.  Dist.  Bkg.  Co.  v. 
Parkinson,  L.  R.  22  Q. 

B.  Div.  173 238 

Manchester  &  M.  R.  Co.,  Be,  L. 

R.  14  Ch.  Div.  645....  363 


Manchester  Locomotive  Works  v. 
Truesdale,  44Minn.  115, 

9  L.  R.  A.   140 227, 

484,  499 
Mandeville  ■».  Avery,  20  N.  Y.  S. 

R.  801. 259 

V.  Avery,  124  N.  Y.  376... 

173,  259,  375,  410 
Manley  v.  Rassiga,  13  Hun,  288.. 

22,  92,  114,  252,  259,  375 
Manlove  v.  Burger,  38  Ind.  211  _. 
153,  154.  158,  161,   162, 
391,  396,  399.  400,  611,  625 

V.  Naw,  39  Ind.  289 158 

V.  Naylor,  38  Ind.  424 158 

Mann  v.  Bruce,  5  N.  J.  Eq.  413..   162 

V.Cooke,  20  Conn.  178 404 

V.  Currie,  2  Barb.  294..  174,  386 
V.  Pentz,  3  N.  Y.  415,  Ov.  2 
Sandf.    Ch.    257.... 47, 
65,    74.    114,    116.    141, 

144,  176,  259,  336,  403 
V.  Poole  (S.  C.)  26  S.  E.  229.  696 

V.  Stcnnett,  8  Beav.  180 79 

Manners  v.  Furzee,  11  Beav.  30..     73 
Manning  v.  Evans,  19  Hun,  500..  143 
V.  Manning,   1  Johns.    Ch. 

527 203,  215 

V.  Monaghan,  1  Bosw.  459, 

23  N.  Y.  539 202 

Manufacturers'  Nat.  Bank,  Be,  5 

Biss.    506. 155 

V.  Baack,  8  Blatchf.  137...  424 
Mapes     V.     Scott,     4     111.     App. 

268.. 43 

March  v.  Eastern  R.  Co,  40  N.  H. 

567 351 

V.  Wright,  46  111.  488 500 

Marine  &  River  Phosphate  Min.  & 

Mfg.  Co.  V.  Bradley,  105 

U.    S.    175.   26    L.   ed. 

1034 98 

Market  Nat.  Bank  v.  Pacific  Nat. 

Bank,  102  N.  Y.  464..  173 
V.   Pacific    Nat.    Bank,    30 

Hun,  50.... 446 

Marr  v.  Bank  of  West  Tennessee, 

4  Coldw.  471 360 

Marsh  v.  Sevmour,  97  U.  S.  348, 

24  L.  ed.  963. 191 

Marshall  v.  Farmers'  &  M.    Sav. 

Bank,  85  Va.  676,  2  L. 

R.  A.  534 408 

V.  Lockett,  76  Ga.  289 

24,  46.  121,  129 
V.  Otto,  59  Fed.  Rep.  249..  566 
Marten  v.   Van  Shaick,  4  Paige, 

479 97,  306-308. 

314,  325,  331,  333,  340,  619 
Martin  v.  Atchison,  2  Idaho,  590 

125,  183,  185,  189,  615 


Ixviii 


CASES  CITED. 


Martiu  v.  Black,  9  Paisre,  641 

103,  107,  131,  323,  495, 

496,  506 

V.  Burgwyn,  88  Ga.  78 

63,  239,  607 

V.  Davis,  21  Iowa,  535 

127,  154,  186 
V.  Martin,  14  Or.  165. -.582,  632 
V.  New  York,  S.  &  W.  K. 

Co.  36  N.  J.  Eq.  109- -  508 

V.  Potter,  11  Gray,  37 111 

V.   Smith,   21   Jones    &    S. 

277..-- 307.331 

V.  Tarver,  43  Miss.  517 455 

Marton,  Ex  parte.  11  Ves.  Jr.  397    93 

Mart,  The,  22  Abb.  N.  C.  227 355 

Marvin  Safe  Co.  v.  Ward,  46  N. 

J.  L.  19 210 

Marvine  v.  Drexel,  68  Pa.  362-..  530 
Marx  V.  Spauiding,  35  Hun,  478.  254 
Mason  v.  Dawson,  15  Misc.  595--  307 
V.   Equitable    League  Sup. 

Ct.  77  Md.  483 343,  346 

V.  Westoby,  L.   R.  32  Ch. 
Div.  206,  L.  R.  42  Ch. 

Div.  590 277,  300,355 

V.  Weston,  29  Ind.  561 251 

Massachusetts  Mut.  L.  Ins.  Co.  v. 
Chicago  &  A.  R.  Co.  13 

Fed.  Rep.  857.- 123 

Massey,  Ee,  L.  R.  9  Eq.  367. 586 

V.  Banner,  4  Madd.  416 207 

v.  Massey,  1  Cbeves  Eq.  159  591 
Massie  v.  Watts,  10  U.  S.  6  Cranch, 

148,  3  L.  ed.  181 147 

Master  v.  Kirton,  3  Ves.  Jr.  75.  .  334 
Mathews  «.  Neilson,  3Edw.  Ch.346  532 
Mathis  V.   Pridham,  1  Tex.  Civ. 

App.  58 174,384,  399 

Matthews  v.  Albertson,  24  Md.  527  449 
V.  Cooper,  49  N.Y.  S.  R.  792    49 
Mattingly  v.  Nye,  75  U.  S.  8  Wall. 

370,  19L.  ed.  380 239 

Maunsell  v.  Egan,  8  Ir.  Eq.  373--.     79 
May  V.  First  Nat.  Bank.  123  111.  551  413 
V.  Greenhill,  80  Ind.  124-.. 

239,  245,  248,  354 

V.  May,  11  Paige,  201 102 

V.  Printup,  59  Ga.  129_--48,  345 
Mayer  v.  Western  Car  Co.  102  U. 

S.  1,  26  L.  ed.  59 -.494,  497 
Maynard  v.  Bailey,  2  Nev.  333--. 

17,  18,  604 
V.  Bond,  67  Mo.  315- -25,  49 
52,  65,  74,  134,  135,  136, 
141,  147,  148,  373,  373, 

375,  416,  417 
Mayo  V.  McPhaul,  71  Ga.  758-...  44 
Mays  V.  Rose,  1  Freem.  Ch.  (Miss.) 

703 -10,13, 

15,  18,  25.  40,  4.1,  264,  348 


Mays  V.  Wherry,  3  Tenn.  Ch.  34-.     45 
Maysville   &   L.    R.  (:!o.  v.    Puu- 

nelt,  15  B.  Hon.  47----     13 
Maxwell  ».  Peters  Co.  (Ala.)  13  So. 

419  -- 343 

Mead  v.  Orrery,  3  Atk.  385 73 

Meadow  Valley  Min.  Co.  v.  Dodds, 

6  Nev.  363- ..13,  71 

Means'  Appeal,  85  Pa.  75 

175,  363,  403 
Meara  v.   llolbrook,  30   Ohio  St. 

137.-195,  303,  309,  213, 

339,  395,  510.  516 
Mechanics'  Bank  v.  Dakin,  51  N. 

-   Y.  519 -- 346 

Mechanics'    Nat.    Bank    v.    Lan- 

dauer,  65  Wis.  44 

190,  191,  196,  599 
Medeker  v.  Parker,  70  Ind.  509  _ .  - .  302 
Meeker  v.  Sprague,  5  Wash.  343.-  191 
Meier  v.  Kansas  P.  R.  Co.  5  Dill. 

476 -...22,  563 

Meinhard  v.  Strickland,  29  S.  C.  491  239 
Meisser  v.  Thompson,  9  111.  App. 

368. 405 

Melaney  v.  Atkins,  4  Pa.  Dist.  R. 

644 185 

Melendy  v.  Barbour,  78  Va.  544.. 

118,  135,  137,  153,   184. 

190,  191,  303,  311,  395, 

417,  516,  531 
Mellan   v.  Moline  Malleable  Iron 

Works,   131  U.   S.  353, 

33  L.  ed.  179- 101 

Melvin  v.  Robinson,  31  Fed.  Rep. 

635. 133,  124 

Memphis  &  C.  R.  Co.  v.  Hoechner, 

67  Fed.  Rep.  456 501 

Memphis  &  L.  R.  R.  Co.  v.  String- 
fellow,  44  Ark.  323.214,  516 
Mercantile  Ins.  Co.  v.  Jaynes,  87 

III.  199.. ..374,  386 

Mercantile  Invest.  &  Gen.  T.   Co. 

■».  River  Plate  Trust  L. 

&  A.  Co.  3  Ch.  303... .  366 
Mercantile  Trust  Co.  v.  ^Ina  Iron 

Works,    4    Ohio  C.    C. 

579.. 69.  348 

V.  Kanawha  &  O.  R.  Co.  39 

Fed.  Rep.  337 30 

V.  Kanawha  &  O.  R.  Co.  50 

Fed.  Rep.  874 533,  578 

V.  Kanawha  &  O.  R.  Co.  58 

Fed.  Rep.  6 535 

V.  Lamoille  Valley  R.    Co. 

16  Blatchf.  834. 57 

V.  Missouri,  K.  &  T.  R.  Co. 

36  Fed.  Rep.  231,  1  L. 

R.  A.  397 272,  358,  463 

V.  Missouri.  K.  &  T.  R.  Co. 

41  Fed.  Rep.  8 63 


CASES  CITED. 


Ixix 


Mercantile  Trust  Co.  v.  Pittsburg 
&  W.  R.  Co.  29  Fed. 

Kep.  730 85,  196,  476 

V.  St.  Louis  &  S.  F.  R.  Co. 

71  Fed.  Rep.  601 517 

Mercer  v.   Houston   Guano  &  W. 

Co.  (Ga.)  22  S.  E.  638.     42 
Merchants'  &  M.  Bank  v.  Griffith, 

10  Paige,  .519 564 

Merchants'  &    M.    Nat.    Bank  v. 

Kent,  43  Mich.  292 

26,  36,  46,  60,  90,  91, 

278,  560,  589,  602 
Merchants'  &  P.  Line  ®.  Waganer, 

71  Ala.  581 351,  365 

Merchants"  &  P.  Nat.  Bank  v.  Ma- 
sonic Hall,  63  Ga.   549, 

65  Ga.  603 48,  344.  421 

Merchants'  Bank  v.  Stevenson,  5 

Allen,  401 178.  385 

Merchants'  Ins.  Co.,  Ec,  3  Biss.  162 

25,  48,  57 
Merchants'  Nat.  Bank  v.  Landauer, 

68  Wis.  44, 227 

V.  McLeod,  38  Ohio  St.  174. 
50,  51,60,112,  113,  167, 

169,  413,  415 
V.  Northwestern  Mfg.  &  Car 

Co.  48  Minn.  361 

115,  116,  176,  363,  373,  374 

o.  Paine,  13  R.  I.  593 247 

Meredith   Village    Sav.    Bank    v. 
Simpson,  22  Kan.  414. 

50,  183,  186,  191,  417 
Meridian  News  &  Pub.  Co.  v.  Diem 
&    W.    Paper    Co.    70 

Miss.  695. 15,  41, 

97,  603,  604 
Merrell  v.  Pemberton,  62  Ga.  29,. 

97,  291,  340 
Merrick  v.  Peru  Coal  Co.  61  111.  472  367 

Merrill,  Be,  54  Vt.  200. .184,  190 

V.  Commonwealth   Mut.  F. 
Ins.  Co.  (Mass.)  44  N.  E. 

144 373 

V.  Elam,  2  Tenn.  Ch.  513.. 

34,  63,  84,  355 

V.  Lake,  16  Ohio,  405 193 

V.  Ressler,  37  Minn.  82 259 

Merritt,  Be,  5  Paige,  125,  Aff'd  16 

Wend.  405 92, 

153,  159.  162,  184,  197,  383 
«.  Gibson,  129  Ind.  155,  15 

L.  R.  A.  277... 41,  296,  298 
V.  Sawyer,  6  Thonip.  &  C.  160  257 

V.  Seaman,  6  N.  Y.  168 440 

Merriwether  v.  Garrett,  102  U.  S. 

472,26  L.  ed.   197 246 

Merry  v.  Freinon,  44  Mo.  518 246 

Mersey  Docks  &  H.  Co.  v.  Gibbs, 

L.  li.  1  H.  L.  HI.. 211,  213 


Mersey  R.  Co.,  Be,  L.  R.  37  Ch. 

Div.  610 57 

Metcalf  V.  Del  Valle,  64  Hun,  245, 

137  N.  Y.  545. 259 

Methodist  Book  Concern  v.  Hud- 
son, 1  How.  Pr.  N.  S. 

517 ....253,  254 

Metropolitan  Bank,  Be,  L.  R.  2  Ch. 

Div.  366,45  L.J.  Ch.  252  120 
Metropolitan      Eiev.     R.    Co.     v. 
Kneeland,120N.Y.  134, 

8  L.  R.  A.  253. 367 

Metropolitan  Trust   Co.  v.  Tona- 
wanda,  S.  &  C.   R.  Co. 

103  N.  Y.  245 

193,  197,  473,  475,  478,  489 
Metz  V.  Buffalo,  C.  &  P.  R.  Co.  58 

N.  Y.  61 46, 

204,  213,  214,  512 

Metzner  v.  Bauer,  98  Ind.  425 

51,  113,  167 
Meyer  v.  Johnston,  53  Ala.  237... 
86,  96,  381. 453,  475,  485, 

489,491,  524 
v.  Lexow,  1  App.  Div..  116.  206 
V.  Western  Car  Co.  102  U. 

S.  1,  26  L.  ed.  59 

393,  489,  491 
Miami  Reporting  Co.  v.  Gano,  13 

Ohio,  269 399,  401 

Michoud  V.  Girod,  45  U.  S.  4  How. 

503,  11  L.  ed.  1076 359 

Mickles  v.  Rochester  City  Bank,  11 

Paige,  118.. 361 

Micklethwaite  w.  Rhoades,4Sandf. 

Ch.434 41 

Micou  V.  Moses,  73  Ala.  439.11,  26,  242 
Middle  District  Bank,  Be,  1  Paige, 

585 ISO,  181 

Middlesex  County  Freeholders  v. 
State  Bank,  28  N.J.  Eq. 

166 61 

V.  State  Bank,  29  N.  J.  Eq. 

268,  30  N.J.  Eq.  311-41,  417 
Middleton  v.  Dodswell,  13  Ves.  Jr. 
266,  18  Ves.  Jr.  268.... 
368,  538,  534,  536,  545.  546 
V.  Sherburne,  4   Younge  & 

C.  358... 536 

T.  Taber  (S.  C.)  24  S.  E.  282  249 
Midland  R.  Co.  v.  Ambergate,  N. 
B.  &  E.  J.   R.  Co.  10 

Hare,  359 8 

Mikkelson  v.  Truesdale  (Minn.)  65 

N.  W.  260 ...  514 

Milbank  v.  Revett,  2  Meriv.  405.. 

307,  322,  550 

Miller  v.  Bowles,  58  N.  Y.  253.. 3,     18 

V.  David.son,  8  111.  518, 242,  244 

V.  Franklin  Bank,  1  Paige, 

444 440 


Ixx 


CASES  CITED. 


Miller  v.  Jones,  39  111.  54... 60.  61, 

122,  307,  308 
V.  Lehman.  87  Ala.  517  ....  12 
V.  Loeb,  64  Barb.  454.-184, 

195,  198 
V.  MacKenzle,  29  N.  J.  Eq. 

292 115,  171,  242,  251 

V.  Miller,  7  Hun,  208 244 

V.  Sherry,  69   U.  S.  2  Wall.    . 
237.  17  L.  ed.  827.. 251,  256 

V.  Sliriner.  86  Ind.  493 16 

D.  While,  50  N.  Y.  137....  444 
Milliken  v.  Anghinhaugh.  1  Penr. 

&  W.  117 --.  165 

Millikin  v.  Barrow,  55  Fed.  Rep. 

148 --  123 

Millis  V.  Pentelow.  92  Hun,  284  ..  252 

Mills  V.  Argall,  6  Paige,  577 320 

V.  BuUer.  118  U.  S.  655,  30 

L.  ed.  266 441,  442 

V.  Pittman,  11  Paige,  490  ..     43 
V.  Scott,  99  U.  S.  25,  25  L. 

ed.294 175,  177,  404 

V.  Stewart,  41  N.  Y.  384...  177 

Milne  v.  Moreton,  6  Binn.  353 

110,  113,  165.  500 
Miltenberger  v.  Logansport.  C.  & 
S.  W.  R.  Co.  106  U.  S. 
286,  27  L.  ed.  117..  .86, 
203,  217,  218,  301,  348, 
380,  388,  393,  476,  479, 
483,  491,  493,   495,  497, 

523,  525,  575,  577 
Milwaukee  &  M.  R.  Co.  v.  How- 
ard,  131   U.   S.   Appx. 
Ixxxi,  18  L.  ed.  252... 

268,  349 
«.  Milwaukee  &  W.  R.  Co. 

20  Wis.  175 409 

V.  Soulier,  69  U.  S.  2  Wall. 
510,  17  L.  ed.  900  ..10, 
12,  118,   198,  268,  275, 

349,  454,  460,  599 
Milwaukee  &  St.  P.  R.  Co.  v.  Mil- 
waukee &  M.  R.  Co.  20 

Wis.  165.. 56,  345 

Milwaukee  Mut.   F.   Ins.   Co.   v. 
Sentinel    Co.    81    Wis. 
207,  15  L.  R.  A.  627...  374 
Minchin  v.  Second  Nat.  Bank,  36 

N.  J.  Eq.  436 345 

Miner  v.  Belle  Isle  Ice  Co.  93  Mich. 
97,17  L.  R.  A.  412.... 

359,  362,  367 
Minkler  v.  United  States  Sheep  Co. 
,    4  N.  D.  507,  2  Am.  & 
Eng.  Corp.  Cas.  N.  S. 

368 44,239,  357 

Minneapolis  Baseball  Co.  v.  City 
Bank  (Minn.)  69  N.  W. 
331 697 


Minnesota  Thresher  Mfg.  Co.  v. 
Langdon,  44  Minn.  37. 
114,"  115,  171,  173.  175. 
176,  362,  373,   374.  403, 

408,  409 
Minor,  Ex  parte,  11  Ves.  Jr.  554..  100 
Minuse  v.  Cox,  5  Johns.  Ch.  447..  215 
Mississippi  Mills  v.  Bauman  (Tex. 

Civ.  App.)  34  S.  W.  681  101 
V.  Cohn,  150  U.   S.  202,  37 

L.  ed.  1052 244 

Missouri,  K.  &  T.  R.  Co.  v.  Lacy 
(Tex.  Civ.  App.)  35  S. 

W.  505 100 

V.  McFadden  (Tex.) 33  S.  W. 

853 520 

V.  Stouer,  5  Tex.  Civ.  App. 

50_... 233,  513 

v.  Wylie  (Tex.  Civ.  App.)  33 

S.  W.  771 513 

Missouri  P.  R.  Co.  v.  Humes,  115 

U.  S.  572,  29  L.  ed.  463  516 
V.  Texas  P.  R.  Co.  30  Fed. 

Rep.  167. 203.  209,  511 

V.  Texas  P.  R.  Co.  41  Fed. 

Rep.  311 183,  195, 

203,  217,  521 
V.  Texas  &  P.  R.  Co.  31  Fed. 
Rep.  862.  28  Am.  &  Eng. 

R.  Cas.  1 233,  507 

V.  Texas  &  P.  R.  Co.  31  Fed. 

Rep.  864 618 

Mitchel  V.  Lister,  21  Ont.  Rep.  22  330 

Mitchell,  Ex  parte,  12  S.  C.  83  ...  570 

«.  Barnes,  22  Hun,  194.  .41,  171 

V.  Barllett.  51  N.  Y.  447-..  267 

V.  Bunch,  2  Paige,  606  ..50,  147 

Mitford  V.  Mitford,  9  Ves.  Jr.  100.  383 

Mitz  V.  Buffalo.  C.  &  P.  R.  Co.  58 

K  Y.  61 516 

Mizell  «.  Herbert,  12  Smedes  &  M. 

550  ^39 

Moak  V.  Coates733" Barb." 498'.'.-.. 

66,  148,  256 
Mobile  &  O.  R.  Co.  v.  Davis,  62 

Miss    271  519 

Moies  V.  O'Neill,  23  N''j.'Eq'."207 

308.  332 
Moise  v.  Chapman,  24  Ga.  249.180,  384 
MoUan  v.  Griffith,  3  Paige,  402...  181 

Moncure  v.  Hanson,  15  Pa.  385 

261,  407 
Monitor  Furnace  Co.  v.  Peters,  40 

Ohio  St.  575 114,  023 

Montgomery  v.  Knox,  20  Fla.  372 

18,  352 

».  Merrill,  65  Cal.  432 295 

«.  Merrill,  18  Mich.  338----     49 
«.  Petersburg  Sav.  &  I.  Co. 
70  Fed.  Rep.  746,  30  U. 
S.  ^pp.  511 590 


CASES  CITED. 


Ixxi 


Mooer  v.  Cable,  1  Johns.  Ch.  385.  299 
Mooney  v.  British  Commercial  L. 
Ins.  Co.  9  Abb.  Pr.  N. 

S.  103... 101 

Moore  v.  Church,  70  Iowa,  208...  Ill 

V.  Duffy,  74  Hun,  78 149 

«.  Mercer  Wire  Co.  (N.  J.) 

15  Atl.  305 128,  129, 

133,  150 
V.   O'Loghlin,    3  L.  R.   Ir. 

405 90 

V.  Taylor,  40  Hun,  56.  67,  68,  91 

V.  Williams,  62  Hun,  55 392 

Moran  v.  Johnston,  26  Gratt.  108- 

27,  34,  35,  74 
V.  Lydecker,  27  Hun,  582.. 

379,  380 
1).  Sturges,  154  U.  S.  256,  38 

L.  ed.981..57,  122.  123,  183 
Moravian  Soc,  Re,  26  Beav.  101..  276 
Mordaunt  v.  Hooper,  Ambl.  311.43,  44 
Moreton   v.  Harley,    2   W.  «&  W. 

(E.)74,  79 568 

Morey».  Grant,  48  Mich.  326 

305,  321,  339 
Morford  v.  Hamner,  3  Baxt.  391..  551 

Morgan  v.  Hardee,  71  Ga.  730 584 

V.  Neville,  74  Pa.  51 167 

V.  New  York  &  A.   R.  Co. 

10  Paige,  290 

144,  177,  346,  352,  369 

V.  Oliver,  11  Ky.  L.  Rep.  513  598 

V.  Potter,  17  Hun,  403. ...53,  75 

Morgan's  Louisiana  &  T.  R.  &  S. 

S.  Co.  V.  Texas  C.  R. 

Co.  137  U.  S.   171,  34 

L.  ed.  625 477,  523,  580 

Moriarty  -o.  Kent.  71  Ind.  601.153, 

159,  161,  162,  183,  383,  400 
Morison  v.  Morison,  7  DeG.  M.  & 

G.  214 93,  380 

Moritz  V.  Miller,  87  Ala.  331 

15,   17,  18,  19,  20,  293, 

455,  603,  604 
Morrill  v.  Noyes,  56  Me.  458._372,  375 
Morris  v.  Branchaud,  52  Wis.  187. 

278,  281,  286,  290 

v.  Elme,  1  Ves.  Jr.  139 105 

v.  Morris,  5  Mich.  171 409 

V.  Taylor,  L.  R.  32  Ir.  14..  543 
.     V.  Willard,  84  N.  C.  293.13,  544 
Morrison  v.  Buckner,  Hempst.  442 
10,  14,  32,  45,  266,  268, 
271,  274,   277,  282,  284, 

348,  459,  462,  464 
V.  Menhaden   Co.  37  Hun, 

524 124 

V.  Shuster,  1  Mackey,  190.. 

239,  248 
V.  Skerne  Iron   Works  Co. 

60  L.  T.  N.  S.  588....  135 


Morrow  v.  San  Francisco   Super 

Ct.  04  Cal.  383 405 

Morrow  Slioe  Mfg.  Co.  v.  New 
Englaiui  Shoe  Co.  57 
Fed.  Rep.  698,  24  L.  R. 
A.  417,  60  Fed.  Rep.  341  238 

Morse  v.  Brainard,  41  Vt.  551.209,  212 

V.  By  am,  55  Mich.  594 283 

®.  Hannibal  &  St.  J.  R.  Co. 

72  Mo.  585 587 

Moseby  d.  Burrow,  52  Tex.  396 

50,  110,  170,  171,  412 

Moshier  v.  Meek,  80  111.  79.. 244 

Moss  V.  McCullough,  5  Hill,  131..  444 
Mott  ».  Dunn,  10  How.  Pr.  225..  239 
Movius  V.  Lee,  24  Blatchf.  291,  30 

Fed.  Rep.  298 

428,  436.  437,  440,  449 
Moyer  v.  Dewey,  103  U.  S.  301, 

26  L.  ed.  394 252,  260 

MoyersD.  Coiner,  22  Fla.  422. ..15,  18 
Mulcahy  ».  Strauss,  151  111.  70.  _. 

51,  125,  183,  190,  418 
Mulford  V.  Stalzenback,  46  111.  306  616 
Mullen  V.  Jennings.  9   N.  J.  Eq. 

192 14 

Multnomah  County  v.  Oregon  Nat. 

Bank,  61  Fed.  Rep.  912  393 
Mumford  v.  Murray,  6  Johns.  Ch. 

17 215 

V.  Nicoll,  20  Johns.  611 315 

Murray  v.  American  Surety  Co.  2 
Am.  &  Eng.  Corp.  Cas. 

N.  S.  350 357 

V.  American  Surety  Co.  70 

Fed.  Rep.  341 67,  422 

V.  Lylburn,  2  Johns.  Ch.  443  384 

v.  Mumford,  6  Cow.  441...  317 

V.  Murray  (Cal.)  47  Pac.  37  694 

V.  Vanderbilt,  39  Barb.  585.  168 

Murrell«.  McAllister,  79  Ky.  311.  156 

Murrough  v.  Trench,  2  Moll.  497.  560 

Murtha«.  Curley,  90  N.  Y.  372..  259 

Musgrave  v.  Morrison,  54  Md.  161.  162 

Musgrove  v.  Nash,  3  Edw.  Ch.  172 

232    593 

Myers  v.  Estell,  48  Miss.  372 ' 

2.  11,   13,  24.  267,  268, 
277,  280,  285,  290,  348,  349 
Mygatt  V.  Wilcox,  45  N.  Y.  309.. 

216.  626 
Myton  V.  Davenport,  51  Iowa,  583 

277,  280,  282,  302 


N. 

Nagle  V.  James,  7  Abb.  Pr.  234.. 

252  254 
Naglee  «.  Minturn,  8  CjiI.  540...!  338 
Nanglo  V.  Fingall,  1  ilog.  142....   155 


Ixxii 


CASES  CITED. 


Nash  V.  Hughes,  1  Hayes  &  J.  400    17 
Nathan  v.  W hillock,  9  Paice,  l")'*. 

178,  175,  403,  404,  407 
Natkins  v.  Wortbington,  2  Bland, 

Ch.  609. 62 

National  Bank  v.  Kennedy,  84  U. 
S.  17  Wall.  19,  21  L.  ed. 

554 438.485,  436 

t).  Mechanics'  Nat.  Bank,  94 

U.  S.  487,  24L.  ed.  1T(!_  488 
V.  Sprague,  20  N.  J.  Eq.  170     1)9 
®.  Trimble,  40  Oliio  St.  629-  171 
National  E.\change  Bank  v.  Beal, 

50  Fed.  Rep.  355 48 

«.  Peters,  44  Fed.  Hep.  13.. 

398,  399 
National  Funds  Assur.  Soc.,  Re, 
L.  R.  10  Ch.  Div.  118,. 

176,  387,  409 
National  Mechanics'  Bkg.  Asso.  v. 
Mariposa  Co.  60  Barb. 

423 238 

National  Pahquioque  Bank  v. 
Bethel  First  Nat.  Bank, 
36  Conn.  325,  81  U.  S. 
14  Wall.  383,  20  L.  ed. 

840.. 423 

National  Park  Bank  v.  Goddard, 
131  N.  Y.  494,  62  Hun, 

31 98 

National  Secur.  Bank  v.  Butler, 
129  U.  S.  223,  32  L.  ed. 

682 428,  446 

V.  Price,  22  Fed.  Rep.  697..  446 
National  Shoe  &  L.  Bank  v.  Me- 
chanics' Nat.  Bank,  89 

N.  Y.467 448 

National  Trust  Co.  «.  Miller,  38  N. 

J.  Eq.  155 51,  157,  169 

V.  Nider,  33  N.  J.  Eq.  155.  169 
National  Tube  Works  Co.  v.  Bal- 
lou,  146  U.  S.  577,  36 

L.  ed.  1070 238 

Naumberg  v.  Hyatt,  24  Fed.  Rep. 

898 189 

Naylor  c.  Sidener,  106  Ind.  179.. 

12,  28,  71.  307 
Neale  v.  Bealing,  3  Swanst.  804..  105 
V.  Cunningham,    1    H.    Bl. 

1B2,  note 109 

Neall®.  Hill,  16  Cal.  145 66, 

343,  344,  347,  371 
Neel  V.  Carson  (Ky.)  37  S.  W.  949  697 
Neeves®.  Boos,  86  Wis.  313__  66, 

71,85.  616 
Nelson  v.  Burrows,  9  Abb.  N.  C. 

280 450 

«.  Conner,  6  Rob.  (La.)  339. 

48.  127 

V.  Hayner,  66  111.  487 308 

Nesbitt  ».  Turrentine,  83  N.  C.  535    68 


Nettles®.  Marco,  33  S.  C.  47 404 

Nevitt  V.  First  Nat.  Bank,  91  Hun, 

43 406 

New  V.  Nicoll,  73  N.  Y.  127 395 

V.  Wright,  44  Miss.  202 

800.  308,  824.  325 
New  Albany  v.  Burke,  78  U.  S.  11 

Wall.  i)6,  20  L.  ed.  155.  428 
Newberry  v.  Trowbridge,  13  Mich. 

263 100 

New  Birmingham  Iron  &  L.  Co.  v. 
Blevin.s(Tox.  Civ.  App.) 
34  S.  W.  828... 55,  853,  354 
Newbold  v.  Peoria  &  S.  R.  Co.  5 

111.  App.  8G7 117,  523 

New  Brunswick  State  Bank  «. 
Fir.m  Nat.  Bank,  34  N. 

J.  Eq.  450 .82,  92 

Newcomb  v.  Almy,  96  N.  Y.  308. 

180.  181,  61  ' 
Newell  V.  Fisher,  24  Miss.  392... 

161,  191,  400 
V.  Schnull,  73  Ind.  241. ..16,  17 
V.  Smith,  49  Vt.  255....... 

209,  229.  395,  511 
New  Foundland  R.  Const.  Co.  v. 
Schack,    40  N.  J.   Eq. 

232. 370.  467 

Newgass  v.  Atlantic  &  D.  R.  Co. 

72  Fed.  Rep.  712 489 

New  Haven  Horse  Nail  Co.  v. 
Linden  Spring  Co.  142 

Mass.  349. 405 

New  Jersey*  N.  Y.  R.  Co.,  Re, 

29  N.  J.  Eq.  67.. 373 

New  Jersey  Protection  &  L.  Bank 

v.  Thorp,  6 Cow.  46.113,  170 
Newman  t>.  Chapman,  2  Rand.  93.  872 
V.  Davenport,  9  Baxt.  538.. 

202,  227 
V.  Hammond,  46  Ind.  119..     55 

V.  Willetts,  52  HI.  98 

239,  240.  242,  244,  245,.  247 
New  Orleans  v.  Morris,  105  U.  S. 

600,  26  L.  ed.  1184....  454 
New  Orleans  Gaslight  Co.  v.  Ben- 
nett, 6  La.  Ann.  456 

115,  116,   174,  176,  897,  403 

Newport  «.  Berg,  23  Beav.  30 60 

Newport  &  C.  Bridge  Co.  v.  Doug- 
lass, 12  Bush,  673 267 

Newton  v.  Bennet,  1  Bro.  C.  C.  359  215 
V.  Bronson,  13  N.  Y.  587...  147 
1).  Chicago,  R.  L   &  P.  R. 

Co.  66  Iowa,  422 381 

1).  McKay,  80  Mich.  380....  298 

®.  Sly.  15  Mich.  391 293 

New  York  &  W.  U.  Teleg.  Co.  v. 
Jewett.  48  Hun,  565, 
Aff'dllS  N.  Y.  166--- 

198,  233,  557,  564,  565 


CASES  CITED. 


Ixxiii 


New  York  Breweries'  Co.  ».  Hig- 

gins,  79  Tlun,  250 392 

New  York,  P.  &  O.  R.  Co.  v  New 

York,  L.  E.   &   W.   R. 

Co.  58  Fed.   Rep.  268.. 
95,  100,  107,  123,  224,  506 
New  York  Security  &  T.  Co.  v. 

E(Hiitable  Mortg.  Co.  71 

Fed.  Rep.  550 58 

New  York  Security  Co.   v.   Com- 

mnnweiilth  Nat.  Bank, 

2  Hun,  287 422 

Nichols  V.  Perry  Patent  Arms  Co. 

11  N.  J.  Eq.  126 

10,  41,  347,  359,  369 

V.  Smith,  115  Mass.  3B2 

202,  211,  511 
Niemann  v.  Niemann,   L.  R.   43 

Ch.  Div.  198.... 89,  97,  337 
Nillink  v.  Morris  Canal  &  Bkg.  Co. 

4N.  J.  Eq.  377 126 

Nimocks  «.  Cape  Fear  Shingle  Co. 

HON.  C.  230 12,  71 

Noble  V.  Halliday,  1  N.  Y.  330...  133 

Noe  «.  Gibson,  7  Paige,  513 

46,  127-129,  133. 

184,  190,  221,  416.  620,  621 
Nonotuck  Silk  Co.  v.  Flanders,  87 

Wis.  237 628 

Noonan  ».  McNab.  30  Wis.  277..  339 
Norcutt  V.  Dodd,  1   Craig  &  Ph. 

100 407 

Norris  v.  Johnson,  34  Md.  485 

178,  385,  449 

V.  Lake,  89  Va.  513 

10,  13,  14,  43 
North  American  Gutta  Percha  Co., 

Be,  17  How.  Pr.  549... 

25,  126,  137 
North  Carolina  R.  Co.  v.  Drew,  3 

Woods,  691 41,273,  461 

V.  Swasey,  90  U.  S.  23  Wall. 

405,  23  L.  ed.  136 71 

V.  Wil.son,  81  N.  C.  225 545 

Northern  P.  R.  Co.  v.  Lamont,  69 

Fed.  Rep.  23.. 483,  488,  490 
V.  St.  Paid,  M.  &  M.  R.  Co. 

47  Fed.  Rep.  530,  Aflf'd 

4U.  S.  App.  149 40 

North    London   R.    Co.    v.    Great 

Northern  R.  Co.  L.  R. 

11  Q.  B.  Div.  30 5,  356 

North   River  Bank,  lie,  60  Hun, 

91 392 

North   Slate   Copper  &   G.    Min. 

Co.  V.  Field,  ()4Md.  151  343 
Northumberland  A;  D.  Dist.  Bkg. 

Co.,  lie,  2  DeG.  &  J. 

508 --     00 

North  Wales  Gunpowder  Co.,  Be 

[1892J  2  Q.  B.  220 5 


Northwestern  Iron  Co.   v.  Lehigh 
Coal  &  I.  Co.  (Wis.)  66 

N.  W.  515 584 

Northwestern  Mut.  L.  Ins.  Co.  v. 
Park  Hotel  Co.  37  Wis. 

125 267 

Norway  v.  Rowe,  19  Ves.  Jr.  144. 

13,  307 
Norwood,  Ex  parte,  3  Biss.  304..  167 
Nothard  v.    Proctor,   L.  R.   1  Ch. 

Div.  4,  45  L.  J.  Ch.  302     56 
Noyes  v.  Blakeman,  6  N.  Y.  580. 

216,  626 
V.  Rich,  52  Me.  115.        74, 

136,  142,  360,  387,  417,  508 
Nusbaum  t).  Stein,  12  Md.  315... 

15,  239,  248,  603 
Nussbaum  v.  Price,  80  Ga.  205.  .66,  549 
Nutting  V.  Colt,  7  N.  J.  Eq.  539.. 

308,  309 


O. 


Oakes  v.  Myers,  68  Fed.  Rep.  807.  137 
Oakey  t).  Bennett,  52  U.  S.  11  How. 

33.  13  L.  ed.  593 170 

Oakford  v.  Robinson,  48  111.  App. 

270 296 

Oakley  v.  Paterson  Bank,  2  N.  J. 

Eq.   173 11,  20,  41, 

84.  346,    347,  367,  370,  608 
Oak  Pits  Colliery  Co.,   Be,  L.  R. 

21  Ch.  Div.  322 

103,  107,  204,  221, 
223,  224,  387,  393.  497,  507 
O'Brien  v.  Chicago,  R.  I.  &■  P.  R. 

Co.  53"  Barb.  568 351 

V.  Coulter,  2  Black f.  421...  247 
Ocean  Nat.  Bank  v.  Olcott,  46  N. 

Y.  12 248 

O'Connor,  Be,  47  N.  Y.  S.  R.  415.  200 
«.  Long  Island  Traction  Co. 

IS^Misc.  501 353 

V.  Malone.  1  Ir.  Eq.  20 83 

V.  Witherby,  111  Cal.  523..  438 
O'Farrell  v.  McCan,  7  Ir.  Eq.  63. .     77 

Ogden  V.  Arnot,  29  Flun,  146 337 

V.  Chalfant,  32  W.  Va.  559.     42 
V.  Saunders,    25    U.    S.    12 
Wheat.  213,6  L.ed.  606 

110,  165 
V.  Warren,  36  Neb.  715....  331 
Ogdensburg    Bank    v.    Arnold,    5 

Paige,  40 272,  274,  292 

Ogilvie  ®.  Ogilvie,  1  Bradf.  356...  215 
Oglesby  v.  Attrill,   105  U.  S.  605, 

26  L.  ed.  1180 343 

Ohio  &  M.  R.  Co.  V.  Anderson.  10 

III.  App.  313... 214 

V.  Davis,  23  Ind.  553 

46,  202,  213,  214,  511 


Ixxiv 


CASES  CITED. 


Ohio  &  M.  R.  Co.  V.  Fitch,  20  Ind. 

498 -57,  204,  345,  512 

V.  Nickless,  71  Ind.  271....  4iy 

V.  Nickless,  73  Ind.  383 520 

V.  Russell,  115  111.  52 

195,  204.  374.  513 
Ohio  Falls  Car  Mfg.  Co.  v.  Ccnlnil 
Trust  Co.  71  Fed.  Rep. 

91J 490 

Oil  Run  Petroleum  Co.  v.  Gale,  6 

W.  Va.  525 15 

O'Keefe  v.  Armstrong,  2  Ir.  Ch. 

115 77 

Olcott  w.  Heermans,  3  Hun,  434..  119 
Old   Dominion  S.   S.   Co.   v.    Mc- 

Kenna.  30  Fed.  Rep.  48  131 
Oldham  v.  First  Nat.  Bank,  84  N. 

C.   304... 13,  294 

Olds  V.  Tucker,  35  Ohio  St.  584.. 

184,  190 
Oliver  v.  Decatur,  4  Cranch,  C.  C. 

458 279,  292 

V.  Victor,  74  Ga.  543... 239,  319 
Olivier  v.  Townes,  2  Mart.  (N.   S.) 

93 110,  165,  500 

Olmstead  v.  Distilling  &  C.  F.  Co. 

67  Fed.  Rep.  24,  2  Am. 

&  Eng.  Corp.  Cas.  N.  S. 

392  397 

v.  Distming" &  C.'  F.'  CoV 73 

Fed.  Rep.44.. 58,99, 101,  693 
Olmsted  v.  Rochester  &  P.  R.  Co. 

106  N.  Y.  673... 347 

Olney  -c.  Baird,  15  Misc.  385 361 

V.  Tanner,  10  Fed.  Rep.  101, 
Aff'd  18  Fed.  Rep.  636. 

50,  115,  252,  259,  260 
V.  Tanner,  21  Blatchf.  540..  112 
Olyphant  v.  Atwood,  4  Bosw.  459 

110,  167,  168 
«.  St.  Louis  Ore  &  S.  Co.  22 

Fed.  Rep.  179 234 

«.  St.  Louis  Ore  &  S.  Co.  28 

Fed.  Rep.  729 

103,  104,  183,  190 
V.  St.  Louis  Ore  &  S.  Co.  39 

Fed.  Rep.  308 180 

O'Mahoney  v.  Belmont,  62  N.  Y. 

133 

48,  53,  63,  345,  372,  607,  616 
V.  Belmont,  5  Jones  &  S.  380  123 

V.  Rollins,  85  N.  C.  485 56 

Ordway  v.  Central  Nat.  Bank,  47 

Md.   217 437 

O'Reilly  v.  Alderson,  8  Hare,  101.  276 
O'Reily,  Ex  parte,  1  Ves.  Jr.  112.  377 
Original  Hartleypool  Colleries  Co., 

The,  51  L.  J.  Ch.  508..  194 
Original  Vienna  Bakery  C.  &  N. 
Co.  V.  Heissler,  50  111. 
App.  406 348 


Orphan     Asylum    v.     McCartee, 

llopk.  Ch.  429_ 

12,  14,  18,  302,  542,  545 

Orton  V.  Madden.  75  Ga.  83 39,  239 

V.  Smith,  59  U.  S.  18  How. 

263,  15L.  ed.  393 178 

Osborn  v.  Bank  of  United  States, 
22  U.  S.  9  Wheat.  738, 

6L.  ed.  204 434 

V.  Byrne,  43  Conn.  155 180 

V.  Montelac  Park,  89  Hun, 

167,  35N.Y.  Supp.  610.     51 

V.  Heyer,  2  Paige,  342 57,  60 

Osborne  v.  Ilarvey,   1  Younge  & 

C.  42 28 

V.  Moss,  7  Johns.  161.  ..157,  260 
Osgood  V.   Ogden,   3  Abb.  App. 

Dec.  425 171,  376 

V.  Ogden,  4  Keyes,  70. 

114,  171,  180 

V.  Laytin,  3  Keye.s,  521 171 

V.  Laytin,  48   Barb.    404,   5 
Abb.   Pr.  N.  S.  9..  114, 
174,  177,  251,  384,  380,  397 
V.  Laytin,  3  Abb.  App.  Dec. 

418. 173,  409 

V.  Maguire,  61  N.  Y.  524... 

110,  142,  144,  167,  168,  180 
Otis,  Be,  101  N.  Y.  580_.103,  221,  224 

■V.  Gross,  96  111.  612 202,  392 

Outcalt  V.  Disborough,  3N.  J.  Eq. 

214 ■ 13 

Overton  v.  Bigelow,  10  Yerg.  54..  279 
V.  Memphis  &  L.  R.  R.  Co. 

10  Fed.  Rep.  866. 

453,  454,  456 
Overton  Bridge  Co.  v.  Means,  33 

Neb.857 454 

Owen,  Ex  parte,  L.  R.  13  Q.  B. 

Div.  113 308 

®.  Dupignac,  9  Abb.  Pr.  ISO  254 
«.  Homan,   3  Macn.   &    G. 
378,  20  L.  J.  Ch.  N.  S. 
314,  4  H.  L.  Cas.  997.. 

10,  12,  33,  42-44,  268 
V.  Kellogg,  56  Hun,  455.  .48,  570 
«.  Smith,  31  Barb.  641 142 

P. 

Pacific  Bank  «.  Robinson,  57  Cal. 

520 251 

Pacific  Nat.   Bank  v.  Eaton.  141 

U.  S.  227,  35  L.  ed.  702  441 
Pacific  R.  Co.  V.  Ketchum,  95  U.  S. 

1,  24  L.  ed.  347 35,  54 

V.  Wade,  91  Cal.  455,  13  L. 

R.  A.  754 

128,  183,  190,  191,  521,  598 
Packer  v.  Rochester  &  S.  R.  Co.  17 

N.  Y.  295 276 


CAbES  CITED. 


lxx\ 


Padgett  V.    Lawrence,    10    Paige, 

170,  870 157,  2G0 

PiigetJ.  Golden,  2  Stark.  309 100 

V.  McKee,  3  Bush,  135 171 

V.  Vankiik,  1  Brewst.  290_. 

309,  325,  334 

Paige  V.  Smith,  99  Mass.  395 

130,  188,  189,  202,  209, 
211,  395,  509,  511,  516,  622 
Paine  v.  Lake  Erie  &  L.  R.  Co.  31 

Ind.  283 360,  407.  503 

«.  Lester,  44  Conu.  196.. 113,  107 
V.  McElroy.  73  Iowa,  81 .  -35,  293 
Palen  v.  Biishuell.  13  N.  Y.  Supp. 

785 69 

Palestine  v.  Barnes,  50  Tex.  538--.  454 
Palmer  v.  Clark,  4  Abb.  N.  C.  25. 

363,  608 

V.  Colville,  63  Hun,  536 252 

V.  Scriven,  21  Fed.  Rep.  354. 

183,  185,  191 
V.  Thayer,  28  Conn.  237....  407 

V.  Trilby,  136  Pa.  556 200 

V.  Wright,  10  Beav.  234 530 

Palys  V.  Jewett,  32  N.  J.  Eq.  303. 
132.  184,  185,  191,  417, 

521,  613 
Paradise®.  Farmers' &  M.  Bank,  5 

La.  Ann.  710 167 

Parcels  v.  Johnson,  87   U.    S.  20 

Wall.  653,  22  L.ed.  410.     71 

Pardon  v.  Dwire,  23  111.  572 616 

Pare  v.  Clogg,  7  Jur.  N.  S.  1136. .     28 
Parish  v.  Murphree,  54  U.   S.   13 

How.  99,  14  L.  ed.  67--  256 
Park  V.  New  York,  L.  E.  &  W.  R. 
Co.  57  Fed.  Rep.  799.. 

95,  506 
Parker  v.  Browning,  8  Paige,  388. 
115,  121.  122.  126,  149, 

184.  189,  417,  509,  622 

V.  Dunn,  8  Beav.  497 83,  153 

t.  Grammer,  Phil).  Eq.  28..  544 
V.  Moore,  3  Edw.  Ch.  234.. 

32,  44,  238 
V.  Nickerson,  187  Mass.  487 

161,  400,  404 

V.  Parker,  82  N.  C.  165 550 

V.  Pocock,  30  L.  T.  N.  S. 

458 143 

«.    Stoughton    Mill    Co.    91 

Wis.  174 390,  412,  414 

Parkhurst  v.  Kinsman,  2  Blatchf. 

78  13   39 

«.  Muir77"N.'.T."Eq'3b7V..  308 
Parkin  v.  Beddons,  16  L.  R.  Eq. 
Cas.   34,  42  L.  J.   Ch. 

470 37,  43 

Parmley  v.  Tenth  Ward  Bank,  3 

Edw.  Ch.  295  ....14.  32,  45 
Parr  v.  Bell,  9  Ir.  Eq.  55. -.129, 184, 193 


Parshall  v.  Tillou,  13  How.  Pr.  7-.  244 
Parsons   v.   Charter   Oak   L.    Ins. 
Co.  31  Fed.  Rep.  305.. 

169.  412,  470 
V.  Lyman,  5  Blatchf.  170. ..  123 
v.  Monroe  Mfg.  Co.  4  N.  J. 

Eq.  187 347.  309,  370 

Paschal  v.  Acklin,  27  Tex.  173-..  171 

Pasco  V.  Gamble,  15  Fla.  562 293 

Patrick  v.  Eells,  10  Kan.  680 196 

Patten  v.  Accessory  Transit  Co.  4 
Abb.  Pr.  235,  13  How. 
Pr.  502- -.277,  280,  296,  343 

V.  Dcshon,  1  Gray,  325 224 

Patterson    Bros.    v.    Goorley,    14 

Misc.  56 251 

Patton   V.  Royal   Baking   Powder 

Co.  114  N.  Y.  4 216,  626 

Patz  V.  Brewington,  71  Md.  79...  322 

Paulson  V.  Ward,  4  N.  D.  100 239 

Pauly  D.  State  Loan  &  T.   Co.  56 

Fed.  Rep.  430... 438 

Paxton  ®.  Steele,  86  Va.  311 88 

Payne   v.    Atterbury,    Harr.    Ch. 

(Mich.)  414 552 

V.  Baxter,  2  Tenn.  Ch.  517.. 

47.  125,  129,  184,  186 

V.  Drewe.  4  P^ast,  538 123 

1).  Gardiner,  29  N.  Y.  146 ,.  433 
V.  Hook,  74  U.   S.  7  Wall. 

425,  19  L.  ed.  260 54 

V.  Sheldon,  63  Barb.   169-. 

244,  247 

Peabody  v.  Flint,  6  Allen,  53 351 

Peace  and  Waller,   Be,   L.   R.  24 

Ch.  Div.  405 249 

Peacock  v.  Peacock,  16  Ves.  Jr.  49 

307-309,  314,  317,  334 
V.  Pittsburg   Locomotive  & 
Car  Works,  52  Ga.  417 

70,  230 

Peak®.  Ellicott,  30  Kan.  156 393 

Peale  V.  Phipps,  55  U.  S.  14  How. 

375,  14  L.  ed.  461 127 

Pearce  v.  Gamble,  72  Ala.  341 337 

V.  Jennings,  94  Ala.  524.. 44,  549 
Pearson  v.  Kendrick  (Miss.)  31  So, 

37.. 694 

Pease  v.  Scranton,  11  Ga.  33 245 

Peay  v.  Morrison,  10  Gratt.  144...  247 
Peck  V.  Beloit  School  Dist.  No.  4, 

21  Wis.  517 356,415 

V.  Crane,  25  Vt.  146. 372 

V.  Jen  n ess,  48  U.  S.  7  How. 

612,  12  L.  ed.  841 122 

V.  Trimsaran    Coal,  I.  &  S. 
Co.   L.  R.  2  Ch.   Div. 

115 36,  33,  39,  96 

Peebles,  7?^.  2  Hughes,  394. 137 

Peillon,    Ex   parte,    3    Thomson 

(Nova  Scotia)  405 36 


Ix.wi 


CASES  CITED. 


PeirsoU  v.  Elliott,  31  U.  S.  6  Pet. 

95,  S  L.  ed.  332 178 

Pelzer  v.  Huglies,  27  S.  C.  408.. 
11,  13,  44,  47,  C4,  243, 

250,  528 
Pendleton  v.  Johnson,  85  Ga.  840..     42 

V.  Perkins,  49  Mo.  565 247 

V.  Russell,  144  U.  8.  640,  36 
L.  ed.  574,  Aflf's?  106  N. 
Y.  619.... 153,  155,  196,  374 
Penn  v.  Callioun,  121  U.  S.  251,  30 

L.  ed.  915 580 

V.   Lord   Baltimore,   1  Ves. 

8r.  444 147 

«. Whitehead,  12  Gratt.  74.. 

264,  580 
Penn  Bank,  Warner,  v.  Hopkins, 

111  Pa.  328 398 

Penn  Mut.  L.  Ins.  Co.  v.  Heiss,  141 

Fil.  35 477 

«.  Semple,  38  N.  J.  Eq.  314.  564 
Pennsylvania  &  D.  R.  Co.  v.  Leuf- 

fer,  88  Pa.  168 481 

Pennsylvania  Co.  v.  American 
Const.  Co.  2  U.  S.  App. 
606,  55  Fed.  Rep.  131..  458 
V.  Jacksonville,  T.  &  E.  W. 
R.  Co.  55  Fed.  Rep.  131, 
2U.  S.  App.  606  ...11,  359 
V.  Jacksonville,  T.  &  K.  W. 

R.  Co.  66  Fed.  Rep.  421  588 
Pennsylvania  Finance  Co.  v. 
Charleston.  C.  &  C.  R. 
Co.  46  Fed.  Rep.  508. 
48  Fed.  Rep.  188,  52 
Fed.  Rep.  526,  678.... 
202,  204.  212,  478,  498, 
499,  519,  573,  575,  578.  596 
Pennsylvania  R.  Co.  v.  Jones,  155 
U.  S.  333,  39  L.  ed.  176 

515,  516 
Pentz  I).  Hawley,  1  Barb.  Ch.  122. 

115.  117.  176,  403 
People  V.  Albany  &  S.  R.  Co.  38 

How.  Pr.  228.. .-     15 

V.   Albany  &   S.    R.    Co.   7 

Abb.    Pr.    N.    S.    265, 

Aff'd57N.Y.  161 -.467,  603 

V.  Albany  &  S.    R.   Co.   55 

Barb.  344..  17,  18,  455, 

466,  603 
V.  American  Loan  &  T.  Co. 

37  N.  Y.  Supp.  780....  392 
V.  American  Loan  &  T.  Co. 

2  App.  Div.  193-.....-  392 
V.    American    Steam   Boiler 

Ins.  Co.  147  N.Y.  25..  346 
V.   American    Steam   Boiler 
Ins.    Co.    3    App.   Div. 
504,  Aff'g  14  Misc.  162. 

225,  396,  571 


People  1).  Allan  tic  Mut.  L.  Ins.  Co. 

15  Hun,  84 379 

V.    Bank    of    Dansville,    39 

Hun,  187.... 392,  627 

V.   Beveridge  Brew.  Co.  91 

lluu,  313 489 

V.  Brutf,  9  Abb.  N.  C.  153. 

367,  465 
V.   Buffalo   Stone  &  C.  Co. 

131  N.  Y.  140,  15  L.  R. 

A.  240 357 

«.  Bushwick  Chemical  Co. 

45  N.  Y.  S.  R.  329....  563 
V.    Central    City   Bank,    53 

Barb.  412,  35  How.  Pr. 

428 57,  121 

V.  City  Bank,  96  N.  Y.  32  _.  393 
1).  Columbia  Car  Spring  Co. 

12  Hun,  585 .593,  632 

V.   Commercial   Alliance  L. 

Ins.  Co.  91    Hun.  389..  573 
V.   Equitable   Mu*.   F.   Ins. 

Co.  1  App.  Div.  93....  369 
V.  Erie  R.  Co.  3G  How.  Pr. 

129 460 

V.  Globe  Mut.  L.  Ins.  Co.  91 

N.  Y.  174 396 

V.  Jones,  33  Mich.  303.. 202, 

234,  588 
V.  Judge,  31  Mich.  456. 
V.    Knickerbocker    L. 

Co.  101  N.  Y.  636- 
V.    Knickerbocker    L. 

Co.    106     N.    Y. 

Rev'g  43  Hun,  574... 
V.    Knickerbocker    L.    Ins. 

Co.  31  Hun,  622 593 

V.  Mechanics'  &  T.  Sav.  Inst. 

92  N.  Y.  7 3fl2 

V.  Merchants'  &  M.   Bank, 

78  N.  Y.  269 202, 

392,  628 
V.  Merchants'  Bank,  92  Hun, 

159 481 

V.  Murdock,  50  111.  App.  311    77 
V.    Mutual    Ben.    Asso.    39 

Hun,  40- 583 

V.   Mutual  Trust  Fund  L. 

As.so.    31    Abb.   N.   C. 

279. 

V.  National' Trust  Co.  82  N. 

Y.   283 Sm,  495 

V.  New  York,  10  Abb.  Pr. 

111.    Rev'd  8  Abb.  Pr.  7  552 

V.  Norton,  1  Paige,  17 

l7,  18,  331,  466 
■V.  O'Brien,  111  N.  Y.  1.  3 

L.  R.  A.  255- 603 

v.  Remington,  59  Hun,  282, 

Aff'd    126    N.    Y.    654 

(mem.) 569,  570 


Ins. 

Ins. 
619, 


36 
569 


196 


346 


CASES  CITED. 


Ixxvii 


People  V.  Rogers,  2  Paige,  103...  122 
V.   St.   Clair  Circuit  Judge, 

31  Mich.  456..-. 15 

V.  St.  Nicholas  Bank,  3  App. 

Div.  544 394 

V.   St.    Nicholas   Bank,    76 

Hun,  522 82,  618 

».    St.   Nicholas    Bank,    77 

Hun,  159 392 

«.  St.  Nicholas  Bank.  83  N. 

Y.522.... 120 

V.  San  Francisco  Super.  Ct. 

100  Cal.  105 357 

V.  Security  L.  Ins.  &  A.  Co. 

78  N.  Y.  114. G18 

V.  Third  Ave.  Sav.  Bank,  50 

How.  Pr.   22 564 

V.   Universal  L.  Ins.  Co.  30 
Hun,    142. ...106,    116, 

203,  222,  393,  626 
V.   Universal  L.  Ins.  Co.  42 

Hun,  616. 569 

V.  Washington   Ice  Co.    18 

Abb.  Pr.  382. 346 

V.  Yoakum  (Tex.  Civ.  App.) 

25  S.  W.  1001 

202,  212 
People,  exrel.  Atty.  Gen.,  «.  Secur- 
ity L.  Ins.  &  A.  Co.  23 
Hun,  596,  71  N.  Y.  226 

144,  347,  368 
Atty.    Gen.,   v.    Security    L. 
Ins.  &  A.  Co.  79  iST.  Y. 

267 

82,  368,  377,  619 
Davis,    V.    Sturlevant,    9    N. 

Y.   266 85,  232 

Fitch,  V.  Mead,  29  How.   Pr. 

360 ..237,   251 

Grissler,    v.    Dudley,    58    N. 

Y.  323 506 

Newcorab,  v.   McCall,  94  N. 

Y.  587... 290 

Tremper,  v.  Brooks,  40  Mich. 

333 .129,   183 

Williams,  v.  Hulburt,  5  How. 

Pr.  446... 66 

Wright,  v.  Weiglev,   155  111. 

491 ...."' 

237,  356,  361,   415,  417 
People's   Bank  v.  Fancher,  21  N. 

Y.  Supp.  545_ 42 

V.  Winslow  ("Poo  pie's  Bank 
«.  Calhoun")  102   U.   S. 

256,  26  L.  ed.  101 121 

People's  Equitable  Mul.  F.  Ins. 
Co.  «.  Babbitt,  7  Allen, 

225  -. 390 

People's  Home  Sav.  Bank  v.  San 
Frjincisco  Super.  Ct. 
103  Cal.  27 357 


Peoria  &  P.  U.  R.  Co.  v.  Chicago, 
P.  &  S.  W.  R.  Co.  127 
U.    S.   200,   32    L.    ed. 

110 ..103.  224,  i)4.  497 

Perego  v.  Bonesteel,  5  Biss.  (19.127,  183 
Perkins  v.  Taylor,  19  A  bb.  Pr.  146 .  234 
Perrin  v.  Lepper,  56  Mich.  351  _   . 

531,  532,  53;i 
Perry  v.  Oriental  Hotels  Co.  L.  R 

5  Ch.  App.  420... 12,  60,  63 
V.  Turner,  55  Mo.  418.. 178, 

385,  449 
Persee,  Re,  8  Ir.  Eq.  111. .129,  184,  193 
Peters  v.  Foster,  56  Hun,  607.113, 

167,  425,  437,  438 
Peters    Bldg.     Asso.     No.    5.    v. 

Jaecksch,  47  Md.  448..  556 
Petersburg  Sav.  &  I.  Co.  v.  Del- 
latorre,   70    Fed.    Rep. 

643 490,  588 

Petersen  v.  Chemical  Bank,  32  N. 

Y.  21 110,  167,  168 

Petri  V.  Commercial  Nat.  Bank, 
142  U.  S.  644.  35  L.  ed. 

1144 -. ..434,  435 

Peltibone  v.  Drakeford,  37  Hun, 

628 259 

Peyton  v.  Lamar,  42  Ga.  131 245 

Pfetz  V.  Pfelz,  14  Md.  376.. 45 

Phelau  V.  Eaton,  3  Vict.  Rep.  13.  542 
«.  Ganebin,  5  Colo.  14..  121. 

183.  188,  418 
Phelps  V.  Borland,  103  N.  Y.  40().  163 

V.  Foster,  18  111.  309 249 

V.  McCann,  123  N.  Y.  641.. 

167,  412 
V.  Masterton,  3  Robt.  527...  625 
Philadelphia  &  R.  R.  Co.,  Re,  14 

Phila.  501 86 

V.  Com.  104  Pa.  80.137,  388,  516 
Philadelphia  Invest.  Co.  v.  Ohio  &, 
N.  W.  R.  Co.  36  Fed. 

Rep.    48 474 

V.  Ohio  &  N.  W.  R.  Co.  41 

Fed.    Rep.  378.... 502,  504 
V.  Ohio  &  N.  W.  R.  Co.  56 

Fed.  Rep.  696 597 

Philadelphia  Mortg.  &  T.  Co.  v. 
Goos  (Neb.)  66  N.  W. 

843 298 

Philadelphia  Nat.  Bank  «.  Dowd, 
38  Fed.  Rep.  172,  2  L. 

R.  A.  480 430 

Philips  V.  Atkinson,  2  Bro.  C.  C. 

272 ..308,  317 

Phillips®.  Eiland,  52  Miss.  721. _. 

267,  277,  280,  303,  548,  551 
V.  Hunter,  2  H.  Bl.  402.109,  lOt 
V.  Smoot,  1  Mnckcy,  478-53,  126 
V.  Trc/X'vaiit,  67  N.  C.  370. 

325.  328 


Ixxviii 


CASES  CITED. 


Phinizy  v.  Augusta  &  K.  R.  Co. 

56  Fed.  R(^p.  273 29 

V.  Augusta  &  K.  R.  Co.  62 

•      Fed.  Rep.  771 502 

Phceni.x  Foundry  &  Mach.  Co.  v. 
North  River  Const.  Co. 

33  Hun,  156. 417 

Phoenix    Ins.    Co.   v.   Abbott,   127 

Mass.  558... 146 

Phoenix  Mut.  L.  Ins.  Co.  v.  Grant, 

3  McArth.  220 34,  292 

Phoenix  Warebousing  Co.  v.  Bad- 
ger, 6  Hun,  293 46, 

160,  176,  403 
Plckersgill  v.  Myers  &  L.  F.  Ins. 

Co.  99  Pa.  602 192 

Pickett  V.  Filer,  40  Fed.  Rep.  313.  124 
V.  School  Dist.  25  Wis.  553.  360 

Pierce  v.  Brewster,  32  111.  268 250 

1).  O'Brien,  129  Mass.  314...     51 

Piety  v.  Stace,  4  Ves.  Jr.  620 315 

Pignolet  V.  Bushe,  28  How.  Pr.  9. 

44,  550 
Pilkington    v.    Baker,    24  Week. 

Rep.  234 586 

Pillsbury  v.  Kingon,  33  N.  J.  Eq. 

287 92,  406,  407 

Pillsworth  V.  Hopton,  6  Ves.  Jr. 

51 13 

Pincke,  Ex  parte,  2  Meriv.  452.54 

60,  90,  547 
Pingree  v.  Detroit,  L.  &  N.  R.  Co. 

66  Mich.  148 622 

Pini  V.  Roucoroni,  1  Ch.  Div.  633. 

307,  325,  328 
PiscataquaF.  &M.  Ins. Co.  v.  Hill, 

60  Me.  178. ...114,  157,  404 

Pitcher  v.  Hellier,  Dick   580 546 

Pitman.  Be,  1  Curt.  C.  C.  186 207 

Pitt  V.  Snowden,  3  Atk.  750 154 

Pittman  v.  Tounshend,  1   W.  W. 

&  A'B.  (Vict.)  140....     27 
Pittsburg  Carbon  Co.  v.  McMillin, 
119  N.Y.  46,  7  L.  R.  A. 
46. ..114,  149,  171.  172, 

259,  375,  377,  410,  Oil 
Pittsfield  Nat.  Bank  v.  Bayne,  140 

N.  Y.  321 587 

Piza  V.  Butler,  90  Hun.  254 370 

Plankinton  Bank,  Be,  87  Wis.  378.  392 

Plait,  Be,  52  How.  Pr.  468 191 

Be,  1  Ben.  534 88.  382 

V.  Archer,  9  Blatchf.  559.. 48,  57 
V.  Beach,  2  Ben.  303 ...423, 

424.  434,  436 
V.  Beebe,  57  N.  Y.  339.423, 

425,  437 
V.  Cad  well,  9  Paige,  386...  252 
■V.  Crawford,  8  Abb.  Pr.  N. 

S.  297 92,  423,  425. 

426,  434,  436 


Piatt  V.  Hunter,  11  N.  Y.  Week. 

Dig.  300 250 

V.  Munroe,  34  Barb.  293...     11 
V.  Philadelphia  &  R.  R.  Co. 

54  Fed.  Rep.  509 30 

V.  Philadelphia  &  R.  R.  Co. 

65  Fed.  Rep.  668... 502,  61H 
Plewes  V.  Baker,  L.  R.  16  Eq.  564.  330 

Poage  V.  Bell,   3  Rand.  586 14,  32 

Poague  V.  Greenlee,  22  Gratt.  724.  120 
Poland  V.  Lamoille  Valley  R.  Co. 

52  Vt.  144 

476,  481,  489,  574 

Pond  V.  Cooke,  45  Conn.  126 

50,  111,  112,  134,  168,  414 
V.  Framingham  &  L.  R.  Co. 

130  Mass.  194 

343,  363,  453,  459 
Ponder  «.  Calterson,  127  Ind.  434. 

162.  410 

V.  Tate,  96  Ind.  330 280 

Pondir  v.  New  York.  L.  E.  &  W. 

R.  Co.  72  Hun,  384 566 

Pope  V.  Ames.  20  Or.  199.. 52.  125,  147 
V.  Cole.  64  Barb.  406,  55  N. 

Y.  124. 251 

V.  Solomon,  36  Ga.  541 247 

Pope's  Case,  30  Fed.  Rep.  169 

395.  512.  510 
Popper  V.  Scheider,  7  Abb.  Pr.  N. 

S.  56 308,  309,  334,  336 

PoTtv.  Russell,  36  Ind.  60.. 359 

Porter  v.  Kingman,  126  Mass.  141 

183,  190,  621,  631 
V.  Lones.L.  R.7Ch.Div.358, 

37  L.  J.  N.  S.  824 33 

V.  Pittsburg  Bessemer  Steel 
Co.  120  U.  S.  649,  30  L. 

ed.  830 477 

V.  Sabin.  149  U.  S.  473,  37 
L.  ed.  815.... 114,  122, 
123,  126,  128,  183,  184,  409 
V.  Williams,  9  N.  Y.  142... 
65,  66,  74,  114.  142-144,  ■ 
147-149,    157,  162,  171, 
172.  241,  251,  256.  258- 
261.  263,  375,  376,  410,  609 
Port  Huron  &  G.  R.   Co.  v.  St. 
Clair  Circuit  Judge,  31 

Mich.  456 363 

Portman  v.  Mill,  8  L.  J.  Ch.  N.  S. 

161 ...21,  49 

Port  Royal  &  A.  R.  Co.  v.  King, 
93  Ga.  63,  24  L.  R.  A. 

730...   113,  345 

Post  V.  Dorr,  4  Edw.  Ch.  412 

296,  300,  301 
Postlewait  v.  Howes,  3  Iowa,  366.  246 
Potter  V.  Bunnell,  20  Ohio  St.  150 

194,  202,  510,  516,  613 
V.  Dear,  95  Cal.  578 405 


CASES  CITED. 


Ixxix 


Potter  V.  Merchants'  Bank,  28  N. 

Y.  641 54,  92 

V.  Spa  Spring  Brick  Co.  47 

N.  J.  Eq.  442.. 

24,  46,  121,  120.  132 
Potts,  Re,  [1893]  1  Q.  B.  G48,  22 

L.  J.  Q.  B.  392 15,  17 

V.  Leightou,  15  Ves.  Jr.  273 

203,  215,  587 
V.  New  Jersey  Arms  &  O. 

Co.  17  N.  J.  Eq.  576...  372 
Pouder  v.  Kitzinger,  102  Ind.  572.  302 
Poughkeepsie     v.      Ibbotson,     24 

Wend.  473 385 

Pound,  Be,  L.  R.  42  Ch.  Div.  402 

358,  366 
Pountain,  Be,  L.  R.  37  Cb.  Div. 

609 547 

Powell  V.  Dayton,  S.  &  G.  R.  Co. 

16  Or.  33 204.  515 

V.  Quiun,  49  Ga.  523 39,  40 

Powell  Duffryn  Steam  Coal  Co.  v. 
Taff  Vale  R.  Co.  L.  R. 

9  Cb.  App.  331. 130 

Powers  V.  Hamilton  Paper  Co.  60 

Wis.  23 157 

V.  Lougbridge,  38  N.  J.  Eq. 

396. ...201,  204,  205 

Poyle  V.  Townes,  9  Leigh,  158 134 

Poylhress  v.  Poytbress,  16  Ga.  406  543 

Pratt  V.  Jewett,  9  Gray,  34.. 351 

V.  Underwood,  4  N.  Y.  Civ. 

Proc.  167. 311 

Pray  v.  Jersey  City,  32  N.  J.  L.  394  210 
Premier  Steel  Co.  v.   McEIwaine- 
Richards  Co.  (Ind.)  43 

N.  E.  876 128 

Prentiss  v.  Brenuan,  1  Grant,  Ch. 

484... 325,  335 

Prescott  V.  Pfeiffer,  57  Mich.   21 

259,  376 
Pressley  v.  Harrison,  102  Ind.  14.  602 

V.  Lamb,  105  Ind.  171 

55,  66.  67.  70,  85,  365,  616 
Preston  v.  Colby,  117  111.  477.-244,  248 
V.  Loughran,  58  Hun,  210.. 

128,  184 
V.  Wilcox,  38  Mich.  578. .. .  245 
Price  V.  Abbott,  17  Fed.  Rep.  506. 

424,  425,  434-436,  443 

V.  Doudy,  34  Ark.  285 

267,  277,  280 
V.  Forrest  (N.   J.)    35    Atl. 

1075 699 

«.  Price,  23  N.  J.  Eq.  428..  529 
V.  White,  1  Bail.  Eq.  240...  584 
V.  Whitney,    28   Fed.    Rep. 

297... 443 

Prime,  Be,  1  Barb.  306 274 

Prince  George's  County  Comrs.  v. 

Clarke,  36  Md.  206 137 


Pringle  v.  Woo  I  worth,   90  N.  Y. 

502,592 49,192,  374 

Priutup,  Ex  parte,  87  Ala.  148 

183,  185 

Probst  V.  Welden,  46  Ark.  409  ... .  250 

Prosser  v.  Edmunds,  1  Younge  & 

C.  481 409 

Providence  Rubber  Co.  v.  Good- 
year, 76  U.  S.  9  Wall. 
788,  19  L.  ed.  566 191 

Prudential  Assur.  Co.  v.  Knott,  L. 

R.  10  Ch.  142. 131 

Prytherch,  Be,  L.  R.42Ch.Div.  590  277 

Pudney  v.  Griffiths,  6  Abb.  Pr.  211  252 
V.  Griffiths,  15  How.  Pr.  410  254 

Pugh  V.  Hurtt,  52  How.  Pr.  22... 

51,  107,  113 

Pugsley  V.  Aikin,  11  N.  Y.  494...  506 

Pullan  V.  Cincinnati  &  C.  A.  L.  R. 

Co.  4  Biss.  35 

10, 13,  288,  282.  284,  463,  468 

PuUiam  v.  Osborne,  58  U.   S-  17 

How.  471,  15  L.  ed.  154  123 
v.  Stebbins,  51  Fed.  Rep.  10  240 

Purviancew.  Emley,  126  Ind.  419.  302 

Putnam  «.  Man,  3"Wend.  202....  254 
V.  New  Albany  &  S.  C.  J.  R. 
Co.  ("Burke  v.  Smith") 
83  U.  S.  16  Wall.   395, 

21  L.  ed.  363 404,  428 

V.  Ruch,  54  Fed.  Rep.  216.  361 

Pyles  V.   Riverside   Furniture  Co. 

30  W.  Va.  123.-366,470,542 

Pyrolusite  Manganese  Co.,  Be,  29 

Hun,  429 346,  347 

Q- 

Quarmann  v.  Burnett,  6  Mees.  & 

W.  509 ....210 

Quarrell  v.  Beckford,  13  Ves.  Jr. 

377 284 

Queen  I).  Lincolnshire  &  D.  County 
Judge,  L.  R.  20  Q.  B. 
Div.  167 543 

Queenan  v.  Palmer,  117  111.  619..  405 

Questel  v.  Questel,  Wright  (Ohio) 

492... 553 

Quiggley  v.  Trumbo,  56  Cal.  626.     55 

Quincy   v.    Cheesemau,    4   Sandf. 

Ch.  405 

41,  267,  278,  285,  288 

Quincy,  M.  &  P.  R.  Co.  v.  Hum- 
phreys, 145  U.  S.  82,  36 

L.  ed.  632 95, 

102,   106,   203,  221-224, 
355,  393,   394,   477,  497,  506 

Quinlivan  v.  English,  44  Mo.  46..  308 

Quiun  V.  Brittain,  3  Edw.  Ch.  314 

264.  296,  299.  300,  303 

V.  Gunn,  1  Hog.  75 17 


Ixxx 


CASES  CITED. 


R. 


Radebans;!!  ».  Tacoma  &  P.  R.  Co. 

^  8  Wash.  570-  -67,  85,  492,  493 
Radford  v.  Folsora,  55  Iowa,  276.. 

215,  394.  588 
Rasfsdale  v.  Holmes,  1  S.  C.  91...  245 
Ra'ht  V.  Attiill,  100  N.  Y.  423,  42 

Hun,  414. 

192,  197,  388,  473,  484.  488 
Railway  Co.  v.  Blak'e,  1  Macq.  461  359 

liainoock  v.  Simp.son,  Dick.  120 154 

Hatnbaut  v.  Maytield,  1  llawk.s,  85  245 
Ramsey  v.   Erie  R.  Co.   38  How. 

Pr.    193 460,  470 

Ranee's  Case.  L.  R.  0  Cli.  104..  176,  409 
Randall  ";.  Morrell,  17  N.  J.   Eq. 

343... 42.  307,  325,  328,  334 
Randfield  v.  Randfield,  3  DeG.  F. 

&  J.  766..  130,  184,  185,  418 
Randle  v.  Carter,  62  Ala.  95_38,  39,  536 
Raud,  McN.  &  Co.  v.  Mutual  F. 

In.s.  Co.,  Parker.  58  111. 

App.   528 67,  390,  414 

Ranger  v.  Champion  Cotton-Press 

Co.  52 Fed.  Rep. 609.  .34,  353 
Rankin  v.  Rothschild,  78  Mich.  10  34 
Rankine«.  Elliott,  16  N.  Y.  377.. 

115,  175,  176,  384,  403 
Ranney  V.  Peyser,  83  N.  Y.  1....  300 

Rapelye  v.  Prince,  4  Hill,  119 78 

Rappw.  Reehling,  122  Ind.  255.16,  550 
Ratclille  v.  Graves,  1  Vern.  196..  215 
Rathbone  v.  Parkersburg  Gas  Co. 

31  W.  Va.  798 40,  347 

Rawnsley  v.  Trenton  ]Mut.  L.  Ins. 

Co.  9  N.  J.  Eq.  95.370.  467 

Ray  V.  Macomb,  2  Edw.  Ch.  165.89,  90 

V.  Ossulstou,  2  Strange,  1107  207 

Raymond  v.  Palmer, 35  La.  Ann.  276  387 

Raynor  v.   Pacific  Nat.  Bank,  93 

N.  Y.  371 448 

Read  v.  Bowers, 4  Bro.C.C.441.324,  326 

V.  Brayton,  72  Hun,  633 184 

Readings. Waterman,  46 Mich.  107 

271,  283,  469 
Real  Estate  Associates,  Re,  58  Cal. 

356.... ...73,  84 

Real  Estate  Associates  v.  San  Fran- 
cisco Super.  Ct.  60  Cal. 

223... 54 

Receivers  of  Philadelphia  &  R.  R. 

Co.,  lie,  14  Phila.  501  _.  363 
Redmond  «.  Enfield  Mfg.  Co.  13 

Abb.  Pr.  N.  S.  332.-40,  359 

Reed  v.  Axtell,  84  Va.  231 

125,  153,  184,  191 

V.  Pelletier,  28  Mo.  173 250 

Reedert).  Dargan,  15  S.  C.  185...  293 
Rees  V.   Watertown,  86  U.   S.  19 

Wall.  107,  22  L.  ed.  72.  245 


Reese  v.  Bradford,  13  Ala.  837....  245 

Reg.  V.  Bayly,  4  Ir.  Eq.  142 78 

V.  Kendrick,  5  Q.  B.  49....  131 
V.  Parncll,  14  Co.x,  C.  C.  508  131 
Regenstcin   v.  Pearl  stein,  30  S.  C. 

192 52,  65,  74,  125,  239 

Regent's  Canal  Ironworks  Co.,  lie, 

L.  R.  3Ch.  Div.  411...  388 
Reid  V.  Middleton,  Turn.  &  R.  455 

136,  296 
V.  Reid,  38  Ga.  24.10,  12,  62,  71 
Reinach  v.  Atlantic  &  G.  W.  R.  Co. 

58  Fed.  Rep.  33 345 

Relf  V.  Columbia  L.  Ins.  Co.  11 

Mo.  App.  374 388 

Reliance  Lumber  Co.  v.  Brown,  4 

Ind.  App.  92 42 

Remick  v.  Bard?^  of  West  Union,  13 

Ohio,  298 399 

Remington,  Re,  7  Wis.  643.... 238,  254 
Remington  Paper  Co.  v.  Louisiana 

Printing  &  Pub.  Co.  56 

Fed.  Rep.  287 123 

Renaud  v.  O'Brien,  35  N.  Y.  99..   253 
Rendall».  Rendall,  1  Hare,  152.. 

530,  534,  547 

Renfro  v.  Goetter,  78  Ala.  314 185 

Renton  v.  Chaplain,  9  N.  J.  Eij.  62 

308,  316,  325,  333 
Republican  Mountain  Silver  Mines 

V.  Brown,  58  Fed.  Rep, 

644,  24  L.  R.  A.  776.343,  351 
Republic  L.   Ins.  Co.  v.   Swigert, 

135  111.  150,  12  L.  R.  A. 

328-... 21,  83,  113,  116, 

149,  156,  157,  173,  176, 

376,  385,  403,  404,  406-409 
Reyburn  v.  Consumers'  Gas  Fuel 

&  L.  Co.  29  Fed.  Rep. 

561 95,  96 

Reynolds  «.  Adden,  136  U.  S.  353, 

34  L.  ed.  362 170,  412 

V.  Austin,  4  Del.  Ch.  24....  313 
V.  Cleveland,  4  Cow.  282...  315 
v.  Pettyjohn,  79  Va.  327.23,  195 
«.  Quick,  128  Ind.  316. ..41,  296 
V.  Stockton,  140  U.  S.  254, 

35  L.  ed.  464... 

48.  155,  183.  198,  357 

Rhawn  v.  Pearce,  110  111.  350 

112,  113,  170.  413 
Rheinsteiu  v.  Bixby,  92  N.  C.  307.13,  39 
Rhodes  v.  Cousins,  6  Rand.  188.. 

239,  248,  249 
«.  Ililligops(Ind.)45N.E.666  698 

V.  Lee,  32  Ga.  470 308 

Rice».  Hartman,  84  Va.  251 240 

V.  St.  Paul  &  P.  R.  Co.  24 
Minn.  464. ...14,  32,  33, 

45,  276,  460,  468,  469 
t.  Wood(Ark.)3lL.R.A.609  244 


CASES  CITED. 


Ixxxi 


Rich  V.  Levy,  16  Md.  74.. 239,  248,  354 
V.  Loutrel,  18  How.  Pr.  121 

25,  126,  137 
Richards  v.  Barrett,   5  111.    App. 

510 ---  542 

V.  Bauerman,  65  N.  C.  162..  309 
V.  Chave,  12  Ves.  Jr.  462...  547 
V.  Chesapeake  &  O.   R.  Co. 

1  Hughes,  28 60 

V.  Goolds,  7  Ir.  Eq.  209....  83 
V.  New  Hampshire  lus.  Co. 

43  N.  H.  263 360,  407 

V.  People,  81  III.  551 

66,   85,    121,    123.    147, 

372,  416,  501,  616 
Richardson  v.  Hoyt,  60  Iowa,  70.  394 

V.  Wiu-d,  6  Madd.  266 77 

Richmond  v.  Irons,  121  U.  S.  27, 

30  L.  ed.  864. 

424,  438.  441,  443,  444 
Richter  v.  Schroeder,  110  HI.  112.  596 
Rickard  v.  Schley,  27  W.  Va.  617. 

Ricks  V.  Broyles,  78  Ga.  610...^.! 

201,  218,  391 

Rider  v.  Bagley,  84  N.  Y.  461 

11,  267,  270,  296,  302,  349 

V.  Morrison,  54  Md.  429 162 

V.  Vrooman,  12  Hun,  299.. 

300,  303 
Ridgeway  v.  First  Nat.  Bank,  78 

Ind.  119.. 298 

Ridgway  v.  Symons,  4  App.  Div.  98  398 
Riggs  V.  Whitney,  15  Abb.  Pr.  388 

24,  184,  620 
Rinn  v.  Astor  F.  Ins.  Co.  59  N.  Y. 

147 198 

Rio  Grande  R.  Co.  v.  Vinet,  132  U. 

S.  478,  33  L.  ed.  400...  123 
Risk  V.  Kansas  Trust  &  Bkg.  Co. 

58  Fed.  Rep.  45 371 

Ritterband  v.  Maryult,  13  N.  Y. 

Leg.  Ob.  158 252,  254 

Roben,son  v.  Ross,  40  Ga.  375... 12,  71 

Roberdeau  v.  Rous,  1  Atk.  544 50 

Roberson  v.  Roberson,  3  Lea,  50..     71 
Robert  v.   Hodges,  16  N.  J.  Eq. 

299 246 

Roberts  v.  Albany  &  W.  S.  R.  Co. 

25  Barb.  663.. 240 

V.  Armstrong,  2  Moll.  352..  105 
t>.  Eberhardt  or  Everhardt, 

1  Kay,  148 .306, 

308,  309,  315,  332,  335,  340 
V.  Hill,  24  Fed.  Rep.  571,  Ov. 

23  Fed.  Rep.  311.. 446,  447 
V.  Hill,  23  Blatchf.  312  ....   428 
Robertson  v.   Bullions,  11  N.  Y, 

253 344 

Robinson,    Kc  parte,   6  McLean, 

355 123 

V 


Robinson  v.  Atlantic  &  G.  W.  R. 

Co.  66  Pa.  160 

24,  25,  46,  125,  137, 
129,  184,  186,  188,  190, 
373,  417,  501,  620,  621,  631 
V.  Bank  of  Attica,  21  N.  Y. 

406 173,  407 

V.  Growder,  4  McCord,    L. 

519 165 

V.  Dickey  (Ind.)  42  N.  E.  638    68 
V.  Hadley,  11  Beav.  614,  18 

L.  J.  Ch.  N.  S.  428 -.27,  354 
V.  National  Bank,  95  N.  Y. 

637 178 

®.  Ross,  40  Ga.  375 62 

V.  Smith,  3  Paige,  22. 351 

V.  Taylor,  42  Fed.  Rep.  803     61 
«.  Turrentine,  59  Fed.  Rep. 

554 441 

Rochat  V.  Gee,  91  Cal.  355 118,  594 

Rochester  v.  Bronson,  41  How.  Pr. 

78 209,  346,  374 

Rockwell  V.  Merwin,  8  Abb.  Pr. 

N.  S.  330 159 

V.  Merwin,  45  N.  Y.  166... 

92.  200.  411,  415 
Rodbourn  v.  Utica,  I.  &  E.  R.  Co. 

28  Hun,  369 261,  461 

Rogers  «.  Corning,  41  Barb.  229..  121 
V.  DeForest,  7  Paige,  272..  29 
V.  Dougherty,  20  Ga.  271.. 

15,  17,  467,  603 

V.  Haines,  96  Ala.  586 412 

v.  Lafayette    Agri.    Works, 

52  Ind.  296 359 

V.  Marshall,  6  Abb.    Pr.  N. 

S.  457 552 

V.  Mobile  &0.  R.Co.(Tenn.) 
13  Am.  &  Eng.  R.  Cas. 

442 46 

V.  Mobile,    etc.   R.    Co.    17 

Cent.  L.  J.  290 313 

V.  Wendell,  54  Hun,  540... 

216,  217,  230,  395,  625 
V.  Wheeler,  43  N.  Y.  598.. . 

128.  184,  211,  396 
Rollins  V.  Henry,  77  N.  C.  467... 

42,  43,  289,  552 
Rollwagen  i).  Rollwagen,  37  N.  Y. 

S.  R.  393 551 

Roman  v.  Woolfolk,  98  Ala.  319.. 

351.  365 
Rome  &  D.  R.  Co.  v.   Sibert,  97 

Ala.  393...   600 

Rose®.  Bcvan.lOMd.  466.... 337,  364 
Rosenberg  v.  Moore,  11  Md.  376. . 

339,  248,  249 
Rosenblatt  v.  Johnston,  104  U.  S. 

462,  26  L.  ed.  832.. 422,  429 
Ross  V.  Bridge,  15  Abb.  Pr.  150,  24 

How.  Pr.  163 566 


Ixxxii 


CASES  CITED. 


Ross  Mehan  Brake  Shoe  Foundry 
Co.  ■».  Southern  Mal- 
leable Iron  Co.  72  Fed. 

Rep.  957 401,  403 

Rounds  V.  McCormick,  114  111.  252  405 
Rouse  V.  Hornsby,  67  Fed.  Rep. 

219 - 514 

V.  Redinger,  1  Kan.  App.  355  513 

Rovfev.  Rand.  Ill  Ind.  206 583 

V.  Wood,  2  Jac.  «&  W.  553.. 

284,  335 
Rowell  V.  Chandler,  83  111.  288...  175 
Rowth  ».  Howell,  3  Ves.  Jr.  565.. 

201.  218 
Roxbury  v.   Central   Vernaont  R. 

Co.  60  Vt.  121 

190,  202,  212,  615 

Royal  Bank  of  Scotland  v.Cuthbert 

(Stein's  Case),  1   Rose, 

Bank  Cases,  Appx.  472, 

2  Rose,  Bank  Cases,  78.  109 

Ruck  V.  "Williams,  3  Hurlst.  &  N. 

308 210 

Rudd  V.  Robinson,  54  Hun,  339.. 

171,  173,  407 
Rufifner  v.  Mairs,  33  W.  Va.  655.. 

70,  603,  604 

Ruggles  ».  Brock,  6  Hun,  164 

117,  177,  403 
Ruuk  V.  St.  John,  29  Barb.  585... 

110.  Ill,  113,  167,  168 
Runyon  v.  Farmers'  &  M.   Bank, 

4N.  J.  Eq.  480.. 00,  84.  114 
Russell  V.  Bristol,  49  Conn.  251... 

389,  396 
V.  Chicago     Trust    &    Sav. 
Bank,   139  111.   538,  17 

L.  R.  A.  345 

22,  253,  263,  376 
V.  Clark,  11  U.  S.  7  Cranch, 

69,  3L.  ed.  271 240,  246 

V.  East  Anglian    R.    Co.    3 

Macn.  &G.  104 

34,    85.     124.    127-129, 

132,  184.  190,  621 
V.  Texas  &  P.  R.  Co.  68  Tex. 

646 24,  46,  65,  125,  501 

V.  White.  63  Mich.  409 66 

Rust  V.   United   Waterworks  Co. 

70  Fed.    Rep.  129.. 398,  412 
Rutherford  v.  Jones,  14  Ga.  521..  550 
Ruttert).  Tallis,  5  Sandf.  611.... 
52.  53,  65,  74,  124,   125, 
261.  307.  315,  372,  375,  417 
Ryall  V.  Larkin.  1  Wils.  155,  Bull- 

er'sN.  P.  181 384 

Ryan  v.  Hays,  62  Tex.  42.. 46,  212, 

233,  395,  516,  517,  520,  565 
V,  Kingsbery,  88  Qa.  361.-- 

121,    122 
V.  Morrill,  83  Ky.  352. ..87,  337 


Ryan  v.  Rand,  20  Abb.  N.  C.  313 

216,  395,  626 
Ryckman  v.  Parkins,  5  Paige,  543 

89,  90 
Ryon  V.  Thomas,  104  Ind.  59.594.  632 

S. 

Sacker,  Re,  L.  R.  22  Q.  B.  Div.  179  401 

Sacramento  P.  li.  Co.  v.  San  Fran- 
cisco Super.  Ct.  55  Cal. 
453 459,  462,  465 

SaflEord  v.  Douglas,  4  Edw.  Ch.  538  376 

V.  People,  85  111.  558 

120,  345,  418 

Sage  V.  Memphis  &  L.  R.  R.  Co. 
125  U.  S.  361.  31  L.  ed. 

694 

68,  69,  247,  268,  272, 
282,  348,  349.  359,  303, 
455,  456,  458,  479,  562.  575 

Sagory  v.  Dubois,  3  Sandf.  Ch.  466 

116,  175,  362.  403.  404 

St.  Albans  First  Nat.  Bank,  Be,  49 

Fed.  Rep.  120 382 

St.  Clair  County  v.  Lovingston,  85 
U.  S.  18  Wall.  628,  21 
L.  ed.  813 71 

St.  George's  Estate,  Be,  L.  R.  19  Ir. 

566 563 

St.  Joseph  &  D.  C.  R.  Co.  v.  Smith, 

19  Kan.  225 46,  50, 

125,  183,  189,  191,  418,  614 

St.  Joseph  &  St.  L.  R.  Co.  «.  Hum- 
phreys, 145  U.  S.   105, 

36  L.  ed.  640 

103,  106,  221,  222.  393,  497 

St.  Louis  V.  St.  Louis  Gaslight  Co. 

II  Mo.  App.  337 588 

St.  Louis  &  C.  R.  Co.  V.  East  St. 

Louis  &C.  R.  Co.  39  111. 
App.  354,  Aff'd  139  111. 

401 325 

St.  Louis  &  S.  Coal  &  M.  Co..  v. 
Edwards,  103  111.  472. 

41,  347.  355,  367 
V.  Sandoval  Coal  &  M.  Co. 

III  111.  32-_68,  85,  142, 
148,  161,   173,  399,  400,  616 

St.  Louis  &  S.  F.  R.  Co.  v.  John- 
ston. 27  Fed.  Rep.  243..  203 

St.  Louis,  A.  &  T.  H.  R.  Co.  v. 
Cleveland,  C.  C.  &  L.  R. 
Co.  135  U.  S.  658,  31  L. 
ed.   833.. 95,    373,  481, 

579,  580 

St.  Louis,  A  &  T.  R.  Co.  v.  Whit- 

aUcr.  68  Tex.  636 374 

St.  Louis  Car  Co.  «.  Stillwater 
Street  R.  Co.  53  Minn. 
139- 295 


CASES  CITED. 


Ixxxiii 


St.  Louis,  K.  C.  &  C.  R.  Co.  v. 

Dewes,  23  Fed.  Rep.  519  460 
St.  Louis  S.  W.  R.    Co.  V.   Hol- 

brook,  T6  Fed.  Rep.  113  491 
St.  Louis  Trust   Co.  ■».  Riley,  70 
Fed.  Rep.  33,  30  L.  R. 

A.  456 ---  491 

St.  Nicholas,  The,  49  Fed.  Rep. 

676 183,  192 

St.  Paul  Title  Ins.  &  T.  Co.  v.  Di- 
agonal Coal  Co.  (Iowa) 

6i  N.  W.  606-.- 589 

Sales  V.  Lusk,  60  Wis.  490 

11,  300,  349 
Salisbury  v.  Metropolitan   R.  Co. 

38  L.  J.  Ch.  349 409 

Salt  V.  Coomv,  L.  R.  16  Ch.  Div. 

544 249 

Salter  v.  Bowe,  33  Hun,  236 259 

Salway  v.  Salway,  3  Russ.  &  M. 

215 23,201,  207 

San  Antonio  &  G.  S.  R.  Co.  v. 
Davis  (Tex.)  2  Am.  & 
Eag.  Corp.  Cas.  N.  S. 
374.-42,   73,   239,    344, 

361,  374 
Sanders  v.  Christie,  1  Grant,  Ch. 

137. 355,  535,  557 

V.  Partridge,  108  Mass.  556.  224 
Sanderson  v.    Stockdale,  11   Md. 

563 247 

Sandfordw.  Ballard,  30  Beav.  109-  42 
V.  Ballard,  33  Beav.  401_..-  550 
«.  Clark,  38  N.  J.  Eq.  265-- 

301,  204 
V.  Sinclair,  8  Edw.  Ch.  393. 

15,  16,  34 

V.  Sinclair,  8  Pais;e,  373 

15,  18,  33,  363,  466 
Sands  v.  Roberts,  8  Abb.  Pr.  343- 

66,  139 
V.  Sanders,  28  N.  Y.  416--. 

115,  369,  391,  634 

V.  Sweet,  44  Barb,  108 391 

Saokey  «.  O'Maley,  3  Moll.  491..  563 
Sargant  v.  Read,  L.  R.  1  Ch.  Div. 

600,45L.  J.  Ch.  206-27,  313 
Saunders  v.  Kempner  (Tex.  Civ. 

App.).33  S.  W.  585.-33,  67 
V.  Williams,  5  N.  H.  313.50,  110 
Savage  v.  Medbury,  19  N.  Y.  32-. 

158,  309,  383,  390 
V  Murphy,  34  N.  Y.  508--.  356 
Savannah  v.  .lessup,  106  U.  S.  563, 

27  L.  ed.  276..  118,  127,  183 
Saverios  v.  Levy,  1   N.  Y.  S.  R. 

758 309,  336 

Sawyers.  Harrison,  43  Minn.  297-  698 
V.  Hoag,   84  U.  S.   17  Wall. 
610,  21  L.  ed.  731  ..157, 

404,  405,  446 


Saxbey  v.  Easterbrook,  L.  R.  8  C. 

P.  Div.  339 131 

Saylcs  V.  National  Water  Purify- 
ing Co.  41  N.  Y.  S.  R. 

856 144 

Saylor  v.  Mockbie,  9  Iowa,  309- . 

307,  311 
Scammon  v.  Kimball,  92  U.  S.  363, 

23  L.  ed.  483.-180,383, 

440,  618 
Schalucky  v.  Field,  124  111.  617...  405 
Schell  V.  Hu.seman  (C.  P.)  1  Ohio 

L.  D.  120- -.     59 

Schenck  v.  Consumers'  Coal  Co.  26 

Abb.  N.  C.  356 574 

V.  Ingrahara,  5  Hun,  397...  593 

Schenk  v.  Peay,  1  Dill.  267 73,  84 

Scheubert  «.  Ilonel,  50  111.  App. 

597,  152  111.  313 253 

Schieffelin  v.  Stewart,  1  Johns.  Ch. 

618... 215 

Schiele  v.  Healy,  61  How.  Pr.  73.  250 

Schier  v.  Lamb,  134  Mass.  275 400 

Schindelholz  v.  Cullam,  55  Fed. 

Rep.  885 417 

Schlect's  Appeal,  60  Pa.  172 12,  43 

Schmid  v.  New  York,  L.  E.  &  W. 

R.  Co.  32Hun,  3.85...- 

519,  520,  629 
Schmidlapp  v.  Currie,  55  Miss.  597  387 
Schmittler  v.  Simon,  101  N.  Y.  557 

216,  626 

Schoharie©.  Pindar,  3  Lans.  8...    76 
Schoonover  v.  Hinckley,  48  Iowa, 

83....117.  174,177,  385. 

386, 403 
Schrader    v.  Manufacturers'  Nat. 

Bank,  133  U.  S.  67,  33 

L.  ed.  564 444 

Schreiber  v.  Carey,  48  Wis.  208.. 

34,  267,  274,  281,  289, 

397,  298 
Schultz  V.  Phenix  Ins.  Co.  77  Fed. 

Rep.  375 -.  698 

Schuyler  Steam  Tow  Boat  Co. ,  Re, 

43  N.  Y.  S.  R.  163... 53,  74 
Re,  136  N.  Y.  169,  20  L.  R. 

A.  391,  64  Hun,  386... 

52,  57,  65,  74,  123,   135, 

127,  139,  417 
Schwartz  v.  Keystone  Oil  Co.  153 

Pa.  383  .-394,  584,  585,  587 

Scott,  Ex  parte,  1  Rose,  446 106 

1).  Armstrong,  146  U.  S.  499, 

36  L.  ed.  1059 

138,  151,  180,  383,  439,  439 
V.  Beechcr,  4  Price,  Exch. 

Rep.  346 530 

V  Clinton  &  S.  R.  Co.  6  Biss. 

539 276 

V.  Delahunt,  65  N.  Y.  128..  489 


Ixxxiv 


CASES  CITED. 


Scott  V.  Depeyster,  1  Edw.  Ch.  513  360 
V.  Duncombe,  49  Barb.  73-.     92 

«.  Elmore,  10  Hun,  68 

66,  142,  148 
V.  Farmers'  Loan  &  T.  Co. 

69  Fed.  Rep.  17.. 472 

V.  notcbkls8(Cal.)47  Pac.  45  693 

V.  McMillen,  1  Litt.  302 247 

V.  Neely.  140  U.  S.  106,  35 

L.  ed.  358    238 

V.  Nesbitt,  14  Ves.  Jr.  438..     96 

V.  Nevins,  6  Duer,  672 257 

V.  Rainer  Power  &  R.  Co.  13 
Wash.  108,  2  Am.  &. 
Eng.  Corp.  Cas.  N.   S. 

401  ....393,  514,  517 

V.  Scott,  13  Ir.  Eq.  212  ....  552 

V.  Soarles,  5  Sraedes  &  M.  25    54 

V.  Ware,  65  Ala.  174.70,  276,  280 

Scouton  V.  Beuder,  3  IIow.  Pr.  185  144 

Scoville  V.  Thayer.  105  U.  S.  143, 

26  L.  ed.  968. 404,  405 

Screven  v.  Clark.  48  Ga.  41 . .  ..92, 

153,  159,  383,  399,  410,  411 

Scripps  V.  King,  103  111.  469 238 

Scruggs  V.  Memphis  &  C.  R.  Co. 
108  U.  S.  368,  27  L.  ed. 

756 38 

Scudder  v.  Anderson,  54  Mich.  122  622 
Seagram  v.  Tuck,    L.  R.  18  Ch. 

Div.  296- 78 

Sea  Ins.  Co.  v.  Slebbins,  8  Paige, 

565 267,  274,  277- 

280,  284.  288,  290,  299 

Seaman,  Be,  2  Paige,  209 203 

Searle  v.  Choate,  L.  R.  25  Ch.  Div. 

723 184,  194 

Searles  v.  Jacksonville,  P.  &  M.  R. 

Co.  2  Woods.  621 471 

Seattle,  L.  S.  &  E.  R.  Co.,  Re,  61 

Fed.  Rep.  541 503 

Second  Nat.  Bank  v.  Dunn,  97  N. 

Y.  156 123,  124 

Second  Ward  Bank  v.  Upmann,  12 
Wis.  499...  45,  59,  238, 

254    255 
Secor  V.  Toledo,  P.  &  W.  R.  Co.  7 

Biss.  542 128 

Securities  &  Properties  Corp.  v. 
Brighton,  Alhambra,  62 

L.  J.  Ch.  566 ...95,  96 

Security  Life  Ins.  &  A.  Co.,  Be,  31 

Hun,  36. 585 

Security   Sav.  &  T.  Co.   ■».  Piper 

(Idaho)  40  Pac.  144.356,  417 
Sedgwick    v.   Meuck,   6  Blatchf. 
156,  1  Nat.  Bankr.  Reg. 

230 ...48,  56,  121 

e.  Place,  3  Ben.  360 57 

Seibert  v.  Seibert,  1  Brewst.  531.. 

307,  315 


Seidenbach  v.  Denklespeil,  11  Lea, 

297 78 

Seighortner  v.  Weissenborn,  20  N. 

J.  Eq.  172 332 

Seigniousv.  Pate,  32  S.  C.  134...  293 
Sellers  v.  Phoenix  Iron  Co.  13  Fed. 

Rep.  20 359,  367 

Semple    v.    Eubanks    (Tex.    Civ. 

App.)35S.  W.  509-...     52 
0.  Flynn  (N.  J.)  8 Cent.  Rep. 

549 310 

Seney  v.  Wabash  W.  R.  Co.  150  U. 
S.  310,  37  L.  ed.  1092.. 

103,  106,  497 
Senior  v.  Pierce,  31  Fed.  Rep.  627 

123,  124 

Sercomb  v.  Catlin,  128  111.  556 

47,  113.  133,  147,  372,  417 
Sere  v.  Pitot,  10  U.  S.  6  Cranch. 

332.  3L.  ed.  240 408 

Seventh  Nat.  Bank  v.  Shenandoah 
Iron  Co.  35  Fed.  Rep. 

436 484 

Sewell  V.  East  Cape  Mat  Beach  Co. 

50  N.  J.  Eq.  717 353 

Seymour  v.  Milford  &  C.  Tump. 

Co.  10  Ohio,  476 454 

V.  Sturges,  26  N.  Y.  134  ...  404 

V.  Wilson,  16  Barb.  294 114 

V.  Wilson,  15  How.  Pr.  355  258 
Shackelford    v.    Shackelford,    32 

Gratt.  481 ...76,  563 

Shainwald  v.  Davids,  69  Fed.  Rep. 

687  52 

V.  Lewis.'  8  Fed.  Rep.' 878". '. 

89,  91 

V.  Lewis,  7  Sawy.  148 

242,  249 
Shakel  v.  Duke  of  Marlborough,  4 

Madd.  463. 296 

Shand  v.  Hanley,  71  N.  Y  319...  264 
Shannon  v.  Davis,  64  Miss.  717... 

533,  537 
V.  Hanks,  88  Va.  338...... 

26,  35,  42,  61.  62,  70,  603 

V.  Wright,  60  Md.  520 

307.  324,  325,  528 
Shattuck  V.  Cassidy,  3  Edw.  Ch. 

152 147 

Shaughnessy    v.    Rensselaer  Ins. 

Co.  21  Barb.  605. 

369,  383,  397 
Shaw  V.  D wight,  27  N.  Y.  244....  247 
«j.  Glen,  37N.  J.  Eq.  32....     92 
V.  Norfolk  County  R.  Co.  5 

Gray,  162 458.  462,  465 

V.  Rhodes,  2  Russ.  539 215 

.   Shore,  5  L.  J.  Ch.  N.  S. 

79  295 

V.  Wrigh't'"3  Ve's''j'r'2'2'.'."47^  301 

Sheeks  v.  Klotz,  84  Ind.  471 298 


CASES  CITED. 


Ixxxv 


Sheldon  v.  Adams,   18  Abb.    Pr. 

405,   27  How.    Pr.  179, 

41  Barb.  54 --.  558 

Shepherd  v.  Pepper,  133  U.  S.  626, 

33  L.ed.  706 275 

Shepley  v.  Atlantic  «fe  St.  L.  R.  Co. 

55  Me.  395 

273,  458,  461,  462,  464 
Sheppard  v.  Oxenford,  1  Kay  &  J. 

491- 306,  325,  335,  836 

Sherman  v.  Clark,  4  Nev.  138 

14,  32,  45 
V.  Willett,  42  N.  Y.  146....  276 
Sherry  v.  Perkins,  147  Mass.  212. 

130,   131 
Sherwood  v.  Milford  State  Bank, 

94  Mich.  78_ 392 

Shields  v.  Coleman,  157  U.  S.  168, 

39  L.  ed.  660 345 

Shipman  v.  ^tna  Ins.  Co.  29  Conn. 

245 407 

Shirley  v.  Watts,  3  Atk.  200 

237  245  249 
Shockley  v.  Fisher,  75  Mo"  498...  406 
Shoemaker  t).  Smith,  74  Ind.  71.. 

308,  321,  382 
Shotwell  V.    Smith,   8  Edw.  Ch. 

588 267,  274,  277, 

280,  285,  292.  294,  459,  464 
Showalter  v.  Laredo  Improv.  Co. 

83  Tex.  162 

53,  115.  362,  403,  405 
Shreve  t».  Hawkinson,  34  N.  J.  Eq. 

413 105,  107 

Shrewsbury  R.  Co.  v.   Chester  R. 

Co.  14  L.  T.  217. 7,  8 

Shulte  V.  Hoffman,  18 Tex.  578.. 63,  75 
Shultz  V.  Hoagland,  85  N.  Y.  464.  250 
Sickles  «.  Herold,  149  N.  Y.   332, 

Mod.  15  Misc.  116 433 

Sidenberg  v.  Ely,  90  N.  Y.  257...  293 
Silkstone  &  D.  Coal  &  I.  Co..  He, 

L.  R.  17  Ch.  Div.  158..  224 
Sill  V.  Worswick,  1  H.  Bl.  690... 

109,  164 
Silver  v.   Bi-shop  of   Norwich,  3 

Swanst.  112,  7iote 44 

Silverman  v.  Kuhn.  53  Iowa,  436.  264 
V.    Northwestern    Mut.    L. 

Ins.  Co.  5  111.  App.  124  269 
Silver  Valley  Mines,  Re,  L.  R.  21 

Ch.  Div.  381 118 

Simmons  v.  Henderson,  1   Freem. 

Ch.  (Miss.) 493 34,  73 

«.  Wood,  45  How.  Pr.  268.. 

15,  100,  603,  632 
Simmons  Hardware  Co.  v.  Waibel, 

1  S.  D.  488,  11  L.  R.  A. 

267 10,  12,  40,  348,  542 

Simon  v.  Schlo8.s,  48  Mich.  233... 

307,  308,  313,  315,  329 


Simpkins  v.  Smith  &  P.  Gold  Co. 

50  How.  Pr.  56 170.  416 

Simpson  v.  Ottawa  &  P.  R.  Co.  1 
Ont.  Ch.  Chamb.  99.. 

12,  59,  60 

V.  Robert,  35  Ga.  180 295 

v.  Warren,  55  Me.  18... 261,  407 
Sims  V.  Adams,  78  Ala.  395. 

15,  18,  20,  542 
Siney  v.  New  York  Consol.  Stage 
Co.  18  Abb.  Pr.  435,  28 

How.  Pr.  481 ..91,  599 

Singerly  v.  Fox,  75  Pa.  112 

50,  111.  134. 
142,  162,  168.  180,  337,  410 
Skeelew.  Stauwood,  33  Me.  309_.  239 

Skerretts,  lie,  2  Hog.  192. 202 

Skiddy  v.   Atlantic.  M.  &  O,  R. 

Co.  3  Hughes,  320 

477,  483,  577,  607 

Skiles  V.  Houston,  110  Pa.  254 439 

Skinner  v.  Maxwell,  68  N.  C.  400, 

66  N.  C.  45 

14.  22,  24.  25,  46,  124, 
125.  132,  184,  372,  374,  417 
Skinner's  Co.  v.  Irish  Soc.  1  Myl. 

&C.  162. 44 

Skip  V.  Harwood,  3  Atk.  564 

11,  24,  49,  122,  126, 
128,  141.  142,  252,  268,  337 
Slater  Mut.  F.  Ins.  Co.,  Be,  10  R. 

I.  42  391 

Slattery    v.    St.   Louis"&  N."  6" 

Transp.  Co.  91  Mo.  217.  397 
Slee  V.  Bloom,  5  Johns.  Ch.  366.. 

343.  344 

V.  Bloom,  19  Johns.  456 374 

Sleeper  v.  Iselin,  59  Iowa,  379 

277,  280 

Slemmer's  Appeal,  58  Pa.  168 

805,  308,  309,  311,  325.  334 
Sloan  V.  Central  Iowa  R.   Co.  62 

Iowa,  728 202,  209, 

211,  395,  511.  514,  519.  630 

V.  Moore,  37  Pa.  217. ..310,  337 

Smart  v.  Flood,  49  L.  T.  467.. .78,  232 

Smith,  Ex  parte,  23  Ala.  94 54 

V.  Allen,  2  E.  D.  Smith,  259    73 

V.  Bell,  107  Pa.  352. 391 

V.  Buchanan,  1  East,  6 109 

V.  Burton,  67  Vt.  514 98 

V.  Butcher,  28  Gratt.  144. . .     70 
V.  Chicago  &  N.  W.  R.  Co. 

23  Wis.  267 170 

V.  Coliyer,  8  Ves.  Jr.  89....     13 
V.  Cowell,  L.  R.  6  Q.  B.  Div. 

75 249 

V.  Danvers,  5  Sandf.  669...  337 
V.  Danzig,  64  How.  Pr.  320 

347,   465 
V.  Dixon,  4  Week.  Rep.  259    28 


Ixxxvi 


CASES  CITED. 


Smith    V.    Earl   of   Effingham,    2 

BoHV.  232 ....197,  620 

V.  Felton,  43  N.  Y.  419....  180 
v.  Ft.  Scott.  H.  &  W.  R.  Co. 

99  U.  S.  398.  25  L.  ed. 

437 238 

«.  Fox,  48  N.  Y.  674_. 180 

V.  Gordou,  6  Law  Rep.  313.  223 
v.  Hopkins,  10  Wash.  77,  97 

68,  398 

®.  Hurd,  12  Met.  371 397 

V.  Jeyes,  4  Beav.  503... 305, 

307.  309,  325,  328,  330.  332 

«.  Kelley,  31  Hun,  387 

29«.  548.  551 
V.  Lansing,  22  N.  Y.  521 .. .  360 
®.  Longmire,  1  Am.  Insolv. 

Rep.  426 246 

V.  Los      Angeles      County 

Super.  Ct.  97Cal.  348..  239 

V.  Lowe,  1  Edw.  Ch.  33 

308,  331,  334 

V.  Lyster,  4  Beav.  227 

547,  550 
V.  McCullough,  104  U.  S.  25, 

26  L.  ed.  637... 

53,  104,  508,  525 
V.  Mclver,  22U.  8.  9  Wheat. 

533.  6L.  ed.  152 122 

®.  McNamara,  15  Hun,  447. 

121.  122 
«.  Manhattan    Ins.     Co.     4 

Hun,   127 570 

».       Manufacturer's       Nat. 

Bank,    9    Nat.    Bankr. 

Reg.  128 155 

D.  Mosby,  9  Heisk.  501 180 

V.  Mules.  9  Hare,  556 334 

V.  New  York  Consol.  Stage 

Co.  18  Abb.  Fr.  419,  18 

How.  Pr.  377,  28  How. 

Pr.208-25,26.  60,  62,65, 
89,  90,  125.  380,  416,  619 
«.  Perth  Amboy  Brick   Co. 

47  N.  J.  Eq.  442 571 

«.  Port  Dover  &  L.  H.  R.Co. 

12  Ont.App.  288,25  Am. 

&Eng.  R.  Cas.  639.... 

11,  12,  467,  470 

v.  Reid,  134  N.  Y.  578 241 

«.  Smith,2  Younge&C.  351, 

10  Hare,  Appx.  Ixxi.  44, 

274,  284.  586 
v.  Thompson,     Walk.     Ch. 

(Miss.)l .45,  238,  252 

V.  Tiffany,  13  Hun,  671 

277,  280,  297,  298 

«.  Tozer,  42  Hun,  22 

146-148,  262 
V.  Trenton   Delaware    Falls 

Co.  4N.  J.  Eq.  505...-  120 


Smith  V.  Uniled  States  Exp.  Co. 

18.5  111.  279.... 183 

«.  Weeks,  00  Wis.  94 

238.  241,  251 
v.  Wells,  20  How.  Pr.  158.. 

13,  43.  352,  355 

V.  Westerfield.  88  Cal.  374..  357 

V.  Wright,  1  Abb.  Pr.  243..  315 

Smith's  Appeal,  104  Pa.  381.  .111,  112 

Smith   Charities  1).   Connolly,  157 

Mass.  276 272 

Smyth  v.   New    Orleans  Canal  & 
Bkg.  Co.  141  U.  S.  661, 

35  L.  cd.  893__ 288 

Snedaker,  Re,  4  Nat.  Bankr.  Reg. 

44 301 

Snively  v.  LoomisCoal  Co.  69  Fed. 

Rep.  204 388 

Snow  V.  Winslow,  54  Iowa,  200.. 

22.  525 
Snyder  v.  Armstrong,  37 Fed.  Rep. 

18 138 

Sobernheimer  i).  Wheeler,  45  N.  J. 

Eq.  614 

43.  113,  167,  169,  337 
Sohier  v.  Lamb,  134  Mass.  275....  161 
Sollory  ».  Leaver,  L.  R.  9  Eq.  22. 

14,  32,  45 

Solomons  v.  Ross,  1  H.  Bl.  131 

109,  164 
Sorley  v.    Brewer,    18  How.    Pr. 

276 239 

Sortwell  V.  Jewett,  9  Ohio,  181...  167 
Southard  v.  Benner,  72  N.  Y.  424 

173,  261,  407 
South  Bend  Toy  Mfg.  Co.  v.  Da- 
kota F.  &  M.  Ins.  Co.  3 

S.  D.  205 171 

V.  Pierre  F.  &  M.  Ins.  Co.  4 

S.  D.  173... 381 

South  Carolina  R.  Co.,  Re,  11  Chi- 
cago Leg.  News,  8 358 

V.  People's  Sav.  Inst.  64  Qa. 

18.. 48 

Southern  Bank  «.  Ohio  Ins.  Co.  22 

Ind.  181. -     49 

Southern    California    R.     Co.     v. 
Rutherford,     62     Fed. 

Rep.  796... 131 

Southern  Development  Co.w.  Hous- 
ton it  T.  C.  R.  Co.  27 

Fed.  Rep.  844 392 

Southern  Exp.  Co.  e   Western  N. 
C.  R.  Co.  99  U.  S.  194, 

25  L.  ed.  320 

102,  103,  129,  183,  196, 
204,  221,  225,  373,  396, 

493,  505,  511.  515 
Southern  P.  R.  Co.  v.  Maddox,  75 

Tex.  300... 191,  521 

Spahr«.  Nicklaus,  54  Ind.  221...  181 


CASES  CITED. 


Ixxxvii 


Spalding  «.  Com.  88  Ky.  138.. 125,  183 
v.  People,    7    Hill,   301,    10 

Paige,  284... 207 

Sparhawk  v.  Yerkes,  143  U.  S.  1, 

35  L.  ed.  915 103, 

106,  107,  231,  233,  493,  506 

Spears,  Grant,  16  Mass.  9 175,  354 

Special  Bank  Comrs.  v.  Cran>ton 

Sav.  Bank,  12  R.  I.  497  586 
V.  Franklin  Inst,  for  Sav.  11 

R.  I.  557. 583,  632 

Speed  t).  May,  17  Pa.  91 110 

Speights  V.  Peters,  9  Gill,  472 

14,  33,  45,  306,  307,  310, 

311,  322,  325,  330,  335 
Spencer  v.  Cuvler,   17  How.   Pr. 
157,  9  Abb.  Pr.  382.... 

237,  241,  251-253 
V.  World's    Columbian    Ex- 
position (HI.)  45  N.  E. 

250. 697 

Sperling  v.  Levy,  10  Abb.  Pr.  426 

253    254 
Spindle  v.  Shreve,  111  U.  S.  542^ 

28  L.  ed.  512 238 

Spinning  v.  Ohio  L.  Ins.  «&  T.  Co. 

3  Disney,  368... 

24,  48,  56,  138,  129.  132,  416 
Spokane  v.   First  Nat.    Bank,   68 

Fed.  Rep.  983 431 

Spokane  County  v.  Clark,  61  Fed. 

Rep.  538 393 

Spooner  «.  Bay  St.  Louis  Syndi- 
cate, 44  Minn.  403... 33,  33 

Sprague  v.  Smith,  39  Vt.  431 

130,  208-211,  511 
Spratt  V.  Ahearns,  1  Hayes  &  J. 

800 28 

Springhead  Spinning  Co.  v.  Riley, 

L.  R.  6Eq.  551.. _.  130,  131 
Springs  v.  Bowery  Nat.  Bank,  63 

Hun,  505 405.  411,  415 

Stafford  v.  Union  Bank,  57  U.  S 
16  How.  140,  14  L.  ed. 

878 73,  84 

Stairley  v.  Rabe,  McMuIl.  Eq.  22. 

529,  534,  546 

Stanley  v.  Bunce,  27  Mo.  269 350 

V.  National  Union  Bank,  115 

N.  Y.  123 66,  85,  616 

Stanton  v.  Alabama  &  C.  R.  Co.  31 

Fed.  Rep.  585 314.  524 

V.  Alabama  &  C.  R.  Co.  3 

Woods,  506.. 

86,  93,  234,  380,  523 
V.  Andrews,     18    111.    App. 

553. 569 

V.  Wilkinson,  8  Ben.  357... 

163,  404,  435,  435,  437 

Staples  V.  May,  87  Cal.  178. 

202,  231,  332,  295,  632 


Stark  V.  Burke,  5  La.  Ann.  740... 

115,  116,   174,  346,  347, 

374,  403,  465 
V.  Burke,  9  La.  Ann.  341...  177 
Starr  v.  Rathbone,  1  Barb.  70.. 45,  238 
State  V.  Buchanan,  5  Harr.  &  J. 

317 131 

V.  Burnham,  15  N.  H.  396..  131 

V.  Butler,  15  Lea,  113 589 

V.  Chehalis   County  Super. 

Ct.  8  Wash.  210 49 

V.  Clinton  &  P.   H.  R.  Co. 

21  La.  Ann.  156 181 

V.  Commercial  &  Sav.  Bank, 

37  Neb.  174 383 

V.  Commercial  State  Bank, 

28  Neb.  677.. 54 

V.  Delafield,  8  Paige,  537. ..     40 
V.  East  Line  &  R.  R.  R.  Co. 

(Tex.  Dist.  Ct.)  48  Am. 

«feEDg.  R  Cas.  656.-578,  599 
D.  Edgefield  &  K.  R.  Co.  6 

Lea,  353 507 

V.  Exchange  Bank,  34  Neb. 

198 54 

V.  Foot,  37  S.  C.  340.. 245 

V.  Gibson,  21  Aik.  140.. 23, 

77-79,  202,  605 

V.  Glidden,  55  Conn.  46 131 

V.  Jacksonville,  P.  &  M.  R. 

Co.  15  Fla.  201 15, 

16,  48,  55,  111.  169,  345, 

354,  372,  454,  466,  603 
V.  Jacksonville,  P.  &  M.  R. 

Co.  16  Fla.  708 99,  389 

V.  Johnson,  13  Fla.  33... 73,  616 
V.  McMinnville  &  M.  R.  Co. 

6  Lea,  369 105 

V.  Merchants'  Ins.  &  T.  Co. 

8  Humph.  353.- 344 

V.  Miller,  54  Kan  .344 345 

V.  Minneapolis  &  St.   L.  R. 

Co.  88  Iowa,  589 214 

V.  Northern   C.    R.    Co.    18 

Md.  193 273.  461,  462 

V.  Phoenix  Bank,  33  N.  Y. 

9. 69 

V.  Port  Royal  &  A.  R.  Co. 

(S.  C.)23  S.  E.  380.... 

488,  524 

V.  Rivers,  66  Iowa,  653 132 

V.  Rives,  5  Ired.  L.  297 454 

V.  Ross,  122  Mo.  435 67 

V.  Scarritt  (Mo.)  30   S.  W. 

1026. 67 

V.  Snohomish  County  Super. 

Ct.  7  Wash.  77 49,  127 

V.  State  Bank,  40  Neb.  192. .  407 

V.  Stewart,  59  Vt.  273 131 

V.  Wabash  R.  Co.  115  Ind. 

460 213.  510 


Ixxxviii 


CASES  CITED. 


State  V.  Williams,   2    Specrs,    L. 

26 207 

V.  Wilmer,  65  Md.  178 268 

V.  Wnodfin,  5  Ired.  L.  199.-  207 
State,  ex  rel.  Arasterdamsch  Trus- 
tees Kantoor,^).  Spokane 
County      Super.       Ct. 
(Wash.)  47  Pac.  31-...   695 
Brittin,  v.  New  Orleans,  43 

La.  Ann.  829 15,  604 

Collins,  V.  Gooch,  97  N.  C. 

186 201.  218,  546 

Fichtenkamp,  «.  Garabs,  68 

Mo.  289 163 

Iloflfman,    v.    Scarritt,    128 

Mo.  331 356,  415 

Independent  Dist.  Teleg. 
Co.  V.  Silver  Bow 
County  2d  Jud.  Dist. 
Ct.  15  Mont.  324,  27  L. 

R.  A.  392 353,  362,  363 

Klotz,  ».  Ross,  118  Mo.  53..  124 
Merriam,  «.  Ross,  122  Mo. 
435,  23  L.  R.  A.  534... 

371,  345,  355 
Pettenp^er,   v.   Claypool,    13 

Ohio  St.  14 . 558 

Rogers,  v.  Oborn,  86  N.  C. 

432.. 62 

Shepard,    «.    Sullivan,    120 

Ind.  197 92,  179,  611 

Washington  County  Comrs. 
V.  Marietta  &  C.  R.  Co. 

35  Ohio  St.  154 193 

State  Bank  v.  First  Nat.  Bank,  34 

N.  J.  Eq.  450 110, 

174,  412,  414 
®.  Bank  of  New  Brunswick, 

3  N.  J.   Eq.   266 

138,  180,  384 
State  Invest.  &  Ins. Co.  tJ.San  Fran- 
cisco Super.  Ct.  101  Cal. 

135-. 357 

State    Journal    Co.    v.    Common- 
wealth Co.  43  Kan.  93 

358,  362,  560 
State  Trust  Co.  ■».  National  Land 
I.  &  Mfg.  Co.  72  Fed. 

Rep.  575 58,  61 

Staton  ».  Pittman,  11  Gratt.  99... 

261,  407 

Steel  ».  Holladay,  19  Or.  517 587 

Steel  Brick  Siding  Co.  v.  Muske- 
gon Mach.  &  F.  Co.  98 

Mich.  616 192 

Steele  v.  Aspy,  128  Ind.  367- .13, 

28.  43,  549 
«.  Cobbam,  L.  R.  1  Cb.  App. 

325 - --530,  581 

V.  Grosimith,  19  Grant  Ch. 

141- 322 


Steele  v.  Sturgps,  5  Abb.  Pr.  442.. 

52,  57,  74,  125,  257,  417 

V.  White,  2  Paige,  478 118 

Steere  v.  Iloaglaiid,  39  111.  264 246 

Steinhoff  v.  Brown,  11  Grant  Ch. 

114.-- --.  301 

Stenhouse  v.  Davis,  82  N.  C.  432..  532 
Stephens  d.  Bernays,  41  Fed.  Rep. 
401,  44  Fed.  Rep.  642-. 

176,  384,  436,  437,  440 

V.  Bernays,  119  Mo.  143 437 

V.  Follett,     43     Fed.    Rep. 

842 - 441 

v.  Kaga,  142  Ind.  533 552 

V.  Overstolz,  43  Fed.  Rep. 

771 398,  399.  449 

V.  Perrine,  143  N.  Y.  476... 

172,  173,  410 
«.  Schuchmann,  32  Mo.  App. 

338-- 439,  440 

Sterling  v.  Wynne,    Hayes  &  J. 

817- 220 

Stevens  v.  Davison,  18  Gratt.  819 

359,  454,  456 
«.  Union  Trust  Co.  5  Hun, 

498 525 

Stevenson    v.    Palmer,    14    Colo. 

565- 373 

Steward    v.    Stevens,    Harr.    Ch. 

(Mich.)  109 45,  238,  252 

Stewart    v.   Armstrong,    56    Fed. 

Rep.  167.. --  574 

V.  Beebe,  28  Barb.  34... 55, 

92,  405,  411 

v.  Fagan,  2  Woods.  215 244 

V.  Johnston.  87  Ga.  97 605 

V.  Lay,  45  Iowa,  604. -.115- 

117,  176,  177,  403 
V.  Lehigh  Valley  R.  Co.  38 

N.  J.  L.  504 407,  503 

Stewart's  Estate,  Re,  8  N.  Y.  Civ. 

Proc.  354 259 

Stillman    v.    Dougherty,   44    Md. 
380-.115,  117,  174,  176; 

177,  403 

V.  Stillman,  7  Baxt.  169 553 

Stilwell  V.  Williams,  6  Madd.  49, 

Aff'din  Jac.  280 41,  43 

Stilzer  v.  La  Rose,  79  Ind.  435.. 

67,  68 
Stirlen  v.  Jewett,  63  111.  App.  55.. 

253,  254 
Stirm  V.  Erman trout.  89  Ind.  214..  296 

Stith».  Jones,  101  N.  C.  360 

40,  68,  528,  550 
Stockbridge  v.  Beckwiih,   1  Del. 
Ch.  72,  2  Am.  &  Eng. 
Corp.  Cas.  N.  S.  554.. 

413,  414 
Stockman  v.  Wallis,  30  N.  J.  Eq. 

449 267,  275,  294.  358 


CASES  CITED. 


Ixxxix 


Stockton  V.  Central  R.  Co.  50  N. 

J.  Eq.  489.. 364 

e.  Harmon,  32  Fla.  312.--.     15 
«.  Mechanics'    &     L.     Sav. 
Bank,  32  N.  J.  Eq.  163. 

180,  393 
Stoffel  V.  Sellers,  142  Ind.  301....  571 
Stokes  V.  New  Jersey  Pottery  Co. 

46  N.  J.  L.  237 157. 

171,  377,  610 
Stone  ».  Byrne,5  Bro.  P.  C.  213..  118 
«.  Chisf^lm,   113  U.  S.  302, 

28  L.  ed.  991 449 

V.  Dodge,  96  Mich.  514,  21 

L.  R,  A.  280.. 138 

V.  Manning,  3  111.  530 244 

V.  Wishart,  2  Madd.  63.-61, 

90.  546 
Stonebridge,  Re,  37  N.  Y.  S.  R. 

617,  Aff'd  128  N.  Y.  618    85 

V.  Perkins.  141  N.  Y.  1 407 

Storm  u  Waddell,  2  Sandf.  Ch.  494 
47,  48,  56,  65,  74.  124, 
251,  256,  259,  338,  373,  376 
Story  «.  Furman,  25  N.  Y.  214.. 

178,  384 
Stout  V.  Lye.  103  U.  S.  66,  26  L. 

ed.  428.. 122 

Strang  «.  Allen.  44  111.  428 631 

Stratton  «.  California  Land  &  T. 

Co.  86Cal.  353 134 

Strauss  v.  Carolina  Interstate  Bldg. 
&  L.  Asso.  117  N.  C. 
308,  30  L.R.  A.  693.391,  595 
Street  v.  Anderton,  4  Bro.  C.  C. 

414 ...42,  550 

«.  Maryland  C.    R.    Co.   59 

Fed,  Rep.  25 525 

Streit  V.  Citizens'  F.  lus.  Co.  29  N. 

J.  Eq.  21.. 347 

Stringer's  Case,  L.  R.  4  Ch.  475.. 

176,  409 
Strong  V.  Carlyle  Press.  1  Ch.  268. 

358,  560 

®.  McCogg,  55  Wis.  624 353 

V.  Southworth,  8  Ben.  331.. 

155,  427,  437,  438 
Stuart  V.  Boulware,  133  U.  S.  78, 

33  L.  ed.  568 -.230,  572.  582 
«.  Grough,  14  Ont.  Rep.  255  160 
V.  Hayden,  72  Fed.  Rep.  402  442 

Stumps.  Rogers,  1  Ohio,  533 353 

Sullivan  Electric  Light  &  P.  Co. 
V.  Blue  (Ind.)  41  N.  E. 

805 36 

SumsioD  V.  Creenwell,  31  "Week. 

Rep.  399 295 

Sunflower  Oil  Co.  v.  "Wilson,  142 
U.    8.    313,    35    L.    ed. 

1025 103,  106,  204, 

221,  384,  386,  493,  497,  507 


Supreme  Sitting,   O.  of  I.   H.  «. 
Baker,  134  Ind.  293.  3 

L.  R.  A.  210 28.  72, 

351,  355,  359,  362,  363, 

364,  378 
Susquehanna  Canal  Co.  v.   Bon- 
ham,  9  Watts  &  S.  27.  454 
Sussex  County  Chosen  Freehold- 
ers V.  Strader,  18  N.  J. 

L.  108 210 

Sutlifif  V.  Atwood,  15  Ohio  St.  186.  506 
Sutro  V.  Wagner,  23  N.  J.  Eq.  388 

306.  324,  325,  328 
Sutton  V.  Jones,  15  Ves.  Jr.  584  . . 

60,  546 
V.  Rees,  9  Jur.  N.  S.  456...  132 
Suydam  v.  Bank  of  New  Bruns- 
wick, 3  N.  J.  Eq.  114. 

88,  104 
V.  Dequindre,  Harr.  Ch.  347  250 
v.  Northwestern  Ins.  Co.  51 

Pa.  394_... 245 

Swaby  v.  Dickon,  5  Sim.  629..  105, 

153,  159,  184,  193,  219,  383 
Swan,  Re,  150  U.  S.  637,  37  L.  ed. 

1202 .57,  183 

V.  Mitchell,  82  Iowa,  307... 

282   291    293 
Swan  Land  &  C.  Co.  v.  Frank,  148 

U.  S.  612,  37L.  ed.  581.  238 
Swann  v.  Clark,  110  U.  S.  602,  28 

L.  ed.  256 117 

Swartoutw.  Schwerter,  5  Redf.  497  259 
Sweny  v.  Ferguson.  2  Blackf.  129.  246 
Swift  I).  Thompson,  9  Conn.  63...  407 
Swing  V.  Townsend,  24  Ohio  St.  1 

73,84 
v.  White  River  Lumber  Co. 

91  Wis.  517. 415 

Sykes  v.  Hastings,  11  Ves,  Jr.  363 

60,  546 
Sylvester  v.  Reed,  3  Edw.  Ch.  296.  532 
Syracuse  City  Bank  v.  Tall  man, 
31  Barb.  201... 11.  269, 

274,  276,  277,  280,  297 
Syracuse  Sav.   Bank  v.  Hess,  23 

N.  Y.  Week.  Dig.  280.  203 


Tait  D.  Jenkins,  1  Younge  &  C. 

Ch.  491-. 546 

Talbot  V.  Hope  Scott,  4  Kay  &  J. 

96 .43.  44 

Talcott  V.  Hess,  31  Flun,  282 250 

Talladega  Mercantile  Co.  v.  Jenifer 

Iron  Co.  102  Ala.  259.. 

183,  185 
Talmage  v.  Pell,  7  N.  Y.  328.  347. 

114,  157.  171,  173,  406 


xc 


CASES  CITED. 


Turns  V.  Bullitt,  n^^  Pa  808_..261,  407 
Tautield  v.  Irvine,  2  Hiiss.  "249 ...  17 
Tanner  v.  Hicks,  4  Smedes  &  M. 

294 303 

Tapley*.  Martin,  11(5  Mass.  27r,..  423 
Tappan  v.  Evans,  11  N.  H.  312..-  245 
Tale«.  McCormick,  23  Hun.  218.  220 
Tavistock  Iron  Works  Co.,  Be,  24 
L.T.  605,  19Week.Kep. 

672_ 563 

Taylor   v.   Baldwin,  14   Abb.   Pr. 

10(5 129,  184 

V.  Boardman,  25  Vt.  581.-- 

50,  111,  134,  414,  500 
V.  Bowker,  111    U.  S.    110, 

28  L.  ed.  308.-239,  244,  357 
V.  Carryl,  61  U.  S.  20  How. 

583,  15L.  ed.  1028.122.  127 
V.  Columbia    Ins.     Co.     14 

Allen,  353 51,  111,  169 

c.  Eokersley,  L.  R.  2  Ch. 
Div.  302,  45  L.  J  Cli. 
527,  34  L.  T.  637.. .18, 

26,  61,  551 
e.  Geary,  Kirby (Conn.)  313.  165 

V.  Gillean,  23  Tex.  508 

122,  127,  416 
V.  Hutchinson,  25  Gratt.  536  312 
V.  Life  Asso.  of  America.  3 
Fed.  Bep.  465,  13  Fed. 

Kep.   493.-.. 59,  76 

«.  Mayo,  110  U.   S.  330,  28 

L.  ed.  163 125 

V.  Neate,  L.  H.  39  Ch.  Div. 

538 97,  340 

V.  Philadelphia  &  R.  R.  Co. 

7  Fed.  Rep.  377- -..86,  475 
V.  Pliiladelphia  &  R.  R.  Co. 

9  Fed.  Rep.  1 492,  497 

V.  Secor  ("State  R.  Tax 
Cases")  92  U.  S.  575,  23 

L.  ed.  663 246 

Taylor    Orphan   Asylum,    Ee,   36 

Wis.  552 360 

Teal  V.  Walker,  111  U.  S.  250,  28 

L.  ed.  418 272,  282 

Tefft  V.  Sternberg,  40  Fed.  Rep.  7. 

123.  124 
Teller  v.  Randall,  40  Barb.  242...  115 

Tempest  «.  Ord,  2  Meriv.  55 200 

Temple  v.  Williams,  91  N.  C.  82..  546 
Ten  Broeck  v.  Orchard,  74  N.  C. 

409 289 

Terhune  v.  Bell  (N.  J.)  6  Cent.  469  171 
Terrell  v.  Goddard,  18  Ga.  664... 

306,  307,  322 

V.  IngersoU,  10  Lea,  77 214 

Terry    v.    Bamberger,    44    Conn. 

558. - 411 

«.  Bamberger,    14    Blatchf. 

234 172,  383,  398.  503 


Terry  v.  Bank  of  Central  New 

York,  15  How.  Pr.  445  563 
V.  Dubois,    32    Week.   Rep. 

415 593 

V.  Martin   (N.  M.)   32   Pac. 

157 96,  135,  596 

Tewart  v.   Law.son,  L.  R.  18  Eq. 

490 562 

Texas  &  P.  R.  Co.   v.  Adams,  78 

Tex.  372 204.  518,  566 

V.  Bailey,  83  Tex.  19.._214,  565 
V.  Bledsoe,  2  Tex.  Civ.  App. 

88 213 

V.  Boyd,   6  Tex.  Civ.  App. 

205 214 

V.  Collins,  84  Tex.  121 

192,  204.  213.  214,  514 
V.  Comstock,  83  Tex.  537  .. 

204,  518 
V.  Cox.  145  U.  S.  593,  36  L. 

ed.  829 395,  514,  522 

V.  Gay,  86  Tex.  571,   25  L. 

li.  A.  52  -...67,  68.  85,  617 

V.  Geiger,  79  Tex.  13 

203,  209,  518,  566 
V.  Huffman,  83  Tex.  286... 

519.  566 
V.  Johnson.  151  U.  8.  81.  38 

L.  ed.  81 187.  521 

V.  Miller,  79  Tex.  81,  11  L. 

R.  A.  395 518 

V.  Thedens  (Tex.  Civ.  App.) 

21  S.  W.  132.. 213 

V.  Watts  (Tex.)  18  S.W.  312 

565,  569 

V.  White.  82  Tex.  543 565 

Texas  &  St.  L.  R.  Co.  v.  Rust,  17 

Fed.  Rep.  275 391 

Texas  C.  R.  Co.  v.  Morgan's  Lou- 
isiana &  T.  R.  &  S.  S. 
Co.  137  U.  S.  199,  34  L. 
ed   635  95 

Texas  P.  R.  Co.  iy."GriffinV76  Tex. 

441 518.  519.  565 

«.  Johnson,  76  Tex.  421.209. 

518,  519,  565,  566,  569,  629 
V.  Manton  (U.   S.  Sup.  Ct.) 
Advance  Sheets,  Feb.  1, 

1897,  p.   235 696 

V.  Overheiser,  76  Tex.  437..  518 
Texas  Trunk  R.  Co.    v.  Johnson, 

86  Tex.  421 214 

V.  Lewis,  81  Tex.  1 

57,  124,  372-374.  501 

V.  State,  83  Tex.  1 345.  453 

Thacher  v.  Bancroft,  15  Abb.  Pr. 

245 160 

Tharpe  v.  Tharpe,  12  Ves.  Jr.  317 

56,  59,  62 
Thatcher  v.  West  River  Nat.  Bank, 

19  Mich.  196 423 


CASES  CITED. 


XCl 


Thayer  v.  Butler,  141  U.  S.  284,  Sr) 

L.  ed.  711 438,  441 

V.  Clark,  4  Abb.  App.  Dec. 

8!)I 78 

V.  Swift,  Harr.  Cb.  (Mich.) 

480 45,  238,  252 

Thomas  v.  Brigstocke,  4  Hnss.  64. 

142,  301,  387 
V.  Cincinnati,  N.  O.  &  T.  P. 
R.  Co.  62  Fed.  Kep.  17, 

803_...131,  416 

V.  Davies,  11  Beav.  29 

34.  03,  298 
V.  Dawkln,  1  Ves.  Jr.  452.56,  62 
V.  Hubbell,  15  N.  Y.  407...  78 
V.  Nantahala  Marble  &   T. 

Co.  58  Fed.  Rep.  485..  550 
V.  Femberton,  7  Taunt,  206 

223,  496 
».  Peoria  &  R.  I.  R.  Co.  86 

Fed.  Rep.  808 95, 

227,  228,  394,  476,  478,  575 
V.  Thomas,  Flan.  &  K.  621.  129 
V.  Torrance,  1  Chamb.  Ch. 

(Ont.)9 153 

V.  Western  Car  Co.  149  U.  S. 

95,  37  L.  ed.  663 

95,  107,  393,  493,  497,  578 
V.  West  Jersey  R.   Co.  101 

U.  S.  71,  25  L.  ed.  950.  105 
V.  Whallon,  31  Barb.  172.. 

92,  158,  180,  391,  624 
V.  Williams,   L.  R.  14  Ch. 

Div.  864_. 131 

Thompson  v.  AVe^  County,  115  U. 
S.  550,  29  L.  ed.  472. . 

238,  245 
v.  Brown,  4  Johns.  Ch.  619, 

680 240,  246 

V.  DitTenderfer,  1   Md.  Ch. 

-489 39,  40,  239 

V.  Gloucester  City  Sav.  In.st. 

(N.  J.)8  Atl.  97... 202,  595 

«.  Gould,  20  Pick.  135 100 

V.  Greeley,  107  Mo.  507 

172,  173,  346,  397,  401,  408 

V.  Holladay,  15  Or.  34 

56,  67,  85,  120,  123 
V.  Huron     Lumber     Co.     4 

Wash.  527,  600.... 585,  595 
V.  McCleary,  159  Pa.  189... 

24,25.46,  125.  127,  620 
V.  McKim,  6  Elarr.  &  J.  302  118 

V.  Meisser,  108  111.  359 405 

V.  Natchez,  W.  &  S.  Co,  68 

Miss.  428 278 

V.  Phojnix  Ins.  Co.  186  U.  S. 

297,  34  L.  ed.  413 

128,  126.  128,  183 
V.  Schloetzel,  2  S.  D.  395.. 

423,  424 


Thompson  v.  Scott,  4  0111.  409,  508 

127,129,183,189.195,395.418 
«.  SherranI,    22    How.    Pr. 

155,  85  Barb.  593 552 

V.  Shirley,  69  Fed.  Rep.  484 

293,  587 
V.  Tower  Mfg.  Co.   87  Ala. 

733 ..15,  603 

V.  Willamette   S.    M.    L.   & 

Mfg.  Co.  15  Or.  604  ...  590 
Thomson  v.  Dean,  74  U.  S.  7  Wall. 

842,  19  L.  ed.  97 71 

V.  MacGregor,  81  N.  Y.  592. 
Rev'g  13  Jones  &S.  197 

78,  79,  231,  606 
Thorn  v.  Nine  Reefs,  67  L.  T.  93.  41 
Thornhill   v.    Thornhill,    14   Sim. 

600 93,  382 

Thornton  v.  Highland  Ave.  »&  B. 
R.  Co.  94  Ala.  353  .... 

95,  395,  572 
V.  Washington   Sav.   Bank, 

76  Va.  432....  132,  148,  417 
Thuemmler    v.    Barth,    89     Wis. 

381 628 

Thurber  v.  Blanck,  50  N.  Y.  80..  246 
Thurman  ■».   Cherokee  R.   Co.  56 

Ga.  376 -.202,  209,  512,  516 

V.  Morgan,  79  Va.  367 78 

Thurmond  vAieese,  3  Ga.  449...     247 
Thurston  v.  Roseufield,  42  Mo.  474 

111,  167 

Tibballs  v.  Llbby,  87  111.  142 

175,  178,  385,  405 
V.  Sargeant,  14  N.  J.  Eq.  449     15 

Tidd  V.  Lister,  5  Madd.  433 546 

Tiffany  v.  Lucas,  82  U.  S.  15  Wall. 

410,  21  L.  ed.  198 447 

Tilford  V.  Burnham,  7  Dana,  110.  256 
Till,  Ex  parte,  L.  R.  16  Eq.  97...  129 
Tillinghast  v.  Champlin,   4   R.   I. 
173... 47,  142,  149,  153, 

154,  336,  337 
Tillman,  Ex  parte,  93  Ala.  101.. 52,  571 
Tillotson  1).  Wolcott,  48  N.  Y.  188 

66,  139,  256,  257 
Tink  V.  Rundle,  10  Beav.  318.... 

122, 129,  184,  193 
Tippecanoe     County    Comrs.     v. 
Lucas,  98  U.  S.  108,  23 

L.  ed.  822 71 

Tippecanoe  Twp.  v.  Manlove,  39 

Ind.  249 369 

Titherington  v.  Hodge,  81  Ky.  286  389 
Titus  V.  Fairchild,  17  Jones  &  S. 

211 ..76,  77 

Tobey  v.  Russell,  9  R.  I.  58 

115,  177.  403 
Toby   V.  Oregon  Pac.   R.  Co.  98 

Cal.   490... 35 

Todd  V.  Lee,  15  Wis.  365 239 


XCll 


CASES  CITED. 


Todd  V.  Rich,  2  Tenn.  Ch.  107.  _. 

Gl,  300,  313,  325 
Toldervy  v.  Colt,  1  Yoiiiif^e  &  C. 
621,  5 L.J.  Exch.  25... 

43,  274.  284 
Toledo,  A.  A.  &  N.  M.  R.  Co.  v. 
Penusylvania     Co.     54 
Fed.  Rep.  730.  19  L.  R. 

A.  395.. 130 

Toledo,  W.  &  W.  R.  Co.  v.  Beggs, 

85  111.  80. 374 

1).  Milligan,  52  Ind.  505. ..  181 
Toller  V.  Carteret,  2  Vern.  494...  147 

Tolman  v.  Jones,  114  HI.  155 415 

Tome  1).  King,  64  Md.  166.... 300,  588 
Tomlinson  v.  Ward,  2  Conn.  396. 

32,  73,  74,  309,  332 
Tomlinson   &    W.    Mfg.    Co.    v. 

Shatto,   34    Fed.    Rep. 

380.. 246,  248,  253 

Tophara    v.    Chapman,     1     Mill, 

Const.  283 165 

Toronto  Gen.  Trust  Co.  v.  Chicago, 

B.  &  Q.  R.  Co.  123  N. 

Y.  37 113,  167,  168,  412 

Towle  V.  American  Bldg.  L.  &  I. 

Soc.  60  Fed.  Rep.  131. 

41,  367,  369,  555,  556 
Towne    v.    Campbell,    35    Minn. 

231..  262 

Townsend  v.  Coxe,  151  111.  62 413 

V.  Townsend,  60  Mo.  246..  564 
Tracy  v.  First  Nat.   Bank,  37  N. 

Y.  523- ...92,  119,  157, 

160,  171,  177,  196,  428 
«.  Talmage,  14  N.  Y.  162..  173 
Trade  Auxiliary  Co.  «.  Vickers,  L. 

R.  16  Eq.  303. 355 

Traders'  Mut.  F.  Ins.  Co.  v.  Stone, 

9  Allen,  483 890 

Tradesman's  Pub.   Co.   «.  Knox- 

ville  Car- Wheel  Co.  95 

Tenn.  634,  31  L.  R.  A. 

593 ...393,  491 

Travelers'  Ins.   Co.  v.  Brouse,  83 

Ind.  62 63,  298 

Trayhern  v.  Mechanics'  Nat.  Bank 

57Md.  590. 595 

Treadwell  v.  Salisbury  Mfg.  Co.  7 

Gray.  393 460 

Trentman    v.    Eldridge,   98   Ind. 

525 302 

Trenton  Bkg.  Co.  v.  Woodruff,  3 

N.  J.  Eq.  210 299 

Triebert  «.  Burgess,  11  Md.  456.. 

15,  466,  467 
Trimble  «.  Woodhead,  102  U.  S. 

647,  26  L.  ed.  290.. 252,  260 
Trimm  v.  Marsh,  54  N.  Y.  59y...  276 
Tripp  V.  Boardman,  49  Iowa,  410 

84,  101 


Tripp  V.  Chard  R.  Co.  21  Eng.  L. 
&  Eq.  53.  17  Jur.  887, 

92  L.  J.  Ch.  1084 

33.  60,  267 

V.  Cook,  26  Wend.  152 11 

Trippe    v.     Iluncheou,    82     Ind. 

307.. 444 

Trissilian  v.  Canifife,  4  Ir.  Ch.  N. 

S.  399 295 

Trueman,  Hooke,  ».  Piper,  L.  R. 

14  Eq.  278 230 

Truman   v.    Redgrave,    L.    R.    18 

Ch.  Div.  547.... 96,  301,  3.'i8 

Try  V.  Try,  13   Beav.  422 121 

Tucker  v.  Gilman,  45  N.  Y.  193. 

175,  403 
Tuckerman  v.  Brown,   33   N.    Y. 

297.. 114,  375,  376,  387,  610 

Tudes  V.  Hood,  29  Kan.  49 251 

Tufts  V.  Little,  56  Ga.  139 42.  548 

Tully  V.  Herrin,  44  Miss.  626.. 50,  110 
Tumliu  '0.  Vanhorn.  77  Ga.  315..  548 
Tunnesma    v.   Schuttler,    114  111. 

156.. ._ 237 

Turgeau   v.  Brady,  24  La.  Ann. 

348 69 

Turnbull  v.  Prentiss  Lumber  Co. 
55  Mich.  387. ...15,  17, 

19,  43,  455 
Turner  v.  Adams,  46  Mo.  95.. 245,  246 
V.  Cros.s,  83  Tex.  218.  15  L. 
R.   A.  262....  192,  204. 

211,  213,  233,  395,  513 
V.  First  Nat.  Bank,  26  Iowa, 

562 423,  442 

V.  First  Nat.  Bank.  30  Iowa, 

191 564 

«.  Hannibal  &  St.  J.  R.  Co. 

74  Mo.  602.. 214,  516 

V.  Indianapolis,  B.  &  W.  R. 

Co.  8Biss.  315.  527 

202,  212.  393.  478,  481,  574 
V.  Peoria  &  S.  R.  Co.  95  111. 

135 231.  485.  522,  523 

t>.  Richardson,  7  East.  335.. 

103,  106,  493,  496 

V.  Turner,  15  Jur.  298 129 

Turnipseed  v.   Kentucky  Wagon 

Co.  (Ga.)  23  S.  E.  84. .  242 
Tuscaloosa  Mfg.   Co.  v.   Cox,  68 

Ala.^71-. 351 

Tvedt  V.  Miickel  (Minn.)  69  N.  W. 

475 698 

Twigg  V.  Fifield,  13  Ves.  Jr.  517..  100 
Twilty  V.  Logan,  80  N.  C.  69.. 43,  289 

Tylee  ».  Tylee.  17  Beav.  583 73 

Tyler,  IIx  parte,  149  U.  S.  181.  37 

L.  ed.  694 183.  187 

Ee,  149  U.  S.  164,  37  L.  ed. 
689... -24,  46,  122,  124, 

127,  129,  137 


CASES  CITED. 


xcm 


Tyler  v.  Hamilton,  62  Fed.  Rep. 

187 .-  612 

V.  Pea  It,  30  Mich.  68 245 

tJ.Wbitaey,  13  Abb.  Pr.  465. 

252,  253 
V.  Willis,  33  Barb.  327. _75,  253 
Tysen  v.  Wabash  R.  Co.  8  Bi.ss. 
247.. .11,  268,  269,  273, 

366,  460,  463,  468 

u. 

Uhl  V.  Dillon,  10  Md.  500 239,  248 

Underwood  v.  Siitcliflfe,  77  N.  Y. 
58,  Rev'g  10  Hun,  453. 
75,   114,    172,   173,  251, 

256,  257,  259,  260 

Union  &  T.  Co.  «.  Southern  Cali- 
fornia Motor  Road  Co. 
51  Fed.  Rep.  107. 95 

Union  Bank,  Be,  37  N.  J.  Eq.  424. 

201,  203,  204,  216,  590 

Union  Cattle  Co.  v.  International 
Trust  Co.  149  Mass. 
492 416 

Union  Loan  &  T.  Co.  v.  Southern 
California  Motor  Road 
Co.  51  Fed.  Rep.  106, 
49  Fed.  Rep.  267.-333,  599 

Union  Mut.  L.  Ins.  Co.  v.  Union 
Mills  Plaster  Co.  37  Fed. 
Rep.   286,   3   L.   R.   A. 

90.. 283,393,  358,461 

V.  University  of  Chicago,  6 
Fed.  Rep.  443 133 

Union  Nat.  Bank  v.  Bank  of  Kan- 
sas City,  136  U.  S.  323, 
34  L.  ed.  341.... 23,  24, 
48,  126,  128,  141,  148, 

183,  371 

Union  P.  K.  Co.  «.  Myers  ("  Pa- 
cific R.  Removal  Cases") 
115  U.  S.  1,  29  L.  ed. 
319 .-  434 

Union  Trust  Co.  v.  Atchison,  T. 

6  S.  F.  R.  Co.  (N.  M.) 

42  Pac.  89 477 

V.  Chicago  &  L.  II.  R.  Co. 

7  Fed.  Rep.  513.... 524,  636 
V.  Illinois  M.  R.  Co.  117  U. 

S.  434,  39  L.  ed.  963... 
86,95,107,  117,303,381, 
388,  456,  476,  479,  483, 
483,  489,  491,  495,  497, 
502,  522,  523.  525,  575, 

576,  599 

V.  Morrison,  125  U.  S.  591, 

31  L.  ed. 825...477,  499,  575 

V.  Rockford,  R.  I.  &  St.  L. 
R.  Co.  6  Biss.  197.. 48, 

56,  57,  345 


Union  Trust  Co.  v.  St.  Louis,  I.  M. 

&  S.  R.  Co.  4  Dill.  114 

11,  271, 

273,  292,   348,  358,  461, 

463,  469 
V.  Souther,  107  U.  S.  591,27 

L.  ed.  488 203,  217, 

218,  348,  388,  476.  479, 

485.  489,  575,  576 
V.  Thomason,  25  Kan.  1.  512 
v.  Walker,  107  U.  S.  596,  27 

L.  ed.  490 483 

v.  Weber,  96  111.  346 25, 

136,  137,  141,  142 
United    Electric   Security  Co.   v. 
Louisiana  Electric  light 
Co.  68  Fed.  Rep.  673, 

71  Fed.  Rep.  615 

228,  349.  35»,  360 
United  States  v.  Church  of  Jesus 
Christ  of    L.   D.    S.  5 
Utah,  361,  6  Utah,  9... 

43,  114,  173,  352,  584 
V.  Giles,  13  U.  S.  9  Cranch, 

212,  3  L.  ed.  708 79 

V.  Hudson,  11  U.S.  7 Cranch. 

32,  3L.  ed.  359 207 

V.  Ingate,  48  Fed.  Rep.  353.  238 
v.  Kane,  33  Fed.  Rep.  748. 

130,  131 
V.  Knox,  103  U.  S.  422,  26 

L  ed.  316 437 

V.  Knox,  111  U.  S.  784.  28 

L.  ed.  603 ....894,  433 

V.  Mann,  2  Brock.  9 207 

V.  Masich,  44  Fed.  Rep.  10. 

291,  299,  300,  303 
V.  Walker,  109  U.  S.  258,  27 

L.  ed.  937 357 

V.  Wilson,  118  U.  S.  86,  30 

L.  ed.  110 179 

United   States  Bung  Mfg.  Co.  v. 
Armstrong,'34  Fed .  Rep. 

94 439 

United  States  Rolling-Stock  Co., 

Be,  57  How.  Pr.  16....  391 
United  States  Trust  Co.  v.  Harris, 

SBosw.  75 180 

V.  New  York,  W.  S.  &  B. 
R.    Co.   25    Fed.    Rep. 

797 476,485,  489,  498 

V.  New  York,  W.  S.   &   B. 

R.  Co.  35  Hun,  341....  347 
t».  New  York,  W.  S.  &  B. 
R.  Co.  101  N.  Y.  478.. 
145,  267,  270,  346,  347, 

352,  591,  608 
V.  Wabash  &  W.  R.  Co.  150 
U.    S.    287,   37    L.    ed. 

1085 95,  103,  106, 

231,  224,  272,  497 


XCIV 


CASES  CITED. 


Upton  V.  nansbrouiib,  3  Biss.  417.  175 
V.  TribilcocUrsU  U.  S.45,  23 

L.  ed.  203 157 

Utica  Ins.  0>.  v.  L\  nrli,  11  Paige, 
520.--.fc"G,  87,  203,  206, 

388,  394,  589 


Vail  V.  Hamilton,  85  N.  Y.  453... 

114,  171,  387,  406,  407 
Valentine  v.  Juch.  4(5  N.  Y.  S.  K.  64  268 

Van  Allen,  Me,  37  Bar!).  230 

180,  181,  377.  619 
V.  American  Nat.  Bank,  52 

N.  Y.  6 219 

Van  Alslyne  v.  Cook,  25  N.  Y.  496 

49,  65,  74,  124.  147,  151, 

259,  321,  381,  3^8.  372,  373 
Van    Antwerp     -b.     Hulburd,     7 

Blatchf.426.... 425 

V.  Hulburd,  8  Blatchf.  282. 

427,  430 
Vanatta  v.   New  Jersey  Mut.  L. 

Ins.  Co.  31  N.  J.  Eq.  15  180 
Van  Bentbii3sen  v.  Central  N.  E. 

&  W.  R.  Co.  45  N.  Y. 

S.  R.  16.... 358 

Van  Cott  V.  Van  Brunt,  2  Abb.  N. 

C.  283,  82  N.  Y.  535...  114 
Vanderbilt  v.  Central  R.  Co.  43  N. 

J.  Eq.  669 

223.  370,  379,  395,  417,  579 
Vanderwerken  v.  Glenn,  85  Va.  9. 

362,  403,  404 
Van  Dyck  v.  McQuade,  85  N.  Y. 

616 .138,  180 

Van  Glahn  v.  De  Rosset,  81  N.  C. 

407.. 354 

Van  Hook  v.  Whitlock,  3  Paige, 

409 178,  385 

Van  Husan  «.  Kanouse,  13  Mich. 

303 283,   293,  460,  469 

Vann  ®.  Barnett,  2  Bro.  C.  C.  158    33 
Van  Pelt  v.  United  States  Metallic 

Spring  B.  &  S.  H.  Co. 

13  Abb.  Pr.N.  S.  331..  344 
Van  Rensselaer  v.  Emery,  9  How. 

Pr.  135 22,  60,  197, 

307,  309,  416,  630 
Van  Roun  v.  San  Francisco  Super. 

Ct.  58  Cal.  358 126 

Van  Syckle  v.  Richardson,  13  111. 

174.. 238 

Van  Wageman  v.  Clark,  22  Hun, 

497.-115.  175,  176.  362,  403 
Van  "Wagoner®.  Paterson  Gaslight 

Co.  23  N.  J.  L.  283.... 

138,  180,  181.  347,  383,  384 
Varey  v.  Giles,  9  Ga.  253. 368 


Varnum  v.  Leek,  65  Iowa,  751...  550 
Vatable  v.  New  York,  L.  E.  &  W. 

R.  Co.  96  Hun,  49 485 

Vaughan  v.  Vaughau,  Dick.  90...     76 

V.  Vincent,  88  N.  C.  116 550 

Vause  V.  Woods,  46  Miss.  120 

15,  17,  43.  44,  264 
Venable  v.  Smith,  98  N.  C.  523. _.  319 
Venango  Nat.  Bank  ».  Taylor,  56 

Pa.  14 383,  447 

Vermont  &  C.  R.  Co.  v.  Vermont 
C.  R.  Co.  46  Vt.  792,  50 
Vt.  500... 24,  66,  67.86, 
128,  132,  147,  355,  356, 

372,  383,  415.  417,  489 
Vernon  v.  Kinzie,  2  U.  C.  Jur.  40 

531,  540 
Verplanck  v.  Mercantile  Ins.  C'o. 

2  Paige,  438 15-20. 

82-84,331,344,347,360, 
364,  417,  455,  466,  471,  603 
Verplank  v.  Caines,  1  Johns.  Ch. 

58 11.  268,  348,  545 

Very».  McHenry,  29  Me.  208....   110 
V.  Wat  kins,  64  U.  S.  23  How. 

469,  16  L.  ed.  522 22 

Vette  V.    Leonore,   42  Mo.    Aop. 

217... 120 

Vicksburg  &  M.  R.  Co.  v.  Phillips, 

64  Miss.  108 245 

Vilas  V.  Page,  106  N.  Y.  451. 

216,229,381,395,492,  626 

Viles  V.  Bangs,  36  AVis.  131 387 

Vincent  v.  Parker,  7  Paige,  65 45 

Virginia,  T.  &  C.  Steel  &  I.  Co.  v. 

Wilder,  88  Va.  942 

45,  54,  72,  354,  366,  604 

Vogel,  Be,  7  Blatchf.  20 127 

Von  Roun  v.  San  Francisco  Sup. 

Ct.  58Cal.  358-...25,  49,  73 
Voorhees  v.  Howard,  4  Abb.  App. 

Dec. 503 244 

V.  Seymour,  26  Barb.  569.. 

73.  74,  7.5,  257 
Vose  V.  Grant,  15  Mass,  505..  175,  409 

V.  Reed,  1  Woods,  647 

10,  12,   14.  18,  269,  273,  470 
VoshellB.  Hynson,  26  Md.  83.... 

15,  39.  40,  467,  603 
Vrooman  v.  Turner,  69  N.  Y.  285  629 
Vulliamy  v.  Noble,  3  Meriv.  614.. 

818,  327 


W. 

Wabash  R.  Co.,  Be,  24  Fed.  Rep. 

217... 416 

V.  Dvkeman,  133  Ind.  56..- 

15,  17-19,  27,  454,  455,  604 
T.  Stewart,  41  111.  App.  640.  605 


CASES  CITED. 


xcv 


Wabash,  St.  L.  &  P.  R.  Co.  v.  Cen- 
tral Trust  Co.  22  Fed. 
Rep.  272,  23  Fed.  Rep. 
863,  23  Fed.  Rep.  513.. 

29,  222,  3o5,  871,  391 
Wachtel  v.  Wilde,  58  Ga.  50,-239,  248 
Waddle  v.  Hudson,  96  Mich.  432.  92 
Wade  V.  Ringo,  62  Mo.  App.  414.  184 

Wagar  v.  Stone,  36  Mich.  364 

270.  282,  293,  460,  469 
Wager  v.  Hall,  83  U.  S.  16  Wall. 

584,21  L.  ed.  504 446 

Wagner  v.  Coen  (W.  Va.)  23  S.  E. 

735 319,  540 

Waite,  Re,  99  N.  Y.  433 

51,  110,  111,  167,  168,  412 
Wakeman  v.  Price,  3  N.  Y.  334..  102 

Walker,  Ex  parte,  25  Ala.  21 

10,  580,  586 

V.  Bell,  2Madd.  21 301 

V.  Cronin,  107  Mass.  555...  131 

V.  Drew,  20  Fla.  908 532 

V.  Flint,   2  McCrary,  343.  7 

Fed.  Rep.  430 123,  127 

V.  George   Taylor    Commis- 
sion Co.  56  Ark.  1 122 

V.  House,  4  Md.  Ch.  89 

14,  306,  808,  811,  317 

v.  Morris,  14  Ga.  8-28  23 

Wall  1).  Pulliam,  5  Heisk.  365 201 

V.  Young  (N.  J.  Ch.)  38  Atl. 

526 570 

Wallace  v.  Loomis.  97  U.  S.  146, 

24  L.  ed.  895... 

86,  94,  117,  203,  217, 
218,  880,  381,  388,  474, 
483,  485,  489,  491,  ;,^3, 

524,  577 
V.  McConnell,  38  U.    S.  13 

Pet.  151,  10  L.  ed.  102.  123 
©.  Milligan,  110  Ind.  498... 
116,   156,  178,  179,  383. 

885,  386 
V.  Patterson, 2  Harr.  &  McH. 

468 ..110,  165 

V.  Yeager,  4  Phila.  251 336 

Walling  V.  Miller,  108  N!  Y.  178. 
25,  46,  48,  ]01,12">,  127, 

184,  202,  231,  372 
Wall  Street  F.  Ins.  Co.  v.   Loud, 

20  How.  Pr.  95... 

267,  275,  277.  294,  358 
WaLsh  V.  Byrnes,  89  Minn.  527... 

259,   375 
V.  Raymond,  58  Conn.  251. 

89.  90,  596 
Walter?).  Lane,  1  McArth.  275...  256 
vValterst).  Ang'o  American  Mortg. 
&  T.  Co.  50  Fed.  Rep. 

316 343,  344,  355,  562 

V.  Taylor,  2Ves.  &  B.  304..  334 


Walters  v.  Walters,  11  Tr.  Y.q.  335.     79 

V.  Whitlock,  9  Fla.  86 112 

Walton  V.  Grand  Belt  Copper  Co. 

56  Hun,  211 417 

Walworth  v.  Holt,  4  Myl.  &  C 

619 340 

Wambaugh  v.  Gates,  8  N.  Y.  138.  100 
Wannemaker    v.     Hitchcock,    38 

Fed.  Rep.  583 584,  565 

Waples-Platter  Co.  v.  Mitchell 
(Tex.  Civ.  App.)  85  S. 

W.  200. 319,  324 

Ward  V.  Arredondo,  1  Hopk.  Ch. 

218 147 

V.  Chamberlain,  67  U.  S.  2 

Black, 430,  17 L.  ed.319  178 

V.  Farwell,  97  111.  593 85 

V.  GrLswoldville  Mfg.  Co.  16 

Conn.  593 354 

V.  Moflfett,  38  Mo.  App.  395  281 

V.  Morrison,  25  Vt.  593 500 

V.  Petrie,  86  N.  Y.  Supp.  940  243 
V.  Sea  Ins.  Co.  7  Paige,  294.  347 
V.  Segar,  60  III.  App.  424..  361 
V.  Swift,  6  Hare.  3U9... 121, 

122.  129.  153,  159,  184.  383 
Warden  v.  Leavenworth,  3  Edw. 

Ch.  258 262 

V.  Union  P.  R.  Co.  103  U.  S. 

051.  26L.  ed.  509.. 407,  503 
Wardle  v  Hudson,  96  Mich.  432. 

383,  891,  611 
v.  Townsend,  75  Mich.  385, 

4  L.  R.  A.  511. 

869,  390,  391 

Waret).  Ware,  42  Ga.  408. 530 

Waring  v.  Robinson,  1  Hoflfm.  Ch. 

582 386,  888,  339 

Warishoffer  v.  North  River  Const. 
Co.  6  N.  Y.  Civ.  Proc. 

113 347 

Warner  v.  Gouverneur,  1  Barb.  36 

267, 
277,  280,  288.  290.  292,  294 
V.  Jaffray,  96  N.  Y.  248...   Ill 
V.  Rising  Fawn   Iron  Co.  3 

Woods.  514. 

278,  276,  301,  359,  461 
Warren  v.  Bunch,  80  Ga.  124.186,  595 
V.  Fake,  49  How.  Pr.  430.. 

355.  359 
V.  Sprague,  11  Paige,  200.  .89,  90 
V.  Union  Nat.  Bank,  7  Phila. 

156 Ill,   169 

Wartman?),,  Wartman,  Taney.  362  208 
Warwick  v.   Hammell,  32  N.  J. 

Eq.  427 277.  280 

Washington,  A.  &  G.  R.  Co.  v. 
Brown,  84  U.  S.  17 
Wall.  418,  21  L.  ed.  675 

209,  515,  516 


XCVl 


CASES  CITED. 


Washington  City  &  P  L.  R.  Co. 
V.    Southern    Maryland 

R.  Co.  55  Md.  153 564 

Washington.  G.  &  A.  R.  Co.  v. 
Washington,  74  U.  S. 
7  Wall.  577,  19  L.  ed. 

275 118 

Washington    Iron   Works  Co.  v. 

Jensen,  3  Wash.  584...  296 
Washington  L.  Ins.  Co.  v.  Fleisch- 

ner.  10  Hun.  130 300 

Washington  Nat.  Bank  v.  Eckels, 

57  Fed.  Rep.  870 424 

Wason  V.  Frank  (Colo.  App.)  44 

Pac.  378-. 398,  399, 402.  410 
Waterbury  ».  Merchants'  U.  Exp. 

Co.  50  Barb.  157 

343,  344,  347,  352 
Waterhouse B.  Comer,  55  Fed.  Rep. 
149,  19  L.  R.  A.  403... 

127,  131,  132 
V.  Jamieson,  L.  R.  2  H.  L. 

(Sc.)29 - 120 

V.  Jamieson,   2  Pat.  H.   L. 

(Sc.)1892 157 

Waterman  v.  Sliipman,  55  Fed. 
Rep.   983.  64  Pat.  Oflf. 

Gaz.  713. 149 

Waters  «.  Barton,  1  Coldw.  450.. 

50,  111,  134,  414 
V.  Carroll,  9  Yerg.  (Tenn.) 

102. 4,  60,  62 

V.  Dashiell,  1  Md.  455 407 

V.  Taylor,  2  Yes.  &  B.  299.  249 
V.  Taylor,  15  Ves.  Jr.  10.97,  317 
Watkins.    Ee,  L.  R.  15  Ch.  Div. 

253. 65,   74 

V.  Minnesota  Thresher  Mfg. 

Co.  41  Minn.  150 416 

V.  National   Bank  of  Law- 
rence, 51  Kan.  254 

348,  366,  421 
V.  Pinkney,  3  Edw.  Ch.  533 

48,  56 
Watson  V.  Arundel,  9  Ir.  Eq.  324.     61 
V.  Jones,  80  U.  S.  13  Wall. 

679,  20  L.  ed.  666 123 

Watts  V.  Waddle,  31  U.  S.  6  Pet. 

400,  8L.  ed.  442 171 

Waugh«.  Carver.  2  H.  Bl.  235.. .  310 
Waverly  Nat.  Bank  v.  Halsey,  57 

Barb.  249 250 

Wayne  Pike  Co.  v.  Hammons,  129 

Ind.  368.. 355,  359,  362,  367 

«.  State,  134  Ind.  672 

125,  153,  183,  401 
Webb  V.  Cashel,  11  Ir.  Eq.  558...    77 
V.  First  Baptist  Church,  90 

Ky.  117 40 

Weber  v.  Spokane  Nat.  Bank,  50 

Fed.  Rep.  735 428 


Webster  v.  Clark,  25  Me.  313 244 

V.  Couch,  6  Rand.  519....  14,  32 
Weed  V.  SmuU,  3  Sandf.  Ch.  373.  343 

V.  Love,  50  N.  Y.  571 177 

V.  Weeks,  106  N.  Y.  626... 

101,  103,  104,  105,  107 
Weems  v.  Lathiop,  43  Tex.  207.  .65,  78 
Welder  ®.  Maddox,  66  Tex  372...  Ill 
Weigh  tman  v.  Hatch,  17  111.  271.. 

242,   247 

Weil  V.  Tyler,  38  Mo.  545 74 

Weill  V.  First  Nat.   Bank,  106  N. 

C.  1 92,  154,  411 

Weinrich  v.  Koeliing,  21  Mo.  App. 

133  139 

Weis®.  Goetier,  73  Ala.  259 13,  26 

Weise    v.    Welsh,   30    N.  J.    Eq. 

431 550 

Welch  V.  Ileury,  33  Kan.  435....  287 
Welles  V.  Graves,  41  Fed.  Rep.  459 

155,  449 
T.  Larrabee,   36   Fed.    Rep. 

866,  2L.  R.  A.  471....  443 
V.  Stout,  38  Fed.  Rep.  68, 

807 155,  439,  440,  443 

Wellman  v.  Harker,  3  Or.  203....  308 
Wells  ».  Higgins,  132  N.  Y.  458.. 

203,   220 
Wendler  Mach.  Co.,  lie,  2  App. 
Div.  16,  37  N.  Y.  Supp. 

444. 101 

Wenner  v.  Thornton,  98  111.  156.. 

261,  616 

Werborn  v.  Kahn,  93  Ala.  201 

15,  538,  549 
Werner  v.  Murphy,  60  Fed    Rep. 

772.... 183 

Wesson  v.  Chapman,  77  Hun,  144, 

593 523,525 

West«.  Chasten.  12  Fla.  315 

18,  39,  41,  44,  64,  307, 

313,  315,  324 

«.  Conant,  100  Cal.  231 292 

«.  Eraser,  5  Sandf.  653.....     73 
e.  Swan,  3  Edw.  Ch.  420. .34,  42 

V.  Weaver,  3  Heisk.  589 54 

Western  Canada  &  I.   Co.   Ee,  8 
Prec.  Rep.  (Ont.)  263.. 

220,  233 
Western   Div.  of  North  Carolina 
R.  Co.  V.  Drew,  3  Woods, 

391 362 

Western  N.  C.  R.  Co.  v.  Rollins, 

82  N.  C.  523.. -  353 

Western   Pennsylvania   R.  Co.  v. 

Johnston,  59  Pa.  290  ..  477 
Western  U.  Telep.  Co.  v.  Atlantic 
&  P  Teleg.  Co.  7  Biss. 

367 345 

Weston  V.  Loyhed,  30  Minn.  221  . 

376,  387 


CASES  CITED. 


xcvii 


Wetter  v.  Schlieper,   7  Abb.    Pr. 

92 91,567 

V.  Schlieper,  4  E.  D.  Sraitb, 
707 307 

Wheeler    v.    Braham,    3    Campb. 

340. _. 223 

V.  Lampman,  14  Johns.  481.  254 
V.  Pullman    Iron    &  S.  Co. 
143  III.  197,  17  L.  R.  A. 

818 356 

V.  Thayer,  121  Ind.  64 404 

V.  Walton  &  W.  Co.  72  Fed. 

Rep.  966 574 

Wheelock  v.  Kost,  77  111.  296  . . .  _  446 
Whelpley  v.  Erie  R.  Co.  6  Blatchf. 

271 10,  466,  471 

Whipple  V.  Pope,  33  111.  334 250 

Whitiiker  v.  Cohen,  69  L.  T.  451..  543 
V.  Sparkman,  30  Fla.  347  .  -   118 
White  V.  Baugh,   2  Bligh,  N.   S. 

181- 207 

V.  Colfax,  1  Jones  &  S.  297 

307,  314,  315,  325,  328,  329 

V.  Griggs,  54  Iowa,  650 

35,  277,  280,  282,  292,  293 
V.  Haight,  16  N.  Y.  310....   397 

V.  Jones,  38  111.  159 616 

V.  Joy,  13  N.  Y.  83  ....159,  411 
V.  Lincoln,  8  Ves.  Jr.  371..  587 

V.  Low,  7  Barb.  204 92,  159 

V.  Pulley,  27  Fed.  Rep.  441.  272 

V.  Russell,  79  III.  155 .  246 

V.  White,  7  Gill  &  J.  210...  171 
White's  Bank  v.  Farthing,  101  N. 

Y.344.... 264 

Whitehead  v.  Hale  (N.  C.)  24  S.  E. 

360 291 

V.  Hellen,  74  N.  C.  679.. 253,  254 

V.  Wooten,  43  Miss.  523 

15,17,73,  266,  271,  277, 
280,  297,  371,  459,  462, 

464,  467,  603 
Whitehouse  v.  Fellow es,  10  C.  B. 

N.  S.  765... 213 

Whitelaw  v.   Sandys,   12  Ir.    Eq. 

393 18,  19 

Whiteley  v.  Learoyd,  56  L.  T.  846 

531 ,  541 
Whiteside  v.  Prendergast,  2  Barb. 

Ch.  471 75,  76,  561 

Whitesides  v.  Lafferty,  3  Humph. 

150 .307,  312,  313 

While  Water  Valley  Canal  Co.  v. 
Vallette,  62  U.  S.  21 
How.  414,  16  L.  ed.  154 

41,  303 
Whitewright  v.  Stimpson,  2  Barb. 

379 320 

Whitfield,  K.iparte,  2  Alk.  315...     36 
V.  Lord  I..e  Despencer,  Cowp. 

754 211 

o 


Whiting  V.  Bank  of  United  States, 
38  U.  S.  13  Pet.  6, 10  L. 
ed   33  71 

Whitley  v.  Challis"[1892]  1  ChV64 

96,  295 
Whitman  v.  Robinson,  21  Md.  30. 

306,  309,  310 
Whitney*.  New  York  &  A.  R.  Co. 
66    How.    Pr.    436,    32 

Hun,  164. 15 

V.  Ruckman,  26  Cal.  447...  552 

Whittemore,  Be,  157  Mass.  46 596 

V.  Amoskeag  Nat.  Bank,  134 
U.  S.  527,  33L.  ed.  1002 

424,  435 
Whittlesey  v.  Delaney,   73  N.  Y. 
571. .157,  171,  375,  377, 

387,  406,  610 
V.  Frantz,  74  N.  Y.  456.... 

85,  174,  403 
Whitwell  V.  Warner,  20  Vt.  425..  360 
Whitworth    v.    Woflford,    73    Ga. 

259. 552 

Wickens  v.  Tounshend,  1  Russ.  & 

M.  361.... 53 

Wickham  v.  Hull,  60  Fed.   Rep. 

326 122,  Ul 

Wickersham's  Case,  L.   R.  8  Ch. 

831,  28  L.  T.  653 337 

Wicks  V.  Sears,  4  Lea,  298 599 

Wiggins  V.  Armstrong,  2  Johns. 

Ch.  144.. 239,  244,  248,  249 
Wilcox  V.  Pratt,  52  Hun,  340  ....  322 
Wildridge    v.    McKane,    2    Moll. 

545 201 

Wildy    V.    Mid  Hants  R.    Co.    16 

W<ek.  Rep.  409 358 

Wilkins?).  Thorne,  60  Md.  253...  343 
V.  Williams,  3  Ves.  Jr.  515.56,  62 
Wilkinson  v.  Culver,  23  Blatchf. 

416 112 

V.  Culver,  25  Fed.  Rep.  639  414 
V.  Dobbie,  12  Blatchf.  298..  13 
e.  Dodd,  40N.  J.  Eq.  124--  88 
V.  North  River  Const.   Co. 

66  How.  Pr.  423. -.185,  417 
V.  Rutherford,  49  N.  J.  L. 

241 155,  161,  399 

Willard  v.  Decatur,  59  N.  H.  137..  339 
Williams,  Ex  parte,  11  Ves.  Jr.  5. 

318,  327 
V.  Babcock,  25  Barb.  109... 
92,    180,  369,  383,  391. 

611,  624 
V.  Benedict,  49  U.  S.  8  How. 

Ill,  12  L.  ed.  1008....  123 
V.  Brown,  4  Johns.  Ch.  682  244 
V.  Filzliugh,  37  N.  Y.  444..  147 
V.  Halliard,  38  N.  J.  Eq.  378  450 
V.  Hintermeister,     26     Fed. 

Rep.  889 169,  412 


XCVlll 


CASES  CITED. 


Williams  v.  Hogebooni,  8  Paij^e, 

469... 253,  253 

V.  Hdlibtird,      Walk.      Ch. 

(Mi8s.)28 252 

■V.  Hutchinson,  26  Fla.  513.  118 

■c.  Ives,  49  111.  512 253 

«.  Jenkins,  11  Ga.  595 

17.  19,  42,  73,  550 
«.  Michener,  11   N.  J.  Eq. 

520. 246 

e.  Morgan,  111  U.  S.  684,  28 

L.  ed.  559. 118,  119 

V.  Noland,  2  Tenn.  Ch.  151 

279,  358 
V.  Robinson,  16  Conn.  517- . 

280    358 

V.  Sexton,  19  Wis.  43 '  238 

V.  Thorne,  70  K  Y.  270... .  239 
V.  Traphagen,  38  N.  J.  Eq. 

57 ..1B9,  180,  405 

«.  Wilson,  4  Sandf.  Ch.  379 

306,  311,  325,  326,  340 
Williamson  v.  Gerlach,  41  Ohio  St. 

684 .- .-  301 

V.  Monroe,  3  Cal.  383..-308,  334 
V.  New  Albany,  etc.,  R.  Co. 

1  Biss.  198 11,  268, 

271,  276,  292,  458,  463,  469 
V.  Washington  Citv,  V.  M. 
&  G.  S.  R.  Co."  33  Gratt. 

624 ..11,  297,  476,  477 

V.  Wilson,  1  Bland,  Ch.  418 
2,  12,  20,  22,  42,  60,  61, 
62,  65,  73, 142,  306,  307, 

325,  326,  333 

Williamson's  Case,  26  Pa.  1 129 

Willink  V.  Morris  Canal  &  Bkg. 
Co.4N.  J.  Eq.  377.... 

196,  383 
Willis  V.  Corlies,  2  Edw.  Ch.  281. 

40,  43,  321,  362,  536 

V.  Sharp,  46  Hun,  540 537 

V.  Sharp,  124  N.  Y.  406.... 

200,  203,  206,  569 
V.  Sharp,  113  N.  Y.  591,  4 

L.  R.  A.  493 216,  626 

Willison*.  Salmon,45N.  J.  Eq.  257  144 
Willitts  ^.Waite,  25  N.  Y.  577.... 

50,  111,  168 
Wills  V.  Lufif,  L.  R.  38  Ch.  Div. 

197,  57  L.  J.  Ch.  563...     35 
Wilmer  v.  Atlanta  &  R.  Air  Line 
R.  Co.  2  Woods,  421... 
48,    56,    123,    127,    142, 
276,  344,  358.  359,  459, 

461,  464 
Wilmington  Star  Min.  Co.  v.  Allen, 

95  111.288 369 

Wilson  V.  Allen,  6  B^rb.  542 

47,  65,  73,  74,  125,  141, 

142,  144,  171.  261,  400 


Wilson  V.  Aultman  &  T.  Co.  91  Ky. 

299.. .-  296 

t).  Barney,  5  Hun,  257 

67,  69,  562 

V.  Coburn,  35  Neb.  530 392 

V.  Davis,  1  Mont.  98. ..12,  70,  71 
V.  Fletcher,  11  N.  J.  Eq.  71.  325 
V.  Greenwood,  1  Swanst.  471 
307,  308.  312,  315.  322, 

325,  340 
«.  Martin-Wilson  Automatic 
Fire    Alarm    Co.     149 

Mass.  24 146 

«.  Martin-Wilson  Automatic 
Fire  Alarm  Co.  151 
Mass.  515, 8  L.  R.  A.  309  400 

V.  Poe,  1  Hog.  322 60,  90 

V.  Robertson,  21  N.  Y.  587.  250 

V.  Welch,  157  Mass.  77 

75,  159,  161,  162,   181, 

400,  401,  410,  611 

t.  Welsh,  70  Ind.  428 399 

V.  Wilson,  1  Barb.  Ch.  592. 

47,  143,  148 

Wilson's  Case.  1  H.  Bl.  691 109 

Wilson  Cotton  Mills  v.  Randleman 
Cotton  Mills,  115  N.  C. 

478 588 

Winans  v.  Gibbs  &  S.  Mfg.  Co.  48 

Kan. 777 167 

Winbourn's  Case,   30  Fed.    Rep. 

167. 516,  595 

Winchester  Electric  Light  Co.  ». 
Gordon  (Ind.)  42  N.  E. 

914 36 

Winchester  Wagon  Works  &  Mfg. 
Co.  V.  Carman,  109  Ind, 

31 549 

Wincock».  Turpin,  96  111.135 

175,  178,  385,  405 
Winfield  v.  Bacon,  24  Barb.  154.. 

197,  198,  416,  619 

Wing®. Champion,  1  Tenn.  Ch.  515  547 

V.  Disse,  15  Hun,  190... 142,  256 

«.  Dodge,  80  111.  564. -.261,  616 

Winkler  v.  Winkler,  40  111.  179... 

14,  32,  45 
Winslow  V.  Nayson,  118  Mass.  411  207 
Winters    v.    Armstrong,   37  Fed. 

Rep.  508 177,  404,  428 

V.  Sowles,  38  Fed.  Rep.  700  441 
Wisconsin  M.    &  L.   F.  Ins.  Co. 
Bank  v.  Manistee  Salt  & 
L.  Co.  77  Mich.  76.-138.  149 
Wiser  v.  Blachly.  1  Johns.  Ch.  607    76 
Wiswall  V.  Sampson,  52  U.  S.  14 
How.  52, 14L.ed.  323.. 
24.  46,  48,  49,  121,  125- 
127,  129,  141,  183,  186, 
188,  189,  190,  300,  345, 
373,  417,  418,  615,  620,  621 


CASES  CITED. 


xcix 


Witters  v.  Sowles,  32  Fed.   Rep. 
130,  772,  31  Fed.  Rep.  1 

123,  124,  443,  449 
Woerishoffer  v.  North  River  Const. 

Co.  99  N.  Y.  398 • 

24,  128,  129,  352,  353.  418 
Wolbert  v.  Harris,  7  N.  J.  Eq.  605 

97,  307,  322,  340 

Wolfe*.  Claflin,  81  Ga.  64.. 239 

Wood  V.  Ely  the,  46  Wis.  650 85 

®.  BreweP,  9  lad.  86_. 71 

V.  Dummer,  3  Mason,  308.. 

175,  237,  354 
J.  Guarantee  Trust  &  S.  D. 
Co.    128  U.  S.  417,  32 
L.  ed.  472.95,  484,  523,  577 
V.  Hutchings,  2  Beav.  289..  530 
V.  New  York  &  N.  E.  R.  Co. 

70  Fed.  Rep.  741 . . .  .487-490 
V.  Oregon  Development  Co. 

55  Fed.  Rep.  901 563 

V.  Standard  Mut.  L.  S.  Ins. 

Co.  154  Pa.  157 624 

V.  Truckee  Tump.    Co.   24 

Cal.  474. 454 

V.  Wood,  4  Russ.  558- 202 

Woodburn  v.  Smith  (Ga.)  22  S.  E. 

964 99 

Wooden  v.  Wooden,  3  N.  J.  Eq. 

429. ..14,  32 

Wooding  V.  Wooding,  10  Wash. 

531 68 

Woodruff  V.  Erie  R.  Co.  93  N.  Y. 

609. ...103,203, 

204,  220,  221,  224,  381, 

393,  489,  495,  502,  506 
V.  Jevpett,    115  N.  Y.   267, 
Rev"d  in  37  Hun.  205_. 
192,  195,  198,  229,  233, 

395,  559 
Woods  t).  Creaghe,  1  Hog.  174...  562 
V.  Ellis.  85  Va.  471.53.  65,  73,  74 
Woodward  ».  Brooks,  128  111.  222, 
3  L.  R.  A.  702. ...113, 

167,  170,  412,  413 

V.  Roane,  23  Ark.  526 110 

V.  Scbatzell,  3  Johns.  Ch. 

415 326 

».  Wiuehill  (Wash  )  44  Pac. 

860 49,  220,  297 

Woodworth  v.  Ellsworth,  4  Colo. 

580 428 

Woolly  V.  Holt,  14  Bush,  788 

267,  277,  280 
Woolscy  V.  Cummings  Car  Works, 

33  N.  J.  Eq.  432 632 

Woolvcrton  v.  George  II.  Taylor 

Co.  43  III.  App.  424...  176 
Word  V.  Word,  90  Ahi.  81. ...15, 

17,  307,  323,  325,  455 
Wordle  v.  Lloyd,  2  Moll.  38"^ 132 


Wormser  v.  Merchants'  Nat.  Bank, 

49  Ark. 117... 136,  295,  366 

Worrill  v.  Coker,  56  Ga.  666 548 

Woven  Tape   Skirt  Co.,    Re,   12 
Hun,  111,  85  N.  Y.  506. 

122,  585,  590 
Wray  v.  Hazlett,  6  Phila.  155.. ..  184 
V.  Jamison,  10  Humph.  186. 

161,  400,  401 
Wreck  Recovery  &  Salvage  Co., 
Be,  L.  R.  15  Ch.  Div. 

353 97 

Wren  v.  Kirton,  11  Ves.  Jr.  377.. 

201,  207 
Wright  V.  McCormack,  17  Ohio 

St.  86 177 

V.  Merchants'  Nat.  Bank,  1 

Fiipp.  568 421,  422 

V.  Nostrand,  94  N.  Y.  31.. 
173,  242,  243,  252.  257, 

259,260,  375 

V.  Null,  1  H.  Bl.  136 164 

V.  Strong,  3  How.  Pr.  112..  246 

V.  Vernon,  1  Drew.  68. 35 

5.  Vernon,  3  Drew.  112 

34,  63,  298 

Wring  V.  Disse,  15  Hun,  191 143 

Wrixson  v.  Vize.  5  Ir.  Eq.  276...    83 
Wyatt  V.  Ohio  &  M.  R.  Co.  10  111. 

App.  289 ..183,  191 

WyckofE  V.  Scofield,  103  N.   Y. 

630 .-93,382,  626 

Wynn    v.    Lord    Newborough,   3 
Bro.  C.  C.  88...92,  153, 

159,  383 
Wynne  v.  Heck,  92  N.  C.  414....  160 
V.  Lord  Newborough,  IVes. 

Jr.  164 105 

V.  Lord     Newborough,     15 
Ves.  Jr.  283... 56.  59,  60-62 


Y. 

Yardley  v.  Clothier,  49  Fed.  Rep. 

337 138,  384,  439 

v.  Dickson,   47    Fed.    Rep. 

835 436 

Yates  V.  Lansing,  9  Johns.  395...  207 

Yeager  v.  Wallace,  44  Pa.  294 

82,  141,   145,  161,    162, 

262,  396.  399-401,  611 
Yoakum  v.    Dunn,    1    Tex.    Civ. 

App.  524 202,  212 

V.  Selph,  83  Tex.  607..  192, 

204,  211,  213,  514 

Young.  Re,  7  Fed.  Rep.  855 

189,  194,  613- 
V.  Buckett,  51  L.  J.  Ch.  504.  323 
V.  Clapp,  147  111.  176.... 22, 

47,  50,  262,  263,  376 


CASES  CITED. 


Young  V.  Farwell,  139  111.  326.-..  405 
V.  Frier,  9  N.  J.  Eq.  465.  .239,  249 
V.  Montgomery  &  E.  R.  Co. 
2  Woods,  606-.48,  123, 
127.  183,  345,  372,  557,  558 
V.  Northern  Illinois  Coal  & 

.    I.  Co.  9  Biss.  305 272 

«.  Rollins,  85  N.  C.  485. ... 

48,  56,  345.  604 
V.  Rollins,  90  N.  C.  125.172.  370 
V.  Wempe,  46  Fed.  Rep.  354 

437,  438 
V.  Wright,   8  P.   R.    (New 

Brunswick)  198 36 

Yore  V.  San  Francisco  Super.  Ct. 
108CaI.431.-.-67,  346, 

356,  361,  415 


York  &  M.  L.  R.  Co.  v.  Winans, 
58  U.  S.  17  How.  30,  15 
L.  ed.  27 105 

Yuba  County  v.  Adams,  7  Cal.  35. 

127,  137,  373 


Zabriskie  v.  Cleveland,  C.  &  C.  R. 

Co.  04  U.   S.  23   How. 

381,  16  L.  ed.  488 351 

Zell  Guana   Co.  v.   Heatherly,  38 

W.  Va.  416 238.  239 

Zieverink  v.  Kemper,  50  Ohio  St. 

208 355 


LAW   OF 

RECEIVERSHIPS. 


CHAPTER  I. 

GENERAL  NATURE  AND  FEATURES  O^   THE  LAW. 


§  1.  Origin  of  the  law;  its  growth. 

§  2.  Is  ancillary  and  provisional. 

§  3.   Receiver  defined;  liquidators. 

g  4.  Generally,    in     what    cases    ap- 
pointed. 
(a)  Where  parties  entitled  to  cus- 
tody are  incompetent. 
(1)  Over  infants'  estates, 
(f)  Over  lunatics'  estates. 
{3)  Over  decedents'  estates. 
•(b)  Where  parties  entitled  to  cus- 
tody are  competent,  but  are 
otherwise  disqualified. 
(1)  Over  copartnership  property. 
{£)  Over  property  of  tenants  in 

common. 
(5)  Over    properly   claimed    by 
differeut  persons. 
(c)  Where  parties  in   custodj'  are 
violating  fiduciary  duties  and 
trust  relationships, 
(i)  Over   trust    or    quasi    trust 

properly. 
{2)  Executors    and    administra- 
tors. 

(3)  Mortgagors  in  possession. 

(4)  Judgment  debtors. 

(5)  Vendees  in  possession. 
(G)  Fraudulent  purchasers. 

(7)  Annuities. 

(8)  Life  tenants  in  possession. 
ii>)  Corporate  officers. 


(10)  Assignees  in  bankruptcy  and 
insolvency, 
^.d)  Where  the  ordinary  process  is 
insutficient. 
(1)  Creditors'  suits,  supplement- 
ary proceedings. 
{S)  Separate  estates  of  married 

women. 
(3)  Statutory      proceelings     to 
wind  up  corporations. 
^5  5.  Rules  governing  the  appointment. 

(a)  Appointment  rests  in  the  sound 

discretion  of  the  court. 

(b)  Must  be  reasonable  possibility 

of  plaintiff's  recoverj\ 

(c)  Must  be  a  necessity  of  preserv- 

ing property. 

(d)  Defendant   must   be  heard  or 

have  an  opportunity. 
(1)  Exception;  Final  relief. 

'         Where  all  parties 
before  court. 


(2) 
(3) 


*         Where  defendant 
absconded. 
(4)         "         Where    imminent 
danger  of  loss. 
§  6.  Functions  of  receiver. 

(a)  Source  of  power;  nature  and 

extent. 

(b)  Trustee  for  all  parties ;  respon- 

sibility. 

(c)  Care  and  custody  of  property. 
§  7.  Effect  of  appointment. 


2 


RECEIVERSHIPS. 


(a)  Places    property  in   cvHodia 

ler/is. 

(b)  Receiver  not  permitted  to  be 

sued.' 

(c)  Determines  no  rights,  and  af- 

fects no  li<^as. 
§  8.  Kinds  of  receivers. 
§  9.  At  what  stage  appointed. 

(a)  There  must  be  a  suit  pending. 

(b)  Before  answer,  when. 


(c)  After  decree  and  sale,  when. 

(d)  After  appeal,  when. 

§  10.  Application  for;  allegations;who 
appointed. 

(a)  B}'^  whom  application  made. 

(b)  Exercise  of  care  by  the  courts. 

(c)  Allegations,  averments. 

(d)  Receiver  must  be  disinterested. 

(e)  Subsequent    receivers,   ancil- 

lary. 


§  1.    Origin  of  the  law ;  its  growth. 

The  law  of  receiverships,  like  all  other  branches  of  remedial 
jurisprudence,  is  a  growth,  an  evolution,  and,  in  its  application, 
has  for  its  purpose  the  protection  and  preservation  of  the  prop- 
erty which  forms  the  subject-matter  of  the  litigation,  until  the 
final  adjudication  of  the  rights  of  the  parties  litigant.  In  its 
original  exercise  the  appointment  of  a  receiver  was  pnrely  an 
incidental  power  of  the  court  of  chancery,  put  into  operation  as 
part  and  j)ai*cel  of  the  great  body  of  equitable  jurisprudence,  in- 
tended to  secure  justice  by  more  complete  and  adequate  reme- 
dies where  the  strict  and  unelastic  rules  and  practice  prevailing 
in  the  common  law  courts  were  insufficient.' 

This  branch  of  the  law,  however,  has  grown  along  with  the 
other  branches  of  equitable  jurisdiction  and  has  been  extended 
and  brought  into  exercise  in  nearly  every  species  of  chancery 
proceeding,  as  well  as  in  many  common  law  actions.  Perhaps 
no  other  branch  of  jurisprudence  more  fitly  represents  the  grad- 


» Chancellor  Bland  in  1826  says :  "  It 
is  a  power  of  the  court  of  chancery  of 
England  which  appears  to  have  been 
frequently  called  into  action  during 
more  than  a  century  past.  All  the 
leading  principles  in  relation  to  it  were 
well  established  there  long  before  our 
revolution;  and  it  was  then,  and  has 
ever  since  been  considered,  there  and 
here,  as  a  power  of  as  great  utility  as 
any  which  belongs  to  a  court  of  chan- 
cery. And  that  it  is  so  will  appear 
very  evident  from  a  review  of  the  na- 
ture and  the  variety  of  the  exigencies 
in  which  it  has  been  called  into  action, 


either  to  prevent  fraud,  to  save  the  sub- 
ject of  litigation  from  material  injury, 
or  to  rescue  it  from  inevitable  destruc- 
tion." Williamson  v.  Mfoc?/*,  1  Bland, 
Ch.  418.  See  also  Myers  v.  Estell,  48 
Miss.  401 ;  Beverley  v.  Brooke,  4  Gratt. 
187  (208).  Vice  Chancellor  Giffard,  in 
Hopkins  v.  Worcester  <&  B.  Canal  Co.  L. 
R.  6  Eq.  437,  447,  says  in  regard  to  the 
appointment  of  receivers:  "  That  is 
one  of  the  oldest  remedies  in  this 
court,"  and  is  a  remedy  which  a  court 
of  chancery  will  always  grant  ex  debito 
justiticz,  upon  a  proper  showing. 


GENERAL  NATURE  AND  FEATURES  OF  THE  LAW.     3 

nal  (growth  and  adaptation  of  equitable  principles  to  the  ever 
changing  conditions  of  social  progress  and  civil  and  counnercial 
advancement. 

Especially  has  the  law  of  receiverships  been  pnt  into  operation 
and  its  efficient  remedial  action  been  fully  demonstrated  in  the 
winding  up  of  corporations  and  the  administration  of  their  assets. 
By  several  acts  of  Parliament,  in  England,  and  statutory  enact- 
ments in  nearly  all  of  the  states  in  this  country  the  original  law 
of  receiverships  as  administered  in  the  courts  of  chancery,  and 
those  exercising  chancery  powers,  has  been  enlarged  in  its  scope 
and  extended  in  its  application  to  many  subjects  not  theretofore 
embraced  in  its  exercise,  and  the  powers,  duties,  and  liabilities  of 
the  receiver  have  been  largely  increased.  Much  of  this  legisla- 
tion, however,  has  been  but  placing  in  statutory  form  the  princi- 
ples of  equity  jurisdiction  and  practice  existing  long  prior  thereto. 

§  2.     Is  ancillary  and  provisional. 

The  law  of  receiverships  is  peculiar  in  its  nature  in  that  it  be- 
longs to  that  class  of  remedies  which  are  wholly  ancillary  or  pro- 
visional, and  the  appointment  of  a  receiver  does  not  affect,  either 
directly  or  indirectly,  the  nature  of  any  primary  right  but  is 
simply  a  means  by  which  primary  rights  may  be  more  efficiently 
preserved,  protected,  and  enforced  in  judicial  proceedings.  It 
adjudicates  and  determines  the  rights  of  no  party  to  the  proceed- 
ing and  grants  no  final  relief  directly  or  indirectly.^  In  this  re- 
spect its  effects  are  analogous  to  the  law  in  relation  to  injunction 
and  interpleader,  and  sometimes,  as  will  be  seen,  an  injunction 
will  afford  an  adequate  remedy  without  interfering  with  the  pos- 
session of  the  propert3^  It  leaves  the  parties  as  they  have  placed 
themselves,  as  determined  by  the  final  judgment  or  decree  of  the 
court. 

§  3.    Receiver  defined;   liquidators. 

A  receiver  may  be  defined  as  a  person  appointed  by  the  court, 
as  a  quasi  ofiicer  or  representative  of  the  court,  and  therefore 
occupying  a  disinterested  position  as  between  the  parties,  whose 
function  it  is  to  hold,  manage,  control,  and  deal  with  the  property 

'Pom.  Eq.  Jur.  g§  171,  1319,  1330; 
Miller  v.  Bowles,  58  N.  Y.  203. 


4  RECEIVERSHIPS. 

"whicTi  is  the  subject-matter  of,  or  involved  in  the  litigation;  in 
case  there  is  no  person  entitled  competent  to  thus  hold  it ;  or, 
where  two  or  more  litigants  are  equally  entitled,  but  it  is  not 
just  and  proper,  under  existiiig  circumstances,  that  either  of 
them  should  retain  it  under  his  control;  or  where  a  person  is 
legalh^  entitled  to  the  j^ossession,  but  there  is  danger  of  his  mis- 
applying or  misusing  it;  or,  under  some  particular  circumstances, 
in  suits  to  foreclose  mortgages.'  A  receiver  is  an  indifferent 
person  between  the  parties  to  a  cause,  appointed  by  the  court  to 
receive  and  preserve  the  property  or  fund  in  litigation  pendente 
lite,  when  it  does  not  seem  reasonable  to  the  court  that  either 
party  should  hold  it.^ 

Under  the  provisions  of  section  92,  chapter  89  of  the  Compa- 
nies act  of  1862  provision  is  made  in  England  for  the  appoint- 
ment of  a  liquidator  or  liquidators,  for  the  purpose  of  the  wind- 
ing up  of  companies  and  associations  thereunder :  (1)  When  the 
company  has  passed  a  resolution  requiring  the  company  to  be 
wound  up ;  (2)  when  the  company  does  not  commence  its  busi- 
ness within  a  year  from  its  incorporation,  or  suspends  its  business 
for  a  whole  year ;  (3)  when  its  members  are  reduced  in  number 
to  less  than  seven ;  (4)  when  the  company  is  unable  to  pay  its 
debts ;  (5)  whenever  the  court  is  of  the  opinion  that  it  is  just 
and  equitable  that  the  company  should  be  wound  up.  The  pow- 
ers of  the  official  liquidator  under  the  above  act  are  :  (a)  To  bring 
or  defend  any  action,  suit,  or  prosecution,  or  other  legal  proceed- 
ing, civil  or  criminal,  in  the  name  and  on  behalf  of  the  company; 
(b)  to  carry  on  the  business  of  the  company  so  far  as  may  be 
necessary  for  the  beneficial  winding  up  of  the  same ;  (c)  power 
to  sell  the  company's  assets  and  effects;  (d)  to  do  all  acts  and  to 
execute  in  behalf  of  the  company  all  deeds,  receipts,  and  other 
documents,  and  if  necessary  to  use  the  company's  seal ;  (e)  and, 
generally,  to  do  and  perform  all  other  acts  and  things  that  may  be 

'Pom.  Eq.  Jur.  §  1330;  Kerr,  Re-  erley  v,  Brooke,  4  Gratt.  208;  Lottimer 

ceivers,  p.  3.  v.  Lord,  4  E.  D.  Smith,  183;  Lihhy  v. 

^High,  Receivers,  3d  ed.  §  1;  Booth  Bosekrans,  55 Barb.  202;  Waters  v.  Car- 

V.  Clark,  58  U.  S.  (17  How.)  331,   15  roU,9  Yerg.  (Tenn.)  102;  Devendorfv. 

L.  ed.  167;  Hunter  v.  Peaks,  74  Me.  Dickinson,  21  How.  Pr.  275;  Harman 

363;  Gluck  &  Becker  Receivers,  §  1;  v.  McMvllin,  85  Va.  187;  Davis  v.  Duke 

Ex   parte    Jay,    L.    R.    9    Ch.    133;  of  Marlborough,  2  Swanst.  125. 
Baker    v.    Backus,    32   111.    79;    Bev- 


GENERAL  NATURE  AND  FEATURES  OF  TUE  LAW.     5 

necessary  for  winding  up  the  affairs  of  the  company  and  distrib- 
uting its  assets.'  It  is  also  provided  by  the  act  (§  96)  that  the 
liquidator  may  exercise  the  above  enumerated  powers  without 
the  sanction  or  intervention  of  the  court  where  the  order  for  his 
appointment  so  provides.  "While  it  is  true  that  the  appointment  of 
a  liquidator,  under  the  provisions  of  the  above  act,  does  not  abol- 
ish the  office  of  a  receiver,  and  under  peculiar  circumstances  receiv- 
ers are  still  appointed  by  the  courts,  yet  so  far  as  corporations  and 
associations  embraced  in  the  act  are  concerned,  the  official  liqui- 
dator, with  largely  increased  powers  and  duties,  has  superceded 
the  receiver  in  England,  but  the  functions  of  his  office  are  such, 
and  the  decisions  of  the  courts  relating  thereto  so  highly  instruct- 
ive and  important,  that  they  may  be  regarded  and  are  treated 
Iieroin  as  contributions  to  the  general  and  growing  body  of  the 
Jaw  of  receiverships.  Under  the  Winding-up  Act  of  1890,  after 
an  order  has  been  made  for  winding  up  the  company,  the  court 
has  no  power  toi  appoint  a  provisional  liquidator  other  than  the 
official  receiver.^  As  to  tlie  general  power  to  ap^Doint  receivers, 
see  Judicature  Act  of  1873. 

In  this  country  by  the  codes  of  civil  procedure,  and  amenda- 
tory statutes  in  states  not  adopting  the  code  practice,  the  func- 
tions, powers,  and  duties  of  the  receiver  have  been  greatly  in- 
creased and  extended,  and  especially  so  in  their  application  to 
corporations,  and  the  administration  of  their  affairs  in  cases  of 
insolvency,  breach  of  corporate  powers  and  duties,  and  the  more 
effectual  and  speedy  collection  and  distribution  of  assets.^ 

'Ch.  89,  Vol.  XIV.  Rev.   Stat.  p.  features    of    this    subject  are  noted 

202  (25  &  26  Victoria  to  28  &  29  Vic-  la    this    connection    for     reference 

toria,  A.  D.  1862-1865).  merely. 

^  Re   Worth  Wales    Qunx)oicder   Co.  Alabama:  Code,  §  1686. 

[1892]  2Q.B.220;  under  the  Judicature  Arkansas:    Gantt's    Dig.    of    Stat. 

Act  of  1873,  §  25,  cl.  8,  the  court  has  (1874)  «:§  4809,  4810;  Sandell  & 

most  ample  power  in  the  appointment  Hill,  Dig.  of  Stat,  ij  5964. 

of  receivers,  and  may  do  so  whenever  California:  Code  Civ.  Proc.  g^  564, 

it  is  just  or  convenient,  or  as  construed  565,  566. 

by  the   court,    just   and  convenient.  "Colorado:  King's  Code  Civ.   Proc. 

North    London     Railway    v.     Great  (1880)  §  138;  3Iills'  Ann.  Code, 

Northern,   Railway  L.  R.    11   Q.  B.  §  163. 

Div.  30.  Connecticut:   Gen.    Stat.   g§  1318, 

2  The  statutory  provisions  of  the  1319,    1320,    1321.    1322,    19J2, 

several  states  applicable  to  the  maia  1852,  2823. 


RECEIVERSHIPS. 


§  4.  (xouerally,  in  what  cases  appointed. 

Independent  of  statutory  provisions,  a  court  of  equity,  or  a 
common  law  court  exercisin<^  equity  powers,  will  appoint  a  re- 
ceiver in  four  diiferent  classes  of  cases. 


Delaware:  Laws,  pp.  686,  715,  718. 
Florida:    Code    Civ.    Proc.    (1870) 

g  192;  Rev.  Stat.  g§  1211,  2107, 

2154,  2157,  2192. 
Georgia:  Code  (1882)  §g  3098,  3149, 

274,  1486,  3149a,  3216. 
Idaho:  Rev.  Slat.  ^§  4329,  2479. 
Illinois:  Kurd's  Stat.  1895,  chap.  32, 

§  25;   chap.  73,  §  15. 
Indiana:  2  Davis'  Rev.  (1876)  ^  199; 

Rev.  Stat.  1894  (Burns),  §§1236, 

3435-3439,    4807-4870,    4954, 

8125-8127. 
Iowa:  2  Miller's  Rev.  Code  (1880), 

§2903;  McClain's  Ann.  Code, 

§§  4113-4115,  4188,  4279,  4370, 

1817,  457.  2585. 
Kansas:    Dassler's     Comp.     Laws 

(1881),  §254;  Gen.  Stat.  §§4590; 

4.591,  4319,  3«3. 
Kentucky:    Bullitt's    Code    (1876), 

§§    298,   299;    Carroll's   Code, 

298,  218,  302. 
Maine:  Rev.  Stat.  p.  406,  §§  46-48; 

423,  §71;  432,  §121;  455,  §67; 

457,  §  76;  458,  §  83;  478,  §§  47- 

49;  Statutes,  1885-1895,  318, §  5. 
Maryland:  Pub.  Gen.  Law,  389-391, 

§§  268-275. 
Massachusetts:  Pub.  Stat.  569,  f  42; 

Stat.  1883,  chap.  223;  Stat.  1882, 

chap.  22;  Pub.  Stat.  687,  837; 

Supp.Pub.  Stat.  1882-1888,180, 

293,  513,  137,  543,  15,  124,  125. 
Michiejau:     Howell's     Ann.      Stat. 

§§  4263,  4293,  4323,  6624,  7936, 

8064,    8065,   8067,    8111,    8112, 

8158,    8386,    8634,    8744,    8746, 

8748,     8749c,      Supp.     4323i^ 

4d23h\  32510. 
Minnesota:    Stat.    §§    5212,    3432, 

3434,  3435,  4241,  4246,  4810, 

5492,5897, 5899, 5906, 5972,6238. 


Mi.<=souri:  Rev.  Stat.  (1879)  §§  3116, 

3660. 
Mi.ssLssippi:    Ann.    Code,    §§   119, 

574-582.  581. 
Montana:  C.  C.  &  Stat.  Civ.  Code, 

§§  727,    830,   832;    Code  Civ. 

Proc.  §§  950-956,  2251. 
Nebraska:  Comp.  Stat.  1224,  1169, 

1179,  121. 
Nevada:  Gen.  Stat.  §§  2997,  3168. 
New  Jersey:   Rev.   of  N.  J.    187, 

§§  60-62;  121,  §  92;  189,  §  72; 

1281,  §  1;  188,  §61;  189,  §72; 

394,  §  26;   1348,  §§  4,  5;  943, 

§  160;   196,  §106;  Supp.  915, 

§§  11-15. 
New  York:  Bliss'  Ann.  Code,  995- 

1002,    1014-1027.    2815-2322, 

2331,  2745-2750. 
North  Dakota:  Rev.  Code,  §§  5-302, 

5403,  5705,  5770,  5779,  5780, 

5568-5570. 
North   Carolina:   Code   Civ.  Proc. 

197,  290;  Code,  vol.  1,  §§  379, 

668.  494. 
Ohio:    Rev.    Stat.   §§   5587,    5539, 

7609,    7601,   8248,    5670,   5656, 

5705,  5484,  3416. 
Oklahoma:     Stat,    tl    4101-4106, 

4144-4150;  §§  266-272. 
Oregon:   Hill's  Ann.  L.  694,  695?i, 

696?i,  697tt,  698?i,  699. 
Pennsylvania:    Brightley's    P.    D. 

427,  118;  1776,^§  23. 
Rhode  Island:  Gen.  L.  694-699. 
South  Carolina:   Gen.  Stat.  &  Civ. 

Code;  Code  Civ.  Proc.  §§  265, 

318. 
Tennessee:    Code,    §§  4518,    4716, 

3716,  4162,  4516,  2735. 
Texas:  Sayles' Tex.  Civ.  Stat.  vol.  1, 

art.  1461-1469,  1470,  1470i. 


GENERAL  NATURE  AND  FEATURES  OF  THE  LAW.    "i 

(a)  Where  pakties  entitled  to  custody  are  incompetent. 
Where  there  is  no  person  competent  bj  reason  of  interest, 
or  otherwise,  to  take  the  custody  and  management  of  the  prop- 
erty which  constitutes  the  subject-matter  of  judicial  action. 
This  may  occur  (1)  in  regard  to  infants'  estates,  where  there  is  no 
trustee,  and  where  there  is  no  guardian,  or  if  a  guardian,  by  rea- 
son of  inadequate  power,  he  is  unable  to  j^roperly  preserve,  care 
for,  or  manage  his  ward's  estate ;  (2)  in  regard  to  lunatics'  estates, 
where  no  person  will  act  as  a  committee  or  conservator ;  (3)  in 
regard  to  decedents'  estates,  where  by  reason  of  litigation  con- 
cerning the  admission  of  the  will  to  probate,  or  where  by  reason 
of  delay,  from  whatever  legal  cause,  in  the  appointment  of  an 
executor  of  the  will  or  administrator  of  the  estate,  and  where 
there  is  danger  of  loss,  misapplication,  or  misuse  of  the  property 
pending  such  delay.' 

(b)  Where  parties  entitled  to  custody  are  competent,   but 

ARE    otherwise    DISQUALIFIED. 

Where  all  the  parties  may  be  equally  entitled  to  the  pos- 
session and  custody  of  the  property  or  fund,  but  where  it  is  not 
proper,  owing  to  the  nature  of  the  contention,  or  of  the  relation 
of  the  parties  that  either  of  them  should  have  possession  or  cus- 
tody.^ This  may  occur:  (1)  in  matters  growing  out  of,  or  in- 
volved in  the  dissolution  of  a  copartnership ;  (2)  in  partition  pro- 
ceedings between  tenants  in  common ;  (3)  between  claimants  to 
land  under  legal  title,  where  gross  fraud,  great  danger  or  violent 
possession  is  alleged.' 

'  Pomeroy's  Equity  Jur.  §  1332.  foundation  of  the  remedy  is  of  course 

^  Mr.  Pomeroy,  in  bis  Equity  Juris-  the  danger,  yet  it  is  not  always  essen- 

prudence  (Vol.  3,  §  1333),  says  that  lial  that  there  should  be  any  element 

the  second  class  of  cases  is  based  upon  of  actual  fraud  or  breach  of  trust, 

the  fact  that  all  the  parties  are  clearly  *  In  Delaware,  L.  &  W.  R.  Co.  v.  Erie 

entitled  to  the  possession  of  the  prop-  B.  Co.  21  N.  J.  Eq.  298,  where  two 

erty  which  is  the  subject-matter  of  the  railway  companies  had  agreed  to  use 

controversy,  but  it  is  not  just  and  a  railway  station  jointly,  it  is  said 

proper  from  the  nature  of  the  dispute  that  no  doubt  seems  to  have  been  en- 

and  of  their  relations  to  each  other  tertained   in  Shrewsbury  R.     Co.    v, 

that  either  of  them  should  be  allowed  Cheater  R.  Co.  14  L.  T.  217-433,  that 

to  retain  the  possession  and  control  the  court  of  chancery  had  power  to 

during    the    litigation.       While    the  prescribe  rules  for  the  use  of  such  sta- 


S  RECEIVERSHIPS. 

(c)  Where  parties  in  custody   are  violating   fiduciary   du- 
ties   AND    TRUST   RELATIONSHIPS. 

^Yhere  tlie  person  lioldino;  property  occupies  a  position  of 
trust,  or  a  qtcasi  trust  relationship,  and  is  violating  his  fiduciary 
duties  by  waste,  misuse,  or  misapplication.  This  may  occur:  (1) 
in  tlie  case  of  trustees ;  (2)  executors  and  administrators ;  (3) 
mortgagors  in  possession  where  the  security  is  inadequate  and  the 
mortgagor  is  insolvent,  or  is  committing  waste ;  (4)  judgment 
debtors  where  the  judgment  creditor  has  an  equitable  lien,  but  is 
unable  to  enforce  his  judgment  by  the  ordinary  process;  (5) 
vendees  of  land  in  possession,  where  an  action  is  brought  to 
enforce  a  specific  performance  of  the  contract  of  sale ;  (6)  pur- 
chasers of  property  where  by  reason  of  fraud  an  action  is  brought 
to  rescind ;  (7)  delinquents,  in  an  action  brought  by  annuitants 
to  enforce  payment  of  arrears ;  (8)  life  tenants  in  possession  in  an 
action   by   the  remainderman   usually   founded   on   waste ;    (9) 


tion  and  to  appoint  a  receiver.  See  also 
the  case  of  Midland  B.  Co.  v.  Atnber- 
gate,  W.  &B.  &E.J.B.  Go.  10 Hare, 359. 
'  'In  the  case  before  me,"  the  chancellor 
says,  "these  parties  possess  a  com- 
mon interest  in  this  property.  They 
are  tenants  in  common  of  an  ease- 
ment, and  if  the  court  cannot  protect 
the  one  against  the  injustice  of  the 
other,  the  party  whose  rights  are  in- 
vaded is  clearly  without  any  adequate 
remedy ;  for  it  is  certain  that  either  of 
these  companies  thus  situated  can  so 
act  with  respect  to  the  common  ease- 
ment as  to  render  it  worthless  to  the 
other  and  bring  upon  the  other  incal- 
culable mischief.  The  general  cog- 
nizance in  equity  in  cases  of  this  kind 
where  property  is  enjoyed  in  common 
will  not,  it  is  presumed,  be  disputed 
by  any  one,  and  I  can  perceive  no 
reason  why  this  power  should  not  ex- 
ist where  two  railroads  are  such  ten- 
ants in  common,  as  well  as  in  other 
cases.  In  truth,  as  these  companies, 
although  technically  private  corpora- 
tions,  are    in   some  measure  public 


agents,  there  exists  in  such  cases  as 
the  present  an  additional  reason  why 
a  judicial  control  should  be  extended 
as  far  as  possible  over  their  conduct 
towards  each  other.  I  have  no  doubt 
as  to  the  jurisdiction  of  this  court 
over  this  subject,  and  I  shall  not  scru- 
ple therefore  to  exercise  it  to  the  full- 
est extent  that  the  circumstances  of 
the  case  may  now  or  at  any  other 
time  hereafter  appear  to  require." 

In  Bank  of  Mississippi  v.  Duncan, 
52  Miss.  740,  it  is  held  that  where  the 
court  takes  the  fund  from  a  defend- 
ant pending  litigation  and  afterwards 
becomes  satisfied  it  cannot  grant  re- 
lief and  dismisses  the  bill,  it  still  has 
power  to  retain  the  bill  for  the  pur- 
pose of  repairing  the  injury. 

In  Midland  B.  Co.  v.  Ambergate,  N. 
&  B.  &  E.  J.  B.  Go.  10  Hare,  359,  the 
court  refused  to  restrain  one  railway 
company  from  using  the  station  of  an- 
other under  an  agreement  which  was 
made  between  the  two  companies. 

See  also  Shrexcshury  B.  Co.  v.  Cites- 
ter  B.  Co.  14  L.  T.  217-433 


GENERAL  NATURE  AND  FEATURES  OF  THE  LAW.    & 

officers  of  a  corporation  in  an  action  bj  stockholders  charging 
mismanagement  or  acts  ultra  vires  /  (10)  assignees  and  otlier 
persons  in  bankruptcy  proceedings.' 

(d)  Where  the  ordinary  process  is  insufficient. 

4.  Where,  after  the  rendition  of  a  judgment,  it  becomes  neces- 
sary to  carry  into  effect  the  judgment  or  decree  of  the  court  and 
in  which  the  ordinary  officers  of  the  court,  or  the  legally  consti- 
tuted authorities,  cannot  efficiently  act  or  properly  perform  the 
duties  imposed.  This  condition  of  things  may  occur:  (1)  in 
creditors'  suits,  supplementary  proceedings,  or  proceedings  in 
aid,  which  are  designed  to  reach  equitable  interests  where  com- 
mon law  writs  are  inadequate,  and  where  fraudulent  conveyances 
and  obstructions  intervene;  (2)  in  suits  designed  to  reach  the 
separate  estate  of  married  women,  where  such  estate  is  not  held 
by  legal  title,  or  is  held  by  trustees  for  their  separate  use.^ 
(3)  Where  statutory  suits  and  proceedings  are  instituted  for  the 
purpose  of  winding  up  corporations  and  other  associations  of 
statutory  origin  by  reason  of  their  forfeiture  of  charter,  insolv- 
ency, or  acts  ultra  vires .^ 

There  are  many  statutory  proceedings  where  a  receiver  is  pro- 
vided for,  and  where  his  services  are  peculiarly  efficient,  as  in 
winding  up  proceedings  of  corporations,  by  reason  of  insolvency 
or  forfeiture  of  their  charter.  In  such  cases  the  receiver  is 
selected  by  reason  of  his  special  fitness  and  qualifications  for  the 

'  Pdmeroy,  Eq.  Jur.    §   1334,  and  could    not   otherwise    be    efficiently 

cases  there  cited.     Under  this  topic  executed  by  ordinary  process.  Among 

the  authorities    are    very  numerous  the  most  important  cases  in  which  a 

and  are  not  here  noted,  but  will  be  receiver  may  thus  be  appointed  are 

found  under  the  sub  topics  in  their  creditors'  suits,  and  suits  to  enforce 

proper  connection  hereafter.  equitable  liens;  suits  to  enforce  the 

"^  In  speaking  of  this  class  of  cases  contracts  of  married  women  against 

Mr.  Pomeroy  on  Equity  Jurisprud-  their  separate  estates;   and   suits  or 

ence  (Vol.  3,  §  lo3o)  says  in  some  in-  proceedings,  generally  statutory,  for 

stances  a  receiver  appointed  on  mo-  the  winding  up  of  corporations.     In 

tion  pending  the  action  is  continued  the  states  adopting  the  reform  pro- 

in  his  office    after    the    decree.     In  cedure  the  code  of  procedure  gener- 

others  he  is  appointed  after  the  decree  ally  contains  provisions  for  the  ap- 

when  no  appointment  would  be  made  pointment  of  a  receiver, 

until  after  the  hearing.      In   all  in-  ^  See    Receivers    of    Corporations, 

stances  the  object  of  a  receiver  is  to  Railways,  etc.,  chaps.  XII.  and  XIV., 

carry  into  effect  a  special  decree  which  post. 


10 


RECEIVERSHIPS. 


duties  assigned  to  him,  as  well  as  the  magnitude,  frequently,  of 
the  business  intrusted  to  his  management,  and  where  the  ordinary 
officers  of  the  law  could  not  be  expected  to  act  with  efficiency. 

§  5.    Rules  governing  the  appointment. 

The  exercise  of  the  extraordinary  power  of  the  court  in  the 
appointment  of  a  receiver  is  attended  with  such  consequences, 
and  may  end  in  such  extreme,  not  to  say  oppressive,  results  that 
judges  and  courts  in  all  cases  are  extremely  cautious  in  the 
administration  of  this  branch  of  equity  jurisdiction.  In  the 
appointment  of  a  receiver,  which  operates  in  the  nature  of  an 
equitable  execution,  and,  in  its  effects,  is  practically  a  sequestra- 
tion, there  has  been  established  certain  well  defined  and  salutary 
rules  that  operate  as  a  protection  to  the  parties  whose  interests 
are  to  be  affected,  and  as  a  guide  to  the  chancellor  in  making  the 
appointment.  These  rules  are  well-nigh  universal,  and,  it  is 
believed  that  no  case  will  arise  where  their  recognition  will  be 
attended  with  other  than  useful  results,  both  to  the  practitioner 
and  the  court.  Being  founded  upon  the  experience  and  judg- 
ment of  a  large  number  of  careful  and  discriminating  judges, 
called  upon  to  administer  this  branch  of  remedial  jurisprudence, 
they  cannot  be  otherwise  than  founded  in  justice,  and  a  careful 
and  discriminating  regard  for  the  rights  and  interests  of  the 
parties  litigant  is  j)romoted  thereby. 

(a)  Appointment  rests  in  the  sound  discretion  of  the  court. 

Independent  of  statutory  enactments,   the  appointment  of  a 

receiver  rests  in  the  sound  judicial  discretion  of  the  court,  or 

chancellor,  and  as  a  result  calls  for  the  exercise  on  his  part  of  the 

greatest  care  and  circumspection.*     Judicial  discretion  is  not  the 


^Davis  V.  United  States  Electric  P. 
&  L.  Co.  77  Md.  35;  Owen  v.  Roman, 
3  Macn.  &  G.  378.  20  I;.  J.  N.  S.  Ch. 
314,  15  Jur.  389,  Affirmed  in  4  H.  L. 
Rep.  997;  Norris  v.  Lake,  89  Va.  513; 
Grantham  v.  Lucas,  15  W.  Va.  425; 
Crane  v.  McCoy,  1  Bond.  422;  Vose  v. 
Beed,  1  Woods,  647;  Pullan  v.  Cin- 
cinnati &  C.  A.L.B.  Co.  4  Biss.35;  Ben- 
neson  v.  Bill,  62  111.  408;  McJiols  v. 
Perry  Patent  Arms  Co.U  N.J.  Eq.  126; 


Ex  parte  Walker,  25  Ala.  81,  lOi;  Lenox 
V.  Notrehe,  Hemp.  225;  Morrison  v. 
Buckner,  Hemp.  442;  Simmons  Hard- 
ware Co.  V.  Waihel,  1  S.  D.  488,  11  L. 
R.  A.  267;  Mays  v.  Bose,  Freem.  Ch. 
(Miss.)  703;  Chicago  &  A.  Oil  &  Min. 
Co.  V.  United  States  Petroleum  Co.  57 
Pa.  83;  Whelpley  v.  Erie  B.  Co.  6 
Blatchf.  271;  Milwaukee  &  M.  B.  Co.  v. 
Sautter,  94  U.  S.  2  Wall.  510,  17  L.  ed. 
900;  Beid  v.  Beid,  38  Ga.  2'i;Verplank 


GENERAL  NATURE  AND  FEATURES  OF  THE  LAW. 


11 


mere  will  or  caprice  of  the  cliancellor  who  is  called  upon  to  act, 
but  is  broader  and  more  comprehensive.  It  means,  in  this  con- 
nection, the  judicial  action  of  the  chancellor,  based  upon  a  care- 
ful consideration  of  the  facts  and  circumstances  of  the  particular 
case,  the  rights  and  interests  of  the  respective  parties,  and  the 
general .  principles  of  equity  jurisprudence  applicable  thereto. 
Some  courts  have  gone  to  the  extent  of  holding  that  the  appoint- 
ment of  a  receiver  rested  so  largely  in  the  determination  of  the 
appointing  court  that  the  action  was  not  a  matter  of  review  in 
the  upper  courts  except  where  there  appeared  to  be  an  abuse  ol 
the  discretion.  Judicial  discretion,  in  the  restricted  sense  in 
which  it  is  sometimes  used,  in  its  logical  results,  places  the  court 
in  a  position  of  responsibility  which,  in  most  cases,  it  will  not 
willingly  assume,  and  in  some  cases  it  should  not  be  permitted  to 
assume.' 


V.  Gaines,  IJohns.  Ch.  bl ;  LoUimer  v . 
Lord,  4  E.  D.  Smith,  183;  Syracuse 
City  Bank  v.  Tallman,  31  Barb.  201; 
Sales  V.  Lusk,  60  Wis.  490;  Rider  v. 
Bagley,  84  N.  Y.  461;  Lowell  v.  Doe, 
44  Minn.  144;  Myers  v.  Estell,  48  Miss. 
373,  404;  Cone  v.  Pauie,  13  Heisk. 
506:  Jucohs  v.  Gibson,  9  Neb.  380;  La 
Societe  Frangaise  D'ejmr genes  v.  15th 
Judicial  List.  Ct.  58  Cal.  495;  Ashursi 
V.  Lehman,  86  Ala.  370;  Pelzer  v. 
Hughes,  27  S.  C.  408;  Micou  v.  Moses, 
73  Ala.  439;  Pennsylvania  Co.  v.  Jack- 
sonville, T.  &  K.  W.  B.  Co.  55  Fed. 
Rep.  131  [2  U.  S.  App.  606];  William- 
son V.  New  Albany  dc.  B.  Co.  1  Biss. 
198;  Tyson  v.  Wabash  B.  Co.  8  Biss. 
247;  Union  Trust  Co.  v.  St.  Louis,  L. 
M.  &  8.  B.  Co.  4  Dill.  114;  Oakley  v. 
Paterson  Bank,  2N.  J.  Eq.  173;  Farm- 
ers' Loan.  &  T.  Co.  v.  Chicago  &  A.  B. 
Co.  27  Fed.  Rep.  146;  Skip  v.  Bar- 
wood,  3  Atk.  564;  Greville  v.  Fleming, 
2  Jones  &  L.  335  (Sugden's  Dec); 
Smith  V.  Port  Lover  &  L.  II.  B.  Co. 
12  Ont.  App.  288,  35  Am.  &  Eng.  R. 
Cas.  639;  Uamburgh  Mfg.  Co.  v.  Ed- 
tall,  8N.  J.  Eq.  141 ;  Ilanna  v.  Ilanna, 
89  N.  C.  68;  Williamson  v.  Washington 


City,  V.  M.  &  G.  S.  B.  Co.  33  Gratt. 
624;  Denike  v.  NewTork  &  B.  Lime  <& 
C  Co.  80  N.  Y.  599. 

'Judicial  discretion  has  been  de- 
fined to  be  a  discretion  to  be  exer- 
cised in  discerning  the  course  pre- 
cribed  by  the  law;  never  the  arbitrsiry 
will  of  the  judge.  Trip}]  v.  Cook,  26 
Wend.  152;  Piatt  v.  Munroe,  34  Barb. 
293.  According  to  Coke,  discernere 
per  legem,  quid  sitjustum;  perceiving 
by  or  through  (or  according  to)  the 
law  what  would  be  just.  Anderson's 
Dictionary,  p.  363.  Judicial  discre- 
tion as  contradistinguished  from  the 
private  discretion  of  the  judge  is 
wholly  different.  Of  the  latter  Lord 
Camden  says:  "The  (private)  discre- 
tion of  a  judge  is  the  law  of  tyrants; 
it  is  always  unknown;  it  is  different 
in  different  men;  it  is  casual,  and  de- 
pends upon  constitution,  temper  and 
passion.  In  the  best  it  is  oftentimes 
caprice;  in  the  worse  it  is  every  vice, 
folly,  and  passion  to  which  human 
nature  can  be  liable." 

While  the  appointment  of  a  receiver 
rests  in  the  discretion  of  the  court,  yet 
it  is  such  discretion  as  will  be  subject 


12 


RECEIVERSHIPS. 


(b)  Must  be  reasonable   possibility  of  plaintiff's  recovery. 

It  must  appear  affirmatively  that  there  is  a  reasonable  possi- 
bility that  the  plaintiff,  asking  for  a  receiver,  will  ultimately  suc- 
ceed in  obtaining  the  general  relief  sought  by  his  suit.'     As  ap- 


to  review  by  a  higher  court.  La  Societe 
Franciiise  D'ejMtrgenes  v.  15th  Jxdicidl 
Did.  Ct.  53  Cal.  495;  Mihoaukee  &  M. 
R.  Co.  V.  Soutter.  69  U.  S.  2  Wail.  510, 
17  L.  ed.  900;  Grantham  v.  Lucas,  15 
"W.  Va.  425;  WiJuon  v.  Davis,  1  Mont. 
98;  Emmons  v.  Garnett.TMPiCkey ,  52. 
However,  the  appellate  court  will  not 
interfere  with  such  discretion  where 
the  evidence  is  conflcting,  unless  it  is 
shown  that  the  discretion  is  abused; 
JS'aylor  v.  Sidener,  106  Ind.  179;  Sim- 
mons Hardicare  Co.  v.  Waibel,  supra; 
Graham  v.  Fuller  Electrical  Co.  75  Ga. 
878;  Reid  v.  Reid,  38  Ga.  24;  Gunhy 
V.  T/(6»w;;.w?i,  56  Ga.  316;  Crawfordv. 
Spurting,  56  Ga.  611;  Gardner  v.  How- 
ell, 60  Ga.  11;  Nimocks  v.  Cape  Fear 
Shivc/le  Co.  110  N.  C.  280;  Robenson 
V.  Ros>i,  40  Ga.  375;  Cohen  v.  Meyers, 
42  Ga.  46 ;  Emeric  v.  Alvarada,  64  Cal. 
529;  SchlecVs  Appeal,  60  Pa.  172;  Den- 
ike  v.  Neto  York  &  R.  Lime  &  C.  Co.  80 
N.  Y.  599;  Meadow  Valley  Min.  Co. 
V.  Dodds,  6  Nev.  262;  Eaton  &  H.  R. 
Co.  V.  Varnum,  10  Ohio  St.  622;  Mays- 
ville  &  L.  R.  Co.  v.  Punnett,  15  B. 
Mon.  47.  In  Alabama  it  is  held  that 
the  appellate  court  will  not  review 
this  discretion  except  in  statutory 
cases.  Miller  v.  Lehman,  87  Ala.  517. 
The  discretion  is  to  be  governed  by 
a  view  of  the  whole  circumstances  of 
the  case.  Omen  v.  Roman,  3  Macn. 
&  G.  378,  412  (4  H.  L.  Cas.  1033); 
Smith  v.  Port  Dover  &  L.  H.  R.  Co.  25 
Am.  &  Eng.  R.  Cas.  639;  Hamburgh 
Mfg.  Co.  V.  Edsall,  8  N".  J.  Eq.  141; 
Vose  V.  Reed,  1  "Woods,  647;  Perry  v. 
Oriental  Hotels  Co.  L.  R.  5  Ch.  App. 
420;  Cookes  v.  Cookes,  2  DeG.  J.  &  S. 
526;    Williamson  v.  Wilson,  1  Bland, 


Ch.  418.  In  Orphan  Asylum  See.  v. 
McCartee,  Hopk.  Ch.  435.  the  court 
say:  "It  is  said  that  the  appointing 
of  a  receiver  rests  in  discretion. 
This  proposition  does  not  teach  much. 
A  receiver  is  proper  if  the  fund 
is  in  danger,  and  this  principle  rec- 
onciles the  cases  found  in  the 
books.  There  is  no  case  in  which  the 
court  appoints  a  receiver  merely  be- 
cause the  measure  can  do  no  barm. 

*  *  *  As  this  case  now  stands  be- 
fore the  court  the  fund  appears  to  be 
entirely  safe  in  the  hands  of  the  trus- 
tee." Blondheim  v.  Moore,  11  Md. 
865;  Smith  v.  Port  Dover  &  L.  H.  R. 
Co.  25  Am.  &  Eng.  R.  Cas.  639.  In 
Chicago  &  A.  Oil  &  Min.  Co.  v.  United 
States  Petroleum  Co.  57  Pa.  83,  the 
court  say:  "The  appointment  of  a 
receiver  is  the  exercise  of  a  power  in 
aid  of  a  proceeding  in  equity  and  is 
the  subject  of  sound  discretion.  The 
court  must  be  convinced  that  it  is 
needful  and  is  the  appropriate  means 
of  securing  a  proper  end.  Such  an 
appointment  is  a  strong  measure  and 
is    not   to    be  exercised  doubtingly. 

*  *  *  The  plaintiff  must  show  a 
clear  right  in  such  a  case,  or  a  prima 
facie,  with  such  attending  circum- 
stances of  danger  or  probable  loss  as 
will  move  the  conscience  of  a  chan- 
cellor to  interfere."  In  Simpson  v. 
Ottawa  &  P.  R.  Co.  1  Ont.  Ch.  Chamb. 
126,  the  court  say:  "I  agree  that 
where  the  court  cannot  interpose 
usefully  it  should  not  interfere  at  all, 
and  that  it  should  interfere  only  so  far 
as  it  can  interfere  usefully." 

Wwen  V.  Homan,  3  Macn.  &  G.  378, 
412,    Affirmed  in  4  H.  L.  Cas.  997; 


GE^^ERAL  NATURE  AND  FEATURES  OF  THE  LAW. 


13 


plied  to  tlie  plaintiff  in  this  class  of  cases  it  is  what  has  been,  not 
inaptly,  termed  a  locus  standi  in  court.     If  the  evidence  is  con- 


Bainbrif/ge  v.  Baddeley,  3  Macn.  &  G. 
413.  The  Lord  Chancellor  in  this  case 
said:  "This  court  ought  not,  in  any 
case,  to  disturb  the  possession  of  a 
party  who  stands  upon  his  legal  title 
without  a  reasonable  probability  that 
the  plaintiff  will  ultimately  succeed. 
I  consider,  therefore,  that  one  indis- 
pensable ground  for  the  exercise  of 
the  jurisdiction  is  the  reasonable 
probability  shown  to  the  court  that 
the  parties  claiming  to  disturb  the 
possession  will  ultimately  e.stablish  a 
title  to  it."  In  Oicen  v.  Roman,  supra, 
the  court  said:  "The  granting  a  re- 
ceiver is  a  matter  of  discretion  to  be 
governed  by  a  view  of  the  whole  cir- 
cumstances of  the  case;  one  most  ma- 
terial of  which  circumstances  is  the 
probability  of  the  plaintiff  being  ul- 
timately entitled  to  a  decree.  In  this 
case  many  of  the  important  points 
arise  upon  the  construction  of  the 
deeds,  and  not  upon  disputed  facts; 
and  I  repeat  that  in  my  opinion  that 
construction  is  attended  with  too 
much  doubt  and  difficulty  to  entitle 
the  plaintiff  to  a  receiver."  See  also 
Blondheim  v.  Moore,  11  Md.  365; 
Mays  V.  Rose,  Freem.  Ch.  (Miss.)  718; 
Bheinstein  v.  Bixbey,  92  N.  C.  309;  Lev- 
enson  v.  Elson,  88  N.  C.  184;  Goodyear 
V.  Belts,  7  How.  Pr.  187;  Flagler  v. 
Blunt,Z2'Si.S.  Eq.518;  Leavitt  v.  Yates, 
4  Edw.  Ch.  162;  BeecJier  v.  Bininger, 
7Blatchf.  170;  Smithy.  Wells,  20  How. 
Pr.  lo8;  Steele  v.  Aspy,  128  Ind.  367. 
The  rule  is  the  same  as  in  case  of 
an  injunction  asked;  the  plaintiff  must 
first  establish  a  locus  standi  in  court 
Davenport  v.  Davenport,  7  Hare,  217 
Outcalt  V.  Dishorough,  3  N.  J.  Eq, 
214;  mil  V.  Thompson,  3  Meriv.  622 
Pillstcorth  V.  Ilopton,  6  Ves.  Jr.  51 
Smith  V.  Colly er,   8  Ves.  Jr.  89:   Nor- 


way v.  Ro^i-e,  19  Ves.  Jr.  144;  Ashurst 
V.  Lehman,  86  Ala.  370;  Pelzer  v. 
Hughes,  27  S.  C.  408;  Lovett  v.  Slo- 
cumb,  109  N.  C.  110;  Weis  v.  Goetter, 
72  Ala.  259  (See  Statute);  Norris  v. 
Lake,  89  Va.  513. 

"The  authority  of  the  court  to  pre- 
serve the  property  the  subject  of  liti- 
gation pending  the  action  until  final 
judgment  and  then  apply  it,  as  jus- 
tice may  require,  is  too  manifest  to 
admit  of  question,  and  such  authority 
should  be  exercised  when  it  appears 
that  there  is  reasonable  ground  to  be- 
lieve that  the  plaintiff  may  recover, 
and  the  interference  of  the  court  is 
necessary  to  protect  the  property  in 
question  pending  the  controversy." 
Grayer  off  v.  Morehead,  67  N.  C.  432; 
Morris  V.  Willard,  84  N.  C.  293;  Leven- 
son  V.  Elson,  88  N.  C.  182.  If  the  de- 
fendant demands  aflirmative  relief  he 
must  show  an  apparently  good  title, 
either  not  controverted  or  not  un- 
equivocally denied.  Lovett  v.  Slo- 
cumb,  109  N.  C.  110;  McNairy.  Pope, 
96  N.  C.  502;  Bryan  v.  Moring,  94  N. 
C,  694;  Oldham  v.  First  Nat.  Bank,  84 
N.  C.  304;  Wilkinson  v.  Dobbie,  12 
Blatchf.  298. 

As  illustrating  the  caution  the  courts 
exercise  in  cases  where  there  is  a  dis- 
pute between  plaintiff  and  defendant 
as  to  title,  see  Lenox  v.  Notrebe, 
Hemp.  225;  Parkhurst  v.  Kinsman,  8 
Blatchf.  78;  Ellelt  v.  Newman,  92  N. 
C.  519;  Myers  Y.  Esteil,  48  Miss.  401: 
PuUan  V.  Cincinnati  tfe  G.  A.  L.  R. 
Co.  4  Biss.  35;  Crawford  v.  Ross,  39 
Ga.  44;  Chicago  &  A.  Oil  &  Min.  Co. 
V.  United  States  Petroleum  Co.  57  Pa. 
83;  Furlong  v.  Edwards,  3  Md.  99; 
Latham  v.  Chaffee,  7  Fed.  Rep.  525; 
BeecJier  v.  Bininger,  7  Blatchf.  173. 


14 


RECEIVERSHIPS. 


flieting,  or  the  legal  questions  involved  are  douhtfnl  in  the  matter 
of  their  determination,  the  application  will  be  refused,  as  in  a 
foreclosure  proceeding  where  the  right  to  foreclose  is  doubtful, 
or  in  a  proceeding  involving  the  legal  construction  of  deeds. 

(c)  Must  be  a  necessity  of  pkeseeving  property. 
The  court  must  be  satisfied  that  a  receiver  is  necessary  to 
preserve  the  property,  and  thus  adequately  to  protect  the  rights  of 
the  parties  interested  therein.'  If  the  plaintiff  has  an  adequate 
remedy  at.  law  then  a  receiver  will  not  be  appointed.'*  This  prin- 
ciple is  but  the  application  in  receivership  matters  of  a  general 
principle  in  equity  jurisprudence. 

(d)  Defendant  must  be  heard  or  have  opportunity. 
The  court  will  not  appoint    a    receiver  until  the  defendant, 


'  Clark  V.  Ridgely,  1  Md.  Ch.  70; 
Orphan  Asyhim  Soc.  v.  McCartee, 
Hopk.  Ch.  429;  Chase's  Case,  1  Bland, 
Ch.  213;  Blondheim  v.  Moore,  11  Md. 
305;  Walker  v.  House,  4  Md.  Ch. 
89;  Bloodgoodv.  Clark,  4  Paige,  574; 
Lloyd  V.  Passingham,  16  Ves.  Jr.  59-70. 
Lord  EldoD  in  this  case  said:  "  The 
court  must  not  only  be  satisfied  of 
the  existence  of  fraud,  but  it  must  be 
morally  sure  that  upon  the  hearing  of 
the  cause  the  party  would  upon  the 
circumstances  be  turned  out  of  pos- 
session, and  not  only  that,  but  it 
must  see  some  danger  to  the  immedi- 
ate rents  and  profits."  The  chancel- 
lor in  Clark  v.  Ridgely,  supra,  said: 
"Indeed,  it  is  believed  the  authority 
and  duty  of  the  court  to  appoint,  or 
not  appoint,  a  receiver  depends  upon 
the  question  whether  the  property  is 
or  is  not  in  danger  in  the  hands  of 
the  party  who  may  at  the  time  be  in 
possession.  .  .  .  There  is  no  case 
in  which  the  court  appoints  a  receiver 
merely  because  the  measure  can  do  no 
harm,"  The  Chief  Justice  in  Blond- 
heim V,  Moore  laid  down  as  a  fourth 
rule  that  should  govern  the  court  in 
the  appointment  of  a  receiver  the 
following:     "  That  fraud  or  imminent 


danger  if  the  intermediate  possession 
should  not  be  taken  by  the  court  must 
be  clearly  proved." 

"  There  should,  however,  be  a  con- 
currence upon  two  grounds — a  rea- 
sonable probability  of  success  on  the 
part  of  complainant,  and  that  the 
subiect-matter  in  controversy  is  in 
danger."  Ashurst  v.  Lehman,  86  Ala. 
870;  Norris  v.  Lake,  89  Va.  513; 
Skinner  v.  Maxwell,  66  N.  C.  45; 
Flagler  v.  Blunt,  82  N.  J.  Eq.  518. 
Waste  on  the  part  of  the  party  in 
possession  is  suflicient  to  justify  the 
appointment.  Vose  v.  Beed,  1  Woods, 
647. 

^Wooden  v.  Wooden,  8  N.  J.  Eq.429; 
Mullen  V.  Jennings,  9  N.  J.  Eq.  192 
Speights  v.  Peters,  9  Gill,  473;  Bice  v. 
St.  Paul  &  P.  B.  Co.  24  Minn.  464 
Co7'ey  V.  Long,  43  How.  Pr.  497 
Parmly  v.  Tenth  Ward  Bank,  8  Edw. 
Ch.  895;  Winkler  v.  Winkler,  40  111 
179;  Coughron  v.  Swift,  18111.  414;  Or 
phan  Asylum  Soc.  v.  McCartee,  Hopk 
Ch.  429 ;  Webster  v.  Couch,  6  Rand.  519 
Poege  v.  Bell,  3  Rand.  (Va.)  586;  Sher- 
man V.  Clark,  4  Nev.  138;  Morrisony, 
Buckner,}lem]).  442;  Sollory  v.  Leaver ^ 
L.  R.  9  Eq.  23. 


GENERAL  NATURE  AND  FEATURES  OF  THE  LAW. 


15 


or  party  in  possession  of  the  property,  has  been  heard,  or  has  had 
an  opportunity  to  be  heard  in  response  to  the  application/     It  is 


'  Moritz  V.  Miller,  87  Ala.  331 
Thompson  v.  Tower  Mfg.  Co.  87  Ala.  733 
Ashurst  V.  Lehman,  86  Ala.  370 
Sims  V.  Adams,  78  Ala.  895;  Croicder 
V.  31oore,  53  Ala.  220.  See  Heard  v. 
Murray,  93  Ala.  127;  Werborn  v. 
EaJm,  93  Ala.201 ;  State, Brittin,v. New 
Orleans,  43  La.  Ann.  829;  Whitney  v. 
NeiD  York  &A.  B.  Go.  66  How.  Pr.  436, 
32  Hun,  164;  People  v.  Albany,  &  S.  R. 
Co.  38  How.  Pr.  228;  Field  v. Ripley,  20 
How.  Pr.  26:  Lammon  v.  Giles,  3 
Wash.  Terr.  117;  Grandin  v.  La  Bar, 
2  N.  D.  206;  Stockton  v.  Harmon,  32 
Fla.  312;  Fricker  v.  Peters,  21  Fla. 
254;  Moyers  v.  Coiner,  22  Fla.  422; 
State  V.  Jacksonville,  P.  &  M.  R.  Co. 
15  Fla.  201,  280;  Wabash  R.  Co.  v. 
Dykeman,  133  Ind.  56;  Verplanck  v. 
Mercantile  Lis.  (70.2  Paige,  438;  Frtnch 
V.  Gifford,  30  Iowa,  148;  Bisson  v. 
Curry,  35  Iowa,  72;  iZbw?e  v.  Jones, 
57  Iowa,  130;  Saas  v.  Chicago  Bldg. 
Soc.  89  111.  498;  Railway  Co.  v.  Jew)e«, 
37  Ohio  St.  649;  Briar  field  Iron  Works 
Co.  V.  i^osit^T-.  54  Ala.  622;  Word  v. 
TTor^i,  90  Ala.  81;  Cook  v.  i)e^/-oj/f  cfc 
i¥.  i?.  C(?.  45  Mich.  453;  Turnbull  v. 
Prentiss  Lumber  Co.  55  Mich.  387; 
Haugan  v.  Netland,  51  Minn.  552; 
Fredenheim  v.  iJo^r,  87  Va.  764;  Ett- 
linger  v.  Persian  Rug  &  C.  Co.  66  Hun, 
94;  Johnson  v.  Powers,  21  Neb.  292 
(See  Code);  Fricker  v.  Peters,  21  Fla. 
254;  Lucas  v.  5arm,  L.  R.  18  Q.  B. 
Div.  127,  56  L.  J.  Q.  B.  N.  S.  15,  55 
L.  T.  685;  Re  Potts  [1893]  1  Q  B.  648, 
22  L.  J.  Q.  B  392;Vause  v.  Woods,  46 
Miss.  120;  Oil  Run  Petroleum  Co.  v. 
Gale,  6  W.  Va.  525;  People  v.  St.  Clair 
Circuit  Judge,  31  Mich.  456;  Bostwick 
V.  Isbell,  41  Conn.  305;  Hungerford  v. 
Gushing,  8  Wis.  320;  Levoe  v.  Ithaca 
&  0.  R.  Go.  5  Paige,  521  (See  Stat.); 
Nusbaum  v.  Stein,  12  Md.  315;  Voshell 


V.  Hynson,  26  Md.  83;  3Iaysv.  Rose,  1 
Freem.  Ch.  703;  Tibballs  v.  Sargeant, 
14  N.  J.  Eq.  449;  Whitehead  v.  Woolen, 
43  Miss.  523;  Meridian  News  &  Pub. 
Co.  V.  Diem  &  W.  Paper  Co.  70  Miss. 
695;  Buckley  v.  Baldwin,  69  Miss.  804; 
Sandford  v.  Sinclair,  8  Paige,  373; 
Gibson  v.  Martin,  8  Paige,  481 ;  Jifc- 
Car%  V.  Pm^e,  9  Abb.  Pr.  164,  18 
How.  Pr.  138 ;  Sandford  v.  Sinclair,  3 
Edw.  Ch.  393. 

Where  in  an  action  to  quiet  title  to 
real  estate  and  enjoin  the  defendant 
from  tilling  the  land  in  question, 
the  plaintiff's  equities  are  denied 
by  answer,  and  are  without  support 
from  evidence  extrinsic  to  the  com- 
plaint, a  receiver  should  not  be  ap- 
pointed, even  after  notice  and  hear- 
ing; much  less  should  the  defendant 
be  dispossessed  summarily  by  expiarte 
proceedings.  The  practice  of  appoint- 
ing receivers  ex  parte  is  not  tolerated 
by  the  courts  except  in  cases  of 
gravest  emergency  and  to  prevent 
irreparable  injury.  Grandin  v.  La 
Bar,  2  N.  D.  206. 

A  court  is  not  justified  in  appoint- 
ing a  receiver  ex  parte  when  the  com- 
plaint does  not  show  that  the  property 
or  any  part  of  the  same  is  about  to  be 
wasted,  misappropriated  or  removed 
beyond  the  jurisdiction  of  the  court; 
and  that  delay  in  granting  relief 
might  entirely  defeat  the  object  of 
the  suit.  Chicago  &  S.  E.  R.  Co.  v. 
Cason,  133  Ind.  49. 

See  also  jBfondAezOTV.  Moore,  11  Md. 
365;  Triebert  v.  Burgess,  11  Md.  4.52; 
CaiUardv.  Caillard,  25  Beav.  512;  Rog- 
ers V.  Dougherty,  20  Ga.  271 ;  Simmons 
V.  Wood,  45  How.  Pr.  268;  Verplnnck 
V.  Mercantile  Ins.  Go.  2  Paige,  438. 
One  served  with  notice  cannot  com- 
plain   that    others    have    not    been 


16 


RECEIVERSHIPS. 


a  well  establishei  principle  in  equity  jurisprudence  that  the  court 
will  not  encourage  ex  i)aHe  proceedings,  and  a  departure  from 
this  principle  requires  a  state  of  facts  showing  the  greatest 
emergency. 

The  exceptions  to  the  above  rule  are  :  (1)  Where  the  appoint- 
ment of  a  receiver  is  prayed  for  as  a  measure  of  final  relief.'  In 
such  case  the  bill  of  complaint  or  petition,  with  the  service  of  the 
writ,  are  supposed  to  be  notice. 


served.  Ba'p]p  v.  Reeliling,  122  Ind. 
255. 

As  to  the  early  chancery  practice 
in  New  York  in  corporation  proceed- 
ings involving  a  receivership,  see 
Bevoe  v.  Ithaca  &  0.  B.  Co.  5  Paige, 
521. 

The  law  requiring  notice  has  a 
much  greater  force  when  applied  to 
a  receivership  over  a  corporation 
where  large  and  conflicting  interests 
are  often  involved,  and  where  the 
entire  property,  business  and  assets 
may  be  taken  from  the  company  and 
placed  in  the  hands  of  a  receiver,  and 
result  in  the  utter  destruction  of  the 
property  and  dissolution  of  the  com- 
pany. Of  the  appointment  of  a  re- 
ceiver in  such  a  case  without  notice, 
Mr.  Justice  Swayne,  in  Verplanck  v. 
Mercantile  Ins.  Co.  supra,  says:  "It 
is  not  a  common  law  receivership  to 
protect  the  fund  pending  litigation; 
but  the  receiver  is  a  statutory  assignee 
vested  with  nearly  all  the  powers  and 
authority  of  the  assignee  of  an  in- 
solvent debtor.  It  would  therefore 
be  a  violation  of  one  of  the  funda- 
mental principles  of  justice  to  appoint 
such  a  receiver  without  any  restric- 
tion of  his  powers  on  an  ex  jmi-te  ap- 
plication, and  thus  to  condemn  and 
deprive  a  company  of  its  chartered 
privileges  unheard." 

"A.  case  of  great  urgency  should  be 
made  to  appear  to  justify  such  an 
appointment  without  notice,  and, 
-whenever  an  injunction  or  restraining 


order  is  sufficient  to  protect  the  rights 
of  the  plaintiff  no  receiver  should  be 
appointed.  The  appointment  of  a 
manager  of  a  line  of  railroad  is  an 
extraordinary  exercise  of  power. 
Such  appointment  should  be  made 
only  in  extreme  cases,  clearly  justi- 
fying such  action."  State  v.  Jackson- 
ville, P.  &  M.  B.  Co.  15  Fla.  201. 

Where  an  absent  defendant  has 
been  advertised  to  appear  within  a 
certain  time  limited  for  defendant's 
appearance  an  order  for  appointment 
of  a  receiver  before  the  expiration  of 
the  time  limited  is  irregular,  except 
under  special  circumstances.  Sand- 
ford  V.  Sinclair,  3  Edw.  Ch.  393.  See 
also  Gibson  v.  Martin,  8  Paige,  481; 
Field  v.  Ripley,  20  How.  Pr.  26; 
McCarthy  v.  Peake,  9  Abb.  Pr.  164. 

1  JVewell  V.  Schnull,  73  Ind.  241. 
The  process  which  brings  the  defend- 
ant into  court  is  sufficient  notice 
where  the  final  relief  prayed  for  is  the 
receivership.  This  case  was  under  a 
statute  as  follows:  "That  receivers 
shall  not  be  appointed  by  any  court,  in 
any  case,  until  the  adverse  party  shall 
have  appeared  and  answered  in  the 
action  pending,  or  shall  have  had 
reasonable  notice  of  the  pendency  of 
the  action,  and  the  application  for 
such  appointment."  It  has  also  been 
held  that  where  the  record  is  silent  as 
to  notice  of  application  the  court  will 
presume  the  trial  court  gave  proper 
notice.  Miller  v.  Shriner,  86  Ind, 
493. 


GENERAL  NATURE  AND  FEATURES  OF  THE  LAW. 


17 


(2).  "Where  all  parties  are  before  the  court  consenting  to  the 
appointment,  or  at  least  before  the  court  in  person  or  by  attor- 
ney.' In  such  case,  of  course,  the  object  sought  by  the  service 
of  notice  is  accomplished  by  the  presence  of  the  parties. 

(3.)  Where  the  defendants,  or  parties  in  interest,  have  absconded, 
or  are  beyond  the  jurisdiction  of  the  court,  or  cannot  be  found.* 
Of  course  under  such  circumstances  it  would  be  unreasonable  to 
require  notice,  and  the  rule  is  not  obligatory. 

(4.)  Where  there  is  imminent  danger  of  loss,  or  great  damage, 
or  irreparable  injury  or  the  gravest   emergency.'     Sometimes  it 


'  Brodie  v.  Barry,  3  Meriv.  695; 
Duckworth  v.  Trafford,  18  Ves.  Jr.  283; 
Neipell  V.  SchnuU,  73  Ind.  241;  Fitz- 
Patrick  v.  Hawkshaw,  1  Hog.  88; 
McLean  v.  Lafayette  Bank,  3  McLean, 
503;  Haugan  v.  Netland,  51  Minn. 
552.  In  this  case  the  court  say: 
"  The  general  rule  is  to  proceed  only 
after  notice,  but  this  rule  is  not  in- 
flexible so  as  to  prevent  the  court 
from  proceeding  in  cases  where  it  is 
impracticable  to  give  legal  notice,  as 
in  the  case  of  absconding  or  nonresi- 
dent defendants,  but  subject  to  proper 
limitations  the  court  may  in  such 
cases  proceed  without  notice  and 
leave  the  party  to  move  to  vacate  the 
order  if  he  chooses  to  come  in  and 
submit  to  the  jurisdiction  of  the 
court." 

'^Hendrix  v.  American  Mortg.  F. 
L.  Co.  95  Ala.  313;  Verjjlanck  v.  Mer- 
cantile Ins.  Co.  2  Paige,  438;  People  v. 
Albany  &  S.  B.  Co.  55  Barb.  344; 
French  v.  Gifford,  30  Iowa,  148;  Bis- 
son  V.  Curry,  35  Iowa,  72;  Howe  v. 
Jones,  57  Iowa,  130;  Cleveland,  C.  O. 
&  I.  B.  Co.  V.  Jewett,  37  Ohio  St.  649; 
Briarjield  Iron  Works  Co.  v.  Foster,  54 
Ala.  622;  Word  v.  Word,  90  Ala.  81; 
Moritz  v.  Miller,  87  Ala.  331;  White- 
head v.  Woolen,  43  Miss.  523;  Vause  v. 
Woods,  46  Miss.  120;  Cook  v.  Detroit 
&  M.R.  Co.  45  Mich.  453;  Turnhull 
V.  Prentiss  Lumber  Co.  55  Mich.  387; 
2 


Wabash  B.  Co.  v.  Dykeman,  133  Ind. 
56;  Haugan  v.  Netland,  51  Minn.  552; 
Dowling  v.  Hudson,  14  Beav.  423;  Ma- 
guire  v.  Allen,  1  Ball.  &  B.  75;  Na^ 
V.  Hughes,  1  Hayes  &  J.  400;  Bennett 
V.  Bayley,  1  Hayes  &  J.  400;  Greene 
V.  Kernan,  1  Hayes  &  J.  401 ;  Gibbins 
V.  Mainwaring,  9  Sim.  77;  Tanfield  v. 
Irvine,  2  Russ.  149;  Quin  v.  Gunn, 
1  Hog.  75;  London  cfe  8.  W.  Bank  v. 
Facey,  19  W.  R.  676.  24  L.  T.  N.  S. 
126;  People  v.  Norton,  1  Paige,  17; 
see  Williams  v.  Jenkins,  11  Ga.  595. 

If  the  proceeding  is  against  a  cor- 
poration and  the  officers  cannot  be 
found  so  as  to  be  served  with  notice, 
the  court,  in  the  exercise  of  its  discre- 
tion, may  appoint.  Dayton  v.  Borst, 
7  Bosw.  115.  31  N.  Y.  435  (Affirmed 
on  other  grounds);  Maish  v.  Bird,  59 
Iowa.  307. 

Quite  frequently  the  statute   pre- 
scribes the  circumstances  under  which 
a  receiver  may  be  appointed  without 
notice.    Jones  v.  Graves,  20  Iowa,  596 
Hutton  V.  Lockridge,  27  W.  Va.  428 
Maynard    v.    Railey,    2    Nev.    323 
Blondheim    v.    Moore,    11    ]\Id.    365 
Orowder  v.  Moore,  52  Ala.  220;  Frieker 
V.    Peters,    21    Fla.    254;     Whitehead 
V.  Woolen,    43    Miss.    523;    Rogers    v. 
Dougherty,  20  Ga.  271.     See  N.   Y. 
Code  Civ.  Proc.  §  714. 

^  Fredenheim  v.  Rohr,  87  Va.  764; 
Re  Potts   [1893]  1  Q.  B.  648;  Grandin 


18 


RECEIVERSHIPS. 


ceems  imperative  that  this  exception  be  enforced  as  when,  by  no- 
tice, the  very  purpose  of  a  receiver  may  be  rendered  wholly 
nugatory  ;  at  other  times,  however,  notice  may  be  given,  and  a 


V.  LaBar,  2  N.  D.  206;  People  v. 
Norton,  1  Paige,  17;  Verplanck  v. 
Mercantile  Ins.  Co.  2  Paige,  438;  Tay- 
lor V.  Eckersley,  L.  R  2  Cli.  Div.  302; 
Be  H.  E.  V.  H.  L.  R.  1  Ch.  Div.  276, 
45  L.  J.  Ch.  749;  Fricker  v.  Peters,  21 
Fla.  254;  Whitelaw  v.  Sandys,  12  Ir. 
Eq.  393;  Wabash  E.  Co.  v.  Dykeman, 
133  Ind.  56;  Baker  v.  Backus,  32  111. 
79;  Chicago  <&  S.  E.  R.  Co.  v.  Cason, 
133  Ind.  49;  Moyers  v.  Coiner,  22  Fla. 
422;  Beecher  v.  Bininger,  7  Blatchf. 
170;  Montgomery  v.  Knox,  20  Fla.  372; 
West  V.  Chasten,  12  Fla.  315;  Blackett 
V.  Blackett,  24  L.  T.  N.  S.  276;  Ashurst 
V.  Lehman,  86  Ala.  370;  Moritz  v.  Mil- 
ler, 87  Ala.  331 ;  Mays  v.  Rose,  Freem. 
Ch.  (Miss.)  703;  Sims  v.  Adams,  78 
Ala.  395;  Vose  v.  Reed,  1  Woods,  647; 
Goodyear  V.  Beits,Tilo'w.  Pr.l87;  Flag- 
ler V.  Blunt,  32  N.  J.  Eq.  518;  Orphan 
Asylum  Soc.  v.  McCartee,  Hopk,  Ch. 
429;  Eean  v.  Colt,  5  N.  J.  Eq.  365; 
Leavitt  v.  Tates,  4Edw.  Ch.  \Q2\  Lenox 
V.  Notrebe,  Hemp.  225;  Maynard  v. 
Railey,  2  Nev.  313;  Johns  v.  Johns,  23 
Ga.  31;  Cleveland,  C.  C.  &  L  R.  Co.  v. 
Jewett,  37  Ohio  St.  649 ;  Sandford  v. 
Sinclair,  8  Paige,  373 ;  Gibson  v.  Mar- 
tin, 8  Paige,  481;  McCarthy  v.  Peake, 
9  Abb.  Pr.  164;  Field  v.  Ripley,  20 
How.  Pr.  26;  Lucas  v.  Hariis,  56  L. 
J.  Q.  B.  N.  S.  15. 

Iq  Wabash  R.  Co.  v.  Dykeman,  133 
Ind.  56,  the  Rev.  Stat.  1881,  §  1230, 
provided  that  the  receivers  should  not 
be  appointed  either  in  term  or  vaca- 
tion in  any  case  until  the  adverse 
party  should  have  appeared  or  should 
have  had  reasonable  notice  of  the  ap- 
plication for  such  appointment  except 
upon  sufficient  cause  shown  by  affi- 
davit. The  statute  being  silent  as  to 
what  should  constitute    a    sufficient 


cause,  the  court  held  that  the  "suffi- 
cient cause"  required  by  the  statute 
to  be  shown  must  be.  First,  for  the 
appointment  of  a  receiver  at  all. 
Second,  for  not  giving  notice  of  the 
application  to  the  adverse  party.  The 
statement  in  the  verified  complaint 
that  there  was  an  emergency  for  the 
immediate  appointment  of  a  receiver 
without  notice  was  not  a  sufficient 
showing.  This  was  a  mere  statement 
of  opinion,  the  facts  on  which  the 
opinion  was  founded  should  have 
been  pleaded  in  order  to  enable  the 
court  to  judge  of  its  correctness. 
Verplanck  v.  Mercantile  Ins.  Co.  2 
Paige,  438-451;  French  v.  Gifford, 
30  Iowa,  148;  Moritz  v.  Miller,  87 
Ala.  331.  The  court  adopts  the  lan- 
guage of  Gluck  &  Becker  on  Receivers 
of  Corporations  which  is  as  follows: 
"Courts  of  Equity  are  exceedingly 
unwilling  to  appoint  a  receiver  on  an 
ex  parte  application.  It  is  now  the 
settled  practice  not  to  appoint  a  re- 
ceiver ex  parte  and  thereby  deprive 
the  corporation  of  the  possession  of 
its  property  before  it  has  had  an  op- 
portunity to  be  heard  in  relation  to  its 
rights,  except  in  those  cases  where  it 
is. out  of  the  jurisdiction  of  the  court 
or  none  of  its  officers  can  be  found ; 
or  where,  for  some  other  reason,  it  be- 
comes absolutely  necessary  for  the 
court  to  interfere  before  there  is  time 
to  give  notice  to  the  corporation  to 
prevent  the  destruction  or  loss  of 
property."  The  court  also  refers  to 
the  following  cases  as  sustaining  the 
proposition:  People  v.  Albany  &  S. 
R.  Co.  55  Barb.  344.  369;  Bisson  v. 
Curry,  35  Iowa,  72;  Howe  v.  Jones,  57 
Iowa,  130;  Cleveland,  C.  C.  &  L  R.  Co, 
V.  Jewett,  37  Ohio  St.  649;  Cook  v.  De- 


GE^^EKAL  NATURE  AND  FEATURES  OF  THE  LAW.    19 


temporary  injunction  granted  pending  a  hearing  and  in  this  way 
preserve  the  rights  of  all  parties.  Frequently  statutory  provisions 
are  made  for  emergency  matters  of  this  character,  and  especially 
60  in  regard  to  injunctions. 

Where  no  notice  is  required  to  be  given  to  the  adverse  party 
of  the  application  for  a  receiver,  by  reason  of  danger  or  otherwise 
it  is  not  sufficient  to  make  the  bare  allegation  in  the  bill  or  peti- 
tion of  danger,  loss  or  emergency,  but  the  facts  on  which  the 
allegation  is  based  must  be  stated  so  as  to  enable  the  court  to 
judge  of  its  correctness.'  Besides  the  general  allegation  would 
be  bad  pleading,  in  that  it  would  be  at  most  a  conclusion. 


troit  <&  M.  B.  Co.  45  Mich.  45H;  Turn- 
bull  V.  Prentiss  Lumber  Co.  55  Mich. 
387,  and  other  cases. 

In  Whitelawa  v.  (Sandys,  supra,  the 
court  upon  the  application  of  the 
plaintiff  appointed  a  receiver  over  the 
land  of  a  minor  defendant  before  his 
appearance  or  answer  on  affidavit  that 
the  rents  could  not  be  enforced  from 
the  undertenants  of  the  minor,  and 
that  his  interest  was  in  danger  of 
being  evicted,  the  head  landlord  hav- 
ing served  ejectment  for  nonpayment 
of  the  head  rent. 

In  People  v.  Norton,  stqjra,  the 
court  say:  "As  a  general  rule  a  re- 
ceiver should  not  be  appointed  with- 
out notice  to  the  opposite  party;  but 
that  rule  must  be  subject  to  ex- 
ceptions in  special  cases  where  irre- 
parable injury  would  be  sustained  by 
one  or  both  parties  by  such  delay. 
Sandford  v.  Sinclair,  8  Paige,  373; 
Gibson  v.  Martin,  8  Paige,  481. 

"In  Maguire  v.  Allen,  1  Ball  & 
B.  75,  a  receiver  was  appointed 
on  the  application  of  the  plaintiff 
where  the  defendant  had  absconded 
to  prevent  service  of  the  subpoena  to 
appear  and  answer  the  bill.  In  these 
causes  the  defendant  who  had  travers- 
ed the  finding  of  the  jury,  had  left  the 
state  and  was  not  expected  to  return 
for  several   months  and  had  no  resi- 


dence or  place  of  business  where  a 
subpoena  could  be  served.  His  solici- 
tor who  was  employed  on  the  traverse, 
on  being  applied  to  refused  to  appear, 
or  do  anything  in  this  case  on  the 
ground  that  he  was  not  authorized; 
and  it  was  necessary  that  the  receiver 
should  be  appointed  without  delay  to 
collect  the  rents  of  the  tenants  which 
might  be  lost  by  a  delay  of  a  few  days. 
Under  these  circumstances,  I  think 
these  are  proper  cases  for  the  court,  in 
the  exercise  of  a  sound  discretion,  to 
dispense  with  the  formality  of  a  notice 
and  make  ex  parte  orders  for  the  ap- 
pointment of  receivers;  saving  to  the 
defendant  the  right  hereafter  to  apply 
for  relief  against  the  order  if  he  can 
show  any  good  reason  on  the  merits 
for  discharging  the  same." 

'  Verplanck  v.  Mercantile  Ins.  Co.  2 
Paige,  438;  French  v.  Gifford,  30  luwa, 
148;  Lindsay  v.  American  Mortg.  Co. 
97  Ala.  411;  Wabasli  B.  Co.  v. 
Bykeman ,  133  Ind.  56 ;  Chicago  &  S.  E. 
B.  Co.  V.  Cason,  133  Ind.  49;  Moriiz  v. 
Miller,  87  Ala.  331  (See  Code);  Will- 
iams V.  Jenkins,  11  Ga.  595;  Ashurst 
V.  Lehman,  86  Ala.  370;  Fricker  v. 
Peters,  21  Fla.  254. 

In  Verplanck  v.  Mercantile  Ins.  Co. 
supra,  Chancellor  Walworth  says:  "In 
every  case  where  the  court  is  asked  to 
deprive  the  defendant  of  the  possession 


20  RECEIVERSHIPS. 

§  6.  Functions  of*  the  receiver. 

The  functions  of  a  receiver  relate  to  and  embrace  the  due  exe- 
cution and  performance  of  the  duties  and  obligations  resting 
upon  him  by  virtue  of  his  office,  taking  into  consideration  the 
attitude  he  sustains  to  the  court  making  the  appointment,  the 
parties  before  the  court,  concerning  whose  rights  the  court  is 
called  upon  to  adjudicate,  and  the  nature  and  character  of  the 
property  placed  in  his  possession,  custody  or  control. 

(a)  Source  of  power  ;  nature  and  extent. 
He  derives  his  power,  primarily,  from  the  court,  and  his  official 
action,  duties  and  responsibilities  are  measured  by  the  scope  of 
the  order  which,  after  his  qualification,  constitutes  him  receiver, 
and  such  supplementary  orders  and  directions  as  he  may  subse- 
quently receive  in  the  due  administration  of  the  estate  or  matters 
in  controversy.  His  discretionary  powers  are  limited,  as  a  rule, 
to  those  acts  and  transactions  which  are  incident  to  the  general 
scope  of  authority  given  to  him.  He  is  an  officer  of  the  court, 
and  in  this  sense  has  been  considered,  truly  and  properly,  the 
hand  of  the  court,  and  as  such  he  has  been  held  bound  to  render 
to  the  court  a  strict  account  of  his  official  action.'  As  courts  of 
equity,  and  those  exercising  equitable  jurisdiction,  have  extended 
their  jurisdiction,  along  with  the  general  growth  of  remedial 
jurisprudence,  the  functions  of  the  receiver  have  been  increased 
very  materially  as  compared  with  receivershijDS  in  the  earlier 
stages  of  English  and  American  courts.*     As  we  have  already 

of  his  property  without  a  hearing  or  equal  interest  with  them,  collecting 
an  opportunity  to  oppose  the  applica-  and  appropriating  the  proceeds  of 
tion,  the  particular  facts  and  cir-  sale  and  that  they  are  insolvent,  it 
cumstances  which  render  such  a  sum-  will  justify  the  appointment  of  a  Te- 
rnary proceeding  proper  should  be  set  ceiver  without  notice.  Sims  v.  Adams, 
forth  in  the  bill  or  petition  on  which  78  Ala.  395. 

such   application  is    founded.      The  See  also  Darein  v.  Wells,  61  How. 

facts  must  be  stated  on  which  the  Fr. '2^9 ;  Oakley  v.  Faterson  Bank,  2  ]>i. 

opinion    is    founded    to    enable    the  J.  Eq.  173. 

courts  to  judge  of  the  correctness."  '  Chancellor  Bland,  in  Williamson  v. 

An  allegation  on  information  and  Wilson,  1  Bland,  Ch.  418;  Verplanck 

belief  is  insufficient.    Moriiz  v.  Miller,  v.  Mercantile  Ins  Co.  2  Paige,  438. 
supra.    Where  the  affidavits  show  that  *"In  the  progress  and  growth  of 

defendants  are  disposing  of  the  prop-  equity  jurisdiction,    it    has    become 

erty  in  which  complainant's  claim  an  usual    to    clothe    such   officers   with 


GENERAL  NATURE  AND  FEATURES  OF  THE  LAW.    21 

seen,'  both  in  England  and  this  country,  the  law  of  receiv^ership 
has  been  extended  by  statutory  enactment  to  many  subjects,  not 
previously  embraced  in  the  ordinary  chancery  jurisdiction,  and 
the  powers,  duties  and  relationship  of  the  receiver  have  been 
likewise  greatly  increased,  and  in  many  cases,  particularly  with 
regard  to  insolvent  corporations,  he  is  vested  with  all  the  prop- 
erty and  effects  of  the  corporation,  the  power  to  sell  and  dispose 
of  the  same  and  distribute  the  proceeds  to  its  creditors  and  stock- 
holders. This  class  of  receivers  we  have  termed  statutory  receiv- 
ers, as  distinguished  from  common  law  receivers,  the  functions  of 
which  are  sui  generis. 

(b)  Trustee  for  all  parties  ;  responsibility. 
The  receiver,  occupying  a  position  of  perfect  independence,  so 
far  as  the  parties  are  concerned,  appointed  by  the  court  by  reason 
of  such  relation,  and  reflecting  as  he  does  the  impartiality  of  the 
court  as  between  conflicting  interests,  is  not  the  agent  or  special 
representative  of  the  contestants  or  either  of  them.  JSTeither  the 
law  nor  the  court  will  permit  him  in  his  administration  to  mani- 
fest the  slightest  inclination  towards  one  party  or  the  other.  He 
is  a  trustee  of  the  strictest  character,  conserving  the  interests  of 
all  parties  with  special  favors  for  none,"^  and  the  property  and 

much  larger  powers  than  were  for-  applied  to  the  dissolution  of  corpora- 

merly  conferred."  Mr.  Justice  Swayne  tions,  where  by  the  act  of  dissolution 

in  Davis  v.   Oray,  83  U.  S.  16  Wall.  the  corporation  in  effect  makes  an  as- 

203,  219,  21  L.  ed.  447,  452.  signment  for  the  benefit  of  its  credit- 

'  Ante,  §  3;    see  also  post,  chapter  ors,  in  which  case  the  receiver  takes 

on  Railways.  only  the  rights  of    the  corporation 

^  Detroit  First  Nat.  Bank.  v.Barnum  such  as  could  be  asserted  in  its  own 

WireiS:  Iron  Works,  Q^'M\ch.4:^l;  Davis  name,  and  therefore  in  such  case  is 

V .Dukeof  Marlborough,  2^^?irx?,\..10S;  the  representative  of  the  corporate 

Brown  v.  Warner,  78  Tex.  543,  11  L.  body  itself  and  not  of  its  creditors  or 

R.  A.  394;  Com.  v.  Franklin  Ins.  Co.  shareholders.     Rejmblic    L.  Ins.    Co. 

115  Mass.  278;  Day  v.  Postal  Teleg.  Co.  v.  Swigert,  135  111.  150,  13  L.  R.  A. 

66  ild .  354 ;  Green  v.  Bosiwick,  1  Sandf .  328. 

Ch.  185;  Devendorf  v.  Dickinson,  21  The  receiver  does  not  in  any  special 
How.  Pr.  275;  Port  man  v.  Mill,  8  L.  .J.  sense  represent  the  party  upon  whose 
Ch.  N.  S.  161;  Curtis  v  Leavilt,  1  motion  he  is  appointed,  more  than 
Abb.  Pr.  274;  Brown  v .  Northrup,  15  any  other  party  to  the  cause.  He 
Abb.  Pr.  N.  S.  333;  Corey  v.  Long,  43  owes  an  equal  duty  to  all,  and  is  re- 
How.  Pr.  497.  sponsible  to  the  court  alone.     Baker 

Tliere  apiiears  to  be  a  limitation  to  v.  Backus,  32  111.  79 ;  Beverley  v.  Brooke, 

the  rule  announced  in  the  text  when  4  Qratt.  208;  BYrst  Nat.  Bank  v.  Bar- 


22 


RECEIVERSHIPS. 


funds  conlided  to  his  care  are  in  custodia  legis,  and  these  it  is 
his  duty  to  guard  and  preserve  with  scrupulous  care.'  This  posi- 
tion of  trust  and  independence  he  continues  to  occupy  until  the 
litig-ation  is  brought  to  an  end,  and  it  is  judicially  ascertained  to 
whom  the  property  or  its  possession  rightfully  belongs,  after  which 
he  becomes  the  representative  of  sucli  successful  party ;''  or 
where  the  property  is  sold  for  the  benefit  of  creditors,  he  is  the 
hand  of  the  court  and  the  agent  of  the  creditors  in  the  distribu- 
tion of  the  proceeds.  He  is  in  no  sense,  however,  the  represen- 
tative of  those  who  are  not  parties  to  the  suit,  or  become  such 
during  its  progress.^  JN  either  is  he,  without  the  direction  of  the 
court,  to  interfere  with  or  meddle  in  the  litigation  of  the  parties. 


num.  Wire  &  Iron  Works,  60  Mich.  487; 
Union  Nat.  Bank  v.  Bank  of  Kamas 
City,  136  U.  S.  323,  34  L.  ed.  341 ;  Lot- 
timer  V.  Lord,  4  E.  D.  Smith,  183; 
SnoiD  V.  Winslow,  54  Iowa,  200. 

He  is  not  to  be  controlled  by  the 
representatives  of  any  party  to  the 
suit,  Iddings  v.  Bruen,  4  Sandf.  Ch. 
417. 

His  powers  and  duties  are  measured 
by  the  order  of  court  making  the  ap- 
pointment and  the  established  rules 
and  practice  of  such  court.  Battle  v. 
Davis,  66  N.  C.  252. 

See  also  Skinner  v.  Maxwell,  66  N. 
C.  45,  68  N.  C.  400;  Booth  v.  Clark, 
58  U.  S.  17  How.  323,  15  L.  ed.  164; 
Green  v.  Bosticick,  1  Sandf.  Ch.  185; 
Hunt  V.  Wolfe,  2  Daly,  303;  Van  Rens- 
selaer V.  Emery,  9  How.  Pr.  135;  Corey 
V.Long,  43  How.  Pr.  497;  Devendorfv. 
Dickinson,  21  How.  Pr.  275;  Kaiser  v. 
Kellar,  21  Iowa.  95;  Snow  v.  Winslow, 
54  Iowa,  200;  Hooper  v.  Winston,  24  111. 
353;  Ellicott  v.  Warford,  4  Md.  80; 
Williamson  v.  Wilson,  1  Bland,  Ch. 
418;  Coburn  v.  Ames,  57  Cal.  201. 

Where  property  is  placed  in  the 
hands  of  a  receiver,  upon  a  decree 
for  the  plaintiff,  tl  e  receiver's  duties, 
as  such,  are  at  an  end,  and  he  holds 
merely  as  trustee  for  the  plaintiff,  and 


the  goods  can  be  levied  on  in  his 
hands,  for  the  plaintiff's  debts.  Very 
v.  Watkins,  64  U.  S.  23  How.  469,  16 
L.  ed.  522.  And  see  Lottimer  v.  Lord, 
4  E.  D.  Smith,  183;  Re  Cohin' s  Estate, 

3  Md.  Ch.  278;  Ellicott  v.  Warford,  4 
Md.  80;  King  v.  Cutts,  24  Wis.  627; 
Meier  v.  Kansas  P.  R.  Co.  5  Dill.  476. 

'  Ashurst  V.  Leliman,  86  Ala.  370; 
Qayle  v.  Johnson,  80  Ala.  388;  Skin- 
ner V.  Maxwell,  66  N.  C.  45.  68 
N.  C.  400;  Battle  v.  Davis,  66  N.  C. 
252;  Corey  v.  Long,  43  How.  Pr.  497; 
Devendorf  v.  Dickinson,  21  How.  Pr. 
275;  Hunt  v.  Wolfe,  2  Daly,  303;  Co- 
burn  v.  Ames,  57  Cal.  201;  Hooper  v. 
Winston,  34  111.  353. 

*  See  note  1  above. 

2  Howell  v.  Ripley,  10  Paige,  43.  In 
a  case  where  a  creditor's  bill  is  filed 
in  behalf  of  the  complainants  therein, 
and  not  in  behalf  of  other  creditors, 
the  receiver  is  not  necessarily  a  trus- 
tee for  the  benefit  of  all  creditors, 
but  for  the  benefit  of  those  creditors 
in  whose  behalf  he  is  appointed. 
Young  v.  Clapp,  147  111.  176;  Russell 
V.  Chicago  Trust  &  Sav.  Bank,  139  111. 
538, 17  L.  R.  A.  345;  Bostioick  v.  Menck, 

4  Daly,  68 ;  Manley  v.  Rassiga,  13  Hun, 
288. 


GENERAL  NATURE  AND  FEATURES  OF  THE  LAW.    23 

(c)  Cake  and  custody  of  the  property. 
The  receiver,  occupying  the  pecuKarly  responsible  position  that 
he  does,  both  in  his  attitude  to  the  court  and  the  parties  before 
tlie  court,  is  required  to  exercise  great  care  and  circumspection 
over  the  funds  or  property  entrusted  to  him,  or  whatever  other 
interests  that  may  come  to  him  as  receiver.'  Except  in  a  few 
exceptional  cases,  he  is  selected  not  only  because  of  his  ability, 
honesty  and  integrity,  but  because  of  his  not  being  interested  in 
any  manner  in  the  subject-matter  of  the  litigation.  Neither  will 
he  be  permitted  to  become  interested  in  the  property  in  his 
charge  as  receiver  during  the  progress  of  the  litigation,  nor  use 
such  property  or  funds  for  purposes  of  his  own  personal  gain, 
and  all  interest  and  profits  derived  from  the  funds  or  property 
must  be  strictly  accounted  for.''  However  proper  liis  intentions 
may  be,  he  is  liable  for  loss  or  waste  growing  out  of  the  careless 
management  of  his  trusts. 

§  7.  Eifects  of  appointment. 

The  primary  and  proximate  effects  that  follow  the  appointment 
of  a  receiver  are : 

(a)  Places  property  in  custodia  legis. 

The  property,  funds,  or  whatever  may  be  the  subject-matter 
of  the  litigation  that  come  to  the  hands  of  the  receiver  are  in 
custodia  legis,  diudi  being  so,  will  not  be  permitted  to  be  interfered 
with,  either  by  the  parties  to  the  suit,  strangers  to  the  suit,  or 
other  courts  of  co-ordinate  jurisdiction.  The  underlying  reasons 
for  this  rule  are  apparent  and  need  not  be  elaborated  in  this  con- 
nection.    See  "Receiver's  Possession." 

(b)  Receiver  not  permitted  to  be  sued. 

Neither  will  the  court  permit  its  receiver  to  be  sued  or  har- 
rassed  l;y  litigation  witliout  its  express  permission,  to  be  granted 
only  in  exceptional  cases  for  judicious  and  special  reasons.     The 

'  Walker  v.  Morris,  14  Ga.  323;  Henry  Bruen,  4  Sandf.  Ch.  417;  Reynolds  v. 

V.  Kaufman,  24  Md.   1;  State  v.  Gib-  Pettyjohn,  79  Va.  327;  Kaiser  v.  Keller, 

son,  21  Ark.  140;   Devendorf  v.  Dick-  21  Iowa,  95.     See   further   Receiver's 

inson,   21   How.   Pr.   275;    Salway  v.  Liability. 

Salway,  2  Russ.  &  M.  215;  Iddings  v.  ^  Baitaile  v.  Fisher,  36  Miss.  321. 


24  RECEIVERSHIPS. 

court  first  obtaining  jurisdiction  and  appointing  a  receiver  retains 
that  jurisdiction,  as  a  rule,  for  all  purposes,  settling  and  adjusting, 
in  the  same  suit,  all  conflicting  interests  of  whatsoever  nature 
between  the  parties  that  grow  out  of  or  relate  to  the  subject 
matter  in  controversy.'  It  may,  however,  permit  a  jury  to  be 
called  to  pass  upon  disputed  questions  of  fact,  or  may  refer  the 
matter  to  a  common  law  court  and  jury  for  settlement  and 
adjudication,  but,  in  such  case,  the  court  retains  the  property  or 
funds  under  its  control. 

(c)  Determines  no  rights  and  affects  no  liens. 
The  custody  of  the  receiver  is  that  of  the  law,  and  in  its 
nature  is  provisional  and  suspensive,  leaving  the  rights  of  all 
parties  concerned  to  be  controlled  by  the  ultimate  judgment  of 
the  court.  The  appointment,  in  and  of  itself,  determines  the 
rights  of  no  one,  and  does  not  disturb,  or  in  any  wise  affect  the 
legal  or  equitable  standing  of  any  party  to  the  suit,  or  strangers 
thereto.  And  while  the  custody  of  the  property,  or  fund,  may 
be  transferred,  all  liens  upon  or  rights  therein  remain  unchanged, 
and,  if  the  property  be  sold  prior  to  the  final  determination  of 
the  respective  rights  therein  the  status  of  the  parties  to  the  pro- 
ceeds is  preserved  and  protected."     This  is  accomplished  by  suit- 

'  "  By  the  order  of  appointment  the  v.  North  River  Const.  Co.  99  N.  Y.  398; 

court  takes  the  whole  subject  into  its  Re  Day,  34  Wis.  638;  Marshall  v.  Lock- 

own  hands;  and  ultimately  disposes  ett,  76   Ga.  289;  Re   Christian  Jensen 

of   all    questions,   whether  legal    or  Co.  128  N.  Y.  550;  Re  Tyler,  149  U. 

equitable,    growing  out  of  the  pro-  S.  164,    87  L.  ed.   689;    Edwards  v, 

ceeding."    Beverley  y.  Brooke,  iGratt.  Norton,  55  Tex.  405;  Ellis  v.  Vernon 

187.     That  the  court  will  not  permit  Ice  L.  c&TF.  Co.  86  Tex.  109;  Russell  v. 

the  possession  of  its  receiver  to  be  in-  Texas  &  P.R.  Co.  68  Tex.  646;  Robinson 

terfered  with  without  its  permission,  v.  Atlantic  &  O.  W.  R.  Co.  66  Pa.  160; 

see    Vermont  &  C.  R.  Co.   v.  Vermont  Thompson  v.  McCleary,  159  Pa.  189. 

C.   R.    Co.  46    Vt.    792;    Russell   v.  And  see  further  "Suits  against  Ke- 

East    Anglian    R.     Co.    3  Macn.    &  ceiver." 

G.104;ExparteCoc7ira7ie,L.'R.20Eq.  ^Miller  v.  Bowles,   58  N.  Y.  253; 

282;  Spinning  v.  Ohio  L.  Ins.  &  T.  Co.  Myers  v.  Estell,  48  Miss.  372;    Central 

2  Disney,  368;  FortWayne,  M.  &  C.  R.  Trust  Co.  v.  Wabash,  St.  L.  &  P.  R.  Co. 

Co.  V.  Mellett,  92  Ind.  535;  Skinner  v.  30  Fed.  Rep.  344;  Union  Nat.  Bank-v. 

Maxwell.  68  N.  C.  400;  Rotter  v.  Spa  Kansas  City  Bank.  136  U.  S.  223,  34 L. 

Springs  Brick  Co.  47  N.  J.  Eq.  442;  Jo-  ed.  341;  Skip  v.  Hanoood,  3  Atk.  564; 

cobson  V.  Landolt,  73  Wis.  142;  Riggsv.  Anon.  2  Atk.  15;  Wiswall  v.  Sampson, 

Whitney,  15    Abb.  Pr.  388;    Brien  v.  55  U.  S.  14  How.  52,  14  L.  ed.  322; 

PaMi,   3  Tenn.  Ch.  357;    Woerishoffer  Ellis  v. Boston,  B.  &E. R.  Co.  107  Maaa. 


GENERAL  NATURE  AND  FEATURES  OF  THE  LAW. 


25 


able  and  proper  provisions  in  the  decree  or  judgment.  All  liens 
are  protected  and  preserved,  but  the  right  to  enforce  such  liens 
is  suspended  pending  the  receivership. 

§  8.  Kinds  of  receivers. 

Receivers  are  sometimes  designated  as  General  Receivers, 
Receivers  Pendente  Lite,  Special  Receivers,  Interim  Receivers, 
Managers,  Ancillary  Receivers,  and  in  England,  Liquidators. 
The  purposes  in  all  cases  being  the  same,  though  the  methods  of 
accomplishment  may  differ,  and  though  the  functions  of  the 
receiver  may  vary  in  different  cases,  no  good  result,  but  confusion 
ratlier,  follows  the  application  of  the  several  names  to  the  re- 
ceiver, and  so  far  as  the  general  treatment  of  the  subject  is  con- 
cerned, no  nominal  distinction  will  be  observed.  Receivers  may 
be  general  as  to  property  and  special  as  to  power,  or  vice  versa. 
Nearly  all  receivers  are  pendente  lite,  and  with  equal  propi'iety 
might  be  called  interim,  while  a  manager  is  only  in  tlie  exercise 
of  an  enlarged  power,  for  the  accomjjlishment  of  the  same  end.' 


1;  Maynard  v.  Bond,  67  Mo.  315; 
Herman  v.  FisJier,  11  Mo.  App.  275; 
Ex  parte  Dunn,  8  S.  C.  207;  Beverley 
V.  Brooke,  4  Gratt.  187;  Bitting  v.  Ten, 
Eyck,  85  Ind.  357;  Leavitt  v.  Yates,  4 
Edw.  Ch.  138;  EUicott  v.  Warford,  4 
Md.  80. 

That  ihe  receiver's  possession 
is  the  possession  of  the  court, 
see  Skinner  v.  Maxwell,  68  N.  C. 
400;  Robinson  v.  Atlantic  &  G.  W. 
B.  Co.  66  Pa.  160;  Day  v.  Pos- 
tal Teleg.  Co.  66  Md.  354;  De 
Visser  v.  Blackstone,  6  Blatchf.  235; 
Re  Buler's  Estate,  13  Ir.  Ch.  N.  S. 
456;  Re  Merchants'  Ins.  Co.  3  Biss. 
165;  Mays  v.  Rose,  Freem.  Ch.  (Miss.) 
703;  Angel  v.  Smith,  9  Ves.  Jr.  335. 

That  he  takes  the  property  subject 
to  all  liens  thereon,  see  Boicling  Oreen 
Sav.  Bank  v.  Todd,  64  Barb.  146;  Rich 
V.  Loutrel,  18  How.  Pr.  121;  Gei'e  v. 
Dibble,  17  How.  Pr.  31;  Re  North 
American  Qutta  Rercha  Co.  17  How. 
Pr.  549;  Smith  v.  Neic  York  Consol. 
Stage  Co.  18  Abb.  Pr.  419,  432;  Conley 


V.  Deere,  11  Lea,  274;  Von  Roun  v. 
Super.  Ct.  58  Cal.  358;  Union  Trust 
Co.  V.  Weber,  96  111.  346;  Lorch  v. 
Aultman,  75  Ind.  162.  And  while 
the  liens  are  not  suspended  or  in  any 
manner  interfered  with,  yet  the  right 
to  enforce  such  liens  by  ordinary 
process  is  suspended.  Ellis  v.  Vernon 
/ce,Z.c6TF.Cb.86Tex.l09.  Andseealso 
Walling  v.  Miller,  108  N.  Y.  173;  RMn- 
son  V.  Atlantic  &  O.  W.  R.  Co.  66  Pa. 
160;  Thompson  v.  McCleary,  159  Pa, 
189;  Diigger  v.  Collins,  69  Ala.  324. 
See  further  Chap.  II,  §  17. 

'  As  we  have  seen,  a  liquidator  is 
a  statutory  receiver,  with  enlarged 
powers  conferred  by  Act  of  Parlia- 
ment. See  ante,  %  3.  And  may  be 
appointed  generally  or  for  a  special 
purpose.  Re  Langham  Skating  Rink 
Co.  L.  R.  6  Ch.  Div.  102. 

A  receiver  pendente  lite  is  a  mere 
temporary  officer  and  does  not  possess 
the  power  of  a  permanent  receiver, 
or  any  legal  power  except  such  as  is 
specifically  conferred  upon  him  by  the 


26 


RECEIVERSHIPS. 


§  0.  At  what  stage  appointed. 

(a)  It  is  a  prerequisite  that  there  shall  be  at  the  time  of  maldng 
application  a  suit  actually  pending.' 

(b)  And  there  must  be  a  strong  special  ground  to  induce  the 
courts  to  appoint  a  receiver  before  answer/ 

(c)  After  decree  and  sale  a  receiver  may  be  appointed  if  it  is 
necessary  to  secure  complete  justice  to  the  parties.' 


court.  His  functions  are  limited  to  the 
care  and  preservation  of  the  properly. 

Decker  v.  Gardner,  124  N.  Y.  334, 
11  L.  R.  A.  480;  Herring  v.  New  York, 
L.  E.  &  W.  B.  Co.  105  N.  Y.  372; 
Keeney  v.  Home  Ins.  Co.  71  N.  Y.  396. 

In  cases  of  danger  or  loss  the  court 
may  appoint  an  interim  receiver  until 
such  time  as  a  receiver  may  be  ap- 
pointed in  due  course  of  law.  Taylor 
V.  Eckersley,  L.  R.  2  Ch.  Div.  302,  45 
L.  J.Ch.  527;  34  L.  T.  637. 

A  manager  appears  to  be  a  person 
appointed  to  carry  on  a  business  pen- 
dente lite.  Smith  v.  New  York  Consol. 
Stage  Co.  18  Abb.  Pr.  419,  433.  The 
purpose  is  to  enable  the  company's 
business  to  be  sold  as  a  going  con- 
cern, the  current  expenses,  wages,  etc., 
being  provided  for  by  the  plaintiff. 
3Inkins  v.  Ibotson  [1891]  1  Cla.  133,  60 
L.  J.  Ch.  164,  63  L.  T.  515;  Peek  v. 
Trinsmaran  Iron  Co.  L.  R.  2  Ch.  Div. 
115.  And  it  seems  that  such  a  man- 
ager will  be  appointed  where  it  is  nec- 
essary to  preserve  the  security  though 
the  business  is  not  mortgaged.  Camp- 
bell V.  Lloyd's  Bank,  58  L.  J.  Ch.  424. 

'  The  appointment  of  a  receiver 
prior  to  filing  a  bill  is  a  nullity. 

Jones  V.  Schall,  45  Mich.  379;  Mer- 
chants &  M.  Nat.  Bank  v.  Kent,  43 
Mich.  292;  0^^y  v.  Doak,  47  Kan.  236 
Hardy  v.  McClellan,  53  Miss.  507 
Jones  v.  Bank  ofLeadville.  10  Colo.  464 
Kimball  v.  Goodburn,  32  Mich.  10 
Baker  v.  Backus,  32  111.  79;  Davis  v 
Flagstaff  Silver  M.  Co.  2  Utah,  92. 

»  Baker  v.  Backus,  32  111.  79;  Weis 


v.  Goetter,  72  Ala.  259;  Hugonin  v. 
Basely,  13Ves.  Jr.  105;  Micou  v.  Moses, 
72  Ala.  439. 

*  Connelly  v.  Diekson,76  Ind.  440.  In 
this  case  the  court  say:  "  The  debtor 
who  remains  in  possession  after  the 
sale  of  his  land  certainly  owes  some 
duties  to  the  purchaser.  He  has 
charge  of  the  property  and  without 
doubt  may  be  restrained  from  com- 
mitting actual  waste;  but  mere  per- 
missive waste  may  be  no  less  harm- 
ful. Sometimes,  too,  injunction  does 
not  afford  adequate  relief  against 
waste.  .  .  .  Under  our  statute 
the  judgment  debtor  or  owner  in 
possession  holds  the  land  itself  con- 
ditionally for  the  purchaser,  that  is  to 
say,  as  trustee  for  him;  and  for  the 
reasonable  rents  and  profits  is  con- 
ditionally accountable  or  liable  to 
him.  .  .  .  Our  decision  is  that 
where  it  is  shown  that  the  property  is 
in  the  hands  of  a  tenant  who  is  under 
contract  to  pay  a  stipulated  rent 
which  has  not  been  paid  to  the  judg- 
ment debtor  or  to  the  owner  of  the 
land  and  that  the  latter  is  insolvent 
and  cannot  redeem,  the  court  may 
appoint  a  receiver  to  collect  such 
rents  and  to  hold  the  same  until  the 
end  of  the  year,  if  a  redemption  is  not 
sooner  made,  to  be  paid  over  to  the 
debtor  if  he  redeems  and  otherwise 
to  the  purchaser." 

And  after  decree  a  receiver  m.ay  be 
appointed  though  not  prayed  fur  in 
the  bill. 

Shannon  v.  Hanks,  88  Va.  338. 


GENERAL  NATURE  AND  FEA.TURES   OF  THE  LAW.         27 

(d)  Or  after  appeal  where  the  bond  affords  no  adequate  pro- 
tection. ' 

§  10.  Application  for  ;  allegations ;  who  appointed. 

(a)  By  whom  application  made. 
As  a  general  rule  and  in  the  ordinary  course  of  practice  the 
appointment  of  a  receiver  is  made  on  the  application  of  the  plain- 
tiff in  the  suit.  To  this  rule,  however,  there  may  be  exceptions, 
as  where  the  application  is  made  by  both  plaintiff  and  defendant, 
but  tlie  conduct  of  the  proceedings,  in  general,  will  be  given  to 
the  plaintiff.''  And  while  it  may  not  be  entirely  regular  for  one 
defendant  to  apply  for  a  receiver  as  against  a  co-defendant,^  yet 
on  a  cross-bill  he  may  do  so,*  but  even  that  has  been  held  not  to 
be  necessary/ 

(b)  Exercise  of  caee  by  the  courts. 
In  passing  upon  the  application,  by  whomsoever  made,  the 
court  mil  carefully  scrutinize  the  application  and  the  effects  of 
the  appointment  upon  all  parties  concerned.^  The  appointment 
is  usually  an  incident  only  to  the  main  purpose  of  the  bill  or 
petition,  and  is,  in  effect,  the  sequestration  of  the  defendant's 
property  in  advance  of  a  hearing  and  adjudication  of  the  rights  of 

'  Beard  v.  Arhuckle,  19  W.  Va.  145;  unit  is    thereby  detached  from   the 

Adkinsv.  Edwards,  SZY a.  ^\Q,  Moran  main  road.     In  such  case  not  only 

V.  Johnston,  26  Gratt.  108.  the  parties  to  the  suit  are  affected,  but 

*  Sargant  v.  Read,  L.  R.  1  Ch.  Div.  a  large  number  of  employes  are  dis- 
600,  45  L.  J.  Ch.  206.  turbed  in   their  relations  with  their 

^  Robinson  v.  Hadley,  11  Beav.  614;  employer,  and    the    general    public, 

18  L.  J.  N.  S.  Ch.  428.     But  see  Sar-  along  the  line  of  road,  are  liable  to  be 

gantv.  Read,  L.  R.  1  Ch.  Div.  600.  greatly   inconvenienced    by   the  dis- 

*  Orote  V.  Bury,  1  W.  R.  92.  turbance     to    their    shipping    facili- 
'^  Sarga7itv. Read, supra; HenshawY.  ties.      Wabash   R.    Co.    v.   Dykeman 

Wells,  ^ 'E.uva^ih.bQS;  Hortony.  White,  133  Ind.    56.     Courts   in  some  cases 

54  N.  C.  297;  Pittman  v.   Tounshend,  have  been  made  the  instruments  of 

1  W.  W.  &  A  'B.  (Victoria),  140.  perpetrating  great  wrongs,  not  only 

'  In  granting  the  order  of  appoint-  upon  the  public,   but  those  having 

raent  of  a  receiver  the  court  will  scru-  large  pecuniary  interests  in  corpora- 

tiuize  not  only  the  rights  of  the  mov-  tions  where  the  real  purpo.ses  of  the 

ing  party,  but  the  injuries  that  may  plaintiff  in  makingtheapplicationbave 

be  suffered  by  the  adverse  party  and  been  cleverly  concealed  at  the  time  of 

the  public  at  large.     This  is  particu-  the  appointment,  and  on)}'  discovered 

larly  the  case  where  a  line  of  railroad  when  the  effects  were  disastrous  and 

forming  part  of  a  system  operated  as  »  beyond  remedy. 


28  RECEIVERSHIPS. 

the  parties,  and  the  right  of  the  plaintiff  to  recover  upon  the  main 

features  of  the  bill  or  petition  must  be  clearly  established.  Thus  in 
a  foreclosure  proceeding  the  right  to  foreclose  must  be  apparent 
before  the  right  to  a  receiver  will  be  acted  upon.  It  would  seem, 
however,  that  in  case  of  waste  or  imminent  danger  of  loss  the 
court  will  act  with  greater  freedom.  In  its  effect  the  appoint- 
ment is  not  unlike  the  statutory  attachment,  so  far  as  the 
seizure  and  preservation  of  the  property  is  concerned,  and  the 
ultimate  right  of  the  successful  party  is  carried  back  to  the  date 
of  the  order. 

(c)  Allegations,  averments. 
By  whomsoever  the  application  is  made  it  is  necessary  that  the 
proper  averments  shall  be  clear  and  distinct,' but  the  sufficiency  of 
the  averments  of  the  bill  may  be  supplemented  by  affidavits  or 
oral  testimony."  The  court,  as  a  rule,  will  decline  to  appoint  a  re- 
ceiver on  an  interlocutory  application  in  the  absence  of  a  prayer 
asking  for  such  relief,'  but  this  rule  is  not  an  unbending  rule 
where  the  facts  appearing  clearly  justify  the  appointment."  In 
all  cases  the  application  must  be  made  in  a  reasonable  time,' 
unless  the  allegations  contained  in  the  bill  are  supplemented  by 
affidavits  showing  an  excuse  for  the  delay  or  circumstances  justi- 
fying the  intervention  of  the  court." 

(d)  Receiver  must  be  disinterested. 
Inasmuch  as  the  receiver  must  be  an  indifferent  person  as  be- 
tween all  parties,  and  holds  the  property  for  the  benefit  of  all,  it 

'Allegations   that  the  plaintiff  has  ^Naylor  v.  Sidener,  106  Ind.  179. 

reason  to  believe  that  the  property  in-  ^Pare  v.  Clegg,  7  Jur.  N.  S.  1136. 

volved  in  the  litigation  will  be  wasted  *Malcolm  v.    Montgomery/,    2  Moll. 

if  a  receiver  be  not  appointed  are  not  500;  Osborne  v.  Harvey,  1  Youngeifc  C. 

sufficient.    Banna  v.  Banna,  89  N.  C.  42;  Bowman  v.  Bell,  14  L.  J.  N.  S.  Ch. 

68;  Briarfleld Ironworks  Co.  v.  Foster,  119.      But  it  is  not  necessary  to  pray 

54:  A]a.Q22;  Supre7ne  Sitting  Order  of  I.  for  a  receiver  in  a  supplemental  bill 

.ff.  v.i?a^e?-,134Ind.293,20L.  R.A.  210;  where  the  original  bill  contains  such 

I^aylor  V.  Sidener,  lOQ  Ind.  179;  Steele  V.  a   prayer.     Ball  v.  Kirby,  Exch.  11 

Aspy,  128  Ind.  367      Amendments  to  (June,  1831,  unreported.) 

the  petition  in  furtherance  of  justice  ^Bood  v.  First  Nat.  Bank,  29  Fed. 

va&y  be  made,  however,  if  an  oppor-  Rep.  55. 

tunity  be  given  to  answer  the  same,  ^Loveday  v.  D'Esterre,  1  Hayes  &  J. 

there  being  so  abuse  of  the  judicial  151;  Spratt  v.  AJiearns,  1  Hayes  &  J. 

discretion.     McCm-d  v.  Weil,  29  Neb.  800;  Bood  v.  First  Nat.  Bank,  29  Fed. 

682;  but  see  Gouthwaite  v.  Bippon,  1  Rep.  55. 
Bea  V.  54;  Smith  v.  Bixon,  4  W.  R.  259. 


GENERAL  NATURE  AND  FEATURES  OF  THE  LAW.    29 

is  not  proper  that  he  should  be  interested  in  the  property, 
which  is  the  subject-matter  of  the  litigation,  nor  be  interested 
in  the  result  of  the  litigation.'  There  are  cases,  however, 
where  the  receiver  may  be  a  party  and  interested  in  the 
result  of  the  litigation,  but  in  such  cases  he  is  usually  selected 
by  agreement  and  acts  without  compensation.  The  court 
being  free  from  all  bias,  and  meting  out  justice  fairly  and 
impartially  to  all  parties  concerned,  it  is  equally  imperative 
that  its  officers  shall  be  equally  free  and  independent  and 
capable  of  acting  without  the  slightest  cause  for  suspicion  of 
personal  interest.  It  is  not  only  necessary  that  the  receiver  shall 
not  be  an  interested  party  in  the  litigation  but  the  court  will  not 
knowingly  permit  its  receiver  to  occupy  a  position  where  adverse 
criticism  may  be  rhade  in  reference  to  his  acts.  Cases  sometimes 
occur,  however,  where,  owing  to  the  peculiar  nature  of  the  busi- 
ness, it  is  difficult  to  procure  a  competent  and  proper  person  to 
act  who  is  wholly  disinterested  in  the  business,  and  in  such  case 
the  general  rule  is  applied  with  less  stringency. 

(e)  Subsequent  keceivers;  ancillaey. 

While  the  general  rule  is  that  but  one  receiver  will  be  ap- 
pointed,^ yet  subsequent  receivers  for  the  same  fund  may  be 
appointed  for  special  purposes,  subject  however  to  the  powers  of 
the  receiver  previously  appointed,'  but  their  necessity  must  be 
clearly  shown.* 

Ancillary  receivers  are  sometimes  appointed  to  protect  prop- 

^ Detroit  First  Nat.  Bank  v.  Barnum  pointed,  is  no  answer  to  an  applica- 

Wire  &  I.  Works,  60  Mich.  487.     He  tion   for  a  similar  appointment  in  a 

should  not  be  a  party  to  the  suit  unless  subsequent  suit  by  other  parties;  but 

his  appointment  is  consented  to.    Ben-  the  same  receiver  will  be  appointed  in 

neaon  v.  Bill,  62  111.  408;  nor  is  a  mas-  the  subsequent  suit, 

ter  in  chancery  proper  whose  duty  it  is  Rogers  v.  DeForest,  11  Paige,  272. 

to  pass  upon  the  accounts  of  the  re-  ^Bailey  v.  Belmont,  10  Abb.  Pr.  N. 

ceiver.  Id.    See  further  Chap.  H.  §  21.  S.  270;  British  Linen  Co.v.  South  Am- 

-  Wabash,  St.  L.  &  P.  B.  Co.  v.  Central  erica  &  M.  Co.  [1894]  1  Ch.  108;  Baiky 

Trust  Co.  22  Fed.  Rep.  272  ■,Biddulph  v.  v.  O'Mahoney,  1  Jones  &  S.  2b9. 

Hickman,  1  Hog.  2^4:;    Downshire   v.  *  Wabash,  St.  L.  (& P. R.  Co.  v.  Central 

Tyrrell,  Hayes,  354;  Kelly  v.  RuUedge,  Trust  Co.  22  Fed.  Rep.  372.      But  see 

8  Ir.  Eq.  228.  Phinizy    v.  Augusta  &  K.  B.  Co.  56 

The  fact  tliat  a  receiver  of  the  es-  Fed.  Rep.  273. 
tate  of  a  debtor  has  been  already  ap- 


30 


RECEIVERSHIPS. 


erty  beyond  the  jurisdiction  of  the  first  receiver.'  The  ancillary 
receiver  is  not  necessarily  the  same  person  as  the  receiver  in  the 
original  proceeding,  yet  if  consistent  with  interests  of  all  parties 
the  management  of  the  estate  will  be  more  efficiently  managed  by 
60  doing.  The  tendency  of  courts  is  to  recognize  the  rights  of  a 
foreign  receiver  under  a  species  of  comity  and  thus,  to  some  ex- 
tent, avoid  the  necessity  of  ancillary  receivers. 


^Platt  V.  Philadelphia  &  B.  R.  Co. 
54  Fed.  Rep.  569;  Mercantile  Trust 
Co.  V.  Kanawha  &  0.  R.  Go.  39  Fed.  Rep. 
337.  Such  receiver's  appointmenl 
should  be  without  prejudice. 

In  Piatt  V.  PhiUi.  &  R.  R.  Co.  54 
Fed.  Rep.  569,  it  was  held  that  the 
Circuit  Court  would  follow  the  gen- 
eral practice  in  the  Federal  courts  in 
granting  an  ancillary  receivership  on 
ex  parteapplication,butwithout  preju- 
dice to  the  full  consideration  of  the 
legality  of  the  practice  on  subsequent 
motion  to  dissolve  the  order. 

In  Clyde  v.  Richmond  &  D.  R.  Co.  55 
Fed.  Rep.  539,  ancillary  receivers  were 
appointed  in  South  Carolina,  the  orig- 
inal proceeding  being  in  Virginia  and 
it  was  held  that  the  latter  court  was  the 
proper  forum  in  which  a  petition  should 
be  filed  by  a  creditor  asking  for  relief. 
The  petition  however  was  retained  in 
South  Carolina  on  the  ground  of  the 


claim  being  a  meritorious  one,  in  or- 
der to  assist  the  petitioner  in  enforcing 
the  payment  of  his  claim. 

In  A)nes  v.  Union  P.  R.  Co.  60  Fed. 
Rep.  966,  it  was  held  that  the  receivers 
of  a  railroad  system,  appointed  in 
several  circuits,  should  report  to  and 
be  governed  by  the  Circuit  Court 
sitting  in  the  district  of  their  original 
appointment  in  all  matters  relating  to 
their  general  management  of  the  trust, 
their  general  accounting,  and  the  gen- 
eral operation  of  the  road  within  the 
circuit.  But  the  Circuit  Court,  sitting 
in  other  districts  with  the  same  re- 
ceivers, were  subsequently  appointed, 
had  jurisdiction  to  determine  the 
validity  and  amount  of  claims  of 
citizens  thereof  against,  the  receivers 
and  the  corporation;  and  citizens  of 
one  district  will  not  be  required  to  go 
into  another  district  to  assert  their 
claims. 


CHAPTER  11. 


MATTERS  RELATING  TO  THE  APPOINTMENT, 


§  11.  Scope  of  the  bill  or  petition. 
§  12.  Time  when  appointed. 

(a)  Early  English  practice. 

(b)  Modern     English     practice, 

adoption  of. 

(c)  After  decree. 

(d)  After  appeal. 

§  13.  Must  be  suit  pending. 

§  14.  Rules  governing  appointment  ; 
general  principles. 

§  15.  Grounds  upon  which  jurisdic- 
tion is  entertained. 

(a)  Preservation  of  property. 

(b)  Danger  of  loss. 

(c)  Fraud. 

(d)  Insolvency. 

(e)  Plaintiff's  title. 

(f)  Remedy  at  law. 

§  16.  When   jurisdiction    not    enter- 
tained. 
§  17.  Effect  of  appointment. 

(a)  Places    property    in  custodia 

legis. 

(b)  Removes  defendant  from  pos- 

session and  custody. 

(c)  Property  not  to  be  interfered 

with  by  other  courts. 

(d)  Does  not  change  the  title  or 

ultimate  right  of  possession. 

(e)  Custody  of  receiver  coexten- 

sive   with    jurisdiction    of 
court. 

(f )  Leaves  the  rights  of  all  parlies 

in  statu  quo. 

(g)  Receiver's  rights  relate  to  date 

of  appointment. 
(h)  Extent  of  power  as  to  prop- 
erty. 


§  18.  Courts  exercising  jurisdiction, 
g  19.  Conflict  of  jurisdiction. 
§  20.  Scope  of  jurisdiction. 
§  21.  Who  appointed. 

(a)  His  position  as  to  court. 

(b)  Is  a  trustee  as  to  parties. 
§  22.  Form  and  scope  of  order. 

(a)  Should    specifically    describe 

the  properly. 

(b)  Should  embody  power  to  pre- 

serve property. 

(c)  Should    embrace    all    power 

necessary  as  to  possession. 

(d)  But  caution  to  be  exercised  as 

to  property  in  the  hands  of 
third  persons,  etc. 

(e)  Order  relates  back  to  the  date 

of  granting. 

(f)  Assignment  not  necessary  to 

pass  title. 

(g)  Order  subject  to  modification, 
(h)  Order  not  subject  to  collateral 

attack, 
(i)  Nor  affected   by  irregularity 

or  error. 
(j)  Is  subject  to  revocation, 
(i)  Where  it  was  a  nullity. 
(^)  Where  the  appointment  se- 
cured by  collusion. 
(S)  When  the  appointment  em- 
providently  made. 

(4)  When  the  court  had  no  ju- 

risdiction. 

(5)  Application    for     vacation 

must  be  in  apt  time, 
(k)  Order  appointing  may  be  ap- 
pealed from,  when. 
(1)  Effect  of  appeal  from  order. 


32 


RECEIVERSHIPS. 


(J)  Appeal    before  possession. 
(2)  Receiver's    functions     sus- 
pended pending  appeal. 
§23.  Bond. 

(a)  Required  in  all  cases. 


(b)  Runs  to  whom. 

(c)  Sureties,   who    may   be,    dis- 

charge of. 

(d)  Suit  on  bond. 

(e)  Liability  of  sureties. 


§  11.  Scope  of  the  l)ill  or  petition. 

In  order  to  autliorize  the  appointment  of  a  receiver  the  bill  or 
petition  must  lay  a  foundation  for  it  by  stating  the  facts  which 
show  its  necessity  or  propriety.'  And  owing  to  the  nature  of  the 
remedy  and  the  results  that  usually  follow  the  appointment,  a 
strong  case  must  be  made  in  order  to  justify  the  court  in  exercis- 
ino"  its  jurisdiction,  and  it  must  appear  that  there  is  no  other  safe 
■or  expedient  remedy.''  The  primary  purpose  in  all  cases  is  pro- 
tecting and  securing  the  property  which  is  the  subject-matter  of 
the  litigation.^     If  the  plaintifE  has  an  adequate  remedy  at  law,* 


^Tomlinson  v.  Ward,  2  Conn.  396. 
In  this  case  the  court  say:  "Courts  of 
equity  have  undoubtedly  a  power  to 
appoint  receivers  in  proper  cases.  But 
the  facts  should  be  stated  in  the  bill 
which  show  the  necessity  or  propriety 
of  the  appointment;  so  that  the  other 
party  may  answer  them."  The  alle- 
gations must  not  be  based  on  mere  be- 
lief. Cofer  V.  Echerson,  6  Iowa,  502; 
Heavilon  v.  Farmers'  Bank,  81  Ind. 
249. 

It  is  not  an  abuse  of  discretion  for 
the  court  on  motion  for  the  appoint- 
ment of  a  receiver  ^^endente  lite,  to  re- 
fuse to  hear  affidavits  presented  after 
the  expiration  of  ample  time  limited 
by  such  court  in  which  such  affidavits 
might  have  been  presented.  Farmers' 
Mat.  Bank  v.  Backus  (Minn.)  66  N. 
W.  5. 

The  appointment  of  a  receiver  in  a 
regular  proceeding  for  that  purpose 
upon  a  hearing  cannot  form  the  basis 
of  an  action  for  damages  against  the 
applicants.  Saunders  v.  Eempner 
(Tex.  Civ.  App.)  32  S.  W.  585. 

A  receiver  pendente  lite  is  properly 
appointed  in  an  action  to  recover 
money    improperly    appropriated  by 


defendant,  although  he  is  shown  to 
have  considerable  property,  where  he 
has  properly  interests  in  another  state, 
and  has  been  trying  to  dispose  of  his 
property  in  the  state  where  the  action 
is  brought.  Bird  v.  Lanpliear,  92 
Hun.  567,  36  N.  T.  Supp.  1069. 

^Speights  v.  Peters,  9  Gill,  472.  "It 
is  a  high  power  never  exercised  where 
it  is  likely  to  produce  irreparable  in- 
justice or  injury  to  private  rights  or 
where  there  exists  any  other  safe  or 
expedient  remedy."  Winkler  v.  Wink- 
ler, 40  111.  179;  Coughron  v.  Swift,  18 
111.  414;  Webster  v.  Couch,  6  Rand. 
(Va.)  519;  Poage  v.  Bell,  3  Rand.  (Va.) 
586;  Wooden  v.  Wooden,  3  N.  J.  Eq. 
429;  Morrison  v.  Buckner,  Hemp. 
442;  Corey  v.  Long,  43  How.  Pr.  497; 
Rice  V.  St.  Paul  &  P.  B.  Co.  24  Minn. 
464;  Sherman  v.  Clark,  4  Nev.  138; 
Parmley  v.  Tenth  Ward  Bank,  3  Edw. 
Ch.  295;  Brown  v.  Chase,  Walk.  Ch. 
43 ;  Spooner  v.  Bay  St  Louis  Syndicate, 
44  Minn.  403;  SoUoryy.  Leaver,  L.  R. 
9  Eq.  22;  KnigJiton  v.  Toung,  22  Md. 
S59. 

^Battle  v.  Davis,  66  N.  C.  252. 

*Sallory  v.  Leaver,  L.  R.  9  Eq.  22; 
Brewry  v.  Barnes,  3  Russ.  100;  Par- 


MATTERS  RELATING  TO  THE  APPOINTMENT. 


33 


or  if  it  does  not  appear  that  the  appointment  is  demanded  in  order 
to  afford  adequate  protection  to  the  parties  the  court  will  not  act. 
The  action  of  the  court  based  upon  the  ground  that  no  one  will 
be  seriously  injured  thereby  is  an  unjustifiable  exercise  of  juris- 
diction by  a  court  of  equity. 

§  12.  Time  when  appointed. 

(a)  Under  the  early  English  practice  it  was  not  considered 
proper  to  appoint  a  receiver  prior  to  the  answer  of  the  defendant.' 
This  rule,  however,  has  been  abrogated  by  the  modern  English 
practice  (1)  where  the  defendant  has  in  answer  to  plaintiff's  ap- 
plication filed  an  affidavit  wliich,  so  far  as  the  application  is  con- 
cerned, is  to  be  treated  as  an  answer,  (2)  and  where  fraud  is  clearly 
proved  by  affidavit,  or  where  imminent  danger  would  ensue  un- 
less the  property  is  taken  under  the  care  of  the  court.''  The  ap- 
pointment is  usually  made  on  an  interlocutory  application.' 

(b)  The  modern  English  practice  in  regard  to  the  appointment, 
before  answer,  has  been  adopted  in  this  country  where  the  plain- 


ker  V.  Moore,  3  Edw.  Ch.  234;  Spooner 
V.  Bay  St.  Louis  Syndicate,  44  Minn. 
403;  Rice  v.  St.  Paul  <&  P.  B.  Co.  24 
Minn.  464. 

1  Vann  v.  Barnett,  2  Bro.  C.  C.  158. 

^Duckworth  v.  Trafford,  18  Ves.  Jr. 
283;  Lloyd  v.  Passingham,  16  Ves.  Jr. 
70;  Hugnonin  v.  Basely,  13  Ves.  Jr. 
105;  Anon.  12  Ves.  Jr.  4;  Jervis  v. 
White,  6  Ves.  Jr.  738,  note.  The  Lord 
Chancellor  in  Owen  v.  Homan,  4  H. 
L.  Gas.  997,  said:  "  In  all  cases,  there- 
fore, where  the  court  interferes  by  ap- 
pointing a  receiver  of  property  in  the 
possession  of  the  defendant  before  the 
title  of  the  defendant  is  established 
by  decree  it  exercises  a  discretion  to 
be  governed  by  all  the  circumstances 
of  the  case."  But  it  seems  that  a 
court  will  not  appoint  a  receiver  be- 
fore a  hearing,  where  the  purpose  is 
to  carry  into  effect  a  foreign  decree. 
Iloulditch  V.  Donegall,  Beatty  (Jr.) 
390. 

^ Tripp  V.  CJuird  R.  Co.  17  Jur.  887, 
22  L.  J.  Ch.  1084;  Peek  v.  Trimmran 
3 


Coal,  Iron  &  S.  Co.  45  L.  J.  Ch.  281; 
Porter  v.  Loi^es,  L.  R.  7  Ch.  Div.  358, 
37  L.  J.  N.  S.  834;  Anderson  v. 
Guichard,  9  Hare,  275.  And  the  ap- 
pointment may  be  before  service  in  case 
of  bankruptcy  and  consequent  loss  of 
the  estate.  Re  H.'s  Estate,  H.  v.  H.  L. 
R.  1  Ch.  Div.  276,  45  L.  J.  Ch.  749: 
The  court  will  not  appoint  without 
notice  to  defendant,  before  the  time 
for  his  appearance  has  expired,  unless 
he  has  withdrawn  himself  from  the 
jurisdiction,  or  the  property  is  in  dan- 
ger of  being  lost,  or  some  other  special 
circumstance  exists  making  an  imme- 
diate appointment  necessary.  Sand- 
ford  v.  Sinclair,  8  Paige,  373;  Gibson 
v.  Martin,  8  Paige,  481;  McCarthy  v. 
Peake,  9  Abb.  Pr.  164,  18  How.  Pr. 
138. 

The  court  will  not  appoint  on  an  ex 
parte  application  before  the  appear- 
ance, or  until  defendant  has  made  de- 
fault after  service  of  process,  except  in 
cases  of  emergency.  Field  v.  Ripjley, 
20  How.  Pr.  26. 


24: 


RECEIVERSHIPS. 


tiff  satisfies  the  court  that  he  has  an  equitable  claim  to  the  prop- 
erty in  controversy,  and  that  a  receiver  is  necessary  to  preserve 
Buch  property  from  loss  or  serious  damage.'  But  as  we  have  seen, 
except  in  rare  instances  notice  should  be  given  of  the  intended 
application." 

(c)  After  decree  and  upon  motion  a  receiver  may  be  appointed 
where  the  case  is  urgent,'  and  even  where  no  receiver  is  prayed 


^Bloodgood  v.  Clark,  4  Paige,  574; 
Johns  V.  Johns,  23  Ga.  31:  Jones  v. 
Dougherty,  10  Ga.  273;  Bank  of  Mon- 
roe V.  Seller merhorn,  1  Clarke,  Ch. 
214.  Where  an  absent  defendant  has 
been  advertised  to  appear  within  a 
certain  time,  an  order  for  the  appoint- 
ment of  a  receiver,  obtained  by  the 
plaintiff  ex  parte,  before  the  expira- 
tion of  the  time  limited  for  defend- 
ant's appearance,  is  irregular,  except 
under  special  circumstances.  Saiid- 
for  V.  Sinclair,  8  Edw.  393.  If,  how- 
ever, on  tiling  an  answer  the  bill  and 
answer  taken  together  show  that  a  re- 
ceiver ought  not  to  have  been  ap- 
pointed, a  motion  to  discharge  by  de- 
fendant is  proper.  Phmnix  Mut.  L. 
Ins.  Co.  V.  Orant,  3  Mc.  Arth.  220; 
Allen  V.  Dallas  &  W.  R.  Co.  3  Woods, 
332. 

It  is  not  necessary  to  show  that 
there  is  property  to  come  into  the 
hands  of  a  receiver  as  a  prerequisite 
to  the  appointment.  Dutton  v. 
Thomas,  97  Mich.  93;  Rankin  v.  Roths- 
child, 78  Mich.  10. 

In  Clark  v.  Ridgely,  1  Md.  Ch.  70, 
the  court  say:  "A  receiver  should  not 
be  appointed  before  the  coming  in  of 
the  answer,  and  although  the  rule 
has  been  broken  through,  the  ground 
which  will  induce  the  court  to  disre- 
gard it  must  be  very  strong  and  spe- 
cial." It  must  clearly  appear  that  the 
property  is  in  danger.  West  v.  Swan, 
3  Edw.  Ch.  420.  And  where  the  mo- 
tion to  appoint  is  on  bill  and  answer, 
and  the  answer  denies  the  material 


allegations  of  the  bill  the  motion  will 
be  refused.  Simmons  v.  Henderson,  1 
Preem.  Ch.  (Miss.)  493. 

A  receiver  cannot  be  appointed  over 
a  solvent  corporation  upon  the  bill  of 
a  minority  stockholder  before  the  time 
to  answer  has  expired,  because  of 
abuse  of  authority  by  the  president,  or 
his  refusal  to  account  for  moneys  in 
his  hands  or  to  allow  the  complainant 
to  inspect  the  books,  where  his  acts 
are  approved  by  the  majority  of  the 
stockholders.  Ranger  v.  Champion 
Cotton  Press  Co.  52  Fed.  Rep.  609. 

Where  the  bill  of  complaint  is  fully 
responded  to  by  the  answer  and  no 
further  proof  is  offered  by  plaintiff 
there  are  no  grounds  for  the  appoint- 
ment of  a  receiver.  Crombie  v.  Order 
of  Solon,  157  Pa.  588. 

=8ee  §  5,  1[  (d). 

The  appointment  of  a  receiver  in 
the  trial  court  cannot  be  questioned 
in  the  appellate  court  if  the  appoint- 
ment was  by  consent.  Little  Rock 
Waterworks  Co.  v.  Barrett,  103  U.  S. 
576,  26  L.  ed.  523. 

^ Cooke  V.  Owyn,  3  Atk.  690;  Schrei- 
her  V.  Carey,  48  Wis.  208;  ReBywaler's 
Estate,  1  Jur.  N.  S.  227;  Bowman  v. 
Bell,  14  Sim.  392;  Thomas  v.  Davies, 
11  Beav.  29;  Merrill  v.  Elam,  2  Tenn. 
Ch.  513  ;  Hutton  v.  Lockridge,  27  W. 
Va.  428;  Beard  v  ArMickle,  19  W.  Va. 
145;  Aston  v.  Turner,  11  Paige,  436; 
Wright  v.  Ver7ion,  3  Drew,  112;  Moran 
V.  Johnston,  26  Gratt.  108;  Connellys. 
Dickson,  76  Ind.  440;  Brinkman  v. 
Bitzinger,  82  Ind.  258;  Clyburn  v.  Rey- 


MATTERS  RELATING  TO  THE  APPOINTMENT. 


35 


for/     The  court  will  retain  jurisdiction  until  complete  justice  is 
done  between  the  parties. 

(d)  And  after  decree  and  an  appeal  from  such  decree  a  receiver 
may  be  appointed,''  but  only  where  the  supersedeas,  or  appeal 
bond,  does  not  cover  the  rents  and  profits. 

§  13.  Must  he  suit  pending. 

It  is  a  prerequisite  to  the  appointment  of  a  receiver  that  there 


nolds,  31  S.  C.  91;  Shannon  v.  Hanks, 

88  Va.  338;  Eaas  v.  Chicago  Bldg.  Soc. 

89  111.  498;  Adkins  v.  Edwards,  83  Va. 
316. 

In  England  after  a  judgment  for 
foreclosure  absolute  a  receiver  will 
not  be  appointed.  Wills  v.  Lttff,  L. 
R.  38  Ch.  Div.  197,  57  L.  J.  Ch.  563. 

When  a  mortgagor  has  a  right  of 
possession  of  mortgage  premises  until 
the  expiration  of  the  statutory  period 
of  redemption  a  receiver  of  the  crops 
grown  on  the  premises  should  not  be 
appointed.  White  v.  Origgs,  54 Iowa, 
650;  Paine  v.  McElray,  78  Iowa,  81. 

Upon  the  appointment  of  a  receiver 
in  a  creditor's  suit,  the  defendant  is 
not  entitled  to  the  rents  and  profits  of 
his  real  estate  during  the  time  allowed 
for  a  redemption  from  a  sale  on  ex- 
ecution, but  they  go  to  the  receiver 
immediately.  Farnham  v.  Campbell, 
10  Paige,  598. 

'  Wright  v.  Vernon,  1  Drew,  68;  Con- 
nelly V.  Dickson,  76  Ind.  440;  Clyburn 
V.  Reynolds,  31  8.  C.  91;  Shannon  v. 
Eanks,  88  Va.  338.  But,  where  a  re- 
ceiver is  asked  for  after  decree  there 
must  be  a  strong  case  made  out. 
Adair  v.  Wright,  16  Iowa,  385.  and 
see  Haas  v.  Chicago  Bldg,  Soc.  89  111. 
498. 

"^Adkin  v.  Edwards,  83  Va.  316; 
Beard  v.  Arbuckle,  19  W.  Va.  145; 
Moran  v.  Johnston,  26  Gratt.  108;  James 
River  &E.  Co.  v.  Littlejohn,  18  Gratt. 
53.' 


The  court  will  appoint  a  receiver, 
pendente  lite,  upon  a  showing,  after 
trial  and  before  entry  of  decree,  that 
the  property  is  deteriorating  in  value 
and  that  large  expense  is  being  in- 
curred in  maintaining  and  repairing 
the  property;  and  in  such  case  will 
order  a  sale  of  the  property,  and  after 
a  conflrmation  of  the  sale  require  the 
receiver  to  pay  the  amount  in  his 
hands  to  the  plaintiff.  Toby  v.  Oregon 
Pacific  R.  Co.  98  Cal.  490. 

A  receiver  may  be  appointed  after 
the  rendition  of  a  decree  where  oc- 
currences arise  which  threaten  the  ef- 
fectiveness of  such  decree.  Chicago 
&  8.  E.  R.  Co.  V.  St.  Clair  (Ind.)  42 
N.  E.  225. 

The  supreme  court  of  the  United 
States  will  not  appoint  a  receiver  in  a 
case  on  appeal  to  that  court,  where 
no  irregularities  in  the  sale  are  shown, 
and  the  decree  for  s^le  was  by  con- 
sent, and  the  property  is  in  the  hands 
of  the  purchaser.  Pacific  R.  Co.  v. 
Eetchum,  95  U.  S.  1,  24  L.  ed.  347. 

A  receiver  of  specific  real  estate 
cannot  be  appointed  pending  an  ap- 
peal from  a  judgment  setting  aside 
the  probate  of  a  will,  under  N.  Y. 
Code  Civ.  Proc.  §  713,  authorizing 
the  appointment  of  a  receiver  after 
final  judgment  to  preserve,  pending 
an  appeal,  the  property  which  is  the 
"subject"  of  the  action.  Johnson'  v. 
Cochrane,  91  Hun,  163.  36  N.  Y.  Supp. 
287. 


36 


RECEIVERSHIPS. 


shall  be  a  suit  pending  in  which  the  application  is  made ;  other- 
wise the  order  appointing  will  be  void.' 


^Ex  parte  Whitfield,  2  Atk.  315; 
Anoii.  1  Atk.  489,  578  ;  Ex  parte  Peil- 
lon,  2  Thomson  (Nova  Scotia)  405; 
Young  v.  Wright,  8  P.  R.  (New  Bruns- 
wick) 198;  Harwell  v.  Potts,  80  Ala. 
70;  Croicder  v.  Moone,  52  Ala.  220;  Ouy 
V.  Doak,  47  Kan.  236;  MercJiants  &  M. 
Nat.  Bank  v.  Kent,  43  Mich.  292. 
Nor,  does  the  subsequent  filing  of  a 
bill  validate  the  appointment.  Har- 
weli  V.  Potts,  ante  ;  Oold  Hunter  Min. 
&  S.  Co.  V.  Holleman,  2  Idaho,  839; 
Jones  v.Schall,  45  Mich.  379;  Hardy 
V.  McClellan,  53  Miss.  507. 

Courts  have  no  power  to  appoint  a 
receiver  except  in  a  suit  pending  un- 
less in  cases  of  idiots,  lunatics  and  in- 
fants. Jones  V.  Bank  of  Leadville,  10 
Col.  464;  Davis  v.  Flagstaff  S.  V.  Co. 
2  Utah,  91;  Hardy  v.  McClellan,  53 
Miss.  507. 

As  we  have  already  seen,  §  5,  T[  (d), 
the  defendant  must  have  notice  of  the 
application.  See  also  as  to  notice  the 
following  cases: 

Appearance  by  defendant  in  an  ac- 
tion solely  for  the  appointment  of  a 
receiver  does  not  authorize  an  appoint- 
ment without  notice  at  chambers,  un- 
der Ind.  Rev.  Stat.  1894.  §  1244,  pro- 
viding that  receivers  shall  not  be 
appointed  in  term  or  vacation  until 
the  adverse  party  shall  have  appeared 
and  had  reasonable  notice  of  the  ap- 
plication, although  the  appointment 
might  be  made  in  open  court.  Win 
chaster  Electric  Light  Co.  v.  Gordon 
(Ind.)  42  N.  E.  914. 

Sulficient  cause  within  the  meaning 
of  lud.  Rev.  Stat.  1894,  §  1244,  for- 
bidding the  appointment  of  a  receiver 
without  notice  to  the  adverse  party, 
except  upon  sufficient  cause  shown  by 
aflSdavit,  is  not  shown  where  it  af- 
firmatively appears  that  notice  could 
easily  have  been  given,  and  it  does  not 


appear,  either  by  aflBdavit  or  by  veri- 
fied complaint,  that  irreparable  oi 
other  damage  would  have  resulted 
from  giving  the  same.  Sullivan  Elec- 
tric Light  &  P.  Co.  v.  Blue  (Ind.)  41 
N.  E.  805. 

A  liberal  construction  will  be  given 
to  a  complaint  in  determining  its  suf- 
ficiency so  far  as  it  relates  to  the  ap- 
pointment of  a  temporary  receiver 
pending  the  action,  but  it  must  state  a 
cause  for  such  appointment ;  and  if 
the  application  is  made  without  no- 
tice, the  cause  for  an  appointment 
without  notice  must  appear  either  in 
the  verified  complaint  or  by  afiidavit, 
under  Ind.  Rev.  Stat.  1894.  §  1244, 
providing  that  a  receiver  shall  not  be 
appointed  without  notice  of  the  ap- 
plication to  the  adverse  party,  except 
upon  sufficient  cause  shown  by  affi- 
davit. Sullivan  Electric  Light  &  P. 
Co.  V.  Blue  (Ind.)  41  N.  E.  805. 

A  mere  interlocutory  application 
for  a  receiver  pending  suit  is  not 
within  the  provision  of  Alabama 
chancery  practice  rule  77,  requiring  a 
note  of  submission  for  the  hearing. 
Jackson  v.  Hooper  (Ala.)  18  So.  254. 

A  new  receiver  may  be  appointed 
without  notice  to  an  intervening  pe- 
titioner, where  there  is  nothing  to 
show  unfitness  or  incompetency, 
of  the  person  selected.  Fowler  v.  Jar- 
vis-Couklin  M.  T.  Co.  2  Am.  &  Eng. 
Corp.  Cas.  N.  S.  391. 

The  ex  parte  appointment  of  a  re- 
ceiver of  a  corporation  is  void.  People, 
etc.  V.  Judge,  etc.  31  Mich.  456. 

The  appointment  without  notice  is 
unjustifiable  except  where  it  clearly 
appears  that  irreparable  injury  would 
be  done,  and  in  such  case  a  temporary 
injunction  will  usually  be  sufficient. 
Fischer  v.  Super.  Ct.  2  Am.  &  Eng. 
Corp.  Cas.  N.  S.  339. 


MATTERS  RELATING  TO  THE  APPOINTMENT.  37 

To  the  above  rale  there  is  an  exception  where  a  matter  is  pend- 
ing in  the  probate  court  to  set  aside  a  will,  and  thei-e  appears  to 
be  no  one  who  has  a  legal  right  to  deal  with  the  testator's  prop- 
erty.' At  one  time  in  Ireland  it  was  the  practice  of  the  chancery 
court  in  certain  specified  cases  to  appoint  receivers  where  no  bill 
was  pending,  but  this  exceptional  practice  grew  out  of  the  statute 
known  as  4  &  5  Wm.  lY  chap.  78,  §  T ;  5  &  6  Wm.  lY  c.  55,  §  31. 

§  14.  Rules  governing  appointment;  general  principles. 

Courts  of  chancery,  and  courts  exercising  chancery  jurisdic- 
tion, when  called  upon  to  exercise  the  extraordinary  power  of 
appointing  a  receiver  and  thus  wresting  from  a  person  the  pos- 
session of  property  in  advance  of  a  judicial  determination  of  the 
conflicting  interests  therein,  or  adjudication  of  the  rights  of  claim- 
ants thereto,  should  be  governed  by  certain  well  defined  rules. 
These  by  long  usage  and  due  regard  for  the  inherent  rights  of 
persons,  in  property,  have  become  universal  and  everywhere  rec- 
ognized and  respected.  Chancery  jurisdiction,  while  flexible  in 
its  nature  and  adjusting  itself  to  meet  the  various  conditions  that 
arise  in  the  administration  of  justice,  and  affording  a  remedy 
therefor,  and  while  it  is  not  enslaved  to  rules  and  precedents,  as 
at  common  law,  yet  in  the  very  nature  of  things  must  take  cog- 
nizance of  certain  established  principles,  which  have  been  deemed 
essential  to  the  due  and  proper  administration  of  justice  and 
which  conduce  to  the  safety  and  preservation  of  the  rights  of 
litigants,  and  be  governed  by  them,  at  least  in  spirit.  Otherwise 
it  would  be  possible  for  the  chancellor  to  become  a  veritable 
tj^rant.  No  field  of  chancery  jurisdiction  calls  for  a  more  zealous 
recognition  of  these  rules  and  underlying  fundamental  principles 
than  that  of  receiverships. 

§  15.  Grounds  upon  which  jurisdiction  is  entertained. 

The  grounds  upon  which  the  court  is  usually  asked  to  exercise 
its  jurisdiction,  and  appoint  a  receiver  are  few  in  number  and, 
stated  in  general  terms,  are  as  follows : 

^Grinastonv.  Turner,  22  L.  T.  N.  S.        6  S.  C.  R.  Eq.  (New  So.  Wales)  84; 
292;  Parkin  v.  Seddons,  16  L.  R.  Eq.        Be  Leeming,  20  L.  J.  N.  S.  Ch.  550. 
Cas.  34,  42  L.  J.  Ch.  470;  Re  Bowman, 


/u 


38  RECEIVERSHIPS. 

(a)  Preservation  of  property. 
The  power  to  ap})oint  receivers  is,  in  all  cases,  exercised  with 
great  caution.  There  must  be  a  ]e<;al  or  equitable  right  reason- 
ably clear  and  free  from  doubt,  attended  with  danger  of  loss. 
The  preservation  of  the  subject  of  the  controversy  for  the  benefit 
of  the  party  who  will  ultimately  be  decreed  to  have  the  right 
thereto  is  the  object  of  committing  it  to  the  custody  of  the  re- 
ceiver.' The  proper  caution  having  been  exercised  the  appoint- 
ment may  be  an  efficient  means  of  securing  a  protection  to  the 
parties  interested  which,  otherwise,  owing  to  the  delays  incident 
to  protracted  litigation,  would  be  wholly  lost,  or  at  least  seriously 
impaired.  Proper  caution  not  having  been  exercised  property 
may  be  illegally  taken  from  one  rightfully  in  possession,  and  his 
property  interests  sacrificed  without  any  relief  whatever.  In  the 
one  case  the  court  is  a  shield  and  protection ;  in  the  other  it  is  an 
engine  of  destruction.  There  is  probably  no  other  position  in 
the  field  of  remedial  jurisprudence  requiring  more  scrutinizing 
care  on  the  part  of  the  chancellor  than  that  now  under  considera- 
tion. This  is  all  the  more  urgent  from  the  fact  that  the  ultimate 
rights  of  the  parties  must  be  prejudged,  to  some  extent,  from  a 
partial  examination  of  the  circumstances  disclosed  by  the  plead- 
ings and  affidavits,  often  drawn  by  skillful  lawyers,  from  state- 
ment more  or  less  colored  by  interested  parties. 

^Fort  Payne  Furnace  Co.   v.   Fort  ordinarily  no  indemnifying  bonds  are 

Payne  Coal   &   I.   Co.   96    Ala.   472;  required,  and  the  consequences  that 

Hngliesv.  Haichett,  55  Ala..  631;  Bandle  may  follow  from  wresting  from  the 

V.  Carter,  62  Ala.  95.  defendant    of  the    property    in  liti- 

In  actions  at  law  property  will  not  gation,  are  such  that  the  granting  of 

be  taken  from  a  party  in  possession,  a  receiver  should,  in  all  cases,  be  at- 

claiming  in  good  faith  the  right  to  it,  tended  with  great  care  and   circum- 

without  first  exacting  from   him  at  spection.     Briarfield  Iron  Works    v. 

whose  suit  it  is  done  ample  security  Foster,  54  Ala.  622;  Fort  Payne  Fur- 

for  the   protection  of  his  adversary  nace  Co.  v.  Fort  Payne  Coal  &  I.  Go. 

against  injury.     In  actions  of  detinue  96  Ala.  472. 

and   attachment  for   the    seizure  of  The  appointment  of  a  receiver  is 

property  an  adequate  bond  with  good  unnecessary  where  the  property  is  a 

sureties  are  required  to  indemnify  the  decree  of  court,  of  which  the  receiver 

defendant  against  loss.     Injunctions  could  not  take  possession,    it   being 

and  equitable  attachments  are  allowed  virtually  in  the  hands  of  the  court, 

only  on  the  same  conditions.     In  ac-  Scruggs  v.   Memphis  &  C.  R.  Co.  108 

tions  for  the  appointment  of  receivers  U.  S.  5368,  27  L.  ed.  756. 


MATTERS  RELATING  TO  THE  APPOINTMENT.      39 

(b)  Danger  of  loss. 
Perhaps  there  is  no  other  single  ground  upon  which  the  ap- 
pointment of  a  receiver  is  based,  more  often  resorted  to,  and  for 
which  the  appointment  results  in  more  salutary  effects  than  that 
of  loss  or  danger  to  the  parties  in  interest,  and  especially  to  the 
plaintiff  who  by  his  action  puts  the  machinery  of  the  court  into 
action.  Where  the  fund  or  property  constituting  the  subject  of 
contention  is  of  such  nature  as  to  be  subject  to  waste,  deteriora- 
tion, or  serious  injury  if  left  in  the  possession  of  the  defend- 
ant ;  or  where  the  party  in  possession  is  guilty  of  careless 
management,  or  wantonness ;  or  where  by  reason  of  improper 
care  and  attention  from  any  one  the  property  is  liable  to  be  lost 
or  damaged  from  any  cause,  the  court  in  the  exercise  of  its  un- 
•doubted  right  will,  by  its  receiver,  take  the  property  or  fund  into 
possession,  and  preserve  the  same  until  sucli  time  as  the  riglits 
■of  the  litigants  are  determined.  It  not  unf  requently  happens  that 
property  and  assets,  are  charged  with  the  payment  of  debts,  and 
equitably  belong  to  creditors  who,  by  reason  of  inadequacy  of 
common  law  remedies,  or  otherwise,  are  not  afforded  complete 
protection,  and  are  in  danger  of  losing  the  benefit  of  the  security 
to  which  in  equity  they  are  entitled,  and  in  all  such  cases  a  re- 
ceiver is  proper.'     Sometimes  the  plaintiff  may  have  a  lien,  or 

^ParJchurst  v.  Kinsman,  2  Blatchf.  may  be  irreparable.     Bandle  v.  Car- 

78;  Kennedy  v.  St.  Paul  &  P.  R.  Co.  2  ier,  62  Ala.  95. 

Dill.  448;  Orton  v.  Madden,  75  Ga.  83;  On  a  bill  filed  by  a  stockholder  of 

Harrup  v.  Winslet,  37  Ga.   655;  Cor-  a  company  against  a  director,  to  take 

coran  v.  Boll,  35   Cal.  476;  Poicell  v.  charge  of  moneys  alleged  to    have 

Quinn,  49  Ga.  523;  VosJiell  v.  Hynson,  been  improperly  received  and  retained 

26  Md.    83;  Haight  v.  Burr,    19  Md.  by  such  director,  no  apprehension  of 

130;  Thompson  v.  Diffenderfer,  1  Md.  loss  being  alleged  in  the  bill,  and  the 

Ch.  489;TFes^v.  Chasten,  12  Fla.  315;  answer  alleging  that  the  money  was 

Baker  v.  Backus,  32  III.  79;  Fort  Payne  loaned  to  the  director  by  the  board  of 

Furnace  Co.  v.  Fort  Payne  Coal  <&  I.  directors,  a  receiver  will  be  refused. 

€o.  96  Ala.  472;  Hughes  v.  Eatchett,  55  Eager  v,  Stevens,  6  N.  J.  Eq.  374. 

Ala.  631;    Peck  v.  Trimsaran,    Coal,  A  fund  will  not  be  taken  from  one 

Iron  cfe  8.  Co.  L.  R.  2  Ch.  Div.  115.  entitled  to  its  custody  and  transferred 

Although  a  court  of  equity  has  ju-  to  a  receiver,  unless  there  is  imminent 

risdiction  to  appoint  a  receiver  to  pro-  danger  of  loss.     Rheinstein  v.  Bixby, 

tect  and  take  the  administration  of  92  N.  C.  307;  Clark  v.  Dew,  1  Russ. 

the  assets  into  its  own  hands,  it  will  &  M.  103. 

not  exercise  this  jurisdiction   unless  In  an  action  for  an  account  and  for 

there  is  manifest  danger  of  loss  which  the    cancellation    of    a    deed    under 


40  RECEIVERSHIPS. 

an  equitable  claim  to  the  property,  or  other  interest  therein,  and 
in  either  case  the  right  to  a  receiver  is  enforced  where  loss  is 
imminent. 

It  will  be  seen  that  the  danger  of  loss  here  spoken  of  may  be 
occasioned  by  the  peculiar  nature  of  the  subject-matter  of  the 
litigation  itself,  or  by  reason  of  the  acts  or  conduct  of  the  person 
in  custody  or  possession.  It  may  also  result  from  the  insolvency 
or  bankruptcy  of  the  defendant  in  possession  and  his  inability  to 
financially  respond  for  any  damage  or  loss  of  the  property  or 
funds.  It  will  not  be  availing,  however,  if  the  threatened  dan- 
ger is  remote,  or  if  the  danger  is  past.' 

(c)  Fjbaud. 
Another  ground  upon  which  the  court  is  frequently  asked  to 
intercede  and  appoint  a  receiver  is  fraud ;  and  the  fraud  contem- 
plated in  this  connection  may  be  consummated  fraud,  or  contem- 
plated fraud.  Courts  of  equity  are  peculiarly  fitted  for  the 
detection  of  fraud  and  restoring  the  parties  to  their  rights,  and 
as  an  efficient  means  of  such  restoration  a  receiver  is  most  usually 
appointed  in  such  cases."     The  allegations  of  fraud  must  be  spe- 

■which  defendant  claims  to  be  the  pointed  of  the  tolls  of  a  bridge,  see 
owner  of  the  land  which  includes  a  Covington  Drawbridge  Co.  v.  SJiepherd, 
mine,  where  there  is  some  danger  of  62  U.  S.  21  How.  112,  16  L.  ed.  38. 
loss  of  the  tolls  received  f rom  operat-  ^  Kean  v.  Colt,  5  N.  J.  Eq.  365; 
ing  the  mine,  an  order  taking  the  Beecher  v.  Binniger,  7  Blatchf.  170. 
operation  of  the  mine  from  the  de-  The  court  in  Mays  v.  Bose,  Freem, 
fendant  and  placing  it  exclusively  un-  Ch.  (Miss.)  703,  say  the  danger  of  loss 
der  a  receiver  should  not  be  granted  may  arise  "  from  neglect,  waste,  mis- 
where  a  bond,  properly  secured,  to  conduct  or  insolvency  of  the  def end- 
account  for  and   pay  over  the  pro-  ant." 

ceeds  as  the  court  might  thereafter  ^Redmond  v.  Enfield  Mfg.  Co.   13 

direct,  would  furnish  sufficient  secur-  Abb.  Pr.  N.  S.  332;  Powell  v.  Quinn, 

ity.     Stith  v.  Jones,  101  N.  C.  360.  49  Ga.  523;  Baker  v.  Backus,  32  111. 

Pending  the  litigation,  unless  there  79;   State  v.  Delafield,  8  Paige,  527; 

is  some  evidence  that  the  property  is  Thompson  v.  Diffenderfer,  1  Md.  Ch. 

in  danger  or  there  is  clear  proof  of  489;    Uaight  v.    Burr,    19  Md.    130; 

fraud  in  obtaining  possession  thereof,  Vosliell  v.  Hynson,  26  Md.  83;  Webb  v. 

a  receiver  will  be  refused.     \Yillis  v.  First  Baptist  Church  Trustees,  90  Ky. 

Codies,  2  Edw.  Ch.  281.  117;  Northern  P.  B.  Co.  v.  St.  Paul, 

See   also,    Bathbotie  v.  Parkersburg  M.  &  M.  R.   Co.  47  Fed.   Rep.   536, 

Gas  Co.  31  W.  Va.  798;  Mays  v.  Rose,  affirmed  in  4  U.  S.  App.  149;  Heard 

Freem.  Ch.  (Mi.ss.)  703.  v.    Murray,   93    Ala.    127;    Siminons 

As  to  when  a  receiver  may  be  ap-  Hardware  Co.  v.  Waibel,  1  S.  D.  488, 


MATTERS  RELATING  TO  THE  APPOINTMENT. 


41 


cific  and  not  vague  or  too  general,*  and  the  participation  of  the 
plaintiff  in  the  fraud  is  fatal  to  the  application,"  A  concise  state- 
ment of  the  principles  governing  the  appointment  of  receivers 
has  been  given  as  follows :  The  plaintiff  must  show  (1)  that  he 
has  a  clear  right  to  the  property  itself,  or  (2)  that  he  has  some 
lien  upon  it,  or  (3)  that  the  property  constitutes  a  special  fund  to 
which  he  has  a  right  to  resort  for  the  satisfaction  of  his  claim. 
In  addition  to  this  he  must  show  (1)  that  the  possession  of  the 
property  was  obtained  by  the  defendant  by  fraud,  or,  (2)  that 
the  property  itself,  or  the  income  arising  from  it  is  in  danger  of 
loss."   ^ 

(d)  Insolvency. 

Another  ground  upon  which  the  courts  base  the  appointment 
of  a  receiver  in  certain  cases  is  that  of  insolvency  of  the  defend- 
ant. This  basis  for  the  action  of  the  court  most  usually  arises  in 
cases  of  insolvent  banks,*  corporations,"  mortgagors,*  fraudulent 


11  L.  R.  A.  267;  Meridian  News  & 
Pub.  Co.  V.  Diem  &  W.  Paper  Co.  70 
Miss.  695;  Buckley  v.  Baldwin,  69 
Miss.  804;  Re  Lewis'  Petition,  52  Kan. 
660;  Ellett  v.  Newman,  92  N.  C.  519; 
Nichols  V.  Perry  Patent  Arms  Co.  UN. 
J.  Eq.  126;  Micklethwaite  v.  Ehoades, 
4  Sandf.  Ch.  434;  Ounn  v.  Blair,  9 
Wis.  352;  West  v.  Chasten,  12  Fla. 
315;  Lloyd  v.  Pasdngham,  16  Yes.  Jr. 
59;  St.  Louis  &  S.  Coal  Min.  Co.  v. 
Edwards,  103  111.  472;  Stihcell  v.  Wil- 
liams, 6  Madd.  49,  affirmed  in  Jac. 
280;  Hugnonin  v.  Boseley,  13  Ves.  Jr. 
105;  Mitchell  v.  Barnes,  22  Hun,  194; 
Towle  V.  American  Bldg.  &  Invest.  Co. 
60  Fed.  Rep.  131. 

^  Blondheim  v.  Moore,  11  Md.  365; 
Oakley  v.  Patterson  Bank,  2  N.  J.  Eq. 
173. 

^  Eager  v.  Stevens,  6  N.  J.  Eq.  374; 
Hyde  Park  Gas  Co.  v.  Kerber,  5  111. 
App.  132. 

^  Mays  V.  Rose,  Freera.  Ch.  (Miss.) 
V03. 


^Eill  V.  Western  &  A.  R.  Co.  86  Ga. 
284;  Atty.  Oen.  v.  Bank  of  Columbia, 
1  Paige,  511. 

^Middlesex  County  Bd.  of  Chosen 
Freeholders  v.  State  Bank  at  New 
Brunswick,  30  N.  J.  Eq.  311;  North 
Carolina  S.  G.  C.  B.  Co.  v.  Drew,  3 
Woods,  691;  Buck  v.  Piedmont  &  A. 
L.  Ins.  Co.  4  Fed.  Rep.  849;  White- 
water Valley  Canal  Co.  v.  Vallette,  62 
U.  S.  21  How.  414,  16  L.  ed.  154; 
Nichols  V.  Perry  Patent  Arms  Co.  11 
N.  J.  Eq.  126;  Evans  v.  Coventry,  5 
DeG.  M.  &  G.  911. 

« Merritt  v.  Oibson,  129  Ind.  155,  15 
L.  R.  A.  277;  Hart  v.  Eenpess,  89  Ga. 
87;  McMahon  v.  North  Kent  Ironworks 
Co.  [1891]  2  Ch.  148;  Reynolds  v.  Quick, 
128  Ind.  316;  Thorn  v.  Nine  Reefs,  etc. 
67  L.  T.  93;  Brown  v.  Chesapeake  & 
0.  Canal  Co.  73  Md.  567;  Quincy  v. 
Cheeseman,  4  Sandf.  Ch.  405;  Ulll  v. 
Robcrtxon,  24  Miss.  368.  See  further 
Mortgages,  Insolvency 


42 


RECEIVERSHIPS, 


j-)nrcliasers,'  trustees,'  partners,'  judf^ment  debtors,*  executors  and 
administrators/  joint  tenants,'  dower  matters.'  But  there  must 
be  coupled  with  the  allegation  of  insolvency,  also  the  additional 
allegations  showing  plaintitf's  right  of  recovery  or  probability  of 
recovery,  and  that  such  recovery  will  be  wholly  lost  or  substan- 
tially impaired  by  reason  of  the  insolvency/  As  in  the  case  of 
fraud,  so  also  in  matters  of  insolvency  the  allegations  must  be 
specific."  Insolvency  as  a  ground  of  appointment  is  predicated 
upon  the  general  doctrine  of  probable  loss. 


'  Flagler  v.  Blunt,  33  K  J.  Eq.  518; 
Tufts  V.  Little,  56  Ga.  139;  Ounby  v. 
Thompson,  56  Ga.  316;  Chappell  v. 
Boyd,  56  Ga.  578;  Pendleton  Bros. 
V.  Johnson,  85  Ga.  840;  Ahlhauser  v. 
Doud,  74  Wis.  400. 

«  Bowling  v.  Scales,  2  Tenn.  Ch.  63. 

'Bard  v.  Bingham,  54  Ala.  463; 
Randall  v.  Morrell,  17  N.  J.  Eq.  343; 
Barnard  v.  Davis,  54  Ala.  565;  Peo- 
ple's Bank  v.  Fancher,  21  N.Y.  Supp. 
545;  Boyce  v.  Burchard,  21  Ga.  74; 
WHlinmson  v.  Wilson,  1  Bland,  Ch. 
418;  Heathcot  v.  Bavenscroft,  6  N.  J. 
Eq.  113. 

That  a  former  trader  is  engaged  in 
collecting  what  became  due  him  while 
in  business,  and  to  the  bank  of  which 
he  is  president  after  the  sale  of  his 
business  and  stock  of  goods,  does  not 
make  him  a  trader  within  Ga.  Code, 
§§  3149a  et  seq.,  providing  for  the  ap- 
pointment of  a  receiver  for  an  insolv- 
ent trader  on  a  bill  filed  by  his 
creditors.  Mercer  v.  Houston  Guano  & 
W.  Co.  (Ga.)  123  S.  E.  638. 

A  suit  by  a  corporation  for  the  pur- 
pose of  obtaining  an  injunction  does 
not  prevent  another  court  from  ap- 
pointing a  receiver  on  the  ground  of 
insolvency.  San  Antonio,  etc.  O.  D. 
R.  Co.  v.  Davis,  2  Am.  &  Eng.  Corp. 
Cas.  N.  S.  374. 

*  Shannon  v.  Hanks,  88  Va.  338; 
Bunlap  v.  Hedges,  35  W.  Va.  287; 
McCord  v.  Weil,  33  Neb.  868;  Oyden 
V.  Chalfant,  32  W.  Va.  559. 


^  Johns  V.  Johns,  23  Ga.  31;  Jenkins 
V.  Jenkins,  1  Paige,  243;  Williams  v. 
Jenkins,  11  Ga.  595. 

^Street  v.  Anderton,  4  Bro.  C.  C. 
414. 

Sandford  v.  Ballard,  30  Beav.  109; 
Bryan  v.  Moring,  94  N.  C.  699. 

'  Chase's  Case,  1  Bland,  Ch.  206. 

*  Gregory  v.  Gregory,  1  Jones  &  S. 
86;  Chase's  Case,  1  Bland,  Ch.  206; 
McNair  v.  Pope,  96  N.  C.  502;  Rol- 
lins V.  Henry,  77  N.  C.  467;  Law- 
rence Iron  Works  Co.  v.  Rockbridge  Co. 
All  Fed.  Rep.  755;  Owen  v.  Homan, 
4  H.  L.  Cas.  997,  3  Macn.  &  G.  378; 
Commissioners,  etc.  v.  Lockhart,  Ir. 
Rep.  3  Eq.  515;  Cofer  v.  Echerson,  6 
Iowa,  503;  Cox  v.  Peters,  13  N.  J.  Eq. 
39. 

»  West  v.  Swan,  3  Edw.  Ch.  420. 

See  further  on  subject  of  insolvency, 
Corporations  and  Railways. 

Where  a  bill  was  filed  by  a  pur- 
chaser at  a  sheriff's  sale,  alleging  ir- 
reparable mischief  from  defendant's 
insolvency  and  for  injunction,  and  it 
appeared  that  the  defendant  entered 
by  virtue  of  a  lease  made  before  the 
sheriff's  sale,  a  receiver  was  not  ap- 
pointed, it  being  inconsistent  with  the 
prayer  of  the  bill.  Burns  v.  Camp- 
bell, 3  Jones  Eq.  410. 

A  decree  appointing  a  receiver  need 
not  contain  a  finding  of  insolvency, 
where  the  application  forthe  appoint- 
ment alleges  insolvency  and  the  an- 
swer admits  it.     Reliance  Lumber  Co. 


MATTERS  RELATING  TO  THE  APPOINTMENT. 


43 


(e)  Plaintiff's  title. 

It  is  also  a  well  established  rule  in  the  appointment  of  receiv- 
ers where  tlie  matter  of  title  is  involved  in  the  issue  that  the 
plaintifE  b}'  his  bill,  petition  or  other  showing,  must  establish  in 
himself  a  strong  presumptive  title,'  or  a  strong  presumption 
against  the  defendant's  title,''  and  there  must  be  coupled  with 
this  showing  a  danger  of  loss  or  injury,  or  insolvency/  And 
where  it  appears  that  the  title  to  the  property  is  in  dispute  and 
this  is  an  issue  in  the  case,  and  the  rights  of  all  parties  therein 
are  threatened,  or  where  the  property  is  in  Tnedio,  a  receiver 
should  be  appointed/  But  where  the  case  involves  simply  a  dry 
legal  title,  a  court  of  equity  will  refuse  to  interfere  and  leaves 
the  plaintifE  to  his  remedy  at  law,^  and  this  too  though  the  prop- 
erty may  be  vacant/     The  rule  has  sometimes  been  stated  as  fol- 


V.  Brown,  4  Ind.  App.  92;  Turnhull 
V.  Prentiss  Lumber  Co.  55  Mich.  397. 
^Durant  v.  Crowell,  97  N.  C.  367; 
McNairv.  Pope,  96  N.  C.  502;  Bryan  v. 
Mormg,  94  N.  C.  694;  Twitty  v.  Logan, 
80  N.  C.  69;  Leveson  v.  Elson,  88  N.  C. 
182;  Horton  v.  White,  84  N.  C.  297;  Ash- 
nrst  V.  Lehman,  86  Ala.  370;  Emerson 
and  Wall' s  Appeal,  95  Pa.  250;  Schlect's 
Appeal,  60  Pa.  172;  Chicago  &  A.  Oil 
&  Min.  Co.  V.  United  States  Petroleum 
Co.  57  Pa.  83;  Sobernheimer\.  WJueler, 
45  N.  J.  Eq.  614;  Beecher  v.  Binnin- 
ger,  7  Blatchf.  170;  Steele  v.  Aspy,  128 
Ind.  367;  Vause  v.  Woods,  46  Miss. 
120;  Norris  v.  Lake,  89  Va.  513;  El- 
wood  V.  Greenleaf  First  Is  at.  Bank,  41 
Kan.  475;  Cole  v.  O'Neill,  3  Md.  Cli. 
174;  Clark  v.  Ridgely,  1  Md.  Ch.  70; 
Mapes  V.  Scott,  4  111.  App.  268;  Cofer 
V.  Echerson,  6  Iowa,  502;  Chase's 
Case,  1  Bland.  Ch.  206;  Smith  v.  Wells, 
20  How.  Pr.  158;  Willis  v.  Corlies,  2 
Edw.  Ch.  287;  Gregory  v.  Gregory,  1 
Jones  &  S.  1;  Lloyd  v.  Passingham,  16 
Ves.  Jr.  59;  Bambrigge  v.  Boddeley,  3 
Macn.  &  G.  413;  Owen  v.  Homan,  3 
MacD.  »fc  G.  378,  4  H.  L.  R.  Cas.  997; 
Lancashire  v.  Lancashire,  9  Beav.  120; 


Talbot  V.  Hope  Scott,  4  Kay  &  J.  96; 
Parkin  v.  Seddons,  L.  R.  16  Eq.  34; 
De  Walt  V.  Einard,  19  S.  C.  286. 

-^Stilioell  V.  Williams,  6  Madd.  49; 
Eugnonin  v.  Bosely,  13  Ves.  Jr.  105; 
Mapes  V.  Scott,  4  111.  App.  268. 

^  Cases  under  note  1  above. 

*  Graham  v.  Fuller  Electrical  Co. 
75  Ga.  878;  United  States  v.  Church  of 
Jesus  Christ  of  L.  D.  8.  5  Utah,  361 ; 
Hlaicacek  v.  Bohman,  51  Wis.  92; 
Owen  V.  Homan,  4  H.  L.  Cas.  997,  17 
Jur.  861;  Mills  v.  Pittman,  1  Paige, 
490;  Chamberlain  v.  Marble,  24  Miss. 
586;  Berry  v.  Eeen,  51  L.  J.  Ch.  912. 
See  Rollins  v.  Henry,  77  N.  C.  467. 

^ Mapes  V.  Scott,  4  111.  App.  268; 
Lenox  v.  Notrebe,  Hempst.  225. 

«  Carrow  v.  Ferrior,  dl  L.  J.  Ch.  569, 
L.  R.  3  Ch.  719;  Talboi  v.  Hope  Scott,  4 
Kay  &  J.  96,  4  Jur.  N.  «.  1172,  27  L.  J. 
Ch,  273;  Lancashire  v.  Lancashire,  9 
Beav.  120,  15  L.  J.  Ch.  N.  S.  54;  Mor- 
daunt  V.  Hooper,  Ambl.  311;  Dobbin 
V.  Adams,  8  Ir.  Eq.  157;  Clark  v.  Dew, 

1  Russ.  &  M.  103;  Knight  v.  Duplcssis, 

2  Ves.  Sr.  360;  Toldervy  v.  Colt,  1 
Young  &  C.  621,  5  L.  J.  Exch.  Eq. 
25. 


44 


RECEIVERSHIPS. 


lows :  Where  the  issue  is  simply  a  question  of  title  between  the 
plaintiff  and  defendant  and  in  the  absence  of  fraud,  serious  injury 
or  imminent  danger  of  loss,  the  court  will  refuse  to  interfere  until 
the  plaintiff  has  lirst  established  in  a  common  law  proceeding  his 
legal  right.'  In  other  cases  the  general  rule  has  been  stated  that 
to  entitle  the  plaintiff  to  relief  he  must  show  a  reasonable  proba- 
bility of  recovery,  based  on  a  strong  title  in  himself,  and  this 
must  be  coupled  with  imminent  danger  of  loss,^  and  suit  be 
brought  within  a  reasonable  time.' 

(f)  Remedy  at  law. 

"Where  the  plaintiff  may  be  able  to  obtain  ample  redress  and 
protection  by  the  usual  course  of  legal  proceedings  a  court  of 
equity  will  not  appoint  a  receiver."  This  of  course  is  based  upon 
the  general  principle  of  equity  jurisprudence  that  a  court  of 
equity  refuses  to  lend  its  aid  and  grant  relief  where  the  common 
law  courts  can  furnish  adequate  remedy. 


'  See  cases  in  note  1,  p.  43 ;  also  Lhyd 
V.  Passingham,  16  Ves.  Jr.  59 ;  and  see 
specially  Talbot  v.  Hope  Scott,  4  Kay 
&  J.  96;  Davis  v.  Reams,  2  Lea,  649; 
Vause  V.  Woods,  46  Miss.  120;  Earl  of 
Fingal  v.  Blake,  2  Moll.  50;  SmitJi  v. 
Smith,  2  Younge  &  C.  351,  10  Hare 
Appx.  Lxxi;  Silver  v.  Bishop  of  Nor- 
wich, 3  Swanst.  112  n;  Pignoleh  v. 
BusJie,  28  Hows.  Pr.  9 ;  Eipp  v.  Hanna, 
2  Bland's  Ch.  26;  Harrup  v.  Winslet, 
37  Ga.  655;  West  v.  Chosten,  12  Fla. 
315;  Callanan  v.  Shaw,  19  Iowa,  183. 

*  See  note  1,  p.  43;  also  Mayo  v.  Ma- 
Phaul,  71  Ga.  758;  Fingal  v.  Blake.  2 
Moll.  78;  Lloyd  v.  Trimleston,  2  Moll. 
78;  Mordaunt  v.  Hooper,  Ambl.  311; 
Bainbrigge  v.  Baddeley,  3  Macn.  &  G. 
414;  Owen  v.  Homan,  3  Macn.  &  G. 
378;  Gofer  v.  Echerson,  6  Iowa,  502; 
Gregory  v.  Gregory,  1  Jones  &  S.  1; 
Chicago  &  A.  Oil  &  Min.  Co,  v.  United 
Stales  Petroleum  Co.  57  Pa.  83;  and 
see  a  clear  statement  of  the  doctrine 
of  the  text  by  Lord  Erskine  in  Hug- 


nonin  v.  Basely,  13  Ves.  Jr.  105;  and 
see  Lord  Truro  in  Bainbrigge  v.  Bad- 
deley, ante. 

^Skiimer's  Co.  v.  Irish  Soc.  1  Myl. 
&  C.  162,  Commissioners,  etc.  v.  Lock- 
hart,  Ir.  R.  3  Eq.  515. 

'^  Pearce  v.  Jennings,  94  Ala.  524; 
Pelzer  v.  Hughes,  27  S.  C.  408  (see  stat- 
ute); Baltimore  &  0.  Teleg.  Co.  v.  In- 
terstate Teleg.  Co.  54  Fed.  Rep.  50; 
Ellershank  v.  Russell,  6  Australian  L. 
T.  (Victoria)  140;  Manchester,  etc.  v. 
Parkinson,  L.  R.  22  Q.  B.  Div.  173,  58 
L.  J.  Q.  B.  262;  Parker  v.  Moore,  3 
Edw.  Ch.  234;  Minkler  v.  United  States 
Sheep  Co.  3  Am.  &  Eng.  Corp.  Cas. 
N.  S.  368. 

The  court  has  no  right  to  appoint  a 
receiver  merely  because  under  the  cir- 
cumstances of  the  case  it  would  be  a 
more  convenient  mode  of  obtaining 
satisfaction  of  a  judgment  than  the 
usual  modes  of  execution.  It  is  other- 
wise, however,  if  there  is  a  threatened 
fraudulent  conveyance  to  make  way 


MATTERS  RELATING  TO  THE  APPOINTMENT.      45 

§  16.  When  jurisdiction  not  entertained. 

Tliere  are  many  cases  which  are  not  susceptible  of  being  classi- 
fied where  courts  in  the  exercise  of  a  sound  judicial  discretion 
have  refused  to  appoint  a  receiver,  as  where  the  person  in  posses- 
sion of  the  fund  or  property  is  not  a  party  to  the  suit,  or  where 
he  claims  under  the  plaintiff;'  or  where  the  property  and  owner 
are  beyond  the  jurisdiction  of  the  court ;'  or  where  the  plaintiffs 
claims  are  mere  open  accounts,  no  liens  existing ;'  or  where  the 
plaintiff  is  a  trust  or  monopoly  engaged  in  the  conduct  of  busi- 
ness in  restraint  of  trade  ;*  or  where  the  receivership  is  sought  to 
be  extended  over  the  future  earnings  of  a  judgment  debtor  ;^  or 
over  a  pension  fund/  The  list  of  such  refusals  might  be  extended 
indefinitely,  but  most  of  such  cases  are  sui  generis  and  do  not  in- 
volve general  and  well  established  principles  and  will  not  be  con- 
sidered. 

§  17.  Effects  of  appointment. 

The  results  that  follow  the  appointment  of  a  receiver  are 
numerous.  Some  of  the  most  usual  may  be  enumerated  as  fol- 
lows : 

(a.)  By  the  appointment  and  the  taking  of  possession,  through 

with  the  debtor's  property.     Harris  v.  Ch.  (Mich.)  169;  Buckeye  Engine  Co. 

BeaucJuunp  [1894]  1  Q.  B.  801,  63  L.  v.  Donau  Brew.  Co.  47  Fed.  ilep.  6. 

J.  Q.  B.  480.  It  makes  no  difference  in  rule  that  the 

See  also  Carrow  v.  Ferrior,  L.  R.  3  common  law  proceeding  may  be  diffl- 

Ch.  App.  719;  Pfeiz  v.  Pfetz,  14  Md.  cult.   Cremen\.  .Saw^-e5,  8 Ir.  Eq.  153, 

376;   WinkUr  v.  Winkler,  40  111.  179  503. 

(Inj.);  Coughron  v.  Swift,  18  111.  414  See  also  note  2,  §  11. 

(Inj.);  Sherman  v.  Clark,  4  Nev.  138;  ^Mays  v.  Wherry,  3  Tenn.  ch.   34; 

Parmley  v.  Tenth  Ward  Bank,  3  Edw.  Levi  v.  Earrick,  13  Iowa,  344  ;   Vinr 

Ch.  395;  Corey  v.  Long.  43  How.  Pr.  cent  v.  Parker,  7  Paige,  65. 

497,  12  Abb.  Pr.  N.  S.  427;  Rice  v.  St.  ^Field  v.  Eipley,  20  How.  Pr.  26. 

Paul  d  P.  R.  Co.24:mQn.4Qi;S2jeights  ^Virginia  T.  &  C.  Steel  &  L  Co.  v. 

V.  Peters,  ^G'iW.AlQ;  Morrisons.  Buck-  Wilder,  88  Va.   942;  Carter  \.  High- 

ner,  Hempst.  442;   Sollory  v.  Leaver,  tower,  79  Tex.  135. 

L.  R.  9Eq.  22;  Thayer  v.  Swift,  Harr.  *  American  Biscuit  Co.  v.  Elotz,  44 

Ch.  (Mich.)  430;  Cassidy  v.  Meaeham,  Fed.  Rep.  721. 

3  Paige,  311 ;  Congden  v.  Lee,  3  Edw.  Hlohnes  v.   Millage  [1893]  1  Q.  B. 

Ch.  304;   Starr  v.  Rathbone,  1  Barb.  551  (unless  they  have  been  assigned). 

70;  Smith  Y.  Thompson,  Walk.  Ch.  1;  *  Lucas  v.  Harris,    L.  R.  18  Q.  B. 

Second   Ward  Bank  v.  Upmann,   12  Div.  127,  56  L.  J.  Q.  B.  15. 
Wis.  499;  Steward  v.  Stevens,   Harr. 


46 


KECEIVERSHIPS. 


its  receiver,  of  all  the  property  and  effects  of  the  defend- 
ant, the  court  secures  the  power  to  control,  at  its  discretion,  all 
controversies  affecting  the  property.  Otherwise  the  fruits  of  the 
receivership  would  necessarily  be  endangered,  if  not  entirely 
lost.'  Also  the  receiver,  as  a  rule,  is  empowered  to  prosecute  and 
defend,  under  the  direction  of  the  court,  all  pending  suits  and 
proceedings,  in  the  name  of  the  original  plaintiff  or  defendant.' 
After  the  property  has  passed  into  the  hands  of  a  receiver  the 
defendant  whose  property  is  thus  taken  will  not  be  permitted 
to  be  sued,  at  least  so  far  as  liability  growing  out  of  the  manage- 
ment of  the  receivership  property  is  concerned,"  except  in  some 


'The  property  in  the  receiver's  pos- 
session must  not  be  levied  on.  Wis- 
well  V.  Sampson,  55  U.  S.  14.  How. 
52,  14  L.  ed.  322;  Robinson  v.  Atlantic 
&  G.  W.  B.  Co.  66  Pa.  160;  Walling 
V.  Miller,  108  N.  Y.  173;  Thompson  v. 
McCleary,  159  Pa.  189;  Ellis  v.  Ver- 
non Ice,  L.  &  W.  Co.  86  Tex.  109; 
Rusxell  V.  Texas  &  P.  B.  Co.  68  Tex. 
646;  Edicards  v.  Norton,  55  Tex.  405; 
nor  distrained  for  rent  due;  Marshall 
V.  Lockett,  76  Ga.  289;  nor  taken  by 
force;  Ex  parte  Cochrane,  L.  R.  20  Eq. 
282;  Re  Day,  34  Wis.  638;  Atty.  Gen. 
V.  St.  Cross  Hospital,  18  Beav.  601;  nor 
interfered  with  by  ejectment  in  an- 
other court;  Potter  v.  Spa  Spring 
Brick  Co.  47  N.  J.  Eq.  442;  Fort  Wayne, 
M.  &.  C.  B.  Co.  V.  Mellett,  92  Ind, 
535;  nor  taken  for  taxes;  Be  Tyler, 
149  U.  S.  164,  37  L.  ed.  689.  See  also, 
Eowell  V.  Hough,  46  Kan.  152;  St. 
Joseph  &  D.  C.  B.  Co.  v.  Smith,  19 
Kan.  225;  Brown  v.  Carolina  C.  B.  Co. 
83  N.  C.  128;  Skinner  v.  Maxwell,  68 
N.  C.  400;  Noe  v.  Gibson,  7  Paige,  513. 
In  McOean  v.  Metroiwlitan  Elev.  B.  Co. 
133  N.  Y.  9,  the  court  say:  "No 
principle  has  been  more  f  requentJy  as- 
serted or  is  so  well  established  as  that 
where  a  court  of  equity  has  jurisdic- 
tion ovtr  a  cause  for  any  purpose,  it 
may  retain  the  cause  for  all  purposes 
and  proceed  to  a  final  determination 
of  all  the  matters  at  issue.     To  such 


an  extent  has  the  doctrine  been  carried 
that  it  has  been  declared  that  if  the 
controversy  contains  an  equitable 
feature,  or  requires  any  parely  equit- 
able relief  belonging  to  the  exclusive 
jurisdiction  of  equity,  or  pertaining 
to  the  concurrent  jurisdiction  of 
equity  and  law,  and  a  court  of  equity 
thus  acquires  a  partial  cognizance  of 
an  action,  it  may  go  to  a  complete  ad- 
judication and  establish  purely  legal 
rights  and  grant  legal  remedies  which 
would  otherwise  be  beyond  the  scope 
of  its  authority."  See  further  title  Re- 
ceiver's Possession.  But  the  court 
will  not  draw  to  itself  by  means  of  the 
receivership  jurisdiction  to  try  dis- 
puted titles  to  property  unless  the  cir- 
cumstances are  such  as  to  render  the 
common  law  remedies  inadequate  or 
for  some  reason  are  unfit  for  the  pur- 
poses of  the  particular  case.  Mer- 
chants &  M.  Nat.  Bank  v.  Kent,  43 
Mich.  292. 

'^Phoinix  Warehousing  Co.  v.  Badger, 
6  Hun,  293. 

^Hicks  V.  International  &  G.  N.  B. 
Co.  62  Tex.  38;  Byan  v.  Hays,  62  Tex. 
42;  Ohio  &  M.  B.  Co.  v.  Davis,  23 
Ind.  554;  Bell  v.  Indianapolis  C.  &  L. 
B.  Co.  53  Ind.  57;  Metz  v.  Buffalo,  G. 
&  P.  B.  Co.  58  N.  Y.  61 ;  Bogers  v. 
Mobile  &0.B.  Co.  12  Am.  &  Eng.  R. 
Cas.  442. 


MATTERS  RELATING  TO  THE  APPOINTMENT.  47 

cases  for  the  purpose  of  establishing  the  amount  due,  or  settling 
some  disputed  question  of  fact. 

(b)  The  appointment  of  a  receiver  removes  the  parties  in  pos- 
session of  property,  who  are  parties  to  the  suit,  from  the  custody 
and  control  thereof  and  pending  the  litigation  terminates  all  rights 
growing  out  of  such  possession.*  But,  as  we  have  seen  elsewhere, 
one  in  possession  under  o,  jyrhna  facie  title  cannot  be  deprived  of 
such  possession  by  a  receiver  at  the  suit  of  creditors  of  the  debtor 
unless  a  showing  is  made  of  danger  of  the  projjerty  being  lost, 
or  materially  injured,  or  that  the  sale  to  the  defendant  is  fraudu- 
lent, and  that  he  will  be  turned  out  of  possession  at  the  hearing," 
The  effect  of  the  appointment  of  a  receiver  is  to  vest  in  him  the 
title  to  the  personal  property,  choses  in  action  and  equitable  in- 
terests of  the  debtor,  over  which  the  receivership  extends  without 
a  formal  assignment.*  This  principle,  of  course,  has  particular 
application  to  creditor's  proceedings,  and  not  to  mortgage  fore- 
closures or  other  proceedings  relating  to  specific  property.  In 
some  cases  the  defendant  is  permitted  to  remain  in  possession 
pending  the  receivership  and  the  receivership  is  extended  to  the 
rents  and  profits  only. 

(c)  A  court  having  jurisdiction,  and  having  appointed  a  re- 
ceiver over  the  property  which  is  the  subject-matter  of  the  suit, 
and  the  receiver  having  taken  possession  of  such  property,  no 
other  court  of  co-ordinate  jurisdiction  can  interfere  with  the 
property,  or  entertain  complaints  against  the  receiver  or  remove 

^ Payne  v.  Baxter,  2  Tenn.  Ch.  517;  is  not  clear  and  where  the  ri|^ht  of 

Shaw  V.    Wright,    3  Ves.  Jr.  23;  Mc-  purchase  is  set  up.     Bydon  v.  Innes, 

Donnell  v.    White,  11  H.  L.  Gas.  570.  5  W.  W.  &  A.  B.  (Victoria  Eq.)  189; 

The  party  in  possession  is  bound  to  Sercomb  v.  Catlin,  128  111.  556. 
turn  over  to  the  receiver  all  goods  in  ^Tillinghast  v.   Champlin,  4  R.  I. 

his  possession  upon  demand   if    he  173;  Albany  City  Bank  v.  Schermer- 

knovrs  of  the  order  requiring  him  to  liorn,  Clark  Ch.  297;  Mann  v.  Pentz, 

do    so;   he  needs  no   official  notice.  2  Sandf.  Ch.  257;  Storm  v.    Waddell, 

Lewis  V.  Singleton,  61  Ga.  164.  2  Sandf.  Ch.  494;  Iddings  v.  Bruen, 

A  court  of  equity  may  call  in  the  as-  4  Sandf.  Ch.  223;   Wilson -v.  Allen,  ^ 

sets  of  the  estate  from  the  .personal  Barb.  542. 

representative,  and  place  them  in  a  As  to  the  necessity  of  a  formal  trans- 
receiver's  hands.  Davis  v.  Chainnan,  fer  of  real  estate  to  the  receiver,  see 
83  Va.  67.  Toung  v.  Clapp,  147  111.  176;   Wilson 

^Pelzer  v.  Hughes,  27  8.  C.  408.  v.  Wihon,  1  Barb.  Ch.  592;  and  see  § 

Nor  will  a  tenant  be  required  to  at-  22  1"  f,  note  3. 
torn  to  a  receiver  where  the  tenancy 


48 


RECEIVERSHIPS. 


iiim.'  The  ground  upon  which  this  doctrine  is  based  has  peculiar 
application  to  cases  where  a  receiver  is  appointed,  but  is  not  con- 
fined to  that  class  of  cases.  Practice  has  demonstrated  the 
reasonableness  of  the  rule  and  reason  suggests  the  propriety  of 
its  enforcement.  In  a  few  cases  there  has  been  a  departure  from 
the  doctrine,  to  some  extent,  but  usually  it  has  been  from  the 
lack  of  an  observance  of  the  proper  comity  between  state  and  fed- 
eral courts.  The  great  weight  of  authority,  however,  is  in  favor 
.of  the  rule. 

(d)  The  appointment  does  not  in  any  manner  change  the  title 
to  or  right  of  possession  of  the  property,  but  merely  places  in 
the  receiver  its  custody  for  the  benefit  of  the  party  ultimately 
found  to  be  entitled  to  it.''     The  receiver  is  a  trustee  for  all  parties 


'  Young  v.  Montgomery  &  E.  R.  Co. 
2  Woods,  606;  O'Mahoney  v.  Belmont, 
'62  N.  Y.  133 ;  Slate  v.  Jacksonville  P. 
&  M.  B.  Co.  15  Fla.  201 ;  Oest  v.  New 
Orleans,  St.  L.  &  G.  R.Co.  30 La.  Ann. 
pt.  I,  28;  Ellis  v.  Vernon  Ice,  L.  &  W. 
Co.  86  Tex.  109.  In  this  case  an 
officer  made  a  levy  before  the  appoint- 
ment of  a  receiver,  and  sold  the  prop- 
erty after  the  appointment.  Held,  the 
sale  was  void. 

Walling  v.  Miller,  108  N.  Y.  173; 
Nelson  v.  Conner,  6  Rob.  (La.)  339; 
Wiswally.  Sampson,  55  U.  S.  14  How. 
52,  14  L.  ed.  322.  See  contra,  Chau- 
tauqua Bank  v.  Risley,  19  N.  Y.  369. 

Although  the  proceedings  for  the 
appointment  of  a  receiver  were  er- 
roneous, yet  if  they  were  not  void 
the  possession  of  the  receiver  is  legal, 
and  he  cannot  be  dispossessed  at  the 
suit  of  another  receiver  subsequently 
appointed  by  a  court  of  coordinate 
jurisdiction.  Bonner  v.  Hearne,  75 
Tex.  142. 

See  also:  Reynolds  v.  Stockton,  140 
U.  S.  254,  35  L.  ed.  464.  43  N.  J.  Eq. 
211;  Young  v.  Rollins,  85  N.  C.  485; 
McCarthy  v.  Peake,  18  How.  Pr.  138, 
9  Abb.  Pr.  164;  Watkins  v.  Pinkney, 
:3Edw.  Ch.  533;  Storm  v.  Waddell,  2 


Sandf.  Ch.  494;  Qaylord  v.  Fort 
Wayne,  M.  &  C.  R.  Co.  6  Biss.  286; 
Conkling  v.  Butler,  4  Biss.  22;  Bill  v. 
New  Albany,  &c.  R.  Co.  2  Biss.  390; 
Union  Trust  Co.  v.  Rockford,  R.  I.  & 
St.  L.  R.  Co.  6  Biss.  197;  Beecher  v. 
Bininger,  7  Blatchf.  170;  Piatt  v. 
Archer,  9  Blatchf.  559;  Sedgwick  v. 
Menck,  6  Blatchf.  156,  1  Bank  Reg. 
230;  Spinning  v.  Ohio  L.  Ins.  Co.  2 
Disney,  336;  Judd  v.  Bankers  &  M. 
Teleg.  Co.  31  Fed.  Rep.  182;  Davis  v. 
Alabama  &  F.  R.  Co.  1  Woods,  661 ; 
Hutchinson  v.  Green,  6  Fed.  Rep.  833; 
Bruce  v.  Manchester  &  K.  R.  Co.  19 
Fed.  Rep.  342;  May  v.  Printup,  59 
Ga.  129;  Re  Clark,  4  Ben.  88;  Liggett 
v.  Glenn,  4  U.  S.  App.  438,  51  Fed. 
Rep.  381.  But  see  Wilmer  v.  Atlanta 
&  R.  Air  Line  R.  Co.  2  Woods,  409; 
Merchants  &  P.  Nat.  Bank  v.  Masonic 
Hall  Trustees,  63  Qa.  549;  South  Caro- 
lina R.  Co.  V.  People's  Sav.  Inst.  64 
Ga.  18;  East  Tennessee  &  G.  R.  Co.  v. 
Atlanta  &  F.  R.  Co.  49  Fed.  Rep.  608, 
15  L.  R.  A.  109;  Eisenmann  v.  Thiel, 
1.  Cin.  Sup.  Ct.  188;  Re  Merchants 
Ins.  Co.  3  Biss.  162. 

^  Union  Nat.  Bank  v.  Bank  of  Kan- 
sas City,  136  U.  S.  223,  34  L.  ed.  341; 
Owen  V.  Kellogg,  56  Hun.,  455;  Na- 


MATTERS  RELATING  TO  THE  APPOINTMENT. 


49 


concerned,  and  his  appointment  being  remedial  in  its  nature  is 
effective  simply  as  conserving  and  enforcing  the  rights  of  parties. 


tional  Exch.  Bank  v.  Beal,  50  Fed. 
Rep.  355;  Skip  v.  Harioood,  3  Atk. 
564;  Anon.  2  Atk.  15;  Pringlev.  Wool- 
worth,  90  N.  y.  502;  Wiswallv.  Samp- 
son, 55  U.  S.  14  How.  52,  14  L.  ed. 
322;  AUy.  Gen.  v.  Atlantic  &  Mut.  L. 
Ins.  Co.  100  N.  Y.  21^;  Ellis  v.  Boston, 
E.  d  E.  R.  Co.  107  Mass.  1 ;  Maynard 
y.Bond,  67  Mo.  315;  Herman  v .  Fisher, 
11  Mo.  Mo.  App.  275;  Portman  v. 
Mill,  8  L.  J.  N.  8.  Ch.  161 ;  Detroit 
First  Nat.  Bank  v.  Barnum  Wire  <&  1. 
Works,  60  Mich.  487. 

As  a  rule  the  receiver  takes  no  title 
to  the  property.  Matthews  v.  Cooper, 
49  N.  Y.  S.  R.  792. 

The  receiver  is  the  hand  of  the  law 
and  the  law  conserves  and  enforces 
rights — never  destroys  them.  His  ap- 
pointment determines  no  right  and  in 
no  way  affects  the  title  of  any  party  to 
the  property  in  litigation.  Von  Roun 
V.  San  Francisco  Sup.  Ct.  58  Cal.  358. 
He  holds  the  property  subject  to  all 
liens  of  every  kind. 

"While  property  is  in  the  hands  of  a 
receiver,  or  under  the  control  of  the 
court,  no  execution  can  be  levied  upon 
it;  but  the^.  fa.  creates  a  lien  thereon. 
Davis  V.  Bonney,  89  Va.  755. 

A  receiver  is  an  officer  of  the  court, 
but  his  appointment  determines  no 
right,  nor  does  it  affect  the  title  of  the 
property  in  any  way;  it  will  not  pre- 
vent the  running  of  the  statute  of 
limitations.  His  holding  is  the  hold- 
ing of  the  court  for  him  from  whom 
the  possession  was  taken.  He  is  ap- 
pointed on  behalf  of  all  parties  and 
if  any  loss  arises  from  deficiency  in  his 
accounts  the  estate  must  bear  it.  Elli- 
cott  V.  United  States  Ins.  Co.  7  Md.  307. 

If  the  appointment  of  a  receiver  in- 
terferes with  the  rights  of  a  stranger 


to  the  suit,  he  may  apply  to  the  court 
for  the  protection  of  his  rights,  though 
he  cannot  have  the  benefit  of  the 
receivership.  Howell  v.  Ripley,  10 
Paige,  43. 

A  receiver  of  the  effects  of  an  in- 
solvent auctioneer  was  appointed. 
The  auctioneer  had  sold  goods  for  a 
party  and  with  his  knowledge  and 
consent  deposited  the  money  arising 
therefrom  to  his  general  account  at 
the  bank.  After  the  appointment 
and  notice  thereof  to  the  bank,  the 
auctioneer  drew  a  check  in  favor  of 
this  principal  for  the  amount  due  him 
and  gave  him  an  assignment  of  an 
amount  on  demand  equal  to  the 
amount  of  the  check.  Held,  that  the 
principal  thereby  gained  no  right  to 
the  moneys  on  deposit,  nor  of  action 
against  the  bank.  All  title  to  the 
moneys  passed  to  the  receiver  on  the 
day  of  his  appointment  and  by  virtue 
thereof.  Levy  v.  Cavanagh,  2  Bosw, 
100. 

See  Ex  parte  Dunn,  8  S.  C.  207; 
Beverley  v.  Brooke,  4  Gratt.  187; 
Southern  Bank  v.  Ohio  Ins.  Co.  22 
Ind.  181;  Montgomery  v.  Merrill,  18 
Mich.  338;  Van  Alstyne  v.  Cook,  25  N. 
Y.  489;  Davenport  v.  Kelly,  42  N.  Y. 
193;  Gerey.  Dibble,  17  How.  Pr.  31; 
Becker  v.  Torrance,  31  N.  Y.  631; 
Crine  v.  Davis,  68  Ga.  138;  State  v, 
Snohomish  County  Super.  Ct.  7  Wash. 
77;  State  v.  Chehalis  County  Super. 
Ct.  8  Wash.  210. 

The  appointment  of  a  receiver  in  a 
suit  to  foreclose  a  mortgage  against  a 
lessee  will  not  deprive  the  lessor  of  the 
right  to  obtain  possession  of  the  prem- 
ises under  the  forcible  entry  and  de- 
tainer statute.  Woodward  y.  Wineldll 
(Wash.)  44  Pac.  860. 


60 


RECEIVERSHIPS. 


(e)  The  right  to  custody  of  property  relates  to  the  custody  of 
such  personal  property  as  is  within  the  jurisdiction  of  the  court 
making  the  appointment.'  The  general  doctrine  is  that  the  pow- 
ers of  a  receiver  over  the  property  of  the  defendant  are  coexten- 
sive only  with  the  jurisdiction  of  the  court  making  the  ajjpoint- 
ment,  it  being  the  policy  of  every  government  to  retain  in  its  owq 
hand  the  property  of  a  debtor  until  all  domestic  claims  against  it 
have  been  satisfied.*  But  courts  on  the  ground  of  comity  are  dis- 
posed to  permit  suits  to  be  brought  by  a  foreign  receiver  where 
such  suits  do  not  affect  the  rights  of  citizens  of  the  state  where 
suit  is  brought.'     This  principle  of  comity  is  in  accordance  with 


^Humphrey  v.  Hopkins,  81  Cal.  551, 
6  L.  R.  A.  792;  Booth  v.  Clark,  58  U. 
S.  17  How.  322,  15  L.  ed.  164;  Farm- 
ers', etc.  V.  Needles,  52  Mo.  1;  Tully  v. 
Eerrin,  44  Miss.  626;  Kronberg  v.  El- 
der, 18  Kan.  150;  Mosehy  v.  Burrows, 
62  Tex.  396;  Ilunt  v.  Columbian  Ins. 
Co.  55  Me.  290;  Filkins  v.  Nunne- 
macJier,  81  Wis.  91;  McClure  v.  Camp- 
bell, 71  Wis.  350. 

^Chicago,  M.  &  St.  P.  R.  Co.  v.  Keo- 
kuk N.  L.  Packet  Co.  108  111.  317.  But 
where  a  receiver  has  reduced  the  prop- 
erty to  his  possession,  and  in  the 
course  of  his  business  as  such  receiver 
takes  the  property  into  a  foreign  ju- 
risdiction he  may  defend  his  title  to 
such  property  as  against  attaching 
creditors  of  such  foreign  jurisdiction, 
on  the  ground  that  where  a  legal  title 
to  personal  property  has  once  passed 
and  become  vested  in  accordance  with 
the  law  of  the  state  where  situated  the 
validity  of  such  title  will  be  recog- 
nized everywhere.  Cammell  v.  Sewell, 
5  Hurlst.  &  N.  728;  Mostby  v.  Burrow, 
52  Tex.  396;  Clark  v.  Connecticut  Peat 
Co.  35  Conn.  303;  Taylor  v.  Board- 
man,  25  Vt.  581;  Crapo  v.  Kelly,  83 
U.  S.  16  Wall.  610,  21  L.  ed.  430; 
Waters  v.  Barton,  1  Coldw.  450;  Pond 
V.  Cooke,  45  Conn.  126;  Cagill  v.  Wool- 
dridge,  8  Baxt.  580;  Killmer  v.  Eobart, 


58  How.  Pr.  452;  Brownell  v.  Manches- 
ter, 1  Pick.  232;  McAlpin  v.  Jones,  10 
La.  Ann.  552;  Low  v .  Burrows,  12  Cal. 
181;  Lewis  v.  Adams,  70  Cal.  403; 
Boyle  v.  Townes,  9  Leigh.  158;  Singerly 
V.  Fox,  75  Pa.  114.  See  contra,  Hum- 
phrey V.  Hopkins,  81  Cal.  551,  6  L.  R. 
A.  792;  not,  however,  if  the  taking  of 
such  property  to  a  foreign  jurisdic- 
tion is  for  an  illegal  purpose.  Dick 
V.  Bailey,  2  La.  Ann.  974;  Drake, 
Attach.  (5th  ed.)  §  292. 

Courts  are  sometimes  enabled  to 
reach  property  of  a  defendant  in  a 
foreign  jurisdiction  by  injunction 
where  the  owner  of  such  property  is 
a  resident  and  subject  to  the  jurisdic- 
tion of  the  court  and  amenable  to  its 
orders.  Mitchell  v.  Bunch,  2  Paige, 
606;  Roberdeau  v.  Rous,  1  Atk.  544; 
Booth  v.  Clark,  58  U.  S.  17  How.  322, 
15  L.  ed.  164;  St.  Joseph  &  D.  G.  R. 
Co.  V.  Smith,  19  Kan.  225;  Meredith 
Village  Sav.  Bank  v.  Simpson,  22  Kan. 
414.  See  Young  v.  Clapp,  147  111. 
176;  Hoyt  v.  Thompson,  5  N.  Y.  320; 
Hoyt  V.  Thompson,  19  N.  Y.  207;  Wil- 
litts  V.  Waite.  25  N.  Y.  577. 

^Olney  v.  Tanner,  10  Fed.  Rep.  101; 
Merchants  Nat.  Bank  v.  McLeod,  38- 
OhioSt.  174;  Hurd^.  City  of  Elizabeth, 
41  N.  J.  L.  1;  Hunt -v.  Columbian  Ins. 
Co.  55  Me.  290;  Saunders  v.  Williams,  5- 


MATTERS  RELATING  TO  THE  APPOINTMENT. 


51 


the  genius  of  our  government  and  is  gradually  becoming  more 
firmly  established  as  part  of  the  system  of  national  jurisprudence, 
and  its  recognition  by  courts  fosters  and  sustains  the  unity  and 
harmony  that  should  everywhere  prevail  and  especially  so  in  all 
matters  pertaining  to  property  rights  and  commercial  relations. 
The  tendency  in  England,  and  in  this  country,  as  will  be  seen 
elsewhere,  is  in  the  direction  of  a  recognition  of  the  validity  of 
the  transfer  of  personal  property  by  the  owner  at  the  place  of  his 
domicil,  voluntary  or  by  operation  of  law,  as  being  effective  in 
all  jurisdictions  no  matter  where  the  property  may  be  located. 

(f)  The  eifect  of  the  appointment  of  a  receiver  is  to  leave  the 
rights  of  all  parties  as  they  are  found  at  the  time  of  the  appoint- 
ment, with  respect  to  existing  contracts,  mortgages,  liens,  etc., 
out  of  which  their  rights  have  arisen.*     This  principle  is  universal 


N.  H.  213;  Bagby  v.  Atlantic  M.  &  0. 
B.  Co.  86  Pa.  291;  Johnson  v.  Barker, 
4  Bush,  149;  Taylors.  Columbian  Ins. 
Co.  14  Allen,  353;  Bierce  v.  O'Brien, 
129  Mass.  814.  See  note  in  Alley  v. 
Caspari,^  Am.  St.  Rep.  178,80  Me.  234. 
A  receiver  of  an  insolvent  railroad 
corporation  was  appointed  in  Ken- 
tuclcy,  pending  suits  upon  mortgages 
of  the  road  and  its  equipments,  in- 
cluding certain  rolling-stock,  which 
was  included  in  the  property  of  which 
the  receiver  had  been  ordered  to  take 
possession.  Held,  that  upon  princi- 
ples of  interstate  comity,  the  receiver 
would  be  allowed  to  institute,  in  Ohio, 
proceedings  to  obtain  possession  of 
the  rolling  stock,  notwithstanding  the 
atlachment.  Merchants  Nat.  Bank  v. 
McLeod,  38  Ohio  St.  174;  Eobnes  v. 
Sherwood,  3  McCrary,  405,  16  Fed. 
Rep.  725;  Boulware  v.  Davis,  90  Ala. 
207,  9  L.  R.  A.  601;  Bvgh  v.  Hurtt,  52 
How.  Pr.  22;  Re  Waite,  99  N.  Y.  433; 
Metzner  v.  Bauer,  98  Ind.  425;  Ly- 
coming F.  Ins,  Co.  v.  WrigJit,  55  Vt. 
52G;  Bidlock  v.  Mason,  26  N.  J.  Eq. 
230;  National  Trust  Co.  v.  Miller,  33 
N.  J.  Eq.  155;  Uenning  v.  Raymond, 
35  Minn.  303. 


'  Central  Trust  Co.  v.  Wabash,  St.  L. 
&  B.  R.  Co.  46  Fed.  Rep.  26;  Knee- 
land  V.  American  Loan  &  T.  Co.  136 
U.  S.  89,  34  L.  ed.  379;  Hoffman  v. 
Schoyer,  143  111.  598;  Cox  v.  Volkeri,  86 
Mo.  505;  Kirkpatrick  v.  McElroy,  41 
N.  J.  Eq.  539;  Mulcahey  v.  Strauss, 
151  111.  70. 

A  receiver  to  sequestrate  the  prop- 
erty of  a  corporation  and  apply  it  to 
the  payment  of  corporate  debts  cannot 
question  the  validity  of  a  mortgage 
executed  by  the  corporation  to  secure 
the  debt  of  its  president,  where  none 
of  the  creditors  represented  by  him 
were  such  at  the  execution  of  the 
morgtage.  Osborn  v.  Montelac  Bark, 
89  Hun,  r.7,  35  N.  Y.  Supp.  610. 

A  receiver's  possession  is  subject  to 
all  valid  and  existing  liens  upon  the 
property  at  the  time  of  his  appoint- 
ment, and  does  not  devest  a  lien  pre- 
viously acquired  in  good  faith.  Chic- 
ago Title  &  T.  Co.  v.  Smith.  158  111. 
417,  41  N.  E.  1076. 

A  transfer  to  a  trustee  of  accounts 
belonging  to  a  corporation,  duly  made 
and  noted  on  the  books  of  the  corpo- 
ration under  authority  of  the  board 
of    directors    and    accepted    by   the 


$2 


RECEIVERSHIPS. 


in  its  application  and  in  the  verj  nature  of  equity  jurisprudence 
could  not  be  otherwise.  The  adjudication  of  the  rig-hts  of  parties 
and  the  application  of  adequate  remedies  through  the  instrument- 
ality of  courts,  is  fundamental  in  its  nature.  The  contractual  re- 
lations of  parties  fairly  made  and  duly  ascertained  are  not  subject 
to  judicial  modification  or  change. 

(g)  The  rights  of  the  receiver  date  back  to  the  time  of  grant- 
ing the  order/  though  it  has  been  held  that  tiie  date  of  filing  the 


trustee  In  writing,  with  notice  from 
him  to  the  parties  whose  accounts  are 
assigned,  and  also  to  the  persons  for 
whom  he  is  acting  as  trustee,  is  suffi- 
cient to  vest  in  the  trustee  the  right  to 
the  money  derived  from  the  accounts, 
although  on  the  same  day,  but  subse- 
quent to  such  transfer,  a  bill  was  tiled 
for  the  appointment  of  a  receiver  and 
the  winding  up  of  the  affairs  of  the 
corporation.  Chicago  Title  &  T.  Co. 
V.  Smith,  153  111.  417,  41  N.  E. 
1076. 

The  right  of  the  assignee  in  bank- 
ruptcy of  a  firm  to  bring  any  and  all 
suits  which  concern  the  estate  or  trust 
is  not  affected  by  the  appointment  of 
a  receiver  of  the  property  of  an  in- 
dividual holding  assets  of  the  firm  in 
trust,  and  the  passing  of  the  legal 
title  to  such  receiver.  Shainicald  v. 
Davids  (D.  C.  N.  D.  Cal.)  69  Fed. 
Rep.  687. 

A  judgment  creditor  is  not  affected 
by  the  appointment  of  a  receiver  for 
the  debtor  in  proceedings  to  which  he 
was  not  a  party  and  in  which  he  was 
not  required  to  intervene.  Central 
Coal  cfe  0.  Co.  V.  Southern  Nat.  Bank 
(Tex.  Civ.  App.)  34  S.  W.  383. 

A  motion  for  authority  to  levy  upon 
property  in  the  hands  of  a  receiver 
will  not  be  granted  except  upon  no- 
tice to  the  claimants  of  the  property 
who  are  parties  to  the  original  suit,  as 
notice  to  the  receiver  is  not  notice  to 


them.  Re  Hall  <&  S.  Co.  (C.  C.  S.  D. 
Cal.)  69  Fed.  Rep.  425. 

The  lien  of  a  judgment  against  a 
corporation,  obtained  after  the  ap- 
pointment of  a  receiver,  but  before 
the  filing  of  his  official  bond,  is  not 
destroyed  by  the  filling  of  such  bond 
although  his  title  dates  back  to  the 
time  of  the  appointment  for  the  pres- 
ervation and  protection  of  the  prop- 
erty, where  the  judgment  would  have 
been  rendered  before  his  appointment 
but  for  the  interposition  of  a  frivolous 
demurrer.  Be  Lewis  &  F.  Mfg.  Co. 
(Sup.  Ct.)  34  N.  Y.  Supp.  983. 

One  who  purchases  property  at  a 
time  when  all  the  property  of  the 
grantor  is  subject  to  a  judgment  lien 
is,  as  against  a  receiver  subsequently 
appointed  over  the  grantor's  property, 
entitled  to  have  the  remainder  of  the 
property  in  his  hands  subjected  to 
the  lien  in  exoneration  of  that  pur- 
chased by  him.  Scrapie  v.  Eubanks 
(Tex.  Civ.  App.)  35  S.  W.  509. 

^Pope  v.  Ames,  20  Or.  199;  Ex  parte 
Tillman,  93  Ala.  101;  Bonner  v. 
Eearne,  75  Tex.  242;  Be  Christian 
Jensen  Co.  128  N.  Y.  550;  Steele  v. 
Sturges,  5  Abb.  Pr.  442;  Butter  v. 
Tallis.  5  Sandf.  610;  Be  Schuyler's 
Steam  Tow  Boat  Co.  136  N.  Y.  168,  20 
L.  R.  A.  391;  Clinkscales  v.  Pendleton 
Mfg.  Co.  9  S.  C.  318;  Begenstein  v. 
Pearlstein,  30  S.  C.  192;  Maynard  v. 
Bond,  67  Mo.  315;  Ex  parte  Evans,  L. 


MATTERS  RELATING  TO  THE  APPOINTMENT. 


53 


bill  fixes  the  rights  of  the  parties.'  "While  there  is  not  entire 
harmony  in  the  decisions  the  weight  of  authority  undoubtedly  is 
that  the  order  appointing  the  receiver  fixes  the  date  from  which 
the  property  is  regarded  as  being  in  custodia  legis,  and  from 
which  time  it  is  not  subject  to  levy  of  execution  or  attachment* 
The  receiver's  right  to  possession,  however,  as  well  as  his  right  to 
sue  are  dependent  on  his  giving  bond  as  required  by  the  order  of 
appointment.' 

(h)  The  projDerty  over  which  the  receivership  extends  varies  ac- 
cording to  the  nature  of  the  proceeding.  Sometimes,  as  in  the  case 
of  mortgage  foreclosures,  it  merely  extends  to  the  rents  and  pro- 
fits of  the  mortgaged  premises,  sometimes  to  the  whole  property 
as  in  partnerships,  corporations,  etc.,  and  sometimes  to  only  suffi- 
cient property  to  satisfy  the  demand  of  encumbrancers.*  The  or- 
der making  the  appointment  should  be  specific  as  to  the  property 
intended  to  be  embraced  in  the  receivership.*  This  is  necessary 
in  order  that  the  receiver  may  be  protected,  and  as  notice  to  third 
parties. 


R.  13  Ch.  Div.  252;  Re  Birt,  L.  R.  22 
Ch.  Div.  604;  Wickena  v.  Toiinshend, 
1  Russ.  &  M.  361. 

^Fogg  V.  Supreme  Lodge  of  JJ.  0.  of 
G.  T.  159  Mass.  9. 

An  order  appointing  a  receiver  can- 
not, as  against  strangers  to  the  suit 
not  notified  of  the  application  for  the 
order,  relate  back  to  the  commence- 
ment of  the  action  in  which  it  is  made. 
Artisans  Bank  v.  Treadicell,  34  Barb. 
553;  Phillips  v.  Smoot,  1  Mackey,  478. 
But  see  Farmers'  Bank  v.  Beaston,  7 
Gill  &  J.  421. 

If  by  an  order  of  court  the  matter 
of  appointment  is  referred  to  a  mas- 
ter, and  on  the  coming  in  of  his  re- 
port recommending  an  appointment, 
an  order  of  appointment  is  made,  the 
first  order  is  regarded  as  being  the 
date  from  which  the  receiver's  rights 
are  to  be  determined.  liutter  v.  Tal- 
lis,  5  Sandf.  610. 

^See  note  1  above.  Contra:  Farmers' 
Bank  v.  Beaston,  7  Gill  &  J.  421;  De 
Fries  v.  Creed,  34  L.  J.  Ch.  N.  S.  007; 


Edioards  v.  Edwards,  L.  R.  2  Ch.  Div. 
291;  Woods  v.  Ellis,  85  Va.  471. 

^De  Fries  v.  Creed,  34  L.  J.  Ch.  N. 
S.  C07;  Edwards  v.  Edwards,  L.  R.  2 
Ch.  Div.  291;  Johnson  v.  Martin,  1 
Thomp.  &  C.  504;  Morgan  v.  Potter, 
17  Hun,  403;  Contra,  Ex  parte  Evans, 
L.  R.  13  Ch.  Div.  252. 

Where  the  receiver  is  ordered  to 
sue,  and  has  done  so,  and  there  is  an 
entire  want  of  showing  as  to  his  hav- 
ing given  bond,  the  court  will  pre- 
sume that  he  has  complied  with  the 
order  in  this  regard.  Hedgewisch  v. 
Silver,  140  N.  Y.  414. 

*Magrath  v.  Veitch,  1  Hog.  110;  ^ 
ScJiuyler  Steam  Toic  Boat  Co.  43  N.  Y. 
S.  R.  163;  Showalter  v.  Laredo  Improv. 
Co.  83  Tex.  162.  In  a  railroad  fore- 
closure the  receiver  has  no  custody  or 
control  except  of  the  property  covered 
by  the  mortgage.  Smith  v.  McCul- 
lough,  104  U.  S.  25,  20  L.  ed.  637. 

^Crow  V.  Wood,  13  Beav.  271;  0' Ma- 
honey  v.  Belmont,  02  N.  Y.  133. 


54 


RECEIVERSHIPS. 


§  18.  Courts  exercising  jurisdiction. 

As  a  rule  courts  of  original  and  general  jurisdiction  only  may 
exercise  the  power  to  appoint  receivers,'  though  in  some  cases 
appellate  courts  have  been  authorized  to  exercise  such  power." 
The  power  to  appoint  receivers  both  in  this  country  and  in  Eng- 
land was  originally  exercised  by  the  courts  of  chancery  as  long 
as  they  continued  to  exist,  as  such,  as  distinguished  from  the  com- 
mon law  courts,  but  since  the  abolition  of  the  chancery  courts,  the 
common  law  courts,  exercising  chancery  jurisdiction,  have  suc- 
ceeded to  their  powers,  the  remedy  remaining  as  before  peculiarly 
an  equitable  remedy,  and,  except  where  modified  by  statute,  gov 
erned  in  all  respects  by  the  rules  and  principles  of  chancery 
courts,' 

The  application  may  be  heard  in  chambers,*  or  by  a  judge  in 


^Potter  V.  Merchants  Bank,  28  N.  Y. 
641;  Fredenheim  v.  Bohr,  87  Va.  764; 
Virginia,  T.  &  C.  Steel  <&  I.  Co.  v. 
Wilder,  88  Va.  943;  Bitting  v.  Ten 
Eyck,  85  Ind.  357;  Folsom  v.  Evans,  5 
Minn.  A18;  Bank  of  Mississippi  v.  Dun- 
can, 52  Miss.  740;  Scott  v.  Searles,  5 
Smedes  &  M.  25;  Second  Ward  Bank 
V.  Uj}mann,  12  Wis.  499.  In  Illinois, 
a  judge  in  vacation  cannot  appoint  a 
receiver.  Hammock  y.  Farmers'  Loan 
&  T.  Co.  105  U.  S.  77,  26  L.  ed.  1111. 

^State  V.  Exchange  Bank,  34  Neb. 
198;  State  v.  Commercial  Slats  Bank, 
28  Neb.  Ql'l;Westv.  Weaver.  3  Heisk. 
589;  Kerr  v.  White,  7  Baxt.  394,  but 
see  Pacific  R.  Co.  v.  Ketchum,  95  U. 
S.  1,  24  L.  ed.  347;  Ex  parte  Smith,  23 
Ala.  94. 

^The  jurisdiction  is  based  on  the 
inadequacy  of  the  courts  of  ordinary 
jurisdiction.  Barbour  v.  National  Ex- 
change Bank,  45  Ohio  St.  183. 

As  to  English  statute  relating  to 
courts,  and  particularly  to  appoint- 
ment of  receivers,  see  Supreme  Court 
of  Judicature  Act  1873,  36  &  37  Vict, 
chap.  66,  §  25,  par.  8.  The  United 
States  courts  continue  to  exercise 
chancery  jurisdiction    and  are  gov- 


erned by  the  principles  and  practice, 
to  a  large  extent,  of  the  English  court 
of  chancery.  Payne  v.  Rook,  74  U. 
S.  425,  19  L.  ed.  260.  See  National 
Banks,  Chap,  13. 

As  to  state  courts,  see  Statutes  and 
Codes  of  Procedure. 

The  appointment  is  provisional  in 
its  nature  and  an  auxiliary  proceed- 
ing. Bufkin  V.  Boyce,  104  Ind.  53; 
Eottenstein  v.  Conrad,  9  Kan.  435; 
Chicago  &  A.  Oil  &  Min.  Co.  v.  United 
States  Petroleum  Co.  57  Pa.  83. 

To  appoint  receivers  is  an  ordinary 
exercise  of  appropriate  chancery  ju- 
risdiction ;  and  to  enforce  the  bond  re- 
quired from  a  receiver  is  a  matter  in- 
cidental and  ancillary  to  the  appoint- 
ment, and  may  appropriately  be  in- 
trusted to  a  court  of  general  chancery 
powers.  Bank  of  Mississipjn  v.  Bun- 
can,  52  Miss.  740. 

The  right  to  appoint  a  receiver  and 
to  vacate  the  appointment  is  referable 
solely  to  the  power  which  the  courts 
exercise  as  courts  of  chancery.  Fol- 
som V.  Evans,  5  Minn.  418. 

*Ex  parte  Fletcher,  6  Ves,  Jr.  427; 
Ex  parte  Pincke,  2  Meriv.  452;  Real 
Estate    Associates    v,   San    Francisco 


MATTERS  RELATING  TO  THE  APPOINTMENT. 


55 


vacation/  or  in  open  court.  Under  the  earlier  practice  in  this 
country  and  in  England  the  matter  of  appointment  was  referred 
to  a  master  in  chancery  who  was  directed  to  hear  the  application, 


Super.  Ct.  60  Cal.  223.  Not  in  vaca- 
tion, however,  by  a  judge,  the  court 
not  being  in  session.  Newman  v. 
Hammond,  46  Ind.  119. 

'  Clark  V.  Raymond,  84  Iowa,  257. 

Under  Miss.  Code  of  1880,  a  circuit 
judge  has  no  power  to  appoint  a  re- 
ceiver in  a  case  pending  in  the  chan- 
cery court,  either  in  vacation  or  in 
term  time.  Alexander  v.  Manning, 
68  Miss.  634. 

Under  N.  C.  Acts  1877,  chap.  223. 
modified  by  1879,  chap.  63,  motions  for 
the  appointment  of  a  receiver  may  be 
made  before  the  resident  judge  of  the 
district,  or  one  assigned  to  the  dis- 
trict, or  one  holding  the  courts  there- 
of by  exchange,  at  the  option  of  the 
mover.     Corbin  v.  Berry,  83  N.  C.  27. 

Under  the  constitution  and  laws  of 
Florida,  a  receiver  cannot  be  ap- 
pointed by  the  judge  of  one  circuit  to 
talie  possession  of  property  in  another. 
State  v.  JacksoiwiUe  &  P.  M.  R.  Co.  15 
Fla.  201. 

An  order  appointing  a  receiver  un- 
der the  N.  Y.  act  of  1848,  chap.  26, 
could  be  entered  by  the  justice  mak- 
ing it,  at  any  term  of  the  court,  in  the 
Bame  manner  as  other  orders.  Stewart 
V.  Beebe,  28  Barb.  34. 

In  Indiana  a  judge  has  no  power  to 
appoint  a  receiver  during  vacation, 
nor  has  a  clerk  any  power  to  approve 
a  receiver's  bond  in  vacation.  New- 
man  v.  Hammond,  46  Ind.  119. 

For  a  full  discussion  of  the  power 
of  courts  in  vacation  see  article  by 
Mr.  Duwalt  in  Chicago  Legal  News, 
vol.  xxviii.,  p.  414. 

Where  a  receiver  was  appointed  by 
the  chancellor  upon  a  creditor's  bill, 
and  several  other  bills  were  filed  be- 
fore the  vice-chancellor  by  creditors 


of  the  same  debtor,  in  which  suits  the 
receiver  in  the  first  suit  was  made  re- 
ceiver,— held,  that  the  direction  as  to 
distribution  of  the  fund  belonged  to 
the  chancellor.  Burrall  v.  Leslie,  6 
Paige,  445. 

A  change  of  venue  carries  with  it 
the  appointment  of  a  receiver,  and  the 
receiver  appointed  is  the  receiver  of 
the  court  to  which  the  case  is  taken. 
Ex  parte  Haley,  99  Mo.  150. 

A  judge  in  vacation,  in  Illinois,  can- 
not appoint.  Hammock  v.  Farmers' 
Loan  &  T.  Co.  105  U.  S.  77,  26  L.  ed. 
1111. 

A  court  commissioner  has  no  juris- 
diction to  appoint  a  receiver,  and  a 
bond  given  by  a  receiver  so  appointed 
is  void.  Quiggley  v.  Trumbo,5Q  Cal.  626. 

Where  a  master  is  directed  to  ap- 
point a  receiver,  his  report  of  the  ap- 
pointment needs  no  order  of  con- 
firmation ;  and  such  a  report  cannot 
be  excepted  to.  Be  Eagle  Iron  Works, 
8  Paige,  385. 

The  words  court,  judge,  and  judge 
in  vacation  are  synonymous.  Press- 
ley  V.  Lamb,  105  Ind.  171.  But  see, 
Hammock  v.  Farmers'  Loan  &  T.  Co. 
105  U.  S.  77,  26L.  ed.  111]. 

The  powers  of  the  courts  of  Indiana 
in  appointing  receivers  are  the  same 
under  the  code  as  under  the  general 
rule  of  equity.  The  power  will  be 
exercised  for  the  same  purposes,  and 
in  the  same  emergencies.  Bitting  v. 
Ten  Eyck,  85  Ind.  357. 

A  receiver  may  be  appointed  by  the 
judge  in  vacation  under  the  Texas 
statute  giving  the  "judge,"  and  not 
the  "court,"  power  to  appoint  re- 
ceivers. New  Birmingham  Iron  &  L. 
Co.  V.  Blevins  (Tex.  Civ.  App.)  34  S. 
W.  828. 


66 


RECEIVERSHIPS. 


and  make  a  recommendation  as  to  the  propriety  of  granting  the 
same  as  well  as  the  proper  persons  to  be  appointed.' 

§  19.  Conflict  of  jurisdiction. 

As  a  general  rule  one  court  will  not  interfere  with  the  juris- 
diction of  another  court,  when  the  latter  has  full  power  to  act 
and  do  complete  justice."     Where  two  persons  on  the  same  day 


^ Re  Eagle  Iron  Works,  8  Paige,  385; 
Wynne  v.  Lord  Neicboroiigh,  15  Ves. 
Jr.  283;  Tharpe  v.  Tharpe,  12  Ves.  Jr. 
317;  Wilkins  v.  Williams,  3  Ves.  Jr. 
588;  Anon.  3  Ves.  Jr.  515;  Oarland  v. 
Oarland,  2  Ves.  Jr.  137;  Thomas  v. 
Dawkin,  1  Ves.  Jr.  452;  Creuze  v.  Lon- 
don, 2  Prov.  C.  C.  253.  And  when 
the  master  on  due  investigation  has 
made  his  recommendation,  the  court 
requires  strong  ground  to  interfere 
therewith.  lie  Eagle  Iron  Works, 
ante;  Tharpe  v.  Tharpe,  ante,  and  fur- 
ther cases  above  cited  in  this  note. 

2  Union  Trust  Co.  v.  Roekford,  R.  I. 
&St.L.  R.  Co.  6  Biss.  197;  Gaylordv. 
FortWayne,  M.  <&  C.  R.  Co.  6  Biss. 
286;  Conklin  v.  Butler,  4  Biss.  22;  Bill 
V.  New  Albany  &  G.  R.  Co.  2  Biss. 
390;  Beecher  v.  Bininger,  7  Blatchf. 
170;  Sedgicick  v.  Menck,  6  Blatchf.  158; 
Storm,  v.  Waddell,  2  Sandf.  Ch.  494; 
Watkina  v.  Pinkney,  3  Edw.  Ch. 
533 ;  Bruce  v.  Mancliester  &  E.  R.  Co. 
19  Fed.  Rep.  342;  Judd  v.  Batikers  & 
M.  Teleg.  Co.  31  Fed.  Rep.  182;  Davis 
V.  Alabama  &  F.  R.  Co.  1  Wood,  661; 
Hutchinson  v.  Oreen,  6  Fed.  Rep.  833; 
Spinning  v.  Ohio  L.  Ins.  &  T.  Co.  2 
Disney,  336;  Re  Clark,  4  Ben.  88;  Re 
Eulst,  7  Ben.  17;  Liggett  v.  Glenn,  4 
U.  S.  App.  438;  Milwaukee  &  St.  P.  R. 
Co.  V.  Milwaukee  &  M.  R.  Co.  20  Wis. 
165.  The  cases  are  not  uniform,  how- 
ever, some  holding  that  the  institu- 
tion of  the  suit,  and  the  appointment 
of  a  receiver  confers  jurisdiction,  and 
Bome  holding  that  these  must  be  fol- 
lowed by  actual  possession  in  order  to 
confer  exclusive  jurisdiction.      East 


Tennessee,  V.  &  G.  R.  Co.  v.  Atlanta  cfe 
F.  R.  Co.  49  Fed.  Rep.  608,  15  L.  R. 
A.  \Q^;Wilmer  v.  Atlanta  &  Air  Line 
R.  Co.  2  Woods,  409.  The  weight  of 
authority,  and  reason,  it  would  seem, 
as  well,  are  in  favor  of  the  doctrine 
that  when  a  court  has  taken  cogniz- 
ance of  a  controversy,  it  should,  as  a 
matter  of  right,  have  jurisdiction  for 
all  purposes  including  the  right  of 
possession  or  control  of  the  res.  The 
contrary  doctrine  may,  and  often  has, 
given  occasion  for  criticism  of  courts 
for  unseemly  rivalry  and  undue  haste 
in  obtaining  possession  of  property 
forming  the  subject  of  litigation.  The 
supposed  advantage  of  controling  the 
receivership  sometimes  manifested  by 
litigants  clearly  should  cease  with 
the  entry  of  the  order  of  appointment. 
This,  of  course,  presupposes  that  the 
interested  parties  are  properly  in 
court.  See  also,  Nothard  v.  Proctor, 
L.  R.  1  Ch.  Div.  4,  45  L.  J.  Ch.  302; 
Bonner  v.  Eearne,  75  Tex.  242. 

Where,  under  the  provisions  of  New 
York  Laws  1880,  chap.  537,  a  court  of 
one  judicial  district  has  power  to  re- 
move a  receiver  appointed  in  an  ac- 
tion pending  in  another  judicial  dis- 
trict, it  has  no  power  to  appoint  a 
successor.  For  this  purpose  the  pro- 
ceedings must  be  remitted  to  the  dis- 
trict in  which  the  action  is  pending. 
Attrill  V.  Rockaway  Beach  Improv. 
Co.  25  Hun,  376;  McCarthy  v.  Peake, 
18  How.  Pr.  138,  and  see,  Bill  v. 
New  Albany,  2  Biss.  390;  O'Ma- 
hony  V.  Belmont,  5  Jones  &  S.  380; 
Young  v.  Rollins,  85  N.  C.  485. 


MATTERS  RELATING  TO  THE  APPOINTMENT. 


57 


are  appointed  receivers  it  must  be  determined  as  a  legal  rights 
which  is  entitled  to  receive  the  assets,  and  the  legal  right  is  de- 
termined by  the  priority  of  judicial  action,  without  regard  to  the 
time  of  verification  of  the  papers,  or  the  time  of  actually  getting 
possession  of  the  assets,'  and  fractions  of  a  day  may  be  taken  into 
consideration.'^  The  court  first  acquiring  jurisdiction  will  retain 
jurisdiction  for  the  purposes  of  administering  the  estate.' 


^People  V.  Central  City  Bank,  53 
Barb.  412;  Re  Schuyler's  Steam  Tow 
Boat   Co.  136  N.   Y.   169.   20  L.   R. 

A.  391 ;  Heidritter  v.  Elizabeth  Oil  Cloth 
Co.  112  U.  S.294,  28  L.  ed.  730;  TJiiion 
Trust  Co.  V.  Rockford,  R.  1.  &  St.  L. 

B.  Co.  6  Biss.  197;  Steele  v.  Sturges,  5 
Abb.  Pr.  442-  Texas  Trunk  B.  Co.  v. 
Lewis,  81  Tex.  1. 

Of  two  courts  of  concurrent  juris- 
diction the  one  whose  jurisdiction 
first  attaches  acquires  exclusive  con- 
trol of  all  controversies  respecting  it, 
involving  substantially  the  same  in- 
terests, and  the  possession  of  a  receiver 
is  the  possession  of  the  court  appoint- 
ing him,  and  cannot  be  divested  by  a 
court  of  co-ordinate  jurisdiction. 
Bruce  v.  MancJiester  &  R.  B.  Co.  19 
Fed.  Rep.  342. 

As  to  conflict  of  jurisdiction  be- 
tween courts,  see  Gest  v.  Neic  Orleans, 
St.  L.  &  C.  B.  Co.  30  La.  Ann.  pt. 
1,  28;  Jennings  v.  Philadelphia  &  R.  R. 
Co.  23  Fed.  Rep.  569;  Osborn  v.  Reyer, 
2  Paige,  342;  Pue  Mersey  R.  Co.  L.  R. 
37  Ch.  Div.  610. 

A  receiver  appointed  by  a  state 
court,  but  who  has  not  qualified  until 
after  the  United  States  marshal  has 
assumed  possession  of  property  is  not, 
as  against  the  marshal,  entitled  to  pos- 
session. Moran  v.  Sturges,  154  U.  S. 
256,  30  L.  ed.  981.  See  also,  Re  Swan. 
150  U.  S.  637,  37  L.  ed.  1202,  but, 
where  a  receiver  of  the  United  States 
court  is  appointed  over  an  association, 
a  state  court  may  cancel  a  mortgage 
given  by  such  association  which  has 


been  paid.  Callioun  v.  Lanaux,  127 
U.  S.  634,  37  L.  ed.  297. 

''East  Tennessee,  V.  &  G.  R.  Co.  v. 
Atlanta  &F.  R.  Co.  49  Fed.  Rep.  608, 
15  L.  R.  A.  109;  People  v.  Central  City 
Bank,  53  Barb.  412,  35  How.  Pr.  42. 

^Thompson  v.  Holladay,  15  Or.  348^ 
Heidritter  v.  Elizabeth  Oil  Cloth  Co, 
112  U.  S.  294,  28  L.  ed.  730,  but  see, 
Buchanan  v.  Smith,  83  U.  S.  16  Wall. 
309,  21  L.  ed.  287;  Ohio  &  M.  B.  Co. 
V.  Fitch,  20  Ind.  828. 

In  a  case  of  doubtful  authority  it 
has  been  held  that  in  matters  of  bank- 
ruptcy the  federal  courts  have  exclu- 
sive jurisdiction,  so  far  as  the  assets 
of  an  insolvent  corporation  are  con- 
cerned. Be  Merchants' Ins.  Co.  3  Biss. 
162,  and  see  Brick  v.  Piedmont  &  A. 
L.  Ins.  Co.  4  Fed.  Rep.  849;  Piatt  v. 
Archer,  9  Blatchf .  559;  Be  Binninger,  7 
Blatchf.  262;  Sedgwick  v.  Place,  3  Ben. 
360. 

It  has  also  been  held  that  though 
a  receiver  of  one  court  may  be  in  pos- 
session of  mortgaged  property,  a  fore- 
closure may  be  carried  on  in  another 
court.  Mercantile  Trust  Co.  v.  Lam- 
mlle  tfe  V.  B.  Co.  16  Blatchf.  324;  Kin- 
ney V.  Crocker,  18  Wis.  74;  and  where 
there  is  a  serious  conflict  of  authority 
between  state  and  federal  courts,  in 
actions  pending  in  each  by  antagon- 
istic claimants,  and  there  is  serious 
danger  of  loss  the  federal  court  has 
appointed  a  receiver  to  take  posses- 
sion and  sell.  Crane  v.  McCoy,  1 
Bond,  422. 

A  receiver  appointed  by  a  federal 


58 


RECEIVERSHIPS. 


§  20.  Scope  of  jurisdiction. 

The  scope  of  power  given  to  a  cliancellor  in  appointing  a  re- 
ceiver varies  according  to  the  nature  of  the  proceeding,  and  will 


court,  looking  to  the  winding  up  of  a 
corporation  as  insolvent,  and  paying 
all  its  creditors,  will  not  be  directed 
to  give  up  possession  of  the  property 
to  a  receiver  appointed  by  the  state 
court  in  a  suit  by  minority  stock- 
holders to  secure  proper  representa- 
tion in  the  management  and  the  pro- 
tection of  their  rights,  but  such  minor- 
ity stockholders  will  be  allowed  to 
become  parties  to  the  proceedings  in 
the  federal  court.  De  La  Vergne  Ee- 
frigerating  Mach.  Co.  v.  Palmetto  Brew. 
Co.  (C.  C.  D.  S.  C)  72  Fed.  Rep.  579. 

A  temporary  receiver  appointed  by 
a  federal  court  in  a  suit  to  foreclose  a 
mortgage  deed  of  a  corporation  will 
not  be  ordered  to  deliver  up  the  prop- 
erty to  a  receiver  previously  appointed 
by  a  state  court,  in  a  suit  by  simple 
contract  creditors  to  prevent  waste  of 
the  corporate  property,  to  which  other 
creditors  are  not  parties,  as  the  two 
proceedings  do  not  conflict.  State 
Trust  Co.  V.  National  Land  I.  &  Mfg. 
Co.  (C.  C.  D.  S.  C.)  72  Fed.  Rep.  575. 

A  United  States  court  cannot,  upon 
an  application  for  delivery  to  a  re- 
ceiver appointed  by  a  state  court  of 
property  in  the  hands  of  a  receiver  of 
the  federal  court,  review  the  pro- 
priety and  validity  of  the  action  of  the 
state  court  in  appointing  such  receiver. 
De  La  Vergne  Refrigerating  Mach.  Co. 
v.  Palmetto  Brew.  Co.  (C.  C.  D.  S.  C.) 
72  Fed.  Rep.  579. 

The  United  States  circuit  court  may 
have  jurisdiction  to  appoint  a  re- 
ceiver of  the  property  of  a  coip  ora- 
tion which  has  been  dissolved  by  a 
state  court  under  a  statute  providing 
that  such  a  corporation  whose  powers 
have  expired  shall  continue  its  corpo- 
rate capacity  for  two  years   for  the 


purpose  of  collecting  debts  due  it, 
and  conveying  and  selling  its  property 
and  effects,  where  an  appeal  has  been 
perfected  from  the  judgment  of  ouster, 
but  such  judgment  remains  in  effect 
and  creditors  are  about  to  commence 
suits  by  which  the  property  will  be 
wasted.  Olmstead  v.  Distilling  &  C. 
F.  Co.  (C.C.N.D.Ill.)  73  Fed.  Rep.44. 

A  Federal  court  in  the  state  in 
which  a  corporation  was  organized, 
which  has  appointed  a  receiver  as  an- 
cillary to  a  receivership  of  the  corpo- 
ration instituted  in  another  state,  has 
jurisdiction  to  adjudicate,  at  the  suit 
of  a  claimant  within  the  state,  the  ex- 
istence and  extent  of  his  claim  against 
the  corporation,  where,  as  a  condition 
of  appointing  the  receivers,  it  has  re- 
quired that  they  appoint  a  person 
within  the  jurisdiction,  upon  whom 
service  of  notices  and  writs  might  be 
made.  New  York  Security  &  T.  Co. 
V.  Equitable  Mortg.  Co.  (C.  C.  W.  D. 
Mo.)  71  Fed.  Rep.  556. 

A  United  States  circuit  court  will 
not  decline  jurisdiction  of  a  motion  to 
remove  receivers  of  railroad  property 
appointed  by  it,  on  the  ground  that 
the  primary  jurisdiction  is  at  the  home 
office  of  the  company,  or  in  another 
district  in  which  a  portion  of  the  rail- 
road lies,  where  neither  of  such  courts 
has  assumed  jurisdiction,  and  it  does 
not  appear  that  they  will  do  so. 
Farmers'  Loan  &  T.  Co.  v.  Northern 
P.  B.  Co.  (C.  C.  D.  Wash.)  69  Fed. 
Rep.  871. 

That  stock  of  other  corporations  has 
been  transferred  to  the  receivers  of  a 
railroad  company  does  not  vest  a  fed- 
eral court  of  a  district  other  than  that 
of  the  home  office  of  the  company 
with  control  of  such  stock,  so  far  as 


MATTERS  RELATING  TO  THE  APPOINTMENT.  59 

be  more  fully  noticed  under  appropriate  chapters  relating  to  re- 
ceiverships as  ajjplied  to  corporations,  partnerships,  etc.  It  may 
be  stated,  in  general,  that  the  proceeding  being  remedial  in  its 
nature  and  an  incident  to  the  general  powers  of  courts  of  chan- 
cery, the  court  will  be  governed  by  the  primary  nature  of  the  pro- 
ceeding and  the  objects  sought  to  be  accomplished  thereby,  taking 
into  consideration  the  general  principles  of  equity  as  administered 
by  courts  of  chancery  or  courts  of  chancery  jurisdiction,  and  such 
modifications,  extensions  and  limitations  as  may  have  been  made 
by  statutory  enactment.' 

§  21.  Who  appointed. 

In  the  selection  of  a  person  to  act  as  receiver,  the  court  exer- 
cises a  discretion  and  such  discretion  is  to  be  governed  by  a  con- 
sideration of  the  following  principles  : 

(a)  The  receiver,  in  certain  respects,  is  an  officer  of  the  court, 
at  least  occupies  a  quasi  official  position.  His  acts  are  the  acts 
of  the  court,  and  his  official  conduct  is  supposed  to  reflect  the  will 
of  the  court  or  judge  who  appoints  him,  and  the  power  with 
which  he  is  clothed  emanates  from  the  court,  as  a  rule,  and  to  it 
he  must  strictly  account. 

(b)  While  he  occupies  this  important  relation  to  the  court  he  also 
sustains  an  important  trust  relationship  to  the  parties  in  interest. 
He  must  therefore  be  fully  competent  to  perform  the  important 
duties  assigned  to  him  -^  he  must  be  a  person  unexceptional  to 

to  require  an  application  for  the  re-  jurisdiction,  but  the  circumstances 
moval  of  the  receivers  to  be  made  to  must  be  such  as  to  have  enabled  the 
it  before  application  to  the  court  of  a  court  of  chancery  to  appoint  a  re- 
third  district  appointing  them  after  ceiver  before  the  act.  Harris  v.  Beau- 
the  original  appointment.  Farmers'  champ  Bros.  [1894]  1  Q.  B.  801.  As 
Loan  &  T.  Co.  v.  Northern  P.  R.  Co.  has  been  seen  elsewhere  almost  every 
(C.  C.  D.  Wash.)  69  Fed.  Rep.  871.  state  in  the  Union,  and  especially  so 

The   Ohio  court  of  common  pleas  in  code  states,  has  enlarged  the  power 

has  no  jurisdiction  of  a  suit  to  compel  of  appointing  receivers  by  statutory 

receivers  appointed  by  the  superior  enactments,  though  in  many  cases  it 

court    to    allow   a    claim.      Scltell  v.  will  be  found  that  the  statute  is  simply 

Huseman  (C.  P.)  1  Ohio  L.  D.  120.  a  re-enactment  of  a  previous  power 

See  also  §  17,  T[  c.  exercised  by  the  courts.     See  §  4. 

'Under  the  English  judicature  act  '^Simpson  v.  Ottawa  &  P.  B.   Co.  1 

of  1873  §  25,  sub  §  8,  a  court  did  not  Ont.  Ch.  Ciiamb.  99;  Suptonv.  Steph- 

have  jurisdiction  to  appoint  a  receiver  ennon,  11.  Ir.  Eq.  484;  Wynne  y.  Lord 

by  way  of  equitable  execution  in  case  Newhorough,  15  Ves.  Jr.  283;  Tharpe 

where,  prior  to  the  act,  no  court  had  v.  Tharpe,  12  Ves.  Jr.  317;  Taylor  v. 


60 


RECEIVERSHIPS. 


all  the  parties  interested  ;'  indifferent  as  to  all  parties.'  As  a 
rule,  he  slionld  not  be  a  creditor  nor  shareholder  nor  officer  in  an 
action  against  a  corporation/  nor  a  stockholder  or  director  of  an 
insolvent   railroad   company  ;*    nor  an   ex-agent   of   the  defend- 


Life  Association,  3  Fed.  Rep.  465,  13 
Fed.  Rep.  493. 

In  making  the  appointment  all  pri- 
vate considerations  and  preferences 
are  not  to  be  considered;  "no  man 
and  the  counsel  of  no  man  has  a 
right  to  complain  that  he  or  his  par- 
ticular friend  is  not  appointed  a  re- 
ceiver; especially  where  the  assets,  as 
in  these  banis  cases,  to  be  entrusted  to 
his  responsibility  are  counted  not  by 
thousands  but  by  hundreds  of  thou- 
sands." Be  Empire  City  Bank,  10 
How.  Pr.  498;  Williamson  v.  Wilson, 
1  Bland.  Ch.  418;  Smith  v.  New  York 
Consol.  Stage  Co.  28  How.  Pr.  208; 
Be  Empire  City  Bank,  10  How.  Pr, 
498,  Perry  v.  Oriental  Hotel  Co.  L.  R. 
5  Ch.  App.  420;  Cookes  v.  Cookes,  3 
DeQ.  J.  &  S.  526;  Wynne  v.  Lord 
Newhorough  15  Ves.  Jr.  283. 

^Simpson  v.  Ottawa  &  P.  B.  Co.  1 
Ch.  Chamb.  99 ;  Brant  v.  Willoughby, 
17  Grant  Ch.  (Ont.)  627;  Bichards  v. 
Chesapeake  &  0.  B.  Co.  1  Hughes  28; 
Wilson  V.  Poe,  1  Hog.  322;  Hooper  v. 
Winston,  24  111.  353 ;  Baker  v.  Backus, 
32  111.  79;  Merchants  Nat.  Bank  v. 
McLeod,  38  Ohio  St.  174;  Kaiser  v. 
Eellar,  21  Iowa,  95;  Williamson 
V.  Wilson,  1  Bland.  Ch.  418;  Waters 
V.  Carroll,  9  Yerg.  102;  Corey  v. 
Long,  43  How.  Pr.  497;  Devendorf 
V.  Dickinson,  21  How.  Pr.  275;  Os- 
iorn  V.  Heyer,  2  Paige,  342;  Brown  v. 
Northrup,  15  Abb.  Pr.  N.  S.  333; 
Curtis  V.  Leavitt,  1  Abb.  Pr.  274;  Van 
Bensselaer  v.  Emery,  9  How.  Pr.  135; 
Ellicott  V.  Warford,  4  Md.  80. 

^Hunter  v.  Hunter,  4  W.  W.  & 
A'B.  (E)  17;  Bolles  v.  Duff,  54  Barb. 
215.  37  How.  Pr.  162;  Atkins  v.  Wa- 
bash, St.  L.  &  P.  B.  Co.  29  Fed.  Rep. 


161 ;  Be  Northum,berland  &  D.  Dist. 
Bkg.  Co.  2  De  G.  &  J.  508;  Barbour's 
Ch.  Pr.  Vol.  I.,  p.  666.  A  court  will 
not  appoint  an  executor  or  trustee  of 
an  estate  as  receiver  over  the  same 
property,  Sykes  v.  Hastings,  11  Ves. 
Jr.  363;  Sutton  v.  Jones,  15  Ves.  Jr. 

584;  V.   Jolland,   8    Ves.    Jr. 

72,  unless  the  circumstances  of  the 
case  render  it  necessary  so  to  do. 
Netcport  v.  Bury,  23  Beav.  30;  Sykes 
V.  Hastings,  supra;  but  see  Bolles  v. 
Duff,  54  Barb.  215;  Miller  v.  Jones, 
39  111.  54.  He  should  have  no  per- 
sonal interest  in  the  property:  Bun- 
yon  V.  Farmers  &  M.  Bank,  4  N.  J. 
Eq.  480;  Williamson  v.  Wilson,  1 
Bland.  Ch.  418;  Ellicott  v.  Warford, 
4  Md.  80;  but  see  Atkins  v.  Wabash, 
St.  L  &P.  B.  Co.  29  Fed.  Rep.  161; 
Tripp  v.  Chard  B.  Co.  21  Eng.  L.  «fe 
Eq.  53. 

^Be  Northumberland  <&  D.  Dist.  Bkg. 
Co.  2  De  G.  &  J.  508.  See  Be  Eagle 
Iron  Works,  8  Paige,  385;  Lupton  v. 
Stephenson,  11  Ir.  Eq.  484;  Chamber- 
lain V.  Oreenleaf,  4  Abb.  N.  C.  92; 
Finance  Co.  of  Pennsylvania  v. 
Charleston,  C.  &  C.  B.  Co.  45  Fed. 
Rep.  436;  Ex  parte  Pinke,  2  Meriv. 
452;  must  not  be  partner  of  plaintiff's 
solicitor.  Merchants  <&  M.  Bank  v. 
Kent,  43  Mich.  293;  nor  should  trus- 
tees or  executors  be  appointed.  Sutton 
V.  Jones,  15  Ves.  Jr.  584;  Aiion.  3 
Ves.  Jr.  516. 

*Atkins  V.  WabasJi,  St.  L.  &  P.  R. 
Co.  29  Fed.  Rep.  161;  unless  the  case 
is  urgent  and  exceptional,  and  then 
only  when  all  the  parties  consent;  nor 
a  party  in  such  action  or  counsel  in 
the  cause;  Finance  Co.  of  Pennsylvania 
V.  CluirUston,  C.  &  C.  B.  Co.  45  Fed. 


MATTERS  RELATING  TO  THE  APPOINTJMENT. 


61 


ant,'  nor  an  accountant  in  the  office  of  plaintiff's  solicitor ;'  nor  a 
party  to  an  assignment  in  an  action  brought  to  set  such  sssign- 
ment  aside  ;'  nor  a  partner  in  a  proceeding  to  wind  up  such  part- 
nership ;*  nor  one  of  plaintiff's  attorneys  ;^  nor  a  master  in  chan- 
cery of  court.'  It  has  been  held,  however,  that  the  fact  that  he 
is  a  party  to  the  suit  is  not  a  disqualification.'  He  must  not  be  a 
person  who  by  his  own  acts  or  position  stands  in  an  improper  re- 
lation to  the  cause,*  nor  a  stranger  to  the  court  if  objected  to  by 
either  party."  A  clerk  of  the  court  may  be  appointed,  but  acts 
as  an  individual  and  not  as  clerk." 


Rep.  436;  Middlesex  County  Freeholders 
V.  State  Bank,  28  N.  J.  Eq.  166;  Mc- 
CullougTi  V.  Merchants  Loan  &  T.  Go. 
29  N.  J.  Eq.  217;  nor  should  an 
officer  of  a  corporation  or  other 
person  intimately  connected  with  its 
management.  Baker  v.  Backus,  32 
111.  79;  Benneson  v.  Bill,  62  111.  408; 
Atty.  Oen.  v.  Bank  of  Columbia,  1 
Paige,  511;  Re  Eagle  Iron  Works,  8 
Paige,  385;  it  was  done,  however, 
in  Oibbs  v.  Oreenville  &  C.  R.  Co. 
15  S.  C.  304,  but  the  propriety  of  the 
order  does  not  seem  to  have  been 
seriously  contested,  but  turned  upon 
the  question  as  to  whether  the  officers 
were  in  fact  receivers;  see  also  Buck 
V.  Piedemont  <&  A.  L.  Ins.  Co.  4  Fed. 
Rep.  849;  Albany  City  Bank  v.  Scher- 
merhorn,  Clarke  Ch.  366;  in  Re  Fifty- 
four  First  Mortgage  Bonds,  15  S.  C. 
304,  the  president  and  directors  of  a 
railroad  company  were  ordered  to  con- 
tinue in  possession  and  management 
of  a  road,  not  as  officers  of  the  road, 
but  as  officers  of  the  court. 

^Graham  ^.  Graham,  2  Vict.  Rep. 
(E) 145. 

Ulunter  v.  Hunter,  4  W.  W.  &  A'B 
(E)  17. 

^Smith  V.  Neio  York  Consol.  S.  Co. 
18  Abb.  Pr.  419,  28  How.  Pr.  208. 

*Todd  V.  Miller,  2  Tenn.  Ch.  107, 
but  see  Miller  v.  Jones,  39  111.  54. 

^Re  Lloyd,  L.  R.  12  Ch.  Div.  447; 
Garland  v.  Garland,  2  Ves.  Jr.  137; 
not,  however,   if  both   plaintiff  and 


defendant's  attorneys  are  appointed. 
See  also  Shannon  v.  Hanks,  88  Va. 
338;  Watson  v.  Arundel,  9Ir.  Eq.  324; 
Baker  v.  Backus,  32  111.  79. 

That  a  temporary  receiver  is  con- 
nected with  the  firm  of  counsel  for 
complainant  in  the  suit  in  which  he 
was  appointed  renders  him  ineligible 
for  the  appointpent  of  permanent  re- 
ceivers. State  Trust  Co.  v.  National 
Land  L  &  Mfg.  Co.  (C.  C.  D.  S.  C.) 
72  Fed.  Rep.  575. 

^Kilgore  v.  Hair,  19  8.  C.  486;  Ex 
parte  Fletcher,  6  Ves.  Jr.  427;  Stone  v. 
Wishart,  2  Madd.  63;  Bemiesonv.  Bill, 
62  111.  408. 

''DownsJiire  v.  Tyrrell,  Hayes  354; 
Boyle  V.  Bettws  Llantuit  Colliery  Co. 
L.  R.  2  Ch.  Div.  726;  Hyde  v.  War- 
den, L.  R.  1  Exch.  Div.  399;  Tayloi-y. 
Eckersley,  L.  R.  2  Ch.  Div.  302;  Rob- 
inson V.  Taylor,  42  Fed.  Rep.  803;  Re 
Lloyd,  L.  R.  12  Ch.  Div.  447;  Hub- 
bard V.  Guild,  1  Duer,  662;  Fenn  v. 
Bolles,  7  Abb.  Pr.  202;  Hanover  F. 
Ins.  Co.  V.  Germania  F.  Ins.  Co.  33 
Hun,  539;  Jeffery  v.  Smith,  1  Jac.  & 
W.  298. 

^Smith  v.  New  York  Consol.  Stage 
Co.  28  How.  Pr.  208;  Williamson  v. 
Wilson,  1  Bland.  Ch.  418.  See  Han- 
over F.  Ins.  Co.  V.  Germania  F.  Ins. 
Co.  33  Hun,  539;  Wynne  v.  Lord  New- 
borough,  15  Ves.  Jr.  283. 

^Smith  v.  New  York  Consol.  Stage 
Co.  28  How.  Pr.  208. 

^oKerr  v.  Brandon,  84   N.  C.  128; 


62 


RECEIVERSHIPS. 


"Where  the  matter  of  appointment  was  referred  to  a  master 
under  the  Enijlisli  practice  his  judgment  was  conchisive  unless 
some  substantial  proof  was  given  to  the  contrary/  and  his  action 
was  never  disturbed  except  on  special  grounds.* 

The  same  person  will  not  be  appointed  receiver  in  two  cases 
where  the  suits  are  conllicting,'  nor  will  the  court  delegate  the 
appointment  of  an  official  liquidator."  As  a  general  rule  the  ap- 
pointment of  a  receiver  rests  in  the  sound  judicial  discretion  of 
the  court  so  far  as  the  person  selected  is  concerned,  under  all  the 
circumstances  of  the  particular  case/  but  the  court  will  favorably 
consider  the  selection  of  the  parties  in  interest  and  will  invite 
suiTirestions  and  recommendations.* 

The  same  rules  which  apply  to  the  appointment  made  by  a 
master,  are  equally  applicable  to  a  selection  made  by  the  court, 
and  the  discretion  given  to  the  court  in  the  selection  is  rarely 
interfered  with/ 


State,  Rogers,  v.  Oborn,  86  N.  C.  432; 
and  so  when  master  in  chancery  is  ap- 
pointed, Waters  v.  Carroll,  9  Yerg. 
102;  Hammer  v.  Kaufman,  39  111, 
87. 

^Garland  v.  Garland,  2  Ves.  Jr. 
137;  Creuze  v.  London,  2  Bro.  C.  C. 
253;  Thomas  v.  Dawkin,  1  Ves.  Jr. 
452;  Anon.  3  Ves.  Jr.  515;  Wilkins  v. 
Williams,  3  Ves.  Jr.  588;  see  Wynne 
V.  Lord  Neicborovgh,  15  Ves.  Jr.  2^3; 
Hughes  v.  Williains,  6  Ves.  Jr.  453; 
Tharpe  v.  Tharpe,  12  Ves.  Jr. 
317. 

Inasmuch  as  the  appointment  is  pe- 
culiarly within  the  judicial  discretion 
of  the  court  appointing,  it  is  rarely 
that  the  appellate  court  will  interfere 
with  the  selection  made.  Cookes  v. 
Cookes,  2  De  G.  J.  &  S.  526;  but  see 
Perry  v.  Oi~iental  Hotel  Co.  L.  R.  5 
Ch.  App.  420;  Gardiner  v.  Howell,  60 
Ga.  11;  Oiinby  V.  Thompson,  56  Ga. 
316;  Crawfoi-d  v.  Spurting,  56  Ga.  611; 
Robinson  v.  Ross,  40  Ga.  375;  C'oAen  v. 
Meyers,  42  Ga.  46;  Reid  v.  Reid,  38  Ga. 


24;  Re  Eagle  Iron  Works,  8  Paige, 
385. 

^Tharpe  v.  Tharpe,  12  Ves.  Jr.  320; 
Bowersbank  v.  Collosseau,  3  Ves.  Jr. 
164;  Creuze  v.  London,  2  Bro.  C.  C. 
256;  Garland  v.  Garland,  2  Ves.  Jr. 
137;  Anon.  3  Ves.  Jr.  515;  Wilkins  v. 
Williams,  3  Ves.  Jr.  588;  Thomas  v. 
Dawkin  3  Bro.  C.  C.  508;  Re  Eagle 
Iron  Works,  8  Paige,  385. 

'Re  City,  &c.  Ins.  Co.  25  W.  R.  342. 

*Re  City,  &c.,  Ins.  Co.  25  W.  R.  342. 

^ Smith  V.  NeiD  York  Consol.  Stage  Co. 
28  How.  Pr.  208;  Williamson  v.  Wil- 
son, 1  Bland.  Ch.  418;  Perry  v.  Ori- 
ental Hotels  Co.  L.  R.  5  Ch.  App.  420; 
Cookes  V.  Cookes,  2  De  G.  J.  &  S.  526. 

*  Watkins  v.  Worthington,  2  Bland, 
Ch.  609;  Hanover  F.  Ins.  Co.  v.  Ger- 
maiiia  F.  Ins.  Co.  33  Hun,  539. 

''Cookes  V.  Cookes,  2  De  G.  J.  &  S. 
526;  Perry  v.  Oriental  Hotels  Co.  L. 
R.  5  Ch.  App.  420;  Williamson  v.  Wil- 
son, 1  Bland,  Ch.  418;  Shannon  v. 
Hanks,  88  Va.  338. 


MATTERS  RELATING  TO  THE  APPOINTMENT. 


63 


§  22.  Form  and  scope  of  order. 

The  form  of  the  order,  and  its  scope,  ranst  of  necessity  be 
shaped  with  reference  to  the  facts  and  circumstances  of  each  par- 
ticular case  which  renders  it  impossible  to  give  minute  directions 
in  regard  thereto.  A  few  general  rules  and  principles  applicable 
to  this  subject  will  only  be  attempted  in  this  connection. 

(a)  The  order  should  specifically  describe  the  property  over 
which  the  receiver  is  to  have  custody  and  control  if  the  property 
is  of  such  nature  as  to  warrant  such  a  description.'  And  when  a 
receivership  has  been  placed  over  specified  property  it  may  be 
enlarged  upon  the  discovery  of  other  property  over  which  the  re- 
ceiver should  have  custody.* 

(b)  The  primary  object  in  the  appointment  of  a  receiver  being 
the  preservation  of  the  ])i'opei'tj  pendente  lite,  it  follows  that  the 
power  of  the  court  in  making  the  order,  embraces  all  acts  neces- 
sary to  preserve  the  property  and  give  it  additional  value.*     "  A 


'The  order  appointing  a  receiver 
"of  the  incomes  of  the  outstanding 
trust  property  in  the  pleadings  men- 
tioned "  was  held  to  be  insufficient. 
It  should  state  on  the  face  of  it  over 
what  property  the  receiver  is  ap- 
pointed that  a  party  may  know  what 
it  is  that  the  officer  of  the  court  is  in 
possession  of.  Crow  v.  Wood,  13 
Beav.  271.  "Money  deposited  or 
lately  on  deposit  in  the  hands  of  the 
defendants,  Belmont  and  Lucke,  to 
the  credit  of  the  defendant,  John 
O'Mahoney,"  is  not  sufficient.  0' Ma- 
honey  V.  Belmont,  62  N.  Y.  133.  It  is 
sufficiently  specific  where  it  describes 
the  property  as  "the  books,  notes  and 
accounts  of  all  kinds  of  the  said  de- 
fendant in  the  business  of  selling 
cigars,  snuff,  tobacco  and  other 
goods."  Martin  v.  Burgwyn,  88  Ga. 
78.  As  to  form  of  order  of  railroad 
receiver  in  relation  to  keeping  ac- 
counts, see  Mercantile  IVust  Co.  v. 
Missouri,  K.  &  T.  B.  Co.  41  Fed. 
Rep.  8. 

^Lyne  v.    Lockwood,   2    Moll.    498. 
Sometimes  there  is  no  separate  order 


appointing  a  receiver  but  the  appoint- 
ment is  embodied  in  the  final  decree. 
Shidte  V.  Hoffman,  18  Tex.  578;  Bow- 
man V.  Bell,  14  Sim.  392.  Sometimes 
the  appointment  is  interlocutory,  and 
at  other  times  it  is  after  final  decree, 
as  in  Haas  v.  Chicago  Bldg.  Soc.  89 
111.  498;  Bowman  v.  Bell,  14  Sim.  392; 
Wright  v.  Vernon,  3  Drew.  112; 
Thomas -7.  Davies,ll  Beav.  29;  Hyman 
v.  JSelly,  1  Nev.  179;  Asior  v.  Turner, 
11  Paige,  436;  Howell  v.  Ripley,  10 
Paige,  43;  Brinkman  v.  Ritzinger,  82 
Ind.  358;  Connelly  v.  Dickson,  76  Ind. 
440;  Travelers'  Ins.  Co.  v.  Brouse,  83 
Ind.  62;  Buchanan  v.  Berkshire  L. 
Ins.  Co.  96  Ind.  510;  Merrill  v.  Elam, 
2  Tenn.  Ch.  513,  but  in  all  cases 
whenever  the  appointment  may  be 
made  the  order  should  specifically  de- 
fine the  duties  of  the  receiver. 

^Gilbert  v.  Washington  City,  8.  M.  & 
G.  8.  R.  Co.  33  Gratt.  586.  "A  court 
of  equity  having  in  charge  the  mort- 
gaged property  of  a  railroad  company 
is  authorized  to  do  all  acts  that  may 
be  necessary  within  its  corporate  pow- 
ers to   preserve  the  property  and  to 


64 


RECEIVERSHIPS. 


court  of  equity  in  all  cases  delights  to  do  complete  justice  and 
not  by  halves,"  is  a  maxim  in  equity  jurisprudence.' 

(c)  The  power  to  appoint  embraces  all  necessary  orders  as  to  the 
custody  of  the  property  whether  in  the  immediate  possession 
of  the  defendant,  or  his  agent,  and  in  proper  cases  can  also  order 
the  defendant's  agents  and  employes,  although  not  parties  to  the 
record,  to  deliver  specific  property  to  the  receiver." 

(d)  The  court,  however,  will  exercise  great  caution  in  framing 
its  orders  respecting  property  in  the  hands  of  persons  not  parties 
to  the  suit,  or  parties  who  are  in  possession  under  a  prima  facie 
title.'  Courts  of  equity,  except  in  extreme  cases,  are  averse  to  ap- 
pointing receivers  in  cases  where  the  contest  grows  out  of  a  ques- 


give  to  it  additional  value,  not  only  for 
the  benefit  of  the  lien  creditors  but 
also  for  the  benefit  of  the  company, 
■whose  possession  the  court  has  dis- 
placed by  the  appointment  of  a  re- 
ceiver, and  by  taking  into  its  own 
hands  the  property,  rights,  works  and 
franchises  of  the  company.  Any  act, 
it  would  seem,  necessary  for  the  pro- 
tection and  preservation  of  the  prop- 
erty is  a  legitimate  and  proper  act, 
and  whatever  is  manifestly  appropri- 
ate to  such  preservation  and  protec- 
tion or  to  the  enhancement  of  the 
value  of  the  property,  not  in  excess 
of  the  powers  of  the  corporation  will 
always  be  upheld  and  enforced  by  the 
courts."  See  also  Jerome  v.  McCarter, 
94  U.  S.  734,  24  L.  ed.  136. 

^Knight  v.  Knight,  3  P.  Wms.  331; 
Corbet  v.  Johnson,  1  Brock.  77;  Hefner 
V.  Northwestern  Mut.  L.  Ins.  Co.  123 
U.  S.  747,  31  L.  ed.  309. 

^Re  Cohen.,  5  Cal.  594.  In  this  case 
an  order  was  entered  for  a  rule  on 
certain  persons  not  parties  to  the  suit 
to  show  cause  why  they  should  not  be 
attached  for  contempt  in  disobeying 
the  order  for  delivery.  They  ap- 
peared in  answer  to  the  rule.  Ueld, 
the  appearance  and  answer  gave  the 
court  full  jurisdiction  over  persons  as 
well  as  subject-matter. 


While  the  court  has  ample  power 
to  adjust  the  rights  of  all  parties,  yet 
the  order  of  appointment  should  not 
direct  the  manner  of  distribution  in 
advance  of  a  final  decree.  West  v. 
Chasten,  12  Fla.  315. 

^Frank  v.  Stajyler,  83  Ga.  429;  Pel- 
ser  V.  Hughes,  27  S.  C.  409.  In  this 
case  it  appeared  that  a  party  was  in 
possession  and  had  prima  facie  title, 
and  the  court  refused  to  punish  for  con- 
tempt for  refusal  to  deliver.  In  a  simi- 
lar case,  Lloyd  v.  Passi?igham,  16  Ves. 
Jr.  69,  Lord  Eldon  said:  "The  court 
must  not  only  be  satisfied  of  the  ex- 
istence of  the  fraud,  but  be  morally 
sure  upon  the  hearing  of  the  cause 
the  party  would  be  turned  out  of  pos- 
session." "Again,  upon  the  question 
of  title,  a  very  important  distinction 
exists  between  cases  where  different 
and  hostile  equitable  interests  are  in- 
volved, and  where  one  party  has  the 
legal  title  unquestionably  in  him,  and 
particularly  where  with  such  title  he 
is  in  possession."  Hoffman's  Prov. 
Remedies,  §  244.  In  this  class  of 
cases  relating  to  possession  under 
claim  of  title  there  must  appear  dan- 
ger of  loss  or  material  injury  if  pos- 
session is  permitted  to  remain  in  the 
holder.  See  Pom.  Eq.  Jur.  Vol.  III., 
§  1334,  and  cases  cited. 


MATTERS  RELATING  TO  THE  APPOINTMENT. 


65 


tioii  of  title  for  the  reason  that  common  law  courts  are  the  proj^er 
forums  for  adjudicating  such  matters. 

(e)  The  order  of  appointment  relates  back  to  the  date  of  grant- 
ing, though  it  may  not  be  complete  until  the  bond  is  given.  After 
the  granting  of  the  order  the  subject-matter,  or  property,  over 
which  the  receivership  extends  is  m  custodia  legis  and  not  sub- 
ject to  interference  with  or  levy  by  execution  or  attachment.* 
The  receiver  rarely  takes  possession,  however,  until  he  has  quali- 
fied by  giving  bond  with  surety  as  required.  The  order  of  ap- 
pointment continues  during  the  pendency  of  the  suit,  unless 
otherwise  limited  or  modified." 

(f )  No  formal  order  of  assignment  is  necessary  to  pass  the  title 
of  the  defendant  to  a  receiver.'  The  appointment  vests  in  him 
the  title  to  the  property  except  such  as  is  exempt  from  levy  and 


'When  an  order  is  made  for  the  ap- 
pointment of  a  receiver  of  particular 
property  it  amounts  to  a  sequestration 
by  act  and  operation  of  laws  of  such 
property,  and  when  the  receiver  is 
subsequently  appointed  the  title  to 
such  property  vests  by  relation  from 
the  date  of  the  order  to  the  same  effect 
as  if  such  receiver  was  named  in  the 
order.  Van  Alstyney.  Cook,  25  N.Y. 
489;  Butter  v.  Tallis,  5  Sandf.  610; 
Porter  v.  Williams,  9  N.  Y.  142;  Fair- 
field v.  Weslon,  2  Sim.  &  Stu.  fc6; 
Smith  V.  New  York  Consol.  Stage  Co. 
18  Abb.  Pr.  419;  Deming  v.  New  York 
Marble  Co.  12  Abb.  Pr.  66;  Storm  v. 
Waddell,  2  Sandf.  Ch.  544;  Wilson  v. 
Alle7i,  6  Barb.  542;  He  Berry,  26  Barb, 
55;  Be  Christian  Jensen  Co.  128  N.  Y. 
550;  Be  Schuyler  Steam  Tow  Boat  Co. 
136  N.  Y.  169,  20  L.  R.  A.  391;  May- 
nard  v.  Bond,  67  ]^Io.  315;  Begenstein 
V.  Pearlstein,  30  S.  C.  192;  Clinkscales 
V.  Pendleton  Mfg.  Co.  9  S.  C.  318;  Ex 
parte  Evans,  L.  R.  13  Ch.  Div.  252. 

The  order  appointing  a  receiver  is 
in  reality  an  equitable  execution  and 
relates  to  the  date  thereof  though  it  is 
not  perfected  by  giving  of  bond  until 
afterwards.      Ex  parte  Evans  in  Be 


Watkins,  L.  R.  15  Ch.  Div.  252;  Rat- 
ion v.  Hayicood,  L.  R.  9  Ch.  229; 
Anglo-Italian  Bank  v.  Davies,  L.  R.  9 
Ch.  Div.  275.  And  see  Contra:  Ed- 
wards V.  Edimrds,  L.  R.  2  Ch.  Div. 
291;  DeFries  v.  Creed,  34  L.  J.  Eq.  N. 
S.  607;  Woods  v.  Ellis,  85  Va.  471. 

"Weems  v.  Lathrop,  42  Tex.  207; 
Williamson  v.  Wilson,  1  Bland,  Ch. 
418. 

^"Sales  whether  made  on  seizure  un- 
der execution  issued  after  judgment, 
or  on  seizure  before  final  judgment 
on  decretal  orders  which  a  court  has 
power  to  make  are  held  to  pass  title  to 
the  property  sold,  not  because  the 
ministerial  officer  has  title  but  because 
the  law  casts  upon  him,  when  acting 
under  its  authority,  the  power  to  make 
a  sale  which  will  bind  the  owner  as 
fully  as  would  his  own  act."  Bussell 
v.  Texas  &  P.  B.  Co.  68  Tex.  646. 

The  same  rule  has  been  the  law  in 
New  York  before  and  since  the  adop- 
tion of  the  code.  Mann  v.  Pentz,  2 
Sandf.  Ch.  257;  Storm  v.  Waddell,  2 
Sandf.  Ch.  505;  Wilson  v.  Allen,  6 
Barb.  542;  Cooney  v.  Cooney,  65  Barb. 
524.  And  this  rule  applies  to  real 
estate.     Porter  v.   Williams,  9  N.  Y. 


66 


RECEIVERSHIPS. 


sale.'  The  conflict  that  has  been  engendered  by  tlie  courts  upon 
this  question  has  arisen  from  a  misconception  of  the  meaning  of 
the  word  title  as  applied  to  a  receiver  as  elsewhere  explained.* 

(g)  It  is  proper  and  is  the  duty  of  a  chancellor  to  modify  the 
order  if  its  application  is  found  to  operate  harshly.'  The  recitals 
in  an  order  axQ  prima  facie  true,  but  are  not  conclusive,  and  may 
be  contradicted.''  Prior  to  a  hearing  it  is  error  in  the  court  to 
order  payment  of  the  proceeds  to  certain  specified  creditors. 
The  order  should  be  to  hold  the  proceeds  to  await  the  result  of 
the  litigation.^ 

(h)  The  regularity  of  the  appointment  cannot  be  attacked  in  a 
collateral  proceeding,  but  must  be  impeached,  if  at  all,  in  a  direct 
proceeding  for  that  purpose.'     This  doctrine  is  founded  upon 


142.  And  see  §  17,  T[  b,  note;  Idd- 
ings  V.  Bruen,  4  Sandf.  Ch.  252.  The 
court  has  power  to  compel  an  assign- 
ment. Chipman  v.  Sabbaton,  7  Paige, 
47;  Poi-ter  v.  Williams,  5  How.  Pr. 
441;  Fessenden  v.  Woods,  3  Bosw.  550; 
People,  Williams,  v.  Hulburt,  5  How. 
Pr.  446.  See  Moak  v.  Coats,  33  Barb. 
498;  Scott  v.  Elmore,  10  Hun,  68. 

^Hudson  V.  Plets,  11  Paige,  180;  An- 
drews V.  Rowan,  28  How.  Pr.  126;  Til- 
lotson  V.  Wolcott,  48  N.  Y.  188;  C'oo7iey 
V.  Cooney,  65  Barb.  524;  Finnin  v. 
Malloy,  1  Jones  &  S.  382;  Sands  v. 
Boberts,  8  Abb.  Pr.  343. 

« See  §  57. 

*  Graham  v.  Fuller  Electrical  Co.  75 
Ga.  878;  Kron  v.  Smith,  96  N.  C.  386. 

An  order  appointing  a  receiver  of  a 
corporation  will  not  be  vacated  be- 
cause he  resides  in  another  state  and 
is  not  required  to  give  bond  within 
the  jurisdiction.  Aiken  v.  Colorado 
River  I.  Co.  (C.  C.  S.  D.  Cal.)  72  Fed. 
Rep.  591. 

^Pressley  v.  Lamb,  105  Ind.  171. 

*  Nussbaum  v.  Price,  80  Ga.  205. 
On  motion  to  appoint  a  receiver,  an 

order  that  the  president  and  directors 
of  the  Greenville  &  Columbia  R.  Co., 
"  continue  in  possession  and  manage- 
ment of  the  property  under  the  order 


of  and  subject  to  this  court,  and  that 
they  make  report  to  the  court  at  such 
times  as  it  may  require," — Held,  tO' 
constitute  them  receivers.  Oibbes  v. 
Greenville  <&  C.  R.  Co.  15  S.  C.  304. 
518. 

®  In  a  suit  by  the  receiver  in  relation 
to  matters  connected  with  his  trust 
the  order  of  appointment  will  be  con- 
clusive. Neeves  v.  Boos,  86  Wis.  313; 
Vermont  &  C.  R.  Co.  v.  Vermont  C. 
R.  Co.  46  Vt.  792;  Atty.  Gen.  v.  Guar- 
dian Mut.  L.  Ins.  Co.  77  N.  Y.  272 ; 
Stanley  v.  National  U.  Bank,  115  N. 
Y.  122;  Block  V.  Estes,  92  Mo.  318; 
Cox  V.  Volkert,  86  Mo.  505;  Keokuk 
N.  L.  Packet  Co.  v.  Davidson,  13  Mo. 
App.  561;  Richards  v.  People,  81  111. 
551 ;  Commercial  Nat.  Bank  v.-  Burch, 
141  111.  519;  Barbour  v.  National  Exch. 
Bank,  45  Ohio  St.  133;  Beverley  v. 
Brooks,  4  Gratt.  187;  Neall  v.  Hill,  16 
Cai.  145.  It  cannot  be  attacked  in  a 
matter  relating  to  the  compensation 
of  the  receiver;  nor  by  a  creditor  who 
accepts  a  dividend  from  the  receiver, 
Greeley  v.  Provident  Sav.  Bank,  103 
Mo.  212;  nor  by  one  consenting 
to  the  appointment.  Russell  v. 
White,  63  Mich.  409.  Nor,  in  the  ab- 
sence of  fraud  or  mistake,  can  a  pur- 
chaser of  the  receiver  deny  the  valid- 


MATTERS  RELATING  TO  THE  APPOINTMENT. 


67 


general  equitable  principles,  but  it  is  not  applicable  to  a  case 


ity  of  his  appointment.  Stilzer  v.  La 
Rose,  79  Ind.  435.  See  generally  Low- 
enstein  v.  Finney,  54  Ark.  124;  Flor- 
ence Oas,  Elec.  L.  &  P.  Co.  v.  Hanby, 
101  Ala.  15;  Comer  v.  Bray,  83  Ala. 
217;  Moore  v.  Taylor,  40  Hun,  56; 
Case  V.  Marchand,  23  La.  Ann.  60; 
Eldrington  v.  Pridham,  65  Tex.  612; 
Texas,  etc.  R.  Co.  v.  Gay,  86  Tex.  571, 
25  L.  R.  A.  53;  Wilson  v.  Barney,  5 
Hun,  257. 

The  possession  of  a  receiver  ap- 
pointed by  the  court  is  the  possession 
of  the  court;  and  the  right  of  the  court 
to  grant  the  receivership  cannot  be 
questioned  in  proceedings  for  con- 
tempt by  disturbing  such  possession. 
Albany  City  Bank  v.  Schermerhorn, 
9  Paige,  372. 

The  proper  record  evidence  of  an 
appointment  as  receiver  is  conclusive 
evidence  of  the  right  to  act  as  such, 
until  it  is  impeached.  It  is  immate- 
rial whether  the  order  of  appointment 
was  erroneous  or  improper;  while  it 
is  a  subsisting  order  the  receiver  will 
be  sustained  in  his  possession  of  prop- 
erty. Vermont  &  C.  R.  Co.  v.  Vermont 
C.  R.  Co.  46  Vt.  792;  Pressleyv.Lamb, 
105  Ind.  203;  Bodkin  v.  Merit,  102 
Ind.  298;  First  Nat.  Bank  v.  United 
States  Encaustic  Tile  Co.  105  Ind.  227; 
TJiompson  v.  Holladay,  15  Or.  34; 
Darin  Mfg.  Co.  v.  ParkJmrst,  125  Ind. 
317;  Greenawalt  v.  Wilson,  52  Kan. 
109;  Radebaugh  v.  Tacoma  &  P.  R.  Co. 
8  Wash.  570;  Elderkin  v.  Peterson,  8 
Wash.  674. 

The  appointment  of  a  receiver  can- 
not be  collaterally  attacked  in  an  ac- 
tion by  the  receiver  to  recover  an 
assessment,  where  the  court  appoint- 
ing him  had  jurisdiction  of  the  sub- 
ject matter  and  of  the  parties.  Rand, 
McN.  &  Co.  v.  Mutual  F.  1.  Co.  58  111. 
App.  528. 


A  party  to  a  proceeding  for  the  ap- 
pointment of  a  receiver,  who  contests 
the  application  and  fails  to  appeal 
from  the  order  of  appointment,  can- 
not afterwards  assert  a  claim  based  on 
the  irregularity  or  wrongfulness  of 
the  appointment.  Saunders  v.  Kemp- 
ner  (Tex.  Civ.  App.)  33  S.  W.  585. 

A  judgment  appointing  a  receiver 
in  purely  statutory  proceedings  in 
which  such  appointment  is  not  author- 
ized is  void,  and  may  be  collaterally 
assailed.  Murray  v.  American  Surety 
Co.  (C.  C.  App.  9th  C.)  70  Fed.  Rep. 
341. 

An  Insurance  company  does  not 
have  such  an  interest  in  an  assign- 
ment by  a  corporation,  by  reason  of  a 
suit  against  it  on  a  policy  by  a  re- 
ceiver to  whom  the  assignee  was  di- 
rected to  deliver  all  the  property  of 
the  corporation,  as  will  authorize  it  to 
intervene  in  the  receivership  proceed- 
ings for  the  purpose  of  having  the  ap- 
pointment of  the  receiver  and  all  pro- 
ceedings taken  by  him  set  aside. 
BartJiY.  American  Ins.  Co.  (Wis.)  65 
N.  W.  1035. 

A  levying  creditor  cannot  intervene 
to  attack  the  appointment  of  a  re- 
ceiver on  the  ground  of  want  of  juris- 
diction. Holmes  v.  Knapp  Electrical 
Works,  59  111.  App.  58. 

If  the  court  had  jurisdiction  of  the 
snbject-matter  the  validity  of  the  ap- 
pointment cannot  be  questioned  in  an 
action  by  the  receiver.  Davis  v. 
Slvarer,  90  Wis,  250. 

An  erroneous  appointment  on  an 
inadequate  showing  will  not  affect  the 
jurisdiction  of  the  court  over  the  sub- 
ject-matter.    Id. 

Appointment  cannot  be  attacked  in 
a  collateral  proceeding.  State  v.  Scar- 
ntt.  30  S.  W.  Rep.  1026.  See  State 
V.  Ross,  122  Mo.  435;  Yoi'6  v.  Superior 


68 


RECEIVERSHIPS. 


where  the  appointment  is  void  for  want  of  jurisdiction  over  the 
defendant.' 

(i)  Nor  is  the  appointment  invalidated  by  irregularity  or  error 
in  the  proceeding.'^ 


Court,  41  Pac.  Rep.  477;  Smith  v. 
Hopkins,  10  Wash.  77. 

A  judgment  creditor  not  a  party  by 
intervention  or  otherwise  cannot  ap- 
pear in  the  action  without  leave  and 
move  to  vacate  the  order  of  appoint- 
ment. Wooding  v.  Wooding,  10  Wash. 
531. 

•  Texas  &  P.  R.  Co.  v.  Qay,  86  Tex. 
571,  25  L.  R.  A.  53;  St.  Louis  &  S. 
Coal  &  Min.  Go.  v.  Sandoval  Coal  & 
Min.  Co.  Ill  111.  33. 

The  appointment  of  a  receiver  by  a 
void  order  does  not  disqualify  him 
from  being  appointed  under  a  second 
order,  under  Ind.  Rev.  Stat.  1894, 
§  1237,  providing  that  no  party,  at- 
torney, or  "other  person  interested" 
in  any  action  shall  be  appointed  re- 
ceiver therein.  Rohinson  v.  Dickey 
(Ind.)  43  N.  E.  638. 

The  appointment  of  a  receiver  of  a 
dissolved  corporation  without  notice 
to  it  is  void  where  the  appointment  is 
made  without  requiring  the  complain- 
ant to  give  bond,  in  violation  of  Ala. 
Acts.  1894-95,  p.  226,  although  such 
corporation  may  have  been  in  con- 
tempt in  joining  in  a  request  in  an- 
other court  for  the  appointment  of  a 
receiver.  Capital  City  Water  Co.  v. 
Weatherly  (Ala.)  18  So.  841. 

Goods  taken  by  a  receiver  under  an 
appointment  which  is  void  need  not 
be  restored  before  hearing  another  ap- 
plication for  the  appointment  of  a  re- 
ceiver, as  void  appointments  may  be 
entirely  disregarded  and  a  second  ap- 
pointment made  without  vacating  the 
first.  Robinson  v.  Dickey  (Ind.)  42  N. 
E.  638. 

An  appointment  of  a  receiver  upon 


the  application  of  plaintiff  is  not  in- 
valid because  of  the  erroneous  over- 
ruling of  a  previous  motion  by  de- 
fendant to  require  plaintiff  as  a  non- 
resident to  file  a  bond  for  costs  under 
Ind.  Rev.  Stat.  1894,  §  598.  Calloway 
V.  Campbell  (Ind.)  41  N.  E.  597. 

*As  where  one  of  the  firm  is  not 
made  a  party  to  the  proceeding,  it  not 
appearing  that  he  was  within  the  juris- 
diction of  the  court,  or  had  a  substan- 
tial interest  in  the  partnership.  Stel- 
zer  V.  La  Rose,  79  Ind.  435.  Or  where 
the  court  fails  to  require  adequate  se- 
curity. Nesbitt  V.  Turrentine,  83  N.  C. 
535.  Nor  does  the  fact  that  an  exe- 
cution was  not  sued  out  and  returned 
nulla  bona,  in  a  creditor's  proceeding, 
where  no  objection  was  interposed 
at  the  time  of  the  appointment,  and 
where  according  to  the  facts  and  ad- 
missions it  would  have  been  an  idle 
ceremony  and  of  no  benefit.  Sage  v. 
Memphis  &  L.  R.  R.  Co.  125  U.  S. 
361,  31  L.  ed.  694.  Nor  where  the 
clerk  of  court  is  appointed  in  vio- 
lation of  the  statute.  Moore  v.  Tay- 
lor, 40  Hun,  56.  Nor  the  failure  to 
give  notice  as  required  by  law.  Cor- 
bin  v.  Berry,  83  N.  C.  27.  Nor  where 
the  findings  of  the  court  are  not  re- 
duced to  writing  until  three  or  four 
days  after  the  entry  of  the  order. 
Forsaith  Mach.  Co.  v.  Hope  Mills  L. 
Co.  109  N.  C.  576.  Nor  where  the 
order  did  not  specify  the  newspapers 
in  which  it  was  to  be  published,  as 
required  by  the  code.  Re  Christian, 
Jensen  Co.  128  N.  Y.  550.  Nor  by 
reason  of  defects  in  the  averments  of 
the  bill.  Comer  v.  Bray,  83  Ala.  217. 
See  also  Stith  v.  Jones,  101  N.  C.  860. 


MATTERS  RELATING  TO  THE  APPOINTMENT. 


69 


(j)  The  order  of  the -court  appointing  a  receiver  is  subject  to 
revocation  and  will  be  revoked  under  certain  circumstances,  when 
the  application  is  made  in  apt  time : 

(i)  Where  the  appointment  was  a  nullity,  as  where  the  order 
was  ex  jparte  and  without  notice,  the  insolvency  of  the  corpora- 
tion defendant  not  being  alleged.* 

(^)  "Where  the  court  in  making  the  appointment  was  imposed 
upon,  the  application  being  collusive  as  between  the  plaintiff  and 
defendant." 

iS)  Where  it  appears  that  the  appointment  was  an  invasion  of 
defendant's  rights ;  that  the  facts  did  not  justify  an  appointment 
and  the  same  was  unadvisedly  and  improvidently  made.' 

{Ji)  When  it  appears  that  the  court  appointing  had  no  jurisdic- 
tion of  the  action.^ 

(5)  Delay  in  making  application  for  the  vacation  of  an  order 
appointing  a  receiver,  will  be  fatal  to  the  application.  It  must 
be  made  in  apt  time.^  And  so  where  the  applicant  has  partici- 
pated in  the  proceedings  pending  in  which  the  receiver  is  ap- 
pointed.* 


Nor  where  the  receiver  neglects  to  be 
sworn,  as  required  by  statute.  Amer- 
ican Bank  v,  Uooper,  54  Me.  438. 

^Turgeau  v.  Brady,  24  La.  Ann.  348. 

^  Sage  v.  Memphis  &  L.  B.  E.  Co. 
125  U.  S.  361,  31  L.  ed.  694;  State  v. 
Plimdx  Bank,  33  N.  Y.  9;  Wilson  v. 
Barney,  5  Hun,  257. 

^  Allen  V.  Dallas  &  W.  R.  Co.  3 
Woods,  316. 

*  Mercantile  Trust  Co.  v.  ^tna  Iron 
Works,  4  Ohio  C.  C.  579. 

^Palen  v.  BusJmell,  13  N.  Y.  Supp. 
785. 

•  BattersTiall  v.  Davis,  31  Barb.  323. 
In  this  case  a  stockholder  having 
joined  in  an  application  made  to  the 
court  by  the  receiver  to  sell  the  assets 
of  the  corporation,  cannot  be  permit- 
ted to  question  the  validity  of  the  re- 
ceiver's appointment. 

The  revocation  of  the  order  appoint- 
ing a  receiver  is,  as  a  rule,  in  the  dis- 
cretion of  the  court,  and  should  be 


granted  if  the  circumstances  demand 
it. 

Where  a  writ  of  error  is  sued  out 
on  a  judgment  for  complainant  under 
a  bill  alleging  fraudulent  transfers  of 
defendant's  property  and  a  superse- 
deas bond  is  filed  securing  complain- 
ant, a  motion  to  vacate  an  order  ap- 
pointing a  receiver  should  be  granted. 
Louisville  &  St.  L.  M.  Co.  v.  South- 
worth,  38  111.  App.  225. 

Cases  may  arise  in  which  it  would 
be  the  duty  of  the  court,  on  dismiss- 
ing a  bill,  to  retain  the  custody  of  the 
property  and  funds  in  controversy, 
and  to  continue  the  receivership,  or 
even  to  transfer  the  receivership  to 
another  suit,  then  pending  in  the 
court,  between  the  same  parties,  and 
involving  their  rights  and  equities  in 
and  to  the  same  property;  but  such 
transfer  could  never  be  ordered  unless 
the  second  suit  presented  a  state  of 
facts  which  would  have  authorized 


70 


RECEIVERSHIPS. 


(k)  In  many  of  the  states  an  order  appointing  a  receiver  can  be 
appealed  from.'  Tliis  is  based  upon  the  ground  that  in  its  effect 
the  order  is  final,  or  at  least  affects  a  substantial  interest.  And 
frequently  the  statute  authorizes  an  appeal  from  an  order  of  this 
nature." 


the  appointment  of  a  receiver  in  the 
first  instance.  Scott  v.  Ware,  65  Ala. 
174. 

Where  a  receiver  is  appointed  in 
advance  of  probate  to  talce  rents  and 
profits  pending  litigation  upon  a  ca- 
veat  to  the  probate  in  the  prerogative 
court,  and  in  ejectment  by  the  heirs 
at  law  against  the  devisees  in  a  proper 
court  of  law,  and  afterwards  a  judg- 
ment was  rendered  against  the  dev- 
isees, the  receiver  will  be  recalled. 
Baptist  Church  v.  Eetfield,  46  N.  J. 
Eq.  503. 

The  rescission  of  an  order  appointing 
a  receiver,  "  without  prejudice  to  any- 
one, party  or  claimant,"  has  been  held 
to  be  no  defense  to  a  possessory  war- 
rant for  an  engine  previously  sued  out 
against  him.  He  would  have  sur- 
rendered it  to  the  company  at  his  own 
risk.  Peacock  v.  Pittsburg  L.  &  G. 
Works,  52  Ga.  417. 

Where  the  appointment  of  a  receiver 
has  been  properly  vacated  by  the  order 
of  a  judge  at  chambers,  the  validity 
of  such  order  does  not  depend  on  the 
mere  discretion  of  the  court  or  judge 
making  the  appointment.  And  where 
the  court,  without  any  new  showing 
or  change  of  circumstances  calling  for 
judicial  action,  directs  the  order  to  be 
set  aside  as  a  nullity,  it  assumes  au- 
thority not  warranted  by  law.  Cin- 
cinnati, S.  &  C.  R.  Co.  V.  Sloan,  31 
Ohio  St.  1. 

A  party  at  whose  instance  a  receiver 
has  been  improperly  appointed,  but  on 
a  correct  statement  of  facts,  will  be 
charged  with  the  cost  of  the  receiver- 
ship, and  with  such  rents  as  the  re- 
ceiver   himself    would    be    properly 


chargeable  with.  Lockhart  v.  Gee,  3 
Tenn.  Ch.  332. 

It  is  not  necessary  to  notify  the  re- 
ceiver of  a  motion  to  revoke  the  order 
of  appointment.  He  is  entitled  to 
notice  only  where  it  is  sought  to  make 
him  liable,  or  to  account,  or  to  make 
return,  Howard  v.  Lowell  Mach.  Co. 
75  Ga.  325. 

The  appointment  of  a  permanent 
receiver  by  final  judgment,  under  N. 
Y.  Code  Civ.  Proc.  §  713,  supersedes 
the  previous  appointment  of  a  tempo- 
rary receiver  by  the  same  court  in  an- 
other district;  and  an  injunction  re- 
straining the  permanent  receiver  from 
interfering  with  the  temporary  is  erro- 
neous. Glines  v.  Binghamton  Trust 
Co.  68  Hun.  511. 

^Wilson  Y.  Davis,  1  Mont.  98;  Cal- 
lanan  v.  Shaw,  19  Iowa,  183;  Pressley 
V.  Lamb,  105  Ind.  171  (see  stat.);  Cone 
V.  Paute,  11  Heisk.  506;  McMiyinville 
&M.  R.  Co.  V.  Huggins,  7  Coldw.  217; 
Mabry  v.  Ross,  1  Heisk.  769;  Lewis  v. 
Cavipau,  14  Mich.  458;  Barry  v. 
Briggs,  22  Mich.  201;  Detroit  First 
Nat.  Bank  v.  Barnum  Wire  &  I.  Works, 
58  Mich.  315;  Brown  v.  Ring,  11  Mich, 
159;  Bollard  v.  Taylor,  1  Jones  &  S. 
496;  Fellows  v.  Heermans,  13  Abb.  Pr. 
N.  S.  1;  Grant  \.  Webb,  21  Minn.  39; 
Knight  v.  Nash,  22  Minn.  452;  Mc- 
Cord  V.  Weil,  33  Neb.  868,  29  Neb. 
682;  Hovey  v.  McDonald,  109  U.  S. 
150,  27  L.  ed.  888. 

^Daley.  Kent,  58  Ind.  584;  Buchanan 
V.  Berkshire  L.  Ins.  Co.  96  Ind.  510; 
Shannon  v.  Hanks,  88  Va.  338;  Sf7iith 
V.  Butcher,  28  Gratt.  144;  Ruffner  v. 
Hairs,  33  W.  Va.  655. 


MATTERS  RELATING  TO  THE  APPOINTMENT. 


71 


In  otlier  states,  not  being  a  final  order,  it  is  not  appealable.' 
And  so  also  where  the  evidence  is  conflicting/  But  an  order 
based  on  a  motion  to  vacate  the  order  appointing  a  receiver  is  not 
subject  to  appeal,  or  writ  of  error/  And  where  the  order  ap- 
pealed from  is  in  the  discretion  of  the  court  granting  it,  it  is  not 
subject  to  review  unless  the  court  has  abused  its  discretion/ 


'Under  act  of  March  3,  1891,  26 
Stat.  826,  chap.  517,  §  6,  the  United 
States  Court  of  Appeals  will  not  re- 
view an  order  for  the  appointment  of 
a  receiver.  Florida  Constr.  Co.  v. 
Toung,  11  U.  S.  App.  683.  The  rule 
is  the  same  under  the  acts  of  Congress 
regarding  appeals  to  the  Supreme 
Court  of  the  United  States.  Grant  v. 
Plmnix  Mut.  L.  Ins.  Co.  106  U.  S.  429, 
27  L.  ed.  257.  The  requirement  is  that 
the  order  from  which  the  appeal  is 
desired  must  terminate  the  litigation 
of  the  parties  on  the  merits  of  the 
case,  so  that  if  there  should  be  an  af- 
firmance in  the  upper  court,  the  court 
below  would  have  nothing  to  do  but 
to  execute  the  decree  it  had  already 
rendered.  Id.  See  also.  Whiting  v. 
Bank  of  U.  S.  38  U.  S.  13  Pet.  6,  10 
L.  ed.  33;  Forgay  v.  Conrad,  47  U.  S. 
€  How.  201,  12  L.  ed.  404;  Craighead 
V.  Wilson,  59  U.  S.  18  How.  199,  15 
L.  ed.  332;  Beebe  Y.Russell,  60  U.  S. 
19  How.  283,  15  L.  ed.  668;  Branson 
V.  La  Crosse  &  M.  R.  Co.  67  U.  S.  3 
Black,  524,  17  L.  ed.  359;  Thomsons. 
Bean,  74  U.  S.  7  Wall.  342,  19  L.  ed. 
i)7;  8t.  Glair  County  v.  Lovingston,  85 
U.  S.  18  Wall.  628,  21  L.  ed.  813; 
Parcels  v.  Johnson,  87  U.  S.  20  Wall. 
653,  22  L.  ed.  410;  North  Carolina  R. 
Co.  V.  Swasey,  90  U.  S.  23  Wall.  405, 
23  L.  ed,  136;  Crosby  v.  Buchanan, 
90  U.  S.  23  Wall.  420.  23  L.  ed.  138; 
Tippecanoe  County  Comrs.  v.  Lucas, 
93  U.  S.  108,  23  L.  ed.  822;  Bostwick 
V.  Brinkerhoff,  106  U.  S.  3,  27  L.  ed. 
73;  Wilson  y.  Davis,  1  Moat.  98;  Em- 


mett  V.  Oarnett,!  M&ckey,  53;  Meadow 
Valley  Min.  Co.  v.  Dodds,  6  Nev.  261 ; 
Eaton  &  H.  R.  Co.  v.  Varnum,  10  Ohio 
St.  622;  Cincimiati,  S.  &  C.  R.  Co.  v. 
Sloan,  31  Ohio  St.  1;  Holden,  &c.  v. 
McMakin,!  Par.  Sel.  Eq.  Cas.  270; 
WoodY.  Brewer,  9  Ind.  86;  Coates  v. 
Cunningham,  80  111.  467;  Kansas 
Rolling  Mill.  Co.  v.  Atchison,  T.  &  8. 
F.  R.  Co.  31  Kan.  90;  Boyd  v.  Cook, 
40  Kan.  675;  Hottenstein  v.  Conrad,  5 
Kan.  249;  Hanon  Y.Weil,  69  Miss. 
476;  Duncan  v.  Campau,  15  Mich.  415; 
East  &  West  Texas  L.  Co.  v.  Williams, 
71  Tex.  444. 

''Naylor  v.  Sidener,  106  Ind.  179; 
Journeay  v.  Brown,  20  N.  J.  L.  Ill; 
Robenson  v.  Ross,  40  Ga.  375 ;  Cohen  v. 
Meyers,  42  Ga.  46. 

^ Coates  Y.  Cunningham,  80  111.  467; 
Farson  v.  Oorham,  117  111.  137  (see 
statute);  Hull  y.  Caughy,  66  Md. 
104. 

*Neeves  Y.Boos,  86  Wis.  313;  Fel- 
lows Y.  Heermans,  13  Abb.  Pr.  N.  S. 
1;  Nimocks  v.  Cape  Fear  Shingle  Co, 
110  N.  C.  230;  Gardner  v.  Iloicell,  60 
Ga.  11;  Crawford  v.  Spurling,  56  Ga, 
611;  GvnbyY.  Thompson,  56  Ga.  316; 
Reid  V.  Reid,  38  Ga.  24;  Baird  v, 
Cumberland  &  8.  R.  Tump.  Co.  1 
Lea,  394;  Bramley  v.  Tyree,  1  Lea, 
531;  Johnston  v.  Uanner,  2  Lea,  8; 
Roherson  y  .  Roberson,  3  Lea,  50;  La 
Societe  Francaise  D'epergenes  v.  15th 
Judicial  Dist.  Ct.  53  Cal.  495;  Emerie 
V.  Alvarada,  64  Cal.  529;  Journeay  v. 
Brown,  20  N.  J.  L.  Ill;  Brown  v. 
Vandermuelen,  41  Mich.  418-  Beecher 


72 


RECEIVERSHIPS. 


(1)  The  effect  of  an  appeal  taken  from  an  order  appointing  a 
receiver  has  given  rise  to  numerous  conflicting  decisions.  It 
may,  liowever,  be  stated  as  reasonably  clear  from  the  weight  of 
authority : 

(1)  That  after  an  appeal  and  before  the  receiver  has  taken  pos- 
session the  property  is  unaffected  by  the  order.' 

(2)  "When  an  appeal  has  been  taken  from  an  order  appointing  a 
Teceiver  2)ende7ite  lite  the  power  of  the  court  making  the  order 
and  its  officers  is  suspended  in  reference  to  the  order  appealed 
from,  and  the  order  remains  inoperative  pending  the  appeal."    On 


V.  Marquette  &  P.  Rolling  Mill.  Co.  40 
Mich.  307. 

'  Cook  V.  Cole,  55  Iowa,  70. 

The  court  cannot,  in  anticipation  of 
a  judgment,  make  an  order  continu- 
ing a  receivership  after  judgment, 
during  the  pendency  of  appeal,  which 
may  be  taken.  Thus,  an  order  en- 
tered subsequent  to  the  order  of  ap- 
pointment, continued  the  receivership 
"for  thirty  days  after  the  entry  of 
judgment  in  the  action,  and  if  an  ap- 
peal shall  be  taken  until  thirty  days 
after  the  decision  of  the  appeal  by  the 
General  Term,  and  in  like  manner 
until  after  the  decision  of  any  appeal 
•which  might  be  taken,"  Held,  unau- 
thorized. Colwell  V.  Garfield  Nat. 
Bank,  119  N.  Y.  408  (see  code). 

^State  v.  Johnson,  13  Fla.  33:  Allen 
V.  Chadburn,  8  Baxt.  225;  Chicago  & 
S.  R.  Co.  v.  Cason,  133  Ind.  49;  Su- 
preme Sitting  of  0.  of  1.  H.  v.  Baker, 
134  Ind.  298,  20  L.  R.  A.  210;  State 
V.  Johnson,  13  Fla.  33. 

When  an  appeal  is  taken  from  an 
order  appointing  a  receiver  and  a  su- 
persedeas bond  given  as  required  by 
law  the  power  of  the  receiver  is  sus- 
pended, and  the  property  must  be 
restored.  Farmers'  Nat.  Bank,  etc.  v. 
Backus,  2  Am.  &  Eng.  Corp.  Cas.  N. 
8  397. 

When  an  appeal  with  supersedeas  is 
taken    from    an  interlocutory  order 


that  part  of  the  case  which  is  appealed 
is  completely  removed  from  the  juris- 
diction of  the  lower  court.  Farmers^ 
N.  B.  etc.  V.  Backus,  1  Am.  &  Eng. 
Corp.  Cas.  N.  S.  397. 

An  appeal  from  an  order  appointing 
operates  as  a  stay  upon  all  proceed- 
ings under  the  order.  Virginia  T.  & 
C.  Steel  &  Iron  Co.  v.  Wilder,  88  Va. 
942. 

Taking  an  appeal  from  an  order  ap- 
pointing a  receiver  pendente  lite,  and 
fllinga  supersedeas  bond  in  accordance 
with  Minn.  Gen.  Stat.  1894,  t^  6142, 
providing  that  the  effect  of  the  appeal 
with  such  bond  is  to  "stay  all  pro- 
ceedings" on  the  order  and  "save  all 
rights  affected  thereby,"  suspend  the 
power  of  the  receiver  and  render  the 
order  inoperative  pending  the  appeal, 
making  it  the  duty  of  the  receiver  to 
restore  the  possession  of  any  property 
he  may  have  taken  under  the  order. 
Farmers'  Nat.  Bank  v.  Backus  (Minn.) 
65  N.  W.  255. 

A  receiver  of  an  insolvent  corpora- 
tion cannot  appeal  from  a  decree  dis- 
tributing the  assets,  as  he  is  not  in- 
jured thereby.  CJiicago  Title  &  T.  Co. 
V.  Caldwell,  58  Dl.  App.  219. 

An  order  affirming  an  interlocutory 
decree  of  a  lower  court  is  only  an  adju- 
dication by  the  appellate  court  that 
the  action  of  the  court  below  was  not 
erroneous.      The  jurisdiction  of   the 


MATTERS  RELATING  TO  THE  APPOINTMENT.  73 

the  contrary,  where  the  order  appealed  from  is  an  order  of  adju- 
dication in  an  insolvency  proceeding  in  wliich  a  receiver  was  ap- 
pointed it  was  held  that  the  functions  of  the  receiver  were  not 
suspended.'  There  is  not  entire  harmony  in  the  cases  as  to  the 
effect  of  an  appeal  in  regard  to  a  receivership,  but  it  would  seem, 
however,  that  in  all  cases  when  the  order  appointing  a  receiver  is 
appealable,  and  an  appeal  is  taken,  tliat  the  receivership  is  sus- 
pended pending  the  appeal ;  and  that  when  the  order  appointing 
is  only  interlocutory,  and  the  appeal  is  from  the  iinal  decree,  the 
receivership  is  not  suspended,  and  especially  so  if  the  receiver  is 
2ijpendente  lite  receiver  simj)ly. 

§23.  Bond. 

(a)  Except  in  a  few  cases  it  is  a  necessary  incident  and  a  re- 
quirement that  the  receiver  shall  give  bond,  or  recognizance,  with 
sureties  to  be  approved  by  the  court  or  master,  as  the  statute  or 
practice  may  require,  in  such  amount  as  shall  appear  requisite  to 
amply  secure  all  persons  whose  interests  are  involved.''  The  ap- 
pointment is  not  perfected  until  the  person  selected  has  filed  the 

court  below  reverts  after  the  suspen-  ^Banks  v.  Potter,  21  How.  Pr.  469; 

sion  caused  by  the  appeal.     San  An-  Voorhees  v.  Seymour,  26  Barb.  569;  ife 

to7iio,  etc.  O.  S.  R.  Co.y.  Davis,  2  Am.  Eagle  Iron  Works,  8  Paige,  885;  West 

&  Eng.  Corp.  Gas.  N.  S.  374.  v.  Fraser,  5  Sandf.    653;  Lotlimer  v. 

'^ Be  Real  Estate  Associates,  58  Cal.  Lord,  4  E.  D.   Smith,  183;  Wilson  v. 

356;  Coburn  v.  Ames,  52  Cal.  385;  Von  Allen,  6  Barb.   542;   Fairfield  v.  Wes- 

Roun  V.San  Francisco  Super.   Ct.  58  ion,  2  Sim.  &  Stu.  96;  Williamson  v. 

Cal.  358;  Swing  v.  Townsend,  24  Ohio  Wilson,  1  Bland,  C!h.  418;  Tomlinson 

St.  1;  Brien  V.Paul,  3  Tenn.  Ch.  357;  v.  Ward,  2  Conn.    396;    Manners  v. 

Schenk  v.  Reap,  1  Dill.  267;  Smith  v.  Furze,  11  Beav.  30;  Tylee  v.  Tglee,  17 

Allen,  2  E.  D.  Smith,  2.59;  Stafford  v.  Beav.    583;  Simmons  v.  Henderson,  1 

Union  Bank,  57  U.  S.  16  How.  135,  Freem.     Ch.    (Miss.)    493;    Jones    v. 

14  L.  ed.  876.     And  in  Hovey  v.  Mc-  Douglierty,  10  Ga.  273;  McDonald  v. 

Donald,  109  U.  S.   150,  27  L.  ed.  888,  Dougherty,  11  Ga.  570;Williams  v.  Jen- 

•where  an  appeal  was  taken  from  an  kins,   11  Ga.   595;  JoJms  v.JoJcns,  23 

order  appointing  a  receiver,    and  a  Ga.  'd\;  Whitehead  v.  Woolen,  43  Miss, 

supersedeas    filed    the   property    did  b2Z\Woodsv.  Ellis,  85  Va.  ^11;  John- 

not  pass  into  the  custody  of  the  law  son  v.  Martin,  1  Thomp.   &  C.   504; 

until  the  receiver  actually  took  pos-  Defries  v.  Creed,  34  L.  J.  N.  S.  Eq. 

session  after  the  affirmance  of  the  su-  607;  Edwards  v.  Edioards,  L.  R.  2  Ch. 

preme  court.  Div.  291;  Mead  v.  Orrery,  3  Atk.  235, 

Where  a  receiver  is  appointed  in  but  see  Dilling  v.  Foster,  21  S.  C.  334; 

two  suits,    and   one  is  appealed,  see  Shulle  v.  Uoff'man,  18  Tex.  678. 
Lcttimer  v.  Lord,  4  E.  D.  Smith,  183. 


74 


RECEIVERSHIPS. 


required  bond,  and  when  that  is  done  liis  appointment  operates 
by  relation  from  the  time  of  making  the  order.' 

Whatever  may  have  been  the  early  practice  in  the  Eno;lish 
court  of  chancery,  in  exceptional  cases,  of  appointing  a  receiver 
without  bond  by  consent  of  parties,  such  practice  is  no  longer  in 
force  in  this  country  and  never  was  in  the  Irish  court  of  chan- 
cery." 


^Be  Schuyler  Steam  Tow  Boat  Co. 
136  N.  Y.  169,  20  L.  R.  A.  391;  Be 
Chrislian  Jensen  Co.  128  N.  Y.  550; 
Butter  V.  TalUs,  5  Sandf.  610;  Stoi-m 
V.  Waddell,  2  Sandf.  Ch.  M4;Wilsonv. 
Allen,  6  Barb.  542;  Be  Berry.  26  Barb. 
55 -yVoorliees  v.  Seymour,  26  Barb.  581; 
Deming  v.  Neio  Toi'k  Marble  Co.  12 
Abb.  Pr.  66;  Mann  v.  Pentz,  2  Sandf. 
Ch.  257;  Porter  v.  Williams,  9  N.  Y. 
142;  Van  Alstyne  v.  Cook,  25  N.  Y. 
489;  Johnson  v.  Martin,  1  Thomp.  & 
C.  504;  Maynard  v.  Bond,  67  Mo.  315; 
Be  Eagle  Iron  Works,  8  Paige,  383; 
Weil  V.  Tyler,  38  Mo.  545;  Alex-ander 
V.  Merry,  9  Mo.  524;  Steele  v.  Slurgis, 
5  Abb.  Pr.  442;  Lottimer  v.  Lord,  4 
E.  D.  Smith,  183;  Tomlinson  v.  Ward, 
2  Conn.  396;  Fairfield  v.  Weston,  2 
Sim.  &  Stu.  95;  Clinkscales  v.  Pendle- 
ton Mfg.  Co.  9  S.  C.  318;  Begenstein  v. 
Pearlestein,  30  S.  C.  192;  Ex  parte 
Etans,  Be  Watkins,  L.  R.  13  Ch.  Div. 
252.  This  case  is  based  upon  the  doc- 
trine that  the  appointment  of  a  re- 
ceiver is  in  the  nature  of  an  equitable 
execution.  Be  Schuyler  Steam,  Tow 
Boat  Co.  43  N.  Y.  S.  R.  163. 

A  contrary  doctrine  is  held  in,  De- 
fries  V.  Creed,  34  L.  J.  Eq.  N.  S.  607; 
Edwards  v.  Edwards,  L.  R.  2  Ch.  Div. 
291  (see  L.  R.  13  Ch.  Div.  255);  Far- 
mers  Bank  v.  Beaston,  7  Gill.  &  J.  421; 
Woods  V.  Ellis,  85  Va.  471 ;  Noyes  v. 
Bich,  52  Me.  115. 

As  will  be  seen  the  great  weight  of 
authority  is  in  favor  of  the  doctrine 
6tated  in  the  text,  and  is  based  upon 
the  following  propositions  :    (1)  The 


appointment  of  a  receiver  is  in  the 
nature  of  an  equitable  execution,  and 
relates  to  the  date  of  the  order  made. 

(2)  If  this  doctrine  were  not  to  prevail 
endless  confusion  and  waste  would 
ensue  from  permitting  parties  with 
executions  and  attachments  to  inter- 
vene between  the  date  of  the  order 
and  the  perfecting  of  the  same  by  giv- 
ing bond,  and  dissipate  the  property. 

(3)  That  inasmuch  as  the  appoint- 
ment of  itself  does  not  disturb  exist- 
ing rights  or  liens,  there  can  be  no 
valid  reason  for  permitting  the  cus- 
tody of  the  property  or  fund  to  be 
distributed  among  rival  officers  and 
disputing  claimants. 

*  Bailie  v.  Bailie,  1  Ir.  Eq.  413. 

On  appointment  the  court  will  re- 
quire receiver  to  give  bonds.  Tomr 
linson  v.  Ward,  2  Conn.  396. 

After  a  decree  for  the  sale  of  real 
estate  to  satisfy  creditors  having  liens 
thereon,  and  an  appeal  from  such  de- 
cree by  the  debtor,  the  court  below, 
in  which  the  suit  was  pending,  may 
appoint  a  receiver  to  take  possession 
of  the  property  and  rent  it  out,  and 
collect  the  rents,  until  the  further 
order  of  the  court;  and  where,  in  such 
case,  the  sergeant  of  the  city  in  which 
the  property  was  located  was  ap- 
pointed the  receiver, — Held,  not  nec- 
essary to  require  him  to  give  a  bond 
for  the  faithful  performance  of  his 
duty,  as  it  was  covered  by  his  oflBcial 
bond.  Va.  Code  1873,  1124,  chap. 
174,  §  5.  Moran  v.  Johnston,  26 
Gratt.  108. 


MATTERS  RELATING  TO  THE  APPOINTMENT. 


75 


Prior  to  the  filino^  of  a  bond  by  the  receiver  as  required  by  the 
order,  the  receiver  is  unauthorized  to  sue/  but  this  rule  does  not 
apply  to  a  case  where  the  order  does  not  require  the  giving  of 
security," 

(b)  In  the  absence  of  statutory  requirements  the  bond  is  given 
to  the  people,  the  state,  or  the  clerk  of  the  court,  and  must  be 


"Where  the  appointment  of  a  re- 
ceiver is  to  obtain  a  charge  upon  the 
defendant's  property  and  not  to  take 
possession  thereof,  or  collect  rents, 
the  receiver  need  not  give  bonds,  the 
receiver  and  plaintiff  undertaking  not 
to  act  without  leave  of  court.  Ilew- 
ett  V.  Murray,  54  L.  J.  Ch.  572,  52  L. 
T.  380. 

Where  the  bond  given  by  a  receiver, 
upon  his  appointment  in  a  suit  for  an 
account  and  settlement  of  co-partner- 
nership  concerns,  is  not  filed  in  the 
proper  office,  through  inadvertauce, 
the  court  may  direct  it  to  be  filed 
nunc  pro  tunc.  Whiteside  v.  Pi'ender- 
gast,  2  Barb.  Ch.  471. 

A  law  (2  Md.  Code  Pub.  Local 
Laws,  28,  29)  requiring  the  bond  of  a 
receiver  to  be  approved  by  the  court, 
but  not  making  such  approval  a  con- 
dition precedent.  Held,  to  be  only 
directory,  and  an  approval  nunc  pro 
tunc  will  be  valid.  Gephart  v.  Star- 
rett,  47  Md.  396. 

A  special  receiver,  to  whom  money 
is  directed  to  be  paid  by  a  decree, 
ehould  be  required  to  give  bond  with 
approved  personal  securitj',  with 
proper  conditions,  in  a  penalty  to  be 
fixed  by  the  court,  before  he  is  author- 
ized to  receive  the  money,  or  any  part 
thereof.  Carper  v.  Hawkins,  8  W.  Va. 
291. 

See  also  note  1,  p.  74. 

Where  a  receiver  is  appointed  over 
the  same  property  in  separate  suits,  a 
bond  in  each  action  is  said  not  to  be 
imperative.  Hanks  v.  Potter,  21  How. 
Pr.  409. 


'  Where  a  receiver  brought  suit  to 
set  aside  certain  alleged  fraudulent 
conveyances  made  by  a  debtor,  it  ap- 
peared that  the  receiver  had  executed 
an  obligation  in  the  form  of  a  bond, 
but  with  only  one  surety  and  was 
without  seal.  Held,  on  objection  for 
non-compliance  with  the  order  of  ap- 
pointment, that  the  suit  should  be  dis- 
missed. Johnson  v.  Martin,  1  Thomp. 
&  C.  504;  Banks  v.  Hotter,  21  How. 
Pr.  469;  Conger  v.  Sands,  19  How. 
Pr.  8;  Voorhees  v.  Seymour,  26  Barb. 
569.  It  was  subsequently  held,  how- 
ever, that  an  informality  in  the  bond, 
as  that  it  was  not  under  seal,  could 
only  be  taken  advantage  of  by  a  debtor 
defendant  and  not  by  a  third  person. 
Moi-gan  v.  Potter,  17  Hun,  403,  citing 
Tyler  Y.Willis,  32  Barb.  327;  Under- 
wood V.  Sutcliffe,  10  Hun,  453. 

2  In  Wilson  v.  Welch,  157  Mass.  77, 
the  court  say:  "The  fact  that  the 
complainant  (receiver)  has  not  given 
a  bond  is  not  a  defense  to  this  suit. 
Any  person  interested  can  apply  to 
the  court  to  have  this  done  if  thought 
necessary;  but  it  is  not  contended 
that  the  decree  appointing  him  re- 
ceiver was  on  condition  that  he  should 
first  give  a  bond  or  that  it  required 
him  to  give  a  bond."  In  the  absence 
of  direct  evidence  it  is  reasonable  to 
assume  that  the  court  on  entering  an 
order  authorizing  suit  by  the  receiver 
ascertained  that  the  plaintiff  had  duly 
qualified  as  receiver.  Hcgewisch  v.  Sil- 
ver, 140  N.Y.  414. 


76  RECEIVERSHIPS. 

approved  by  the  court,  or  by  the  clerk  of  the  court,  where  the 
latter  is  permissible,  and  it  is  so  ordered.' 

The  order  sliould  provide  for  the  amount  of  the  bond,  taking 
into  consideration  the  value  of  the  property  to  be  placed  in  the 
receiver's  custody  and  control,  and  the  nature  and  character  of 
the  trust  imposed  upon  him.  The  bond  is  at  all  times  subject  to 
the  order  and  direction  of  the  court,  and  if  by  death  of  a  surety, 
or  insolvency,  or  other  good  cause,  the  bond  is  not  complete  or 
the  security  ample  the  court  may,  on  proper  application,  order  a 
new  bond  to  be  given,  or  new  surety  taken.'' 

(c)  The  sureties  must  be  persons  competent  to  bind  them- 
selves, and  be  financially  responsible  for  the  amount  of  the  re- 
quired bond.  The  approval  of  the  sureties  being  in  the  discretion 
of  the  court,  and  the  object  sought  being  the  financial  responsi- 
bility of  the  persons  tendered,  it  is  not  absolutely  essential  in  this 
country  that  the  sureties  shall  be  freeholders,'  or  even  residents 
of  the  state  or  district  in  which  the  action  is  pending."  And  the 
surety  may  be  a  natural  person,  or  a  corporation  organized  as  a 
guaranty  company.  A  surety  may  be  discharged  upon  obtaining 
the  verified  consent  of  the  receiver  and  the  remaining  surety, 
stating  that  the  discharge  shall  be  without  prejudice  to  other  par- 

1  It  is  desirable  in  all  cases  that  the  form  and  not  of  substance  does  not 

bond  should  be  presented  for  approval  invalidate,  it  would  seem.     Schoharie 

and  approved   at  the  earliest  practi-  v.  Pindar,  3  Lans.  8;   Farley  v.  Mc- 

cable  moment  after  the  entry  of  the  Connell,  7  Lans.  428;  Wiser  v.  Blachly, 

order.     And  -where  by  inadvertance  1  John.  Ch.  607. 
the  bond  is  filed  in  an  improper  office  ^  Aterall  v.  Wade,  Flan.  &  K.  325; 

( Whiteside  v.  Prendergast,  2  Barb.  Ch.  Shackelford  v.  Shackelford,  82   Gratt. 

471)  or  for  any  other  cause  the  bond  481. 

is  not  approved  at  the  time  of  entering  2^Q(jer  the  English  practice  sure- 

the  order,  it  may  be  approved  nunc  ties  were  required  to  be  within  the 

pro  tunc.    Vavghanv.Vaughan,  Dick.  jurisdiction  of  the  court,  and  under 

90.     This  is  a  bond  given  pursuant  to  the  Irish  practice  they  were  required 

an  order  or  judgment  of  court,  and  is  to  be  owners  of  real  estate.    Cockburn 

part  of  the  machinery  by  which  it  is  v.  Raphael,  2  Sim.  &  Stu.  453. 
enabled  to  carry  out  its  judgment,  *  Taylor  v.  Life  Association  of  Amer- 

and  is  therefore  one  given  in  pursu-  ica,   3  Fed.   Rep.    465;    Colemore    v. 

ance  of  law,  but  is  not  an  official  bond  North,  21  W.  R.  43.  42  L.  J.  Ch.  4.     If 

in  a  statutory  sense.     Titus  v.  Fair-  a  surety  dies  insolvent,  a  new  bond 

child,  17  Jones  &  S.  211;  Gerould  v.  will  be  required.     Avei-all  v.    Wade, 

Wilson,  81  N.  Y.  578.    A  defect  in  Flan.  &  K.  341. 


MATTERS  RELATING  TO  THE  APPOINTMENT. 


77 


ties  as  to  the  past  or  future  liability,  accompanied  by  the  declara- 
tion that  they,  the  receiver  and  remaining  surety,  will  not  rely  as 
a  discharge  on  the  vacating  of  the  recognizance  as  to  one  of  the 
parties,  in  any  proceeding  against  them ;'  but  the  court  will  not 
vacate  the  receiver's  jecognizance  at  the  time  of  his  discharge, 
even  upon  the  consent  of  all  parties.'  Neither  will  sureties  on 
the  bond  be  discharged  upon  their  own  request,^  unless  under- 
hand practice  is  proved  and  the  person  secured  shown  to  be  con- 
nected with  such  practice."  Where  a  receiver  becomes  insane, 
his  sureties  may  pass  the  accounts,  pay  any  balance  into  court, 
and  thus  be  discharged.* 

(d)  It  is  a  necessary  prerequisite  to  a  suit  on  the  receiver's 
bond  that  there  shall  have  been  an  order  of  the  court  upon  the 
receiver  to  render  an  account,  and  a  default  by  him,*  or  a  rule 
upon  him  to  pay  over.  The  court  will  not  permit  a  suit  on  a 
receiver's  bond  merely  upon  a  showing  that  something  is  due, 
but  the  precise  amount  must  be  stated.'     The  statute  of  limita- 


»  O'Eeeffe  v.  Armstrong,  2  Ir.  Ch. 
115;  Callaghanv.  CaUaghan,  8  Ir.  Eq. 
572. 

«  Fitzgerald  v.  Hill,  2  Ir.  Eq.  398. 

3  Griffith  V.  Griffith,  2  Ves.  Sr.  400. 

*  Hamilton  v.  Brewster,  2  Moll.  407. 

*  Webb  v.Cashel,  11  Ir.  Eq.  558;  Rich- 
ardson V.  Ward,  6  Madd.  266. 

^Atkinson  v.  Smith,  89  N.  C.  72; 
Titus  V.  Fairchild,  17  Jones  &  S.  211; 
French  v.  Dauchy,  57  Hun,  100. 

In  the  case  of  Atkinson  v.  Smith, 
ante,  the  court  say  :  "  The  regular 
cour.se  of  procedure,  according  to  well 
established  practice  in  cases  like  this, 
is  to  proceed  against  the  receiver  in 
the  first  instance,  and  if  he  shall  fail 
in  the  proper  discharge  of  his  duty 
within  the  scope  of  his  bond,  then  to 
obtain  leave  to  sue  upon  his  bond.  It 
may  be  that  in  some  cases  the  surety 
might  by  order  of  court,  and  upon 
reasonable  notice,  be  brought  into  the 
action  in  which  the  receiver  had  been 
appointed  and  proceeded  against  there- 


in. But  this  is  not  the  usual  course 
pursued,  nor  is  it  to  be  encouraged,  if 
indeed  it  could  be  sustained  in  any 
case.  Bank  of  Washington  v.  Credit- 
ors, 86  N.  C.  323;  Gerould  v.  Wilson, 
81  N.Y.  573;  State  v.  Gibson,  21  Ark. 
140;  People  v.  Murdoch,  50  III,  App. 
311. 

"*  Ludgater\.  Channell,  15  Sim.  479, 
3  Macn.  &  G.  175.  Here  the  rule  is 
criticised,  and  decided  that  where  the 
receiver  has  absconded  and  it  there- 
fore becomes  impracticable  to  ascer- 
tain what  is  due  from  him,  suit  may 
be  maintained  against  the  sureties. 
Daniel's  Ch.  vol.  2.  p.  1757  (4th  Am. 
ed.).  And  where  an  attachment  has 
beeii  '""oued  against  a  receiver  and  he 
cone. -Is  himself  so  that  service  can- 
not be  had  upon  him,  service  of  the 
order  to  put  his  recognizance  in  suit 
may  be  had  upon  his  solicitor  wivh 
whom  he  is  in  communication.  0' Far- 
veil  V.  McCan,  7  Ir.  Eq.  63. 


78 


RECEIVERSHIPS. 


tions  is  not  pleadable  to  a  scire  facias  upon  a  receiver's  bond,'  by 
reason  of  the  trust  relationship  which  the  receiver  occupies. 

(e)  The  principal  being  held  to  a  strict  accountability  to  the 
court,  it  follows  that  his  sureties  are  also  liable  strictissimi  juris. 
The  scope  of  their  liability,  in  general,  is  determined  by  the 
terms  and  conditions  of  the  bond  or  recognizance,  and  as  a  rule 
the  liability  is  enforced  by  a  common  law  action  on  such  bond.'^ 
The  extent  of  the  liability  may  be  determined  in  the  proceeding 
in  W'hicli  the  receiver  is  appointed,  upon  notice  to  the  sureties 
and  an  opportunity  for  them  to  be  heard  ;"  they  are  not,  how- 
ever, bound  by  the  action  of  the  court  in  fixing  the  liability  and 
the  amount  thereof,  when  not  made  parties  to  the  proceeding, 
and  have  therefore  not  been  heard."  The  sureties  are  liable  (1) 
for  all  jnoney  coming  into  the  hands  of  the  receiver  at  the  time 


^Reg.  V.  Bayly,  4  Ir.  Eq.  143;  Sea- 
gram V.  Tuck,  L.  R.  18  Ch.  Div.  296. 
The  rule  barring  the  application  of 
the  statute  of  limitations  is  based  upon 
two  grounds  :  (1)  the  debt  is  held  to 
be  a  record,  and  (2)  is  due  on  a  trust. 
"It  is  important,"  says  Kay,  J.,  in 
Seagrams.  Tuck,  "to  hold  the  posi- 
tion of  a  receiver  to  be  one  in  which 
liability  to  account  would  not  easily 
be  barred,  and  so  lorg  as  he  was  liv- 
ing he  must  be  held  to  have  been  a 
trustee  of  the  money.  Whether  the 
debt  is  held  to  be  of  record  or  to  be 
one  on  a  trust,  either  would  be  an 
answer  to  the  defense  of  the  Statute 
of  Limitations." 

2  Thurman  v.  Morgan,  79  Va.  367; 
Weems  v.Lathrop,  42  Tex.  207;  Atkin- 
son V.  Smith,  89  N.  C.  72;  Bank  of 
Washington  v.  Creditors,  86  N.  C.  323; 
State  v.  Gibson,  21  Ark.  140;  Ludgater 
V.  Channell,  3  Macn.  &  G.  175. 

In  Atkinson  v.  Smith,  ante,  the  court 
say:  "The  well  settled  practice  in 
cases  like  this  is  to  proceed  against  the 
receiver  in  the  first  instance,  and  if  he 
shall  fail  in  the  proper  discharge  of 
his  duty  within  the  scope  of  his  bond, 


then  to  obtain  leave  to  sue  on  the 
bond." 

^Ball  V.  Chancellor,  47  N.  J.  L.  125; 
Com.  v.  Qould,  118  Mass.  300;  Nulton 
v.  Isaacs,  30  Gratt.  726.  The  sureties 
not  being  officers  of  court  are  not  sub- 
ject to  the  orders  of  the  court  respect- 
ing the  default  of  the  receiver  and  the 
payment  thereof,  unless  they  have  ob- 
tained possession  of  the  trust  fund. 
Seidenbach  v.  Denklespeil,  1 1  Lea,  297. 

And  see  Atkinson  v.  Smith,  89  N.  C. 
72;  Bank  of  Washington  v.  Creditors, 
86  N.  C.  323. 

^  Thomson  v.  MacOregor,  81  N.  Y. 
592.  It  may  be  possible,  however,  for 
the  sureties  to  make  themselves  liable 
by  the  terms  of  the  bond,  as  where 
there  is  a  special  covenant  in  the  bond 
making  an  adjudication  against  the 
principal  binding  on  the  surety.  Doug- 
lass V.  Rowland,  24  Wend.  35;  Thomas 
v.  Hubbell,  15  N.  Y.  407;  Thayer  v. 
Clark,  4  Abb.  App.  Dec.  391 ;  Rapelye 
V.  Prince,  4  Hill,  119;  Baggoit  v.  Boul- 
ger,  2  Duer,  160;  Smart  v.  Flood,  49 
L.  T.  467;  limited  only  by  the  amount 
of  the  bonds.  Graham  v.  Noakes  [1895} 
1  Ch.  66,  64  L.  J.  Ch.  98. 


MATTERS  RELATING  TO  THE  APPOINTMENT.  79 

of  liis  giving  bond  and  what  he  receives  thereafter,  but  not  for 
acts  of  the  principal  prior  to  the  giving  of  the  bond  unless  the 
terms  of  the  bond  make  them  so."  This  liability  continues 
though  the  order  appointing  a  receiver  is  subsequently  annuled 
on  appeal,''  or  the  suit  discontinued.^  (2)  They  are  also  liable  for 
money  which  the  receiver  had  borrowed  from  the  debtor  prior 
to  his  appointment,  and  failed,  as  receiver,  to  account  for;  and 
(3)  for  interest  on  a  balance  due  from  the  receiver,  unless  there 
has  been  great  delay  in  passing  the  receiver's  accounts  ;^  (4)  and 
for  costs  of  proceedings  taken  to  enforce  payment  of  a  balance 
due  from  the  receiver.' 

'  Tlwmson  v.  MacOregor,  81  N.  Y.  *Com.  v.  Gould,  118  Mass.  300. 

592  (reversing  13  Jones  &,   S.   197);  ^Dawson  v.  Raynes,   2  Russ.    Ch. 

Bissell  V.  Saxion,  G6  N.  Y.  60;   United  466. 

States  V.  Giles,  13  U.  S.  9  Cranch,  212,  ^  He  Lockey,  1  Phill.  Ch.  508,  14  L, 

3  L.  ed.  708;  Farrar  v.  United  States,  J.  Ch.  N.  S.  164;  Maunsell  v.  Egan,  8 

30  U.  S.  5  Pet.  373,  8  L.  ed.  159.  Ir.  Eq.  372;  Contra  Walters  v.  Walters, 

■Macready  v.  Schenck,  41  La.  Ann.  11  Ir.  Eq.  335.    See  also  Marm  v.  Sten- 

456.  neit,  8  Beav.  189. 

'State  V.  GibiiO}i,  21  Ark.  140. 


CHAPTER  III. 


RECEIVER'S  POWERS. 


§  24.  Generally. 

§  25.  Source  of  power;  incidents. 

(a)  Power  should  be  embraced  in 

order. 
(1)  Application  to  court  for  in- 
structions,   English    rule. 
{S)  American  rule. 

(b)  Practice  of  the  court. 

(c)  Power  of    statutory  receivers, 

express  or  implied. 

(d)  Powers  being  limited  is  notice 

to  all. 

(e)  Powers  remain  during  continu- 

ance of  suit. 

(f)  Irregular     appointment,     con- 

firmed how. 
§  26.  Power  to  borrow  money. 

(a)  When  to  carry  on  business. 

(b)  To  complete  road,  etc. 
§  27.  Power  to  loan  money. 

(a)  Must  have  specific  power. 

(b)  Cannot  loan  to  himself  or  to 

his  firm. 

(c)  Conversion  by  firm. 

(d)  When  liable  for  interest. 

§  28.  Power  to  compromise  debts. 

(a)  May  do  so  under  direction  of 

court. 

(b)  May  be  given  general  power  to. 

(c)  No    power    where    defendant 

has     fraudulently     trans- 
ferred. 

(d)  Noauthority  tocommutedebts. 

(e)  No  authority  to  accept   stock 

when. 
§  29.  Power  to  employ  counsel. 


(a)  Must  have  general  or  special 

power. 

(b)  Who  employed. 

(i)  Not  counsel  of  either  party. 
{2)  Third   parties    no    voice  in 
selection, 

(3)  Complainant's  counsel  when 

proper. 

(4)  When      plaintiff's     counsel 

cease  to  be  such. 
§  30.  Power  to  sue. 

(a)  All   suits  under  direction    of 

court. 

(b)  Rights  of  action  available  to 

debtor  are  to  him,  etc. 

(c)  Leave  of  court  necessary. 

(d)  Necessary  allegations. 

(e)  Power    to    avoid    what    con- 

tracts. 
§  31.  Power  to  make  repairs. 

(a)  Without  order  power  limited. 

(b)  Power    liberal    when    repairs 

permanent. 
§  32.  Power    to    purchase    supplies, 

labor,  etc. 
§  33.  Power  to  continue  business. 
§  34.  Power  to  sell,  purchaser's  title. 

(a)  Right    to    sell    real    and   per- 

sonal estate, 
(i)  Order  of  court  directing. 
(f)  Must  describe  property. 

(b)  Evidence  of  title;    purchaser's 

requirement. 

(c)  Sale    not  subject   to  collateral 

attack. 
§  35.  Power  to  perform  existing  con- 
tracts;  limitations. 


RECEIVER'S  POWERS.  81 

<a)  Generally    such     power     not  §  37.  Power  over  property  in  foreign 
granted.  jurisdiction. 

(1)  It  would  be  a  payment.  (a)  English  rule. 

(2)  Receiver  agent  of  court  and  (b)  American  rule. 

not  of  owner.  §  38.  Power  to   impeach  fraudulent 
(S)  Would  be  a  preference  as  to  acts  of  debtor. 

creditors.  §  39.  Power  to  collect  unpaid   stock 
(b)  May  complete  under  order  of  subscriptions. 

court.  §  40.  Power  to  issue  certificates. 

ig  36.  Power  to  lease.  §  41.  Power  to  appeal. 

(a)  When  he  may  do  so.  §  43.  Miscellaneous  powers. 

(b)  Power  to  cancel  lease  when. 

§  24.  Generally. 

The  powers  of  a  receiver  are  derived  from  two  sources,  and 
are  to  be  determined  from  the  nature  of  the  proceeding  and  the 
duties  imposed  upon  him,  by  virtue  of  his  office.  As  we  have 
seen,  the  appointment  of  a  receiver  is  the  exercise  of  a  purely 
provisional  remedy  by  a  court  of  chancery.  The  courts  of  chan- 
cery, both  in  this  country  and  in  England,  by  a  long  line  of 
■decisions  reaching  back  for  more  than  two  centuries,  have  marked 
out  the  jurisdiction  exercised  by  courts  in  this  respect  and  defined, 
with  tolerable  accuracy,  the  cases  in  which  this  extraordinary 
power  is  exercised.'  So  that  as  a  primary  source  of  power 
we  are  to  look  to  rules  of  practice  as  established  by  courts  of 
equity  in  the  appointment  of  receivers.  In  some  states  and 
countries  where  no  chancery  courts  exist  as  distinctive  courts  of 
general  jurisdiction,  the  common  law  courts  of  general  jurisdic- 
tion are  vested  with  chancery  powers  and  administer  this  branch 
of  equity  jurisprudence,  but  are  still  guided  by  the  general  prin- 
ciples established  by  the  courts  of  chancery.  With  the  introduc- 
tion of  the  code  practice  in  most  of  the  states  of  this  country,  and 
the  modifications  of  the  common  law  practice,  by  statutory  enact- 
ments in  other  states  and  countries  the  jurisdictions  of  courts  in 
the  appointment  of  receivers  has  been  somewhat  enlarged,  as  well 
as  the  scope  and  powers  of  receivers,  in  some  particulars,  but  the 
general  scope  of  the  law  of  receivership,  practice  and  powers  of 
receivers  remains  comparatively  unafiiected  by  the  code  enact- 
ments. In  many  of  the  states,  however,  are  found  special 
statutes  relating  to  insolvency,  corporations  and  kindred  matters 

'  Corey  v.  Lonr/,  iS  Abb.  Pr.  N.  S.  427. 
6 


82 


RECEIVERSHIPS. 


wherein  are  special  provisions  relating  to  the  appointment  of 
statutory  receivers,  their  functions,  powers,  duties,  and  official 
relations,  which  are  sui  generis^  and  are  treated  of  herein  under  a 
special  chapter.  Of  such  character  are  the  Companies  Act,  and 
various  winding-up  acts  of  England,  principally  relating  to  cor- 
porations, in  which  the  ministerial  officer  charged  with  speciiic 
duties  analogous  to  those  of  receivers,  and  designated  as  liquida- 
tors, are  appointed,  sometimes  by  the  corporations,  and  sometimes- 
by  the  courts. 

§  25.  Source  of  power ;  incidents. 

(a)  Powers  should  be  embraced  in  order. 

Owing  to  the  nature  of  the  proceeding,  and  the  objects  sought 
to  be  accomplished  by  the  receivership,  and  to  the  fact  that  the 
appointment  of  a  receiver  rests,  in  all  cases,  in  the  sound  judicial 
discretion  of  the  court,  the  receiver's  powers  and  duties  should  be 
embodied  in  the  order  of  appointment.'     The  order  of  appoint- 


'  Grant  v.  Davenport,  18  Iowa,  179; 
Davis  V.  Gray,  83  U.  S.  203,  21  L.  ed. 
447;  Hooper  v.  Winston,  24  111.  353. 
In  this  case  it  was  contended  that  the 
powers  of  the  receiver  were  enlarged 
and  extended  by  stipulation  of  the 
parties,  and  that  by  reason  thereof  he 
was  vested  with  larger  discretionary 
powers  than  ordinarily  attach  to  a 
receivership.  But  the  court  say: 
"We  do  not  deny  that  he  had  some 
discretion  in  this  matter,  but  it  was 
very  limited.  We  hold,  being  an 
officer  of  court,  he  should  have  ap- 
plied to  the  court  for  leave  to  make 
these  expenditures,  and  he  is  answer- 
able to  the  court  for  the  exercise  of 
all  his  powers."  In  Benneson  v.  Bill, 
62  111.  408;  Teager  v.  Wallace,  44  Pa. 
296;  People  v.  St.  Nicholas  Bank,  76 
Hun,  522;  Verplanck  v.  Mercantile 
Ins.  Co.  2  Paige,  438,  452;  Re  Colvin, 
3  Md.  Ch.  278.  See  discussion  of  the 
powers  of  temporary  and  permanent 
receivers  in  Herring  v.  New  York,  L. 
E.  &W.  B.  Co.  105  N.  Y.  340.    The 


original  order  may  be  enlarged  from 
time  to  time  as  the  exigencies  of  the 
case  may  require.  "  Since  the  re- 
ceiver is  an  otflcer,  or,  as  he  is  some- 
times called,  '  the  hand '  of  the  court,, 
it  would  be  singular  if  he  could  not, 
at  any  time,  go  to  it  with  his  com- 
plaint, or  for  instructions  in  regard 
to  any  matter  touching  the  fund 
placed  in  his  custody."  People,  Atty. 
Gen.,  V.  Security  L.  Ins.  &  Anmtity 
Co.  79  N.  Y.  270;  Curtis  v,  Leavitt,  1 
Abb.  Pr.  274.  As  to  what  is  em- 
braced in  the  scope  of  the  order  see 
Benneson  v.  Bill,  supra;  American 
Const.  Co.  V.  Jacksonville,  T.  &  E. 
W.  B.  Co.  52  Fed.  Rep.  937.  While 
it  is  true  that  the  receiver  is  an  ofBcer 
of  the  court,  yet  that  fact  does  not 
confer  upon  him  any  special  privi- 
leges so  far  as  rights  of  action  are 
concerned  over  other  persons  bringing 
suit.  New  Brunswick  State  Bank  v. 
First  Nat.  Bank,  34  N.  J.  Eq.  450. 
Such  a  receiver  has  only  the  power 
and  authority  given  him  in  his  orders. 


RECEIVER'S  POWERS.  83 

ment  should  point  out  distinctly  the  general  scope  of  the  re- 
ceiver's powers  and  duties  so  that,  at  least  in  a  general  sense,  he 
will  be  enabled  to  understand  the  official  duties  imposed  upon 
him,  and  for  the  faithful  discharge  of  which  he  is  to  become 
responsible.  (1)  By  the  earlier  English  practice  the  receiver  was 
supposed  to  occupy  a  position  of  such  extreme  indifference  as 
between  the  parties  that  all  applications  to  the  court  for  directions 
to  the  receiver  were  to  be  made  by  the  proper  parties  to  the  suit, 
and  the  receiver  was  not  permitted  to  apply  to  the  court  for 
directions  until  he  had  first  made  request  of  the  plaintiff  or 
defendant  to  make  the  desired  application  and  have  been  refused 
by  him.'  (2)  This  rule  of  practice,  however,  has  no  force  in  this 
country,  and  owing  to  the  fact  that  the  receiver  is  the  instrument 
or  hand  of  the  court,  he  is  privileged,  and  it  is  his  duty,  to  apply 
to  the  court  at  any  and  all  times  for  instructions  and  directions 
as  to  his  powers  and  duties." 

(b)  Peactice  of  the  coukt. 

A  second  source  of  power  of  ordinary  receivers  is  to  be  found 
in  the  course  and  practice  of  the  courts  relative  to  receiverships. 
The  courts  exercising  chancery  jurisdiction  have  established  by 
long  usage  and  experience  certain  well  defined  rules  relating  to 
the  powers  of  receivers,  and  it  is  to  these  rules  so  established  that 
we  must  usually  go  to  determine  the  scope  of  authority  of  the 
ordinary  receiver.' 


Chautauque  County  Bank  v.  White,  6  '  Parker  v.  Dunn,  8  Beav.  497;  Be 

Barb.   589;  Republic  L.  Ins.    Co.   v.  Doolan,  2  Connor  &  L.  232;  Clark  v. 

Swigert,  135  111.  150,  12  L.  R.  A.  328.  Fisher,    Sausse  &  Sc.  684;  O'Connor 

Whether  the  order  be  comprehen-  v.  Malone,  1  Ir.  Eq.  20;   Wrixson  v. 

sive  in  regard  to  the  power  given  the  Vize,  5  Ir.  Eq.  276;  Ricliards  v.  Goold, 

receiver,  or  his  power  be  given  from  7  Ir.  Eq.  209. 

time  to  time,  as  occasion  requires,  the  '  Curtis  v.  Leavitt,  1  Abb.  Pr.  274. 

court  is  in  fact  the  real  custodian  of  *  Verplanck  v.  Mercantile  Ins.   Co.  2 

the  property,  and  the  acts  of  the  re-  Paige,  438;  Hooper  v.  Winston,  24  111. 

ceiver  are  acts  of  the  court  designed  353;    Chautauque     County    Bank    v. 

to    preserve    the    property    for    the  White,  6  Barb.  589;  Booth  v.  Clark,  58 

benefit  of   the  parties    subsequently  U.   S.  17  How.  222,  15  L.   ed.  164; 

shown  to  be  entitled  to  it.     Bemndorf  Rejniblic  L.  Ins.  Co.  v.  Swigert,  135 

V.  Dickinson,  21  How.  Pr.  275.  111.  150,  12  L.  R.  A.  528. 


84  RECEIVERSHIPS. 

(c)  Powers  of  statutory  receivers,  express  or  implied. 

Statutory  receivers,  or  those  appointed  pursuant  to  the  require- 
ments of  statute,  as  will  be  seen  elsewhere,  derive  their  general 
powers  wholly  from  the  statute  under  which  they  are  appointed, 
and  have  no  powers  except  those  conferred  by  it,  either  by  ex- 
press terms  or  such  as  can  be  fairly  implied  from  the  general  scope 
of  the  statute,  or  as  an  incident  to  an  express  power  given."  The 
power  thus  conferred  is  deemed  delegated  and  requires  careful 
consideration  by  the  court  in  its  exercise.' 

(d)  Power  being  limited  is  notice  to  all. 
A  receiver  by  virtue  of  his  office  is  possessed  of  limited  powers 
and  all  persons  dealing  with  him  must  take  notice  of  such  limita- 
tions, and  contract  with  him  with  such  knowledge.*  This  princi- 
ple is  not  peculiar  to  the  law  of  receivership  but  applies  to  judicial 
sales  made  by  ministerial  officers  generally.  As  in  dealing  with 
a  special  agent  every  one  must  know  that  the  scope  of  the  receiv- 
er's powers  is  limited  and  special,  and  his  acts  at  all  times  subject 
to  modification  or  annulment. 

(e)  Powers  remain  during  continuance  of  suit. 
Unless  sooner  discharged  his  powers  remain  during  the  contin- 
uance of  the  litigation,  and,  as  a  rule,  are  not  suspended  during 
appeal,*  though  there  are  exceptions  elsewhere  noticed. 

'  Runyon  v.  Farmers  <fe  M.  Bank,  4  witnesses.     Runyon  v.  Farmers  &  M. 

N.  J.  Eq.  480;   Aity.  Oen.  v.  Life  &  Bank,  4  N.  J.  Eq.  480. 

F.  Ins.  Co.  4  Paige,  234.     See  Knott  *  Oakley  v.  Pater  son  Bank,  2  N.  J. 

V.  Morris   Canal  &  Bkg.  Co.  4  N.  J.  Eq.  173;  Davis  v.  United  Slates  Flee. 

Eq.  423;   Verplanck  v.  Mercantile  Ins.  P.  &  L.  Co.  77  Md.  35;  Bangs  v.  Mcln- 

Co.  2  Paige,  452;  Atty.Qen.  v.  Allan-  tosh,  23  Barb.  591. 

tic  Mut.  L.  Ins.  Co.  77  N.  Y.  336.  ^  Tripp  v.  Boardman,  49  Iowa,  410; 

A  receiver  appointed  by  a  Federal  Barrow  v.  Mullin,  21  Minn.  374;  Le- 

court  must  manage  and  operate  the  high  Coal  &  Nav.  Co.  v.  Central  R.  Co. 

property  in  accordance  with  the  state  35  N.  J.  Eq.  426. 

where  the  property  is  situated.     Act  ^Brien  v.  Paul,  3  Tenn.  Ch.  357. 

of  Congress,  March  3, 1887,  §  2.    The  Although  the  appeal  may  suspend  or 

power  conferred  on  statutory  receiv-  vacate  the  final   decree.      Merrill  v. 

ers  may  not  always  be  express  but  Flam,  2  Tenn.  Ch.  513;    Stafford  v. 

may   be  inferred   from   the    general  Union  Bank,  57  U.  S.  16  How.  140, 14 

scope  of  the  statute,  as  wbere  author-  L.  ed.  878;    Swing  v.   Townsend,  24 

ity  is  given  to  hear  and  determine  the  Ohio  St.  1;   Schenck  v.  Peay,  1  Dill, 

validity  of  claims,  this  embraces  im-  270;  Re  Real  Estate  Associates^  58  Cal. 

plied  power  to  administer  oaths  to  356. 


RECEIVER'S  POWERS. 


85 


(f)  Irregular  appointment,  confirmed  how. 
The  appointment  of  a  receiver  regularly  and  legally  made  at 
final  judgment  or  decree  vests  in  him  all  the  powers  and  duties 
usually  pertaining  to  his  office,  though  a  previous  irregular  and 
illegal  appointment  has  been  made,  during  the  pendency  of  the 
action.'  The  final  action  of  the  court  becomes  retrospective  so 
far  as  his  acts  as  receiver  are  concerned.  Nor  can  his  powers  and 
acts  be  questioned  in  a  collateral  proceeding,'  except  in  a  case 
where  the  court  is  without  jurisdiction  in  making  the  appoint- 
ment.' 

§  26.  Power  to  Iborrow  money. 

(a)  Where  the  order  of  the  court  gives  to  the  receiver  authority 
to  continue  in  the  possession  and  management  of  the  property,  he 
may  in  good  faith  borrow  the  necessary  money  for  the  successful 
and  proper  management  of  such  property,  and  the  claim  of  the 
lender  will  be  superior  to  that  of  bondholders."    (b)  And  in  case  of 


'Be  Stonehridge,  37  N.  Y.  S.  R.  617, 
AlBrmed  without  opinion  in  128  N. 
Y.  618;  Russell  v.  East  Anglian  B.  Co. 
3  MacN.  &  G.  104;  American  Bank  v. 
Cooper,  54  Me.  438;  Ames  v.  Birken- 
head Docks  Trustees,  20  Beav.  332; 
Cook  V.  Citizens'  Nat.  Bank,  73  Ind, 
256;  People,  Davis,  v.  Sturtevant,  9  N. 
Y.  263;  Albany  City  Bank  v.  Scher- 
merliorn,  9  Paige,  372;  Bichards  v. 
People,  81  111.  551;  Lutt  v.  Grimont, 
17  111.  App.  308. 

^Edrington  v.  PridTiam,  65  Tex, 
612;  Wood  V.  BlytJie,  46  Wis.  650; 
Keokuk  N.  L.  Packet  Co.  v.  David- 
son, 13  Mo.  App.  561;  Dean  v.  Thatch- 
er, 32  N.  J.  L.  470;  Mercantile 
Trust  Co.  V.  Pitt»uurg  &  W.  B.  Co.  29 
Fed.  Rep.  732;  Ward  v.  Farwell,  97 
111.  593;  Whittlesey  v.  Frantz,  74  N.  Y. 
456;  Bichards  v.  People,  81  111.  551; 
Commercial  Nat.  Bank  v.  Burch,  141 
111.  519;  Stanley  v.  National  Union 
Bank,  115  N.  Y.  122;  First  Nat.  Bank 
V.  United  States  Encaustic  Tile  Co.  105 
Ind.  227;  Pressley  v. Lamb,  105  Ind. 
171;    Bodkin  v.  Merit,  102  Ind.  293; 


Oreenawalt  v.  Wilson,  52  Kan.  109; 
Neeves  v.  Boos,  86  Wis.  313;  Thompson 
V.  Holladay,  15  Or.  34;  RadebaughY. 
Tacoma  P.  B.  Co.  8  Wash.  570;  Elder- 
kin  V.  Peterson,  8  Wash.  674. 

'^  Texas  &  P.  B.  Co.  v.  Qay,  86  Tex. 
571,  25  L.  R.  A.  52;  St.  Louis  &  S. 
Coal  &  Min.  Co.  v.  Sandoval  Coal  & 
Min.  Co.  Ill  111.  32. 

*Ex  parte  Carolina  Nat.  Bank,  18  S. 
C.  289;  Ee  Fifty-four  First  Mortgage 
Bonds,  15  S.  C.  304;  Ex  parte  Benson, 
18  S.  C.  38;  Barton  v.  Barbour,  104 
U.  S.  126,  26  L.  ed.  672;  Cowdry  v. 
Galveston,  H.  &H.  R.  Co.  1  Woods,  331. 
In  this  case  the  court  say : '  'All  outlays 
made  by  the  receivers  in  good  faith  in 
the  ordinary  course  with  a  view  to  ad- 
vance and  promote  the  business  of  the 
road  and  to  render  it  profitable  and 
successful  are  fairly  within  the  line  of 
discretion  which  is  necessarily  allowed 
to  a  receiver  entrusted  with  the  man- 
agement of  a  railroad  in  his  hands." 

Greenwood  v.  Algesiras  R.  Co.  [1894] 
2  Ch.  205,  63  L.  J.  Ch.  670.  This  case 
is  based  upon  the  fact  that  there  must 


86 


RECEIVERSHIPS. 


the  foreclosure  of  a  mortgage  or  trust  deed  on  a  railroad,  where 
it  is  necessary  to  preserve  the  road  as  a  going  concern,  the  court 
may  properly  order  the  receiver  to  complete  some  inconsiderable 
portions  of  the  road,  and  put  the  road  in  condition  for  the  trans- 
action of  business,  and  borrow  money  for  that  purpose,  and  make 
the  certificates  a  lien  superior  to  that  of  the  first  mortgage.'    The 


be  an  emergency,  and  that  the  bor- 
rowing of  the  money  is  essential  to  the 
preservation  of  the  property.  In  Bank 
of  Montreal  Y.  Chicago,  C.  &W.  B.  Co. 
48  Iowa,  518,  a  receiver  was  author- 
ized to  issue  certificates  "for  money 
borrowed,  materials  furnished,  labor 
performed,  or  on  account  of  contracts 
made  by  him  for  the  construction  or 
completion  of  said  road  or  any  part 
thereof,"  and  such  certificates  so  is- 
sued were  made  a  first  lien  on  the  road. 
It  was  held  that  certificates  issued 
prior  to  the  furnishing  of  the  material 
or  performance  of  the  labor  were  void. 
The  furnishing  of  the  material  and 
the  performance  of  the  work  were  pre- 
requisites to  the  issuing  of  certificates. 
See  generally  chapter  on  Receivers' 
Certificates.  This  power  should  be 
exercised  with  the  acquiescence  of 
all  parties  concerned,  if  possible, 
Wallace  v.  Loomis,  97  U.  S.  146,  162, 
24  L.  ed.  895,  901,  and  with  caution. 
For  a  full  discussion  of  the  power  in 
its  many  phases,  see,  Credit  Co.  v.  Ar- 
kansas C.B.  Co.  15 Fed.  Rep.  46;  Taylor 
V.  Philadelphia  &  B.  B.  Co.  7  Fed.  Rep. 
377;  Kennedy  v.  *Si!.  Paul  &  P.  B.  Co. 
2  Dill.  448;  Union  Trust  Co.  v.  Illi- 
nois Midland  B.  Co.  117  U.  S.  434,  29 
L.  ed.  963 ;  Millenberger  v.  Logansport, 
C.  &  8.  W.  B.  Co.  106  U.  S.  285,  27  L. 
ed.  117;  Jerome  v.  McCarter,  94  U.  S. 
734,  24  L.  ed.  137;  Cowdry  v.  Galves- 
ton, H.  &  H.  B.  Co.  1  Woods,  331; 
Stanton  v.  Alabama  &  C.  B.  Co.  2 
Woods,  506;  Meyer  v.  Johnston,  53  Ala. 
237;  Vermont  &  C.  B.  Co.  v.  Vermont 
C.  B.  Co.  46  Vl.  792,  50  Vt.  500;  Hoover 
V.  Montclair  &  G.  L.  B.  Co.  29  N.  J. 


Eq.  4;  Bank  of  Montreal  v.  Chicago, 
C.  &  W.  B.  Co.  48  Iowa,  518. 

As  to  power  to  mortgage  see  Bur- 
roughs v.  Gaither,  66  Md.  171. 

And  power  to  invest,  see  Utica  Ins. 
Co.  V.  lynch,  11  Paige,  520;  but  see 
Atty.  Gen.  v.  North  American  I.  Ins. 
Co.  89  N.  Y.  84. 

In  the  case  of  Meyer  v.  Johnston, 
supra,  the  power  of  the  receiver  to  bor- 
row money  is  elaborately  discussed 
after  an  exhaustive  argument  by  coun- 
sel, and  thereasons  both  for  and  against 
the  exercise  of  this  power  are  clearly 
stated  (p.  346). 

Where  a  receiver  borrowed  money 
and  used  the  same  to  discharge  a  valid 
lien  on  the  property  in  his  care  and 
custody  and  acted  in  good  faith,  it  was 
held  proper  to  allow  him  credit  there- 
for.   Heffron  v.  Bice,  149  111.  216. 

The  power  to  incur  expense  does 
not  extend  beyond  what  is  absolutely 
essential  to  the  preservation  and  use 
of  the  property.  Cowdrey  v.  Galves- 
ton, H.  &  H.  B.  Co.  93  U.  S.  352,  23 
L.  ed.  951. 

^Stanton  v.  Alabama  &  C.  B.  Co.  2 
Woods,  506. 

Whether  the  court  has  authority  to 
permit  receivers  of  a  railroad  to  bor- 
row money  to  buy  rolling  stock  where 
there  is  income  from  which  the  rolling- 
stock  might  be  bought,  has  been 
doubted;  but  where  the  receivership  is 
nearly  at  an  end,  it  is  inexpedient  to 
make  such  an  order.  Be  Philadelphia 
&  B.  B.  Co.  14  Phila.  501. 

See  further  upon  this  subject  title 
Railway's  and  Receiver's  Certificates, 


RECEIVER'S  POWERS.  87 

source  of  this  power  is  to  be  found  in  the  inherent  right  of  the  court 
to  preserve  the  receivership  property  from  waste,  damage  or  loss. 
And  in  case  of  public  corporations  the  public  have  interests  that 
are  to  be  protected.  The  power  to  borrow  money  in  all  cases 
presupposes  authority  from  the  court  given  for  that  purpose, 
based  on  specific  application  either  by  the  receiver  or  plaintiff ; 
and  the  exercise  of  the  power  is  with  great  caution. 

The  power  to  mortgage  is,  in  principle,  the  same  as  the  jDower 
to  issue  receiver's  certificates  and  make  them  a  first  lien  upon  the 
property.  There  must  be  the  gravest  necessity  to  justify  an  order 
of  this  kind,  and  more  especially  so  where  the  property  is  not 
•charged  with  a  public  trust.' 

§  27.  Power  to  loan  money. 

(a)  The  receiver  being  in  one  sense  a  trustee,  and  in  another  sense 
an  oflicer  of  court,  in  the  absence  of  specific  authority  so  to  do 
from  the  court  appointing  him,  has  no  authority  to  loan  the  money 
in  his  hands  as  receiver,  (b)  And  if  he  has  authority  to  loan,  given 
to  him,  he  cannot  loan  to  himself,  or  to  a  firm  of  which  he  is  a 
member."  But  when  the  receiver's  funds  have  been  loaned  with- 
out authority,  and  a  note  taken  therefor,  such  want  of  authority  in 
the  receiver  is  no  defense  to  an  action  on  the  note.'  (c)  And  when 
the  money  is  loaned  to  a  firm  of  which  the  receiver  is  a  member, 
and  repaid  by  the  firm  to  one  of  its  members,  who  converts  such 
money  to  his  own  use,  the  firm  still  remains  liable  for  the  money 
loaned.^  (d)  Where  the  receiver  has  loaned  his  trust  fund  to  brokers, 
without  authority  of  the  court,  but  in  entire  good  faith,  and  has 
■charged  himself  with  the  amount  received  as  interest,  no  part  of 
the  fund  being  lost,  and  no  one  injured,  the  receiver  is  not  liable 
for  interest  beyond  the  amount  received.^ 

As  to  the  power  of  the  receiver  to  invest  funds  belonging  to 
the  estate  it  would  seem  to  be  exceedingly  questionable.  It  is,  as 
a,  rule,  wholly  foreign  to  the  functions  of  a  receiver  to  do  more 
than  collect  in  the  estate,  preserve  the  same,  and  distribute  as  di- 

^Burrougha  v.  Qaither,  66  Md.  171.  '^Ryan  v.  Morrill,  83  Ky.  353. 

^Ryan  v.  Morrill,  83  Ky.  353;  Darby  ^Atty.   Oen.  v.  North  American  L. 

V.  Oilligan,  37  W.  Va.  59;  Ueffron  v.  Ins.    Co.  89  N.  Y.  94  (modifying  86 

Bice,  149  111.  316.  Ilun,  294);  Utica  Ins.  Co.  v.  Lynch,  11 

'Corbin  v.De  la  Vergne,  44  N.  J.  L.  Paige,  530. 
70. 


88  RECEIVERSHIPS. 

reeled  by  the  court,  and  if  he  loans  out  receivership  funds  even 
temporarily  to  his  friends,  or  others,  it  is  a  breach  of  trust.  He 
may  not  mix  the  funds  with  his  own  and  use  them,  nor  make  a 
profit  out  of  them.' 

§  28.  Power  to  compromise  debts. 

(a)  Where  doubtful  and  disputed  claims  are  presented  for  allow- 
ance against  the  estate  over  which  the  receiver  is  appointed,  the 
receiver,  by  direction  of  the  court,  may  allow  so  much  of  such 
claims  as  he  may  deem  just  and  equitable.^  (b)  And  it  is  proper  for 
the  court  to  give  the  receiver  general  power  to  compromise  with 
debtors  to  the  estate  where  it  appears  to  him  expedient  and  for  the 
interest  of  all  concerned  so  to  do,  such  debtors  being  unable  to  pay 
in  full.'  (c)  But  the  power  to  compromise  a  statutory  liability  is  ex- 
tremely doubtful,  and  where  it  appears  that  the  debtor  has  fraud- 
ulently transferred  his  property  to  avoid  his  legal  obligations,  or 
to  shield  himself  from  injury  and  exposure  from  litigation,  the 
power  to  compromise  should  be  withheld  from  the  receiver.* 
"Where  it  is  sought  to  establish  that  the  receiver's  contract  is  ille- 
gal and  void  as  being  in  violation  of  the  constitution  forlndding 
undue  or  unreasonable  discrimination  in  freights  it  must  distinctly 
appear  wherein  there  is  want  of  authority ;  it  will  not  be  assumed 
that  the  contract  in  question  is  in  violation  of  authority."  (d)  A  re- 
ceiver has  no  authority  to  commute  a  debt."  (e)  And  where  a  part- 
ner in  the  absence  of  special  authority,  or  a  special  course  of 

'Authorities,  note  5,  p.  87.  '  abuse  is  exercised  with  caution.     And 

^Be  Croton  Ins.  Co.  3  Barb.  Ch.  642.  see  Kimball  v.  Lee,  40  N.  J.  Eq.  403; 

This  power  will  not  be  granted  if  the  Wilkinson  v.  Dodd  (1886)  40  N.  J.  Eq, 

debtor  has  fraudulently  conveyed  his  123;  Dodd  v,  Wilkinson,  41  N.  J.  Eq. 

property  to  avoid  liability.     Re  Cer-  566. 

torn  Stockholders  of  California  Nat.  *Ee  Certain  Stockholders  of  Galifor- 

Bank,  53  Fed.  Rep.  38;  Suydam  v,  ma  iVa«.  ^cttiA;,  53  Fed.  Rep.  38.     Mr. 

Bank  of  New  Brunswick,  3  N.  J.  Eq.  Justice  Ross  in  this  case  characterizes 

276.     See  also  Re  Piatt,  1  Ben.  534;  the  compromise  with  a  stockholder  of 

Kennedy  v.  Gibson,  75  U.  S.  8  Wall.  a  bank  who  has  fraudulently  disposed 

498,  19  L.  ed.  476;  Henderson  v.  Mey-  of  his  property  to  avoid  a  legal  liabil- 

ers,  llPhila.  616;  Wilkinson  v.  Dodd,  ity  as  "a  premium  on  fraud,"  and 

40  N.  J.  Eq.  124.     A  receiver  of  a  contrary  to    fair   dealing  and    good 

national  bank  may  compromise.     See  faith. 

U.  S.  Rev.  Stat.  §  5234,  ^Bayles  v.  Kansas  P.  R.  Co.  13  Colo. 

^Re  Croton  Ins.  Co.  3  Barb.  Ch.  642.  181. 

This  power  being  subject  to  great  ^Paxton  v.  Steele,  86  Va.  311. 


RECEIVER'S  POWERS.  8^ 

dealing,  has  no  power  to  accept  shares  in  a  company  even  though 
fully  paid  up  in  satisfaction  of  a  debt  due  the  firm,  the  court  has 
no  jurisdiction  in  winding  up  the  partnership  to  confer  on  a  re- 
ceiver greater  power  than  a  partner  would  have  had  in  this- 
respect.' 

§  29.  Power  to  employ  counsel. 

(a)  Must  have  general  or  special  power. 

The  receiver,  occupying  as  he  does  in  many  cases,  an  important 
position  of  trust,  and  often  attended  with  difficult  questions  of 
doubt  as  to  the  most  judicious  and  proper  course  to  pursue,  and 
where  the  attitude  of  the  parties  is  often  hostile  towards  each 
other,  it  would  seem  to  be  not  only  the  receiver's  right  but  his 
duty  to  employ  counsel  to  advise  him  as  to  the  management  of 
the  property  placed  in  his  hands  and  as  to  his  duties  in  the  prem- 
ises.* It  is  true  that  he  is  an  officer  of  the  court  and  has  an  un- 
doubted right  to  apply  to  the  court  for  direction,  but  the  duties 
of  the  court  to  the  public,  and  other  litigants,  are  such  that  the 
gaidance  of  the  court  in  many  of  the  important  details  of  compli- 
cated receiverships  is  not  to  be  expected  and  would  be  an  impos- 
sibility. And  while  the  receiver,  without  an  order  of  court  so 
authorizing  him,  may  be  justified  in  employing  counsel,  particu- 

^Niemann  v.  Niemann,  L.  R.  43  Ch.  a  large  and  unjustifiable  extent.     Re 

Div.  198.  First  Nat.  Bank  of  St.  Albans,  49  Fed. 

Where  the   statute    provides    that  Rep.  120. 
the  receiver  "upon  the  order  of  a  court  ^Hubbard  v.   Camperdown  Mills,  25 

of  record  of  competent  jurisdiction  S.   C.    496;    Walsh    v.   Raymond,  58 

may  sell    or  compound   all    bad  or  Conn.  251;  Lotiimery.  Lord,  4  E.  D. 

doubtful  debts,"  and  where  it  is  shown  Smith,  183;  Corey  v.  Long,  12  Abb.  Pr. 

by  the  evidence  that  the  claims  uncol-  N.  S.  427  (443).  Where  the  interests  of 

lected  seem  to  be  valid  and  enforceable  the  parties  are  antagonistic  it  is  inex- 

to  a  far  greater  amount  than  those  pedient,   as    a    rule,    to  employ    the 

against  the  bank,  the  court  will  not  counsel  of  either,     Adams  v.  Woods 

authorize  the  receiver  to  compromise  8  Cal.  306;  Blair  v  St.  Louis,  H.  &  E. 

all  claims  for  and  against  the  bank  by  R.  Co.  20  Fed.  Rep.  348;  ReAinsley,  1 

surrendering  all  its  remaining  assets  in  Edw.  Ch.  576;  Ray  v.  Macomb,  2  Edw. 

consideration  of  sufficient  money  to  Ch..\Q5;  Ryckmany.  Parkins,  ^V&igQ, 

make  a  certain  dividend,  and  particu-  543.     But  see  Warren  v.  Sprague,  U 

larly  where  the  cash  on  hand  is  suffi-  Paige,  200;  Smith  v.  New  York  Consol. 

cient  to  make    the    same  dividend.  Stage  Co.  28  How.  Pr.  377,  18  Abb. 

Such    a    compromise    would    be    a  Pr.  431 ;  Shainwald  v.  Lewis,  8  Fed. 

surrender  of  the  rights  of  the  bank  to  Rep.  878. 


•90  RECEIVERSHIPS. 

larly  where  tlie  court  is  coo^nizant  of  the  duties  expected  of  the 
receiver,  and  of  the  services  performed  by  counsel  in  his  behalf, 
yet  the  receiver  in  every  case  should  see  that  he  is  protected  in 
the  employment  of  counsel  by  the  general  or  some  special  order 
of  court.  The  necessity  of  an  order  is  rendered  specially  impor- 
tant to  the  receiver  in  view  of  the  fact  that  compensation  of 
counsel  is,  in  all  cases,  to  be  passed  upon  by  the  court.'  As  to 
the  amount  of  compensation  to  be  allowed,  the  usual  and  proper 
method  is  to  refer  the  matter  to  a  master  to  enquire  and  report 
what  would  be  a  proper  fee,  and  in  doing  so  the  reference  in  no 
case  should  be  ex  jpai'te^ 

(b)  Who  employed. 

it)  As  a  rule  the  receiver  should  not  employ  as  counsel  the  solicit- 
or or  attorney  of  either  of  the  parties  to  the  proceeding.^  The  pro- 
priety of  enforcing  this  rule  in  most  cases  is  apparent,  the  purpose 
being  to  sustain  the  independent  character  of  the  receiver's  office 
and  to  protect  the  interests  of  all  parties  concerned  and  divest  the 
receiver  of  all  appearance  of  favor  or  partiality.  The  rule,  how- 
ever, is  not  an  unbending  rule,  for  by  consent  of  all  parties  the 
receiver  may  properly  employ  the  solicitor  of  either  to  aid  him  in 
the  discharge  of  his  duties.  (^)  In  such  case  a  mere  stranger  has  no 
right  to  complain,  as  where  a  suit  is  instituted  by  the  receiver 
through  the  solicitor  of  one  of  the  parties  to  suit  in  which  he  is 
appointed,  against  a  third  party.*     (<?)  And  there  are  cases  in  which 

'TFa&A  V.  Baymond,  58  Conn.  251.  ^ Adams  v.  Woods,  8  Cal.  306;  Ray 

In  this  case  Mr.  Justice  Hall  says:  v.  McComb,2'K6.yf.  Ch.  165;  Re  Ains- 

"We  cannot  conceive  that  any  attor-  ley,    1    Edw.    Ch.    676;    Warren    v. 

ney-at-law,  whose  every  act  must  be  Sprague,  11  Paige,  209;  Blair  v.  St. 

•with  full  knowledge  that  he  is  acting  Louis,  H.  &  K.  R.  Co.  20  Fed.  Rep. 

for  an  officer  of  the  court,  will  com-  348;  Ex  jx^rte  Fincke,  2  Meriv.  452; 

plain  that  in  accepting  employment  Wilson  v.  Poe,  1  Hog.  322;  Stone  v. 

for  a  receiver  he  is  held  to  do  so  with  Wishart,     2    Madd.     64;    Moore    v. 

the  understanding  that  his  compensa-  O'Loghlin,  3  L.  R.  (Ir.)  405;   Garland 

tion  will  depend  upon  the  amount  that  v.  Qarland,  2  Ves.  Jr.  137;  Ryckman  v. 

may  be  allowed  him  therefor  by  the  Parkins,  5  Paige,  543;  Merchants'  <& 

court  upon  the  final  accounting  of  the  M.  Nat.  Bank  v.  Kent,  43  Mich.  292; 

receiver."     See  also  Corey  v.  Long,  13  Smith  v.  New  York  Consol.  Stage  Co. 

Abb.  Pr.  N.  S.  427  (443);  Re  Bank,  6  28  How.  Pr.  377. 

Paige,  213.  *'Warrtn  v.  Sprague,  11  Paige,  200. 

^Hubbard  v.  Camperdown  Mills,  25  It  is  not  incumbent  on  the  court,  nor 

S.  C.  496.  can  the  receiver  as  a  matter  of  right 


RECEIVER'S  POWERS. 


91 


the  employment  of  complainant's  solicitor  by  the  receiver  as  his 
solicitor  is  commendable  as  in  case  of  fraudulent  transfers  of 
property.*  (^)  In  supplementary  proceedings  it  is  held  that  the  du- 
ties of  the  plaintiff's  attorneys  ceased  at  the  time  of  tfie  rendition 
of  the  judgment,  and  that  the  receiver  can  employ  other  counsel.' 

§  30.  Power  to  sue. 

A  receiver  without  the  power  to  sue  for  and  recover  the  prop- 
erty or  fund  over  which  he  is  appointed  would  in  many  cases  de- 
feat the  very  purposes  for  which  he  is  apj^ointed.  Conseqently 
in  all  forms  of  receivership  this  power  is  recognized  and  well 
established.  The  general  rules  applicable  to  the  subject  are 
briefly  stated  as  follows : 


require  the  court  even  with  the  consent 
of  all  parties,  to  appoint  a  particular 
attorney  of  his  selection.  First  Nat. 
Bank  v.  Navarro,  43  N.  Y.  S.  R.  813; 
Merchants'  &  M.  Nat.  Bank  v.  Kent, 
43  Mich.  293.  In  this  case  Mr.  Justice 
Cooley  says:  "We  cannot  shut  our 
eyes  to  the  fact  that  the  law  partner 
of  the  solicitor  is  presumptively  as 
much  interested  in  the  proceedings  as 
the  solicitor  himself,  and  it  would  be 
peculiarly  objectionable  that  he  should 
act  in  a  position  requiring  impartiality 
in  a  case  like  this  where  the  parties  to 
the  suit  are  manifestly  acting  in  con- 
cert and  adversely  to  the  interest  of 
other  persons  who  cannot  watch  their 
proceedings.  The  practical  results 
would  be  that  the  receiver  would 
supervise  his  own  accounts.  The 
practice  in  equity  does  not  even  per- 
mit the  receiver  to  employ  a  solicitor 
in  the  case  as  his  own  counsel,  lest  it 
might  disarm  his  vigilance  in  watching 
the  receiver's  proceedings.  This  rule 
may  no  doubt  be  departed  from  by 
consent  of  all  parties  concerned;  but 
this  must  mean  by  consent  of  all  par- 
ties concerned  in  the  results  of  the 
receivership;  and  one  not  a  party  to 
the  suit  may  be  as  much  concerned  in 


these  as  the  persons  who  are  parties." 
It  is  true  this  case  relates  to  the  re- 
ceivership and  not  his  counsel,  but  the 
principle  is  the  same  in  both  cases. 

^Shainwald  v.  Lewis,  8  Fed.  Rep. 
878.  In  this  case  the  court  says: 
"The  person  who  is  of  all  the  fittest 
to  advise  the  receiver,  and,  if  neces- 
sary, to  stimulate  his  efforts  is  the 
solicitor  who,  with  indefatigable  in- 
dustry and  tenacity  has  succeeded  in 
exposini<  the  fraudulent  conspiracy 
which  lies  at  the  foundation  of  all 
these  proceedings,  and  has  obtained 
after  protracted  litigation  the  decree 
against  respondent.  No  other  counsel 
could  feel  the  same  desire  as  he  that 
the  decree  should  not  prove  a  brutum 
fulmen,  nor  the  same  interest  in  baffl- 
ing the  confessed  fraudulent  machin- 
ations of  the  respondent  to  escape  its 
payment."  And  see  also  Wetter  v. 
Schlieper,  7  Abb.  Pr.  93;  Ba)ik  of 
Monroe  v.  Schermerhorn,  Clarke,  Ch. 
366;  Siney  v.  New  York  Consol.  Stage 
Co.  28  How.  Pr.  481;  Eynes  v.  Mc- 
Dermott,  3  N.  Y.  S.  R.  583. 

^ Moore  V.  Taylor,  40  Hun,  56;  Egan 
V.  Rooney,  38  How.  Pr,  131 ;  Lu.ik  v. 
Endings,  1  Hill,  656.  But  see  Glen- 
ville  Woolen  Co.  v.  liipley,  43  N.  Y.  206. 


92  RECEIVERSHIPS. 

(a)  All  suits  by  him  are  under  the  direction  and  control  of  the 
court.' 

(b)  The  rights  of  action  such  as  mii^ht  have  been  maintained 
by  the  person  over  whose  estate  he  is  appointed  are  equally  avail- 
able to  the  receiver/  and  are  subject  to  the  same  conditions  and 
limitations.' 

(c)  Leave  of  court  to  sue,  general  or  special,  is  an  essential 
foundation  for  suit." 

(d)  He  must  also  allege  and  prove  his  authority  to  bring  suit.' 

(e)  The  receiver  of  an  insolvent  corporation  has  the  right  to  sue 
or  defend  an  action  to  avoid  any  instrument  which  is  invalid  as  to 
creditors,  and  in  such  case  the  adjudication  of  insolvency  and  ap- 
pointment of  a  receiver,  appropriates  the  property  of  the  debtor 
to  the  payment  of  his  debts,  and  authorizes  a  receiver  of  this 
class  as  representing  the  creditors  to  take  such  proceedings  as  the 
creditors  might  do  if  no  assignment  had  been  made.  A  judg- 
ment as  a  prerequisite  to  institute  proceedings  of  this  nature  is 
not  required.*  This  rule,  however,  is  not  to  be  extended  to  the 
class  of  receiverships  where  the  receiver  represents  alike  all  par- 
ties to  the  proceeding.'  Nor  to  suits  pending  at  the  time  of  his 
appointment,  unless  he  has  instructions  to  participate  therein.' 

^Be  Merritt,  5  Paige,  125.  Stewart  v.  Beebe,  28  Barb.  34;  Banga 

•'Curtis  V.  Mcllhenny,  5  Jones,  Eq.  ^-  Mcintosh,  23 Barb.  591 ;  WJiite^. Low, 
290;  Falkenhack  v.  Patterson,  43  Ohio  ^  Barb.  204;  Piatt  v.  Crawford,  8 
St.  359;  Coope  v.  Bowles,  28  How.  Pr.  ^bb.  Pr.  N.  S.  297;  Cheney  v.  Fisk, 
10;  Davis  V.Ladoga  Creamery  Co.  128  22  How.  Pr.  236;  Oillet  v.  Fairchild, 
Ind.  222;  Freeman  v.  Winchester,  10  4  Denio,  80;  Manley  v.  Rassiga,  13 
Stnedes  &  M.  577;  New  Brunswick  Hun,  288;  Rockwell  v.  Merwin,  45  N. 
State  Bank  v.  First  Nat.  Bank,  34  N.  Y.  166;  Potter  v.  Merchants'  Bank,  28 
J  Ea   450  ■^'  Y'  ^^^ '  ^^y^^^  ^-  Oonnah,  18  How. 

Pr.  326;  Coope  v.  Bowles,  28  How.  Pr. 
10;  Boland  v.  Wiitman,  33  Ind.  64; 
Helme  v.  Littlejohn,  12  La.  Ann.  298; 
Hayes  V.  Brotzman,  46  Md.  519;  Frank 
V.  Morrison,  58  Md.  423, 

*  Graham  Button  Co.  v.  Spielmann, 
50  N.  J.  Eq.  120;  Pillsbury  v.  Kingon, 
^Oreen  v.  Winter,  1  Johns.  Ch.  33  n.  J.  Eq.  287;  Boe,  Grimsby,  v. 
60;  Wynn  v.  Neicborough,  3  Bro.  C.  ^all,  11  Mees.  &  W.  531;  Eopp)er  v. 
C.  88;  Battle  v.  Davis,  66  N.  C.  252,  Lovejoy,  47  N.  J.  Eq.  573, 12  L.  R.  A. 
Contra,  Weill  v.  First  Nat.  Bank,  106  588,  see  Shaw  v.  Glen,  37  N.  J.  Eq.  33. 
N.  C.  13;  Everett  v.  State,  McKaig,  28  i  gee  chap.  vi.  §§  68. 

Md.  190;  Screven  v.  Clark,  48  Ga.  41.  s  Qadsden  v.  Wh'aley,  14   S.   C.  210; 

*8cott  V.  Duncombe,  49  Barb.  73.  jr^acy  v.  First  Nat.  Bank,  37  N.  Y. 


^Bell  V.  Shibley,  33  Barb.  610;  Wil- 
liams V.  Babcock,  25  Barb.  109;  Thomas 
V.  Whallon,  31  Barb.  172;  Waddle  v. 
Hudson,  96  Mich.  432;  Litchfield  v. 
Peck,  29  Conn.  384;  State,  Shepard,  v. 
Sullivan,  120  Ind.  197. 


RECEIVER'S  POWERS.  93 

§  31.  Power  to  make  repairs. 

(a)  The  power  of  a  receiver  to  make  repairs  without  an  order  of 
court  authorizing  him  is  exceedingly  Kniited,"  but  allowances  of 
courts  have  become  more  liberal  in  this  regard  where  it  is  shown 
that  the  expenditures  are  for  the  lasting  benefit  of  the  estate,' 
and  where  the  receiver  has  acted  in  good  faith  and  for  the  best 
interests  of  the  property  intrusted  to  him,  or  where  it  is  necessary 
to  act  immediately  in  order  to  prevent  damage.'  But  it  would 
seem  that  before  the  court  will  make  an  allowance  for  such  pur- 
pose without  an  order  previously  authorizing  expenditures,  it 
must  appear  that  had  application  been  made  the  court  without 
doubt  would  have  granted  the  order  in  the  first  instance.* 

(b)  The  power  of  the  court  to  authorize  the  receiver  to  make  re- 
pairs, and  charge  the  expense  to  the  estate,  is  much  more  liberal, 
and  indeed  must  be,  in  case  of  receiverships  of  railways,  where 
not  only  the  interests  of  the  parties  are  involved,  but  the  con- 
venience of  the  public  is  to  be  conserved.^  A  railroad  receiver 
may  contract  with  another  company  for  exchange  of  track  facili- 
ties. °  But  there  is  a  limitation  on  the  power  of  the  receiver  to 
make  contracts,  and  he  has  no  right  to  make  a  contract  involving 
large  outlays  that  may  extend  beyond  the  lifetime  of  the  receiver- 
ship.' 

523.     This  will  be  the  subject  of  fur-  {note).    'R\\is,eQ,Wyckoffy.Scofield,\QZ 

ther  consideration  under  the  title  of  N.  Y.  630. 

Suits  by  Receivers,  chap.  vi.  The  court  may  leave  to  the  discre- 

^  Atty  Gen.  \. Vigor, WYgb.  Jr.  5QZ;  tion   of  its  receiver  the  price  to  be 

Ex  parte  Marton,  Ex  parte  Hilbert,  11  paid  for  work  which  he  is  authorized 

Ves.  Jr.  397;  Hooper  v.  Winstoii,  24  111.  to  contract  for.     Oirard  L.  Ins.  A.  & 

353.  A  receiver  is  not  authorized  with-  T.  Co.  v.  Cooper,  162  U.  S.  529,  40  L. 

out  a  previous  order  of  court  to  incur  ed.  1062. 

any  expense  on  account  of  property  •*  Broxcn  v.  Ilazlehurst,  54  Md.  26. 

in  his  hands  beyond  what  is  absolutely  ^  Hoover  v.  Montclair  &  G.  L.  R.  Co. 

essential  to  its  preservation  and  use  29  N.  J.  Eq.  4;  Morison  v.  Morison,  7 

as  contemplated  by  his  appointment.  DeG.  M.&G.  214;  Stanton  \.  Alabama 

Cowdrey  v.  Galveston,  H.  &  H.  R.  Co.  &  C.  R.  Co.  2  Woods,  506;  Bright  v. 

93  U.  S.  352,  23  L.  ed.  951.  North,  2  Phill.  216;  Jerome  v.  McCar- 

'  Blunt  V.  Clitherow,  6  Ves.  Jr.  799  ter,  94  U.  S.  734,  24  L.  ed.  137. 

(note);  Atty  Gen.  v.  Vigor,  11  Ves.  Jr.  ^  J  our  dan  v.  Long  Island  R.  Co.  42 

663;  Central  Trust  Co.  v.  Wabash,  St.  Hun,  657,  see  further  under  title  of 

L.  &  P.  R.  Co.  52  Fed.  Rep.  908.  Railways. 

*  Heffron  v.  Milligan,    40   111.  App.  ■"  Chicago  Deposit  Vault  Co.   v.   Mc- 

291;   Thornhill  v.  Thornhill,   14  Sim.  Nulla,   153  U.    S.  554,   38  L.  ed.  819. 

600;  McCartney  v.  WaWi,   Hayes,  29,  In  Barton  v.  Barbour,  104  U.  S.  126, 


94  RECEIVERSHIPS. 

§  32.  Power  to  purchase  supplies,  labor,  etc. 

In  this  connection  the  power  of  a  receiver  to  purchase  supplies, 
employ  labor,  and  make  expenditures,  relating,  as  it  does,  prin- 
cipally to  railroad  receiverships,  will  be  considered  only  briefly, 
being  dwelt  upon  more  specifically  in  another  connection.  It 
may  be  stated  as  a  general  proposition  that  the  ordinary  outlays 
where  the  amounts  are  small,  and  which  are  necessary  to  pre- 
serve and  protect  the  property  from  loss  or  injury,  may  be  made 
by  the  receiver  as  fairly  within  the  line  of  discretion  which  is 
necessarily  allowed  to  him  intrusted,  as  he  is,  with  the  faithful 
and  successful  management  of  the  property.  In  cases,  however, 
involving  large  outlays  his  business  sagacity  would  suggest,  and 
it  is  the  duty  of  the  receiver  to  apply  to  the  court  for  its  sanc- 
tion and  authority  for  the  contemplated  expenditure.'  Assuming 
this  application  to  have  been  made  it  becomes  a  matter  of  im- 
portance to  determine  the  scope  of  power  the  court  will  exercise 
in  authorizing  its  receiver  to  make  expenditures  upon  the  trust 
property  in  the  shape^of  supplies,  labor,  improvements,  etc.  In 
the  great  majority  of  cases  it  is  not  necessary  that  the  business  of 
the  concern  over  whose  property  the  receiver  is  appointed  should 
be  continued  as  a  going  concern ;  on  the  contrary,  experience  has 
demonstrated  that,  as  a  general  rule,  the  sooner  a  conversion  of 
the  assets  is  made,  and  a  distribution  of  the  proceeds  effected  the 
better  for  all  concerned.  But  in  the  matter  of  railroad  receiver- 
ships, and  others  of  a  quasi  public  character,  it  is  an  important 
factor  that  the  business  of  the  company  shall  be  kept  in  oj)era- 
tion.  In  fact  the  only  means  by  which  the  most  valuable  part  of 
the  property  of  a  railroad  corporation  can  be  preserved  and  saved 
from  ruinous  deterioration  is  by  continuing  the  road  in  full  ope- 
ration. Both  public  right  and  private  interest  require  this.  Ob- 
viously, this  cannot  be  done  unless  authority  exists  somewhere  to 
make  contracts  which  shall  bind  the  trust,  and  by  reason  and 
analogy  the  proper  repository  of  this  authority  is  the  receiver. 

26  L.  ed.  672,  the  court  says:  "It  has  way  until  it  can  be  sold  to  the  best 

come  to  be  settled  law  that  a  court  of  advantage  of  all  interested."     Wallace 

equity  may,  and  in  most  cases  ought  v.  Loomis,  97  U.  S.  146,  24  L.  ed.  895. 

to  authorize  its  receiver  of  a  railroad  '  Cowdry  v.  Galveston,  H.   &  H.  R. 

property  to  keep  it  in  repair,  and  to  Co.  1  Woods,  331. 
manage  and  use  it  in  the  ordinary 


RECEIVER'S  POWERS. 


95 


And  inasmuch  as  the  law  never  imposes  a  duty  without  giving 
the  person  charged  with  its  performance  sufficient  power  to  do- 
his  duty,  it  has  become  an  established  rule  supported  by  a  long 
list  of  precedents  that  a  receiver,  of  this  character,  as  a  necessary 
incident  to  the  duties  imposed  upon  him,  has  authority  under  the 
direction  of  the  court,  to  make  all  such  contracts  for  labor  and 
supplies  as  are  reasonably  necessary  to  enable  him  to  perform 
the  duties  of  his  appointment,  and  that  his  contracts  for  such 
purpose  bind  the  trust.'     The  cost  of  expenditures  of  this  nature 


'  Lehigh  Coal  &  Nav.  Co.  v.  Central 
R.  Co.  41  N.  J.  Eq.  167,  35  N.  J.  Eq. 
426;  Fosdick  v.  Schall,  99  U.  S.  235,  25 
L.  ed.  339;  Thomas  v.  Peoria  &  B.  I. 
R.  Co.  86  Fed.  Rep.  808;  Wood  v.  Guar- 
antee Trust  &  Safe  Deposit  Co.  128  U. 
S.  416,  32  L.  ed.  473;  Reyburn  v.  Con- 
mmers'  Gas  Fuel  &  L.  Co.  29  Fed.  Rep. 
561 ;  McLane  v.  Placerville  £  S.  V.  R. 
Co.  66  Cal.  606 ;  Cowdry  v.  Galveston, 
E.  &  H.  R.  Co.  1  Woods,  331;  Enee- 
land  V.  American  Loan  &  T.  Co.  136 
U.  S.  89,  34  L.  ed.  379;  Kneeland  v. 
Bass  Foundry  &  Mach.  Works,  140  U. 
S.  592,  35  L.  ed.  543;  St.  Louis,  A.  & 
T.  H.  R.  Co.  V.  Cleveland,  C.  C.  &  L  R. 
Co.  125  U.  S.  658,  31  L.  ed.  832; 
Tfiornton  v.  Highland  Ave.  &  B.  R. 
Co.  94  Ala.  353;  Kerr  v.  Little,  39  N. 
J.  Eq.  83;  Beckwith  v.  Carroll,  56  Ala. 
12;  Union  Trust  Co.  v,  Illinois  M.  R.  Co. 
117  U.  S.  437,  29  L.  ed.  964;  Mcllhenny 
V.  Binz,  80  Tex.  4;  Securities  and  Prop- 
erties Corp.  V.  Brighton,  Alhamhra,  62 
L.  J.  Ch.  566;  Thomas  v.  Western  Car 
Co.  149  U.  S.  95,  37  L.  ed.  663.  If  the 
mortgagee  applies  for  a  receiver  the 
rolling  stock  rentals  are  before  the 
mortgage,  but  the  rentals  for  rolling 
stock  are  not  preferred  to  the  mort- 
gage where  the  receiver  is  not  appoint- 
ed on  the  application  of  the  mort- 
gagee. Kneeland  v.  American  Loan  & 
T.  Co.  136  U.  S.  89,  34  L.  ed.  379,  see 
also,  Quincy,  M.  &  P.  R.  Co.  v.  llum- 
phreys,  145  U.  8.  82,  36  L.  ed.  632. 


The  principle  has  been  applied  to 
rentals  for  rolling  stock  in  addition 
the  cases  above  cited  as  follows: 
Thomas  v.  Western  Car  Co.  149  U.  S. 
95,  111,  37  L.  ed.  663,  669;  Quincy,  M. 
&P.  R.  Co.  V,  Humphreys,  145  U.  S. 
104,  36  L.  ed.  640;  United  States  Trust 
Co.  V.  WabashW.  R.  Co.  150  U.  S.  299, 
37  L.  ed.  1088;  Central  Trust  Co.  v. 
Wabash,  St.  L.  &  P.  R.  Co.  46  Fed. 
Rep.  29;  Park  v.  New  York,  L.  E.  <& 
W.  R.  Co.  57  Fed.  Rep.  m^;New  York, 
P.  &  A.  R.  Co.  V.  New  York,  L.  E. 
&  W.  R.  Co.  58  Fed.  Rep.  278;  and  to 
operating  expenses  generally,  as  fol- 
lows: Bound  V.  South  Carolina  R.  Co. 
58  Fed.  Rep.  480;  Clyde  v.  Richmond 
&D.  R.  Co.  56  Fed.  Rep.  541;  Finance 
Co.  V.  Charleston,  C.  &  C.  R.  Co.  48 
Fed.  Rep.  190;  Farmers'  Loan  &  T. 
Co.  V.  Grape  Creek  Coal  Co.  50  Fed. 
Rep.  482, 16  L.  R.  A.  Qd'd;  Finance  Co. 
V.  Charleston,  C.  &  C.  R.  Co.  52  Fed. 
Rep.  679;  Union  Loan  &  T.  Co.  v. 
Southern  California  Motor  Road  Co. 
51  Fed.  Rep.  107;  Bound  v.  South 
Carolina R.  Co.  47  Fed.  Rep.  31;  Fin- 
ance Co.  V.  Charleston,  C.  &  C.  R.  Co. 
46  Fed.  Rep.  428;  Texas  G.  R.  Co.  v. 
Morgan's  Louisiana  &  T.  R.  &  S.  S. 
Co.  137  U.  8.  199,  34  L.  ed.  635;  Ames 
V.  Union  P.  R.  Co.  60  Fed.  Rep.  971. 

The  rule  laid  down  in  the  text  is 
confined  to  railroad  receiverships 
mainly  though  not  exclusively.  Ellis 
V.  Vernon  Ice,  L.  &  W.   Co.   86  Tex. 


^6  RECEIVERSHIPS. 

is  chargeable  first  to  the  net  income,  and  if  that  be  not  sufficient 
then  upon  the  property  itself  or  its  proceeds.'  Expenditures  of 
this  nature,  however,  will  not  be  extended  to  speculative  mat- 
ters.' 

§  33.    Power  to  continue  business. 

The  power  of  the  court  to  authorize  a  receiver,  or  receiver  and 
manap^er  as  he  is  called  in  such  case  in  England,  to  continue  the 
business  of  the  defendant  over  whose  property  and  business  he  is 
appointed,  has  been  recognized,  and  is  supported  by  authority, 
independent  of  the  practice  as  applied  to  railroad  receiverships, 
and  those  of  statutory  origin.  The  exercise  of  this  power,  how- 
ever, should  only  be  granted  in  cases  where  the  necessity  for  so 
•doing  is  clearly  shown.'  There  are  certain  limitations  upon  this 
power  when  applied  to  the  different  forms  of  actions,  or  objects 
sought  to  be  accomplished  by  the  proceeding  in  which  the  re- 
ceiver is  appointed.  Thus  in  case  of  a  foreclosure  of  a  mortgage 
unless  the  mortgage  includes  the  business  or  good  will  of  the 
mortofao-or,  the  court  will  not  continue  the  business  through  its 
receiver.*     Nor  in  a  matter  involving  the  violation  of  a  contract 

109;  Reyhurn  v.  Consumers'  Oas  Fuel  delinquents,  and    thus  transforming 

<fc  L.  Co.  29  Fed.  Rep.  561;  Securities  these  courts  into  commercial  agencies. 

and  Properties  Corp.  v.  Brighton,  Al-  Judicious     legislation,     or    possibly 

hambra,  62  L.  J.  Ch.  566;  Scott  v.  Wes-  greater  judicial  caution   would   pre- 

bitt,  14  Ves.  Jr.  438;    Peck  v.   Trins-  vent  the  undue  haste  sometimes  mani- 

maran  Iron  Co.  L.  R.  2  Ch.  Div.  115;  fested  to  place  the  management    of 

Makins  v.  Ibotson  [1891]  1  Ch.  133.  business  concerns,  especially  corpora- 

'  McLane  v.  Placerville  &  S.  V.  B.  tions,  under  the  fostering  care  of  the 

Co.  66  Cal.  606;  Meyer  v.  Johnston,  53  courts. 

Ala.  237;  Ellis  v.  Vernon  Ice,  L.  &  W.  '^Whitley  v.  Challis  [1892]  1  Ch.  64; 

Co.  86  Tex.  109.  Campbell  v.    Lloyds,    B.  &  B.   Bank 

^Securities  and  Properties  Corp.  v.  [1891]  1  Ch.  136;  Truman y.  Redgrave, 

Brighton,  Alhambm,  62  L.  J.  Ch.  566.  L.  R.  18  Ch.  Div.  547;  Makins  v.  Ibot- 

^As  illustrating  the  growing  tend-  son  [1891]  1  Ch.  133;  Peek  v.  Trina- 

ency  of  recent  times  to  place  the  man-  maran  Iron  Co.  L.  R.  2  Ch  Div.  115. 

agement  of   commercial    enterprises  A  receiver  has  no  authority  unless 

under  the  control  of  courts  of  equity  expressly  authorized  by  the  court,  or 

it  has  been  stated  that  not  less  than  the  business  is  such  as  to  imperatively 

one    sixth  of    the    railroads    of    the  require  him,  to  open  a  drug  business 

United   States  were  in  the  hands  of  with  the  property  or  moneys  in  his 

receivers.     The   functions  of   courts  hands  and  employ  therein   his  son, 

of  equity,  in  many  cases,  and  especi-  who  is  not  a  druggist,  and  run  a  phy- 

ally  during  panics,  are  being  made  to  sician's  office  in  connection  therewith, 

.-subserve  the  interests  of  temporary  Terry  v.  Martin  (N.  M.)  32  Pac.  157. 


RECEIVER'S  POWERS. 


97 


will  tlie  court  throngh  its  receiver  set  up  a  new  business,  or  en- 
gage in  the  manufacture  of  proprietory  articles,  involving  secret 
formulas.'  Under  the  "Companies  act"  of  1862,  which  provided 
that  tlie  official  liquidator  should  have  power,  with  the  sanction  of 
the  court,  "  to  carry  on  the  business  of  the  company,  so  far  as  may 
be  necessary  for  the  beneficial  winding  up  of  the  same,"  it  was 
held  that  the  word  "  necessary  "  as  used  in  the  act  had  sole  refer- 
ence to  the  "  beneficial  winding  up  "  of  the  business  of  the  com- 
pany, and  not  with  a  view  of  its  continuance  in  business,  no 
matter  if  the  continuance  of  the  business  would  be  beneficial  to 
the  shareholders.^  And  in  a  partnersliip  matter  the  purpose  of  a 
receiver  being  to  wind  up  the  business,  the  court  will  not  give 
the  receiver  authority  to  continue  the  business,  except  where  a 
serious  loss  is  apparent,  growing  out  of  a  loss  of  the  good  will,  or 
injury  to  the  property,  as  horses  in  a  livery  stable,  and  then  it 
will  only  be  temporary.^  But  there  are  cases  of  partnership  even, 
where  inevitable  loss  may  result  from  a  refusal  to  authorize  the 
receiver  to  carry  on  the  business,  where  the  court  owing  to  the 
nature  of  the  business  will  not  take  upon  itself  the  management." 


^Merrell  v.  Pemberton,  62  Ga.  29. 

^Re  Wreck,  Recovery,  and  Salvage 
Co.  L.  R.  15  Ch.  Div.  353.  Leave  to 
continue  the  business  was  ordered  in 
the  following  cases:  Dayton  v.  Wilkes, 
17  How.  Pr.  510;  Graham  v.  Qraliam, 
2  Vict.  Rep.  145. 

^Jackson  v.  DeForest,  14  How.  Pr. 
61;  Marten  v.  Van  Schaick,  4  Paige, 
479;  Allen  v.  Hawley,  6  Fla.  164; 
Heatherton  v.  Hastings,  5  Hun,  459; 
Henn  v.  Walsh,  2  Edw.  Ch.  130; 
Wolbert  v.  Harris,  8  N.  J.  Eq.  605.  It 
is  sometimes  necessary  for  the  receiver 
to  complete  contracts  partially  exec- 
uted. Taylor  v.  Neate,  L.  R.  39  Ch. 
Div.  538.  See  §  35,  supra.  See  also 
Meridian  News  <b  Pub.  Co.  v.  Diejn  & 
W.  Paper  Co.  70  Miss.  605. 

*Waters  v.  Taylor,  15  Ves.  Jr.  10. 
In  this  case  the  Lord  Chancellor 
(Eldon)  said:  "Then  considering  the 
jiature  of  this  property  can  the  plain- 


tiff call  upon  the  court  to  assume  the 
management  of  the  theatre?  .  .  .  My 
opinion  is  that  this  court  has  no  juris- 
diction to  manage  this  concern  merely 
for  the  purpose  of  carrying  it  on. 
The  court  will  order  it  to  be  sold  or 
foreclosed;  will  deal  with  it  as  prop- 
erty, but  no  further.  ...  I  do  not 
see  my  way  to  make  such  an  order, 
and  if  I  did  I  must,  by  acting,  ruin  all 
concerned.  They  have  still  the  locus 
pcenitentim,  and  if  they  will  not  settle 
their  own  interests,  it  is  immaterial, 
whether  the  consequences  shall  be 
produced  by  their  own  acts  or  by 
mine."  See  also  Niemann  y .Niemann, 
L.  R.  43  Ch.  Div.  198,  where  it  is 
held  that  a  receiver  will  not  be  ap- 
pointed over  a  partnership,  and  au- 
thorized to  do  acts  in  the  nature  of  a 
compromise  or  settlement  which  the 
partners  were  not  authorized  to  do. 


98  RECEIVERSHIPS. 

§  34.  Power  to  sell ;  purcliaser's  title,  etc. 

(a)  The  court  bein^  in  possession  of  the  property  throns^h  its 
receiver,  for  the  benefit  of  the  parties  who  shall  ultimately  be 
found  to  be  entitled  to  it,  or  to  its  proceeds,  in  a  proper  case  has 
an  undoubted  right  to  order  a  sale  of  such  property  and  direct 
the  receiver  to  bring  the  proceeds  into  court  to  await  the  final  or- 
der of  distribution,  and  this  power  with  certain  limitations  ex- 
tends to  both  real  and  personal  property.  (1)  There  should  in 
all  cases  be  an  order  of  court  of  competent  jurisdiction  directing 
the  sale.*  (2)  The  order  should  particularly  describe  the  property 
to  be  sold,"  the  terms,  conditions,  and  method  of  sale,  and  in  some 
states  statues  have  been  passed  prescribing  the  manner  and  regu- 
lating the  methods  of  such  sales.  As  a  rule  the  sale  should  not 
be  ordered  until  a  final  decree  is  rendered,  for  until  such  time  it 
cannot  generally  be  known  that  a  sale  will  take  place,^  and  the 
receiver  being  in  custody  of  the  property  will  care  for  and  pro- 
tect it,  and  if  of  such  nature  as  to  be  practicable  will  collect  and 
preserve  the  income  therefrom.  If,  however,  the  property  is 
liable  to  deterioration  and  loss,*  or,  as  in  the  case  of  insolvency, 
will  eventually  have  to  be  sold,  the  order  on  a  sufficient  showing 

^ElUs  V.  Littte,  27  Kan.  707.     The  the  sale  is  good.     Barron  v.  MuUin, 

want  of  authority  of  a  receiver  to  21  Minn.  374. 

transfer  a  bond  is  no  defense  to  an  ob-  ^Brush  v.  Jay,  113  N.  Y.  482;  Ester- 

ligor  in  such  bond  where  the  transfer  lund  v.  Bpe,  56  Ga.  284. 
is  subsequently  ralifled  by  the  court.  A  sale  of  property  by  a  receiver,  in 

Manne   &   River  Phosphate  Min.   &  whose  hands  it  has  been  placed  pend- 

Mfg.  Co.  V.  Bradley,  105  U.  S.  175,  26  ing  a  litigation  concerning  the  rights 

L.  ed.  1034.  of  the  parties  thereto,  may  be  ordered 

The  pendency  of  a  bill  of  excep-  where  the  income  is  insufficient  to 

tions  assigning  as  error  the  granting  pay  the  expenses  of  the  receivership 

of  an  order  authorizing  a  receiver  to  and  the  corpus  is    gradually  being 

sell  specified  property  does  not,  in  the  diminished,  although  the  interests  of 

absence  of  the  supersedeas  required  the  parties  therein  have  not  been  de- 

by  law  in    such    case,    prevent   the  termined.     Smith  v.  Burton,   67  Vt. 

hearing  and  determination  of  a  second  514. 

application   to  sell  presented  by  the  ^National  Park  Bank  v.   Ooddard, 

receiver.     Farmers'  Co- Op.  Mfg.    Co.  131  N.  Y.  494,  62  Hun,  31.     (The  text 

V.  Drake  (Ga.)  22  S.  E.  1004.  is  sustained  by  the  lower  court  and 

^Dixon  V.  Rutherford,  26  Ga.  149.  not  questioned  in  the  upper  court.) 

Where  the  order  directs  the  sale  of  all  First  Nat.  Bank  v.  Shedd,  121  U.  S. 

the  property  of  a  defendant  and  the  74,   30  L.  ed.  877;    Crane  v.    Ford, 

receiver  sells  lot  2,  being  part  of  it,  Hopk.  Ch.  114.     And  the  court  may 


RECEIVER'S  POWERS. 


99 


may  be  made  in  an  interlocutory  proceeding  prior  to  the  final  de- 
cree. The  court  should  however  be  careful  to  see  that  a  proper 
case  is  presented  for  the  exercise  of  such  power,  and  to  see  par- 
ticularly that  the  owner  of  the  property  cannot  be  unduly  preju- 
diced by  the  sale  thereof."  In  case  of  sale  the  receiver  retains  a 
lien  for  the  unpaid  balance  of  the  purchase  money.'' 

(b)  The  court  having  power  to  sell,  and  having  directed  the 
receiver  to  do  so,  this  carries  with  it  the  authority  to  give  the 
purchaser  evidence  of  the  transfer  of  title,  A  purchaser  under  a 
sale  by  a  receiver  having  a  deed  from  him  is  not  bound  to  ex- 
amine all  tlie  proceedings  in  the  case  in  which  the  receiver  is  ap- 
pointed. It  is  suflicient  for  him  to  see  that  there  is  a  suit  in 
equity,  in  which  the  receiver  of  the  property  was  appointed  ;  that 
the  court  authorized  the  receiver  to  sell ;  that  the  sale  was  made 
under  that  authority,  and  that  the  sale  was  confirmed  by  the 
court,  and  that  the  deed  accurately  describes  the  property  sold,  or 
interest  therein.     He  is  not  bound  to  inquire  whether  any  errors 


order  part  of  the  property  sold  to  pay 
taxes  where  it  can  be  done  by  reason 
of  its  nature  and  where  it  is  clearly 
necessary.  National  Bank  of  the 
Metropolis  v.  Sprague,  20  N.  J.  Eq. 
170. 

A  receiver  of  the  property  of  a  cor- 
poration owning  several  distilleries 
whose  operation  will  require  the 
making  of  contracts  for  feeding  cattle, 
and  the  involving  of  large  expense, 
may  be  authorized  to  sell  the  distillery 
and  hold  the  proceeds  for  the  benefit 
of  such  claims  as  may  be  adjudged 
valid.  Olmstead  v.  Distilling  &  C.  F. 
Co.  73  Fed.  Rep.  44. 

^Forsaith  MacJi.  Co.  v.  Hope  Mills 
Lumber  Co.  109  N.  C.  576.  In  this 
case  it  appeared  that  the  owner  of  the 
property  was  insolvent  and  that  all 
its  property  had  to  be  sold  to  satisfy 
the  numerous  debtors  who  were  parties 
to  the  action.  Dixon  v.  Rutherford, 
26  Ga.  149.  The  court  has  power  to 
order  the  sale  to  be  made  at  not  less 
than  a  given  price.  McIlJienny  v, 
Bim,  80  Tex.  1. 


A  receiver  making  a  sale  of  prop- 
erty under  the  order  of,  and  subject  to 
approval  by  the  court,  cannot  recover 
of  a  bidder  refusing  to  complete  his 
bid,  the  loss  resulting  from  a  resale 
by  the  receiver  upon  his  own  motion, 
where  the  sale  to  the  first  bidder  was 
never  approved  by  the  court,  and  the 
second  sale  was  so  approved  and  con- 
firmed and  completed.  Leslie  v.  Oood- 
hue,  69  Hun,  71. 

'^Florida  v.  Anderson,  91  U.  S.  667, 
23  L.  ed.  290;  State  v.  Jacksonville,  P. 
&  M.  B.  Co.  16  Fla.  708. 

A  receiver  who  takes  possession  and 
makes  of  sale  of  property,  reserving 
title  until  the  purchaser  has  fully  paid 
the  purchase  money  and  until  con- 
firmation of  the  sale,  may,  although 
actual  possession  is  delivered  to  the 
purchaser,  maintain  an  action  before 
confirmation  to  enjoin  interference  by 
an  adverse  claimant  with  his  posses- 
sion. Wuodburn  v.  Smith  (Ga.)  22  S. 
E.  904, 


lOU 


RECEIVERSHIPS. 


intervened  in  the  action  of  the  court,  or  irregularities  were  com- 
committed  by  the  receiver  in  the  sale.'  Until  the  confirmation  of 
the  sale,  however,  the  receiver  is  not  bound  by  the  sale,  the  deed 
issued  prior  thereto  being  rendered  inoperative  if  the  sale  be  not 
confirmed.  But  after  confirmation  of  the  sale  all  irregularities 
prior  to  the  execution  of  the  deed  are  removed."  The  order  of 
confirmation  is  a  direct  adjudication  of  the  regularity  of  the  ac- 
tion of  the  receiver,'  and  no  transfer  of  title  is  really  made  until 
the  order  of  confirmation  is  granted,  on  notice  to  the  parties 
in  interest."  As  to  the  title  and  condition  of  the  property  the 
rule  of  caveat  emptor  applies,^  and  the  purchaser  takes  the  prop- 
erty subject  to  all  liens,  or  outstanding   interests  therein,"  and 


^Koontz  V.  Northern  Bank,  83  U.  S. 
16  Wall.  196,  21  L.  ed.  465;  Libby  v. 
Eosekrans,  55  Barb.  219;  Brande  v. 
Bond,  63  Wis.  140.  A  deed  made  be- 
fore confirmation  is  good  after  the  con- 
firmation. Koontz  V,  Northern  Bank, 
supra.  Before  the  rights  of  third 
parties  intervene  the  court  may  set 
aside  a  sale  where  the  receiver  or 
master  deceives  the  court  as  to  the  con- 
ditions of  sale  when  the  purchaser  par- 
ticipates in  such  deception.     Id. 

Want  of  notice  is  ground  for  re- 
fusal to  confirm.  Beford  v.  Mawcatty, 
2  Am.  &  Eng.  Corp.  Cas.  N.  S.  477. 

^Koontz  V.  No7'ihei'7i  Bank,  83  U.  S. 
16  Wall.  196,  21  L.  ed.  465. 

The  purchaser  of  a  note  at  a  re- 
ceiver's sale  is  not  bound  by  the  re- 
ceiver's statement  of  the  amount  due, 
but  is  entitled  to  recover  whatever 
may  be  due  upon  it.  Newberry  v. 
Trowbridge,  13  Mich.  263. 

Those  who  purchased  real  property 
taken  from  citizens  during  the  late 
war  under  the  plea  of  their  being  alien 
enemies,  at  sales  made  by  Confeder- 
ate receivers,  obtained  thereby  no 
title  to  it,  nor  do  those  claiming  un- 
der them  with  notice.  The  possession 
of  all  such  persons  is  tortious  and 
they  are   liable  for  rents  and  profits 


and  for  any  damage  done  to  the  prop- 
erty while  in  their  possession.  Mc- 
Clure  V.  McLane,  39  Tex.  81;  Simmons 
V.  Wood,  45  How.  Pr.  368. 

^Brande  v.  Bond,  63  Wis.  140;  Atty. 
Oen.  V.  Continental  L.  Ins.  Co.  94  N. 
T.  199. 

^Simmons  v.  Wood,  45  How.  Pr.  262; 
Wambaugh  v.  Gates,  8  N.  Y.  138;  Ex 
parte  Minor,  11  Ves.  Jr.  554;  Twigg  v. 
Fijkld,  13  Ves.  Jr.  517;  Thompson  v. 
Gould,  20  Pick.  135. 

^Barron  v.  Mullin,  21  Minn.  374; 
England  v.  Clark,  5  111.  486 ;  Bashore 
v.  Wliisler,  3  Walts,  490;  Fox  v. 
Mensch,  3  Watts  &  S.  444;  King  v. 
Gunnison,  4  Pa.  171. 

A  purchaser  of  a  railroad  in  the 
hands  of  a  receiver,  whose  contract 
makes  it  liable  for  the  obligations  of 
the  receiver,  is  liable  to  pay  a  judg- 
ment entered  against  the  receiver  on 
a  supersedeas  bond  which  he  had  ex- 
ecuted to  appeal  a  judgment  against 
the  railroad, — especially  where  the 
road  was  improved  and  bettered 
while  in  the  hands  of  the  receiver  to 
an  amount  in  excess  of  such  judg- 
ment. Missouri,  E.  &  T.  R.  Co.  v. 
Lacy  (Tex.  Civ.  App.)  35  S.  W.  505. 

^ Fitch  v.  Wetherbee,  110  111.  475; 
Hackensack    Water     Co.    v.    DeKay, 


RECEIVER'S  POWERS. 


101 


after  sale  lie  becomes  subject  to  orders  of  the  court.'  All  sales 
are  subject  to  the  control  of  the  court,  and  may  be  set  aside  for 
fraud,  or  mistake."  A  receiver  ordered  to  sell  will  be  protected 
by  the  court  in  making  such  sale.* 

(c)  The  sale  of  property  made  by  a  receiver  is  not  subject  to 
collateral  attack.* 

All  persons  dealing  with  a  receiver  are  bound  to  take  notice 
that  he  is  at  all  times  subject  to  the  orders  of  court,  and  that  all 
his  acts  may  be  annulled  or  modified  by  the  court  at  its  pleasure/ 
and  particularly  so  with  reference  to  sales  made  by  him.' 


36  N.  J.  Eq.  548;  Lowry  v.  Smith,  9 
Hun,  514;  Foster  v.  Barnes,  81  Pa. 
377;  Lorch  v.  Aultman,  75  Ind.  162; 
Dann  Mfg.  Co.  v.  Parkhurst,  125  Ind. 
317. 

ii?e  Denison,  114  N.  Y.  621. 

^Atty.  Gen.  v.  Continental  L.  Ins. 
Co.  94  N.  Y.  199;  Hackley  v.  Draper, 
60  N.  Y.  88,  2  Hun.  523. 

^Walling  v.  Miller,  108  N.  Y.  173. 

A  purchaser  of  land  at  a  receiver's 
sale  subject  to  a  mortgage  of  a  speci- 
fied amount  cannot  refuse  to  com- 
plete the  sale  on  the  ground  that  such 
mortgage  was  payable  in  gold,  with- 
out showing  that  gold  coin  is  of 
greater  value  than  the  other  various 
kinds  of  money  made  a  legal  tender. 
Blanck  v.  Sadlier,  5  App.  Div.  81,  16 
16  Misc.  164. 

A  sale  of  goods  by  the  receiver  of 
an  insolvent  vests  the  title  thereto  in 
the  purchaser,  free  from  any  claim 
growing  out  of  the  indebtedness  of 
the  insolvent.  Mississippi  Mills  v. 
Bauman  (Tex.  Civ.  App.)  34  S.  W. 
681. 

*  Brande  v.  Bond,  63  Wis.  140; 
Mellen  v.  Moline  Malleable  Iron  Works, 
131  U.  S.  353,  33  L.  ed.  179. 

The  sale  of  the  property  of  a  cor- 
poration by  a  receiver  to  shareholders 
will  not  be  refused  on  the  ground  that 
the  corporation  attempted  to  create  a 


trust,  and  that  such  shareholders  were 
responsible  for  its  unlawful  conduct, 
as  the  court  cannot  assume  that  im- 
proper use  will  be  made  of  the  prop- 
erty by  the  purchaser,  or  undertake 
to  control  the  use  after  it  is  sold  and 
and  conveyed  by  the  receiver.  Olm- 
stead  V.  Distilling  &  C.  F.  Co.  (C.  C. 
N.  D.  111.)  73  Fed.  Rep.  44. 

It  is  incumbent  upon  a  receiver  on 
a  motion,  contested  by  creditors,  for 
confirmation  of  the  sale  of  corporate 
property,  to  furnish  evidence  that  a 
mortgage  lien  subject  to  which  the 
sale  was  made  was  valid.  Re  Wendler 
Mack.  Co.  2  App.  Div.  16,  37  N.  Y. 
Supp.  444. 

*  Tripp  V.  Boardman,  49  Iowa,  410; 
Mooney  v.  British  Commercial  L.  Ins. 
Co.Q  Abb.  Pr.  N.  S.  103;  Ellis  v.  Little, 
27  Kan.  707;  but  notice  must  be  given 
to  the  person  whose  contract  is  to  be 
considered.  In  Lehigh  Coal  &  Nav. 
Co.  V.  Central  R.  Co.  35  N.  J.  Eq. 
426,  it  is  said:  "Until  his  contracts 
are  approved  or  ratified  by  the  court, 
the  court  is  at  liberty  to  deal  with 
them  as  to  it  shall  appear  to  be  just, 
and  may  either  modify  them  or  dis- 
regard them  entirely."  See  also 
Weeks  v.  Weeks,  106  N.  Y.  626. 

« Uale  V.  Clauson,  60  N.  Y.  339; 
Weeks  v.  Weeks,  106  N.  Y.  626;  and 
the  court  has  power  even  in  the  ab- 


102 


RECEIVERSHIPS. 


§  35.  Power  to  perform  existing  contracts  ;  limitations. 

(a)  The  power  to  the  receiver  to  carry  out  contracts  existing  at 
the  time  of  his  appointment  is  not,  as  a  rule,  granted  by  the  court, 
except  in  cases  wliere  there  is  a  lien  upon  the  receivership 
property  of  some  nature  operating  as  a  security  for  the  perform- 
ance of  the  contract.     The  reasons  for  this  rule  are  apparent : 

(1)  If  the  receiver  could  be  held  to  the  performance  of  an  un- 
completed contract,  the  performance  of  the  contract  by  him 
would  be  equivalent  to  a  payment  or  satisfaction  of  the  contract 
indebtedness,  and  in  the  absence  of  adequate  funds  for  that  pur- 
pose, the  court  will  not  require  him  to  do  so.'     The  functions  of 


sence  of  fraud  to  set  aside  a  sale,  but 
the  relief  is  addressed  to  the  sound 
judicial  discretion  of  the  court  and  no 
appeal  lies  from  such  an  order:  {Razle. 
ton  V.  Wakeman,  3  How.  Pr.  357: 
Wakeman  v.  Price,  3  N.  Y.  334; 
Bank  of  Geneva  v.  Reynolds,  33  N.  Y. 
160;  Dows  V.  Congdon,  28  N.  Y.  122; 
May  V.  May,  11  Paige,  201)  and  in 
such  case  it  is  immaterial  that  there 
are  grantees  and  bona  fde  purchasers 
from  the  purchaser  at  such  sales.  A 
purchaser  at  a  judicial  sale,  though  a 
stranger  to  the  judgment  or  decree,  by 
his  purchase,  submits  himself  to  the 
jurisdiction  of  the  court  in  respect  to 
the  sale  and  purchase  and  so  do  all 
acquiring  title  from  and  under  him. 
Cazet  V.  Hubbell,  36  N.  Y.  677;  May 
V.  May,  11  Paige,  201.  The  court, 
however,  will  in  all  cases  indemnify 
the  persons  who  are  effected  by  a 
vacation  or  modification  of  an  order 
of  sale  or  leasing.  Weeks  v.  Weeks, 
106  N.  Y.  626. 

Where  a  receiver  of  property,  ap- 
pointed in  an  action  against  a  cor- 
poration, fraudulently  obtains  an 
order  for  the  sale  of  a  debt  due  the 
corporation,  an  equitable  action,  at 
the  suit  of  the  creditor,  will  lie  to 
vacate  the  order  and  set  aside  a  sale 
made  in  pursuance  thereof.  The 
creditor  is  not  limited  to  a  motion  in 


the  action  wherein  the  receiver  was 
appointed.  Hackley  v.  Draper,  .60 
N.  Y.  88. 

A  private  sale  of  a  judgment  by 
a  receiver,  to  one  representing 
judgment  creditors,  at  a  grossly 
inadequate  price,  will  be  set  aside 
as  fraudulent.  It  is  not  necessary 
in  such  a  case  to  show  fraud  on  the 
part  of  all  the  parties  to  the  trans- 
action. If  the  receiver  acted  fraudu- 
lently, this  is  enough  to  warrant 
vacating  the  sale;  and  the  fact  that  he 
took  the  precaution  of  obtaining  an 
order  of  court  authorizing  him  to  sell 
at  private  sale  will  not  sustain  it. 
Hackley  v.  Draper,  4  Thomp.  &  0. 
614.' 

The  court  may  correct  a  mistake 
made  in  the  computation  of  the 
amount  of  a  receiver's  sale,  when  the 
record  and  papers  furnish  all  the  ele- 
ments for  the  correction.  Bryan  <& 
Brown  Shoe  Co.  v.  Block,  52  Ark.  458. 

1  Southern  Exp.  Co.  v.  Western  N.  G. 
E.  Co.  99  U.  S.  191,  25  L.  ed.  319; 
Central  Trust  Co.  v.  Marietta  &  N.  O, 
B.  Co.  51  Fed.  Rep.  15,  16  L.  R.  A. 
90;  Brown  v.  Warner,  78  Tex.  543,  11 
L.  R.  A.  394.  See  contra,  Howe  v. 
Harding,  76  Tex.  17.  As  to  leasehold 
estates,  Mr.  Chief  Justice  Fuller  in 
Quincy,  M.  <&  P.  B.  Co.  v.  Humphreys, 
145  U.  S.  83,  36  L.  ed.  632.  says:    "If 


RECEIVER'S  POWERS. 


103 


the  receiver  are  to  marshal  the  assets  and  distribute  the  same  to 
the  creditors  as  directed  by  the  court  according  to  their  respective 
rights  and  interests. 

(2)  The  receiver  in  general  is  but  the  agent  of  the  court,  and 
is  not  the  agent  of  the  owner  of  the  property  for  the  fulfillment 
of  his  contracts,  except  where  he  makes  the  contracts  his  own  by 
some  act  of  adoption.' 

(3)  If  the  receiver  were  required  to  complete  the  unfinished 
contract  of  the  owner  the  efiiect  in  many  cases  would  be  to  make 
a  preference  in  favor  of  a  simple  contract  creditor  as  against  a 
lien  holder,  and  thus  change  the  rights  of  the  parties  as  they 
exist  at  the  time  of  the  receiver's  appointment.^ 

(b)  The  court,  however,  may  order  the  receiver  to  complete  un- 


the  order  of  court  under  which  the  re- 
ceiver acts  embraces  the  leasehold 
estate  it  becomes  his  duty  of  course 
to  take  possession  of  it.  But  he  does 
not  by  taking  such  possession  become 
assignee  of  the  term  in  any  proper 
sense  of  the  word.  He  holds  that  as 
he  would  hold  any  other  personal 
property  for  and  as  the  hand  of  the 
court  and  not  as  the  assignee  of  the 
term."  OaitJier  v.  Stockbridge,  67 
Md.  222;  Olenny  v.  Langdon,  98  U.  S. 
20,  25  L.  ed.  43;  American  File  Co,  t, 
Garrett,  110  U.  S.  288,  28  L.  ed.  149; 
Sparliawk  v.  Tevkes,  142  U.  S.  1,  35  L. 
ed.  915;  Martin  v.  Black,  9  Paige, 
641;  Com.  v.  Franklin  Ins.  Co.  115 
Mass.  278;  Ellis  v.  Boston,  H.  &  E.  R. 
Co.  107  Mass.  1 ;  Fidelity  Safe  Deposit 

6  T.  Co.  V.  Armstrong,  35  Fed.  Rep. 
566;  Ben-y  v.  Gillis,  17  N.  H.  9;  Re 
Oak  Pits  Colliery  Co.  L.  R.  21  Ch. 
Div.  322. 

'  Com.  V.  Franklin  Ins.  Co.  115 
Mass.  278;  Brown  v.  Warner,  78  Tex. 
543,  11  L.  R.  A.  394;  Re  Brown.  3 
Edw.  Ch.  384;  Turner  v.  Richardson, 

7  East,  335;  Ellis  v.  Boston,  H.  & 
E.  B.  Co.  107  Mass.  1;  Re  Otis, 
101  N.  Y.  580;  Sunflower  Oil  Co. 
V.    Wilson,    142    U.    8.    313,    35    L. 


ed.  1025;  Hoyt  v.  Stoddard,  2  Allen, 
442;  Woodruff  Y.  Erie  R.  Co.  93  N.  Y. 
609;  St.  Joseph  &  St.  L.  R.  Co.  v. 
Humphreys,  145  U.  S.  105,  36  L.  ed. 
640;  United  States  Trust  Co.  v.  Wabash 
Western  R.  Co.  150  U.  S.  287,  37  L. 
ed.  1085;  Seney  v.  Wabash  Western  R. 
Co.  150  U.  S.  310,  37  L.  ed.  1093; 
Peoria  &  P.  U.  R.  Co.  v.  Chicago,  P. 
&  S  W.  R.  Co.  127  U.  S.  200.  32  L.  ed. 
110. 

"^  Olyphant  v.  St.  Louis  Ore  &  S. 
Co.  28  Fed.  Rep  729;  Southern  Exp. 
Co.  V.  Western  Worth  Carolina  R.  Co. 
99  U.  S.  191,  25  L.  ed.  319.  In  this 
case  there  was  a  contract  between  a 
railroad  company  and  an  express 
company  by  which  the  latter  loaned  the 
former  a  sum  of  money  to  be  expended 
in  repairing  and  equipping  the  road 
in  consideration  of  the  privileges  and 
facilities  of  express  business  over  the 
road.  Foreclosure  proceedings  were 
instituted  and  a  receiver  appointed, 
who  refused  to  perform  the  contract. 
A  bill  for  specific  performance  of  the 
contract  was  filed  by  the  express  com- 
pany. The  court  held  that  a  specific 
performance  if  decreed  would  be  a 
form  of  satisfaction  or  payment,  and 
declined  to  grant  the  relief. 


104  RECEIVERSHIPS. 

finished  contracts  if  by  so  doing  the  interests  of  all  parties  will  be 
better  conserved,  and,  in  such  case,  whatever  is  done  by  the 
receiver  in  the  performance  of  such  contracts  becomes  an  obliga- 
tion upon  the  receivership  and  its  property  to  be  protected  by  the 
court.'  Even  the  rights  of  lien  holders  may  ofen  be  promoted 
by  such  adoption. 

The  receiver  has  no  right  to  impeach  or  disaffirm  the  legal  and 
authorized  acts  of  a  corporation,  as  where  a  corporation  had  sur- 
rendered a  note  upon  which  the  receiver  subsequently  brought 
suit,  no  fraud  or  mistake  of  fact  being  shown,''  for  in  such  a  case 
the  receiver  is  as  much  bound  by  the  act  of  the  company  as  the 
company  would  be.  He  may,  however,  avoid  the  illegal  and  un- 
authorized act  of  the  company." 

§  36.    Power  to  lease. 

(a)  It  was  formerly  the  law  in  England  that  a  receiver  could  not 
ex  mere  motu  lease  the  premises  which  he  held  as  receiver.  But 
in  this  country  it  is  a  common  practice  for  the  receiver  to  apply 
to  the  court  for  leave  to  lease,  and  frequently  power  is  given  in 
the  order  of  appointment  for  such  purpose.  It  is  not  necessary, 
however,  that  the  order  contain  such  power."  The  court  may 
also  authorize  the  leasing  of  the  receivership  property  beyond  the 
termination  of  the  litigation  for  the  reason  that  if  this  power  did 
not  exist,  and  the  lease  is  terminable  ijpso  facto,  on  the  termina- 
tion of  the  litigation  tenants  could  not  be  obtained  at  reasonable 

1  Olyphant  v.  St.  Louis   Ore   &  S.  *  Leavitt  v.    Palmer,   3   N.  Y.    19; 

Co.  28  Fed.  Rep.  729;  Florence  Gas,  Gillet  v.  Moody,  3  N.  Y.  479;  Brouwer 

E.  L.  &  P.  Co.  V.  Hanby,  101  Ala.  15;  v.  Hill,  1  Sandf.  629.     A  receiver  in 

Suydam  v.  Bank  of  New  Brunswick,  a  foreclosure  proceeding  has  no  power 

3  N.  J.  Eq.  114.     But  see  Elmira  lion  to  contract  for  municipal  aid  in  the 

<fc  S.  Boll.  Mill  Co.  V.  Erie  R.   Co.  26  construction  by  him  of  the  unfinished 

N.  J.  Eq.  284.  portion  of  a  branch  road.     Smith  v. 

^Eyde  v.  Lynde,  4  N.  Y.  387.  As  to  McGullough,  104  U.  S.  25.  As  to  the 
the  right  of  a  receiver  of  a  railroad  to  liability  of  the  receiver  for  work  par- 
sever  the  connection  between  it  and  tially  completed  when  appointed  and 
another  railroad,  for  non-payment  of  continued  by  the  contractor  there- 
the  sums  agreed  to  be  paid  by  the  after  until  ordered  to  suspend,  see 
latter  for  the  privilege  of  running  Oerard  L.  Ins.  A.  &  T.  Co.  v.  Cooper, 
over  the  road,— determined,  in  a  case  51  Fed.  Rep.  332,  4  U.  S.  App.  631. 
depending  upon  particular  facts,  see  *Weeksv.  TFefA:s,  106  N.  Y.  626; ^c- 
Elmira  Iron  &  8.  Roll.  Mill  Co.  v.  Minnville  &  M.  Railroad  v.  Euggins,  3 
Erie  R.  Co.  26  N.  J.  Eq.  284.  Baxt.  177. 


RECEIVER'S  POWERS.  105 

rentals,*  The  term  for  which  the  lease  may  be  made  in  many 
cases  is  governed  by  statute,  and,  as  in  England  and  New  York, 
is  governed  by  rules  or  general  orders,  but  in  the  absence  of  gen- 
eral orders  the  customary  time  for  which  premises  of  the  charac- 
ter under  the  receivership  are  usually  rented  may  be  a  basis  upon 
which  to  act.  It  has  recently  been  adjudicated  and  deter- 
mined that  the  power  to  lease  without  notice  to  the  parties, 
is  not  a  jurisdictional  defect  rendering  the  order  void,''  yet 
it  would  seem  that  where  the  lease  runs  for  a  term  of  years, 
or  any  considerable  period,  notice  should  be  given.  As  to  the 
length  of  time  for  which  a  receiver  may  lease  without  an  order 
of  court,  general  or  special,  there  seem  to  be  no  well  considered 
cases,  though  Daniel's  Chancery  Pleading  and  Practice  says  he 
may  "  lease  for  a  year  certain,  or  less,  or  for  any  term  not  exceed- 
ing three  years.''  ^ 

In  case  of  a  railroad  company  where  no  power  exists  in  the 
corporation  to  lease  its  2:)roperty  it  is  evident  no  power  exists  in 
its  receiver  to  lease,'  and  all  improvements  made  by  such  a 
lessee  are  at  his  own  risk. 

(b)  An  important  question  has  frequently  arisen  as  to  the  power 
of  the  receiver  to  cancel  a  lease  partially  expired  at  the  time  of  his 
appointment.  The  ordinary  chancery  receiver  is  clothed  with  no 
estate  in  the  property  but  is  a  mere  custodian  of  it  for  the  court, 
and  where  the  order  of  court  embraces  a  leasehold  estate  it  be- 

^SJireve  v.  Hawkinson,  34  N.  J.  Eq.  to  lease  for  seven  years  or  pending 

413;  Weeks '<r.  Weeks,  lOQ 'Si.  Y.  626.  the  suit.    Buckworthy.  Morgan,  Smith 

2  Weeks  v.  Weeks,  106  N.  Y.  626.  on  Recrs.  (Irish)  82. 

«2  Daniel's  C.  P.  &  P.  p.  1750.  The  See  further  as  to  authority  to  lease 

case  upon  which  Mr.  Daniel  relies  for  without  order,   JV^eale  v.    Bealiiig,   3 

this  statement  was  decided  in  Cham-  Swanst.  304;  Moi-risv.  Elme,  1  Ves.  jr. 

bers  and  does  not  seem  to  have  been  139;   Swaby  v.  Dickon,   5  Sim.    631; 

reported,  so  that  for  the  facts  upon  Roberts  v.  Armstrong,  2  Moll.  352;  or 

which  it  is  based  or  the  precedents  leave  of  master,  Dujfield  v.  Elwes,  11 

relied  upon,   if  any,  we  have  no  in-       Beav.  590;  v.  Lindsey,  15  Ves. 

formation.     Lord  Thurlow  in  Wynne  Jr.  91. 

V.  Newborough,    1  Ves.   Jr.  164,  said:  '^Statev.  McMinnmlle  &  M.  R.  Co.  6 

"I  do  not  know  how  to  make  a  dis-  Lea,  369;  TJiomas  v.  West  Jersey  R.  Co. 

tinction  between  leases  for  one  year  101  U.  S.  71,  25  L.  ed.  950;   York  & 

and  others,"  and   held  the  receiver  M.  L.  R.   Co.  v.  Winans,  58  U.  S.  17 

could  not  lease  for  one  year  without  How.  30,  15  L.  ed.  27;  McMiniiville  & 

application  to  the  master.  M.  Railroad  v.  Muggins,  3  Baxt.  177. 

The  Irish  rule  seems  to  have  been 


106 


RECEIVERSHIPS. 


comes  the  duty  of  the  receiver  to  take  possession  of  it,  but  he 
does  not  by  such  possession  become  assignee  of  the  term.'  The 
court  does  not  bind  itself  or  its  receiver  eo  instanti  by  the  mere 
act  of  taking  possession  of  the  leasehold  property.  After  taking 
possession  of  such  property  the  receiver  is  entitled  to  a  reason- 
able time  in  which  to  ascertain  the  situation  of  affairs  and  deter- 
mine whether  it  will  be  advantageous  to  the  parties  in  interest,  or 
the  estate,  for  him  to  retain  and  use  the  leasehold  property."  In 
all  such  cases  the  receiver  should  act  with  reasonable  promptness, 
and  in  the  meantime  do  no  act  that  may  be  construed  as  an  adop- 
tion of  the  lease.'     A  receiver  is  not  bound  to  accept  property  of 


^Oaither  v.  Stockbridge,  67  Md.  223; 
Quincy,  M.  &  P.  R.  Co.  v.  Huni'phreys, 
145  U.  S.  82,  36  L.  ed.  632. 

Receivers  who  take  possession  of 
cars  held  by  an  insolvent  railroad 
company  under  a  lease,  with  full  au- 
thority to  do  so,  and  operate  the  cars 
with  full  knowledge  of  the  lease  and 
the  burdens  assumed  by  the  company, 
are  bound  by  the  lease  as  assignees  of 
the  company.  Easton  v.  Houston  &  T. 
C.  R.  Co.  38  Fed.  Rep.  784. 

^St.  Joseph  &  St.  L.  R.  Co.  v.  Humph- 
reys, 145  U.  S.  105,  36  L.  ed.  640;  Quin- 
cy, M.  &  P.  R.  Co.  V.  Humphreys,  145 
U.  S.  82,  36  L.  ed.  630 ;  Turn&r  v.  Rich- 
ardson, 7  East,  335;  Broome  v.  Robin- 
son, cited  in  7  East,  339;  Sunflower 
Oil  Co.  V.  Wilson,  142  U.  S.  313,  322, 
35  L.  ed.  1025,  1028;  Com.  v.  Franklin 
Ins.  Co.  115  Mass.  278;  Spar  hawk  v. 
Yerkes,  142  U.  S.  1,  35  L.  ed.  915;  Mw 
York,  P.  &  0.  Co.  V.  New  York,  L.  E. 
&  W.  R.  Co.  58  Fed.  Rep.  268;  Farm- 
ers' Loan  &  T.  Co.  v.  Northern  P.  R. 
Co.  58  Fed.  Rep.  257;  United  States 
Trust  Co.  V.  Wabash  Western  R.  Co.  150 
U.  S.  287,  37  L.  ed.  1085;  Seney  v. 
WabashWestern  R.  Co.  150  U.  S.  310, 
37  L.  ed.  1092;  Gaither  v.  Stockbridge, 
67  Md.  222.  But  see  People  v.  Uni- 
versal L.  Ins.  Co.  30  Hun,  142. 

*What  acts  of  the  receiver  may  be 


construed  as  an  acceptance  of  the  lease 
must,  in  the  very  nature  of  things,  be 
determined  from  the  circumstances 
surrounding  each  particular  case,  and 
is  often  a  question  of  much  difficulty. 
In  the  matter  of  assignees  in  bank- 
ruptcy where  the  same  rules  apply,  it 
has  been  held,  that  advertising  the 
leasehold  for  sale  with  a  view  of  as- 
certaining its  value  is  not  an  adoption, 
but  it  would  be  if  a  bid  were  accepted. 
Lord  Ellenborough,  in  Turner  v. 
Richardson,  7  East,  335;  or  if  at  the 
sale  the  assignee  bid  in  the  property, 
Hastings  v.  Wilson,  Holt,  N.  P.  290; 
or  conveyed  it.  Page  v.  Golden,  2 
Stark.  309.  As  to  what  would  be  a 
reasonable  time  in  which  to  make  the 
election,  see  Ex  parte  Fletcher,  1  Deac. 
&  Ch.  318;  Ex  parte  Scott,  1  Rose,  446, 
Twte;  Ex  parte  Blandy,  1  Deac.  286. 

The  general  rule  as  to  what  con- 
stitutes an  acceptance  of  a  lease  by  an 
assignee  in  bankruptcy  is  stated  by 
Ch.  J.  Fuller  in  Quincy,  M.  &  P. 
R.  Co.  V.  Humphreys,  145  U.  S.  82, 99, 
36  L.  ed.  632,  638,  as  follows:  "If, 
however,  they  accepted  a  bidding,  or 
dealt  with  the  estate  as  their  own,  or 
used  it  in  a  manner  injurious  to  the 
persons  otherwise  entitled,  they  are 
not  within  this  protection. "  The  same 
doctrine  is  held  in  Glenny  v.  Langdon, 


RECEIVER'S  POWERS. 


107 


an  onerous  and  unprofitable  nature  which  would   be  a  burden  in- 
stead of  a  benefit  to  the  estate.* 

A  claim  of  the  lessor  for  rent  accruing  before  the  receivership 
is  not  entitled  to  priority  over  lien  creditors.  It  is  an  unsecured 
liability  and  must  rank  along  with  all  other  claims  of  the  same 
class  on  final  distribution  of  the  assets.^ 


98  U.  S.  20,  25  L.  ed.  43;  American 
File  Co.  V.  Garrett,  110  U.  S.  288,  28 
L.  ed.  149;  Sparhawk  v.  Yerkes,  142 
U.  S.  1,  35  L.  ed.  915;  Martin  v.  Black, 
9  Paige,  641;  Com.  v.  Franklin  Ins. 
Co.  115  Mass.  278;  Berry  v.  Gillis,  17 
N.  H.  9;  Eoyt  v.  Stoddard,  2  Allen, 
442. 

In  Re  Oak  Pits  Colliery  Co.  L.  R. 
21  Ch.  Div.  322,  Lord  Justice  Lindley, 
under  the  "Companies  Act,"  stated 
the  English  rule  upon  this  subject  as 
follows:  (1)  "If  the  liquidator  has 
retained  possession  for  the  purposes 
of  winding  up,  or  if  he  has  used  the 
property  for  carrying  on  the  compa- 
ny's business,  or  has  kept  the  property 
in  order  to  sell  it  or  to  do  the  best 
he  can  with  it,  the  landlord  will  be 
allowed  to  distrain  for  rent  which  has 
become  due  since  the  winding  up. 
...  (2)  But  if  he  has  kept  possession 
by  an  arrangement  with  the  landlord 
and  for  his  benefit  as  well  as  for  the 
benefit  of  the  company  and  there  is 
no  agreement  with  the  liquidator  that 
he  shall  pay  rent,  the  landlord  is  not 
allowed  to  distrain.  .  .  .  When  the 
liquidator  retains  the  property  for  the 
purposes  of  advantageously  disposing 
of  it,  or  when  he  continues  to  use  it, 
the  rent  of  it  ought  to  be  regarded  as 
a  debt  constructed  for  the  purpose  of 
winding  up  the  company  and  ought 
to  be  paid  in  full  like  any  other  debt 
or  expense  properly  incurred  by  the 
liquidator  for  the  same  purpo.se,  and 
in  such  a  case  it  appears  to  us  that  the 


rent  for  the  whole  period  during  which 
the  property  is  so  retained,  or  used, 
ought  to  be  paid  in  full  without  ref- 
erence to  the  amount  which  could  be 
realized  by  a  distress.  .  .  .  But  no  au- 
thority has  yet  gone  the  length  of  de- 
ciding that  a  landlord  is  entitled  to 
distrain  for  or  be  paid  in  full  rent  ac- 
cruing since  the  commencement  of  the 
winding  up  when  the  liquidator  has 
done  notliing  except  abstain  from  try- 
ing to  get  rid  of  the  property  which 
the  company  holds  as  lessee.  If  the 
landlord  had  endeavored  to  reenter 
and  the  liquidator  had  objected,  the 
case  might  be  different." 

^Sparhliawk  v.  Yerkes,  142  U.  S.  1, 
35  L.  ed.  915;  Olenny  v.  Langdon,  98 
U.  S.  20,  25  L.  ed.  43;  American  File 
Co.  V.  Garrett,  110  U.  S.  288,  28  L. 
ed.  149.  This  species  of  unprofitable 
property  is  termed  by  Lord  Kenyon 
damnosa  hcereditas,  cited  in  7  East, 
342.  Weeks  v.  Weeks,  106  N.  Y.  626; 
McMinnville  &  M.  Railroad  v.  Uug- 
gins,  3  Baxt.  177;  Shreve  v.  Hankinson, 
34  N.  J.  Eq.  413;  Weeks  v.  Weeks,  106 
N.  Y.  626. 

^Euidekoper  v.  Hinckley  Locomotive 
Works,  99  U.  S.  258,  25  L.  ed.  344; 
Fosdick  v.  Schall,  99  U.  S.  235,  25  L. 
ed.  339;  Union  Trust  Co.  v.  Illinois 
M.  R.  Co.  117  U.  S.  470,  29  L.  ed.  975; 
Thomas  v.  Western  Car  Co.  149  U.  S. 
95,  37  L.  ed.  603;  New  York,  P.  &  0. 
R.  Co.  V.  Ne^c  York,  L.  E.  &  W.  R. 
Co.  58  Fed.  Rep.  2G8. 


108  RECEIVERSHIPS. 

§  37.  Power  over  property  in  foreign  jurisdiction. 

It  is  exceedingly  difficult  to  reach  a  proper  solution  of  this 
question  separate  and  distinct  from  the  cognate  question  relating 
to  the  receiver's  right  to  sue  in  foreign  jurisdictions  in  which  form 
the  rights  of  the  receiver  and  his  power  over  such  property  have 
usually  been  discussed.  It  will  not  be  attempted  therefore,  in  this 
connection,  to  touch  upon  the  subject  except  in  a  brief  way." 

It  has  been  the  practice  in  the  courts  of  chancery  of  England 
for  perhaps  a  century  and  a  half  to  appoint  receivers  for  the  pur- 
pose of  collecting  in  the  effects  of  persons,  and  decedent's  estates, 
situated  in  foreign  countries."  Sometimes  the  practice  was  to  ap- 
point a  receiver  resident  in  the  foreign  country  where  the  assets 
were  situated,  and  sometimes  to  appoint  as  receiver  a  resident  of 
England  with  power  to  appoint  a  foreign  agent  through  whom 
the  business  was  transacted."  And  the  same  thing  has  been  done  in 
this  country,  but,  owing  to  the  great  variety  of  decisions,  and  ap- 
parent conflict  between  many  of  them,  growing  out  of  the  tech- 
nical rules  of  practice  relating  to  parties  authorized  to  sue  as  well 
as  the  relative  rights  of  citizenship  in  the  difl'erent  states  and  the 
remedies  applicable  to  such  relationship  the  law  has  been  subject 
to  great  confusion.  Much  of  this  confusion  has  arisen  from  the 
mistaken  idea  that  the  title  to  the  property  over  which  the  receiver 
is  appointed  is  vested  in  the  receiver  eo  instanti  on  the  date  of 
the  order,  as  in  bankruptcy  and  many  insolvency  proceedings 
where  by  deeds  of  assignment  the  title  to  property  is  vested  in  the 
assignee. 

(a)  English  rule. 

The  following  propositions  may  be  considered  as  established 
in  England : 

(1)  A  valid  transfer  of  personal  property  according  to  the  laws 
of  the  place  of  residence  is  valid  everywhere  and  will  be  enforced. 

(2)  The  same  rules  apply  to  transfers  of  personal  property 

'See  Chap.  vi.  ^Oockburn  v.  Raphael,  2  Sim.  &  Stu. 

Wrewry  v.  Darwin,  May  20,  1765,       453;  v.  Lindsey,  15  Ves.  Jr.  91. 

cited  in  24  L.  J.  Ch.  121;  Einton  v. 
Qalli,  24  L.  J.  Ch.  121.  2  Eq.  479. 


RECEIVER'S  POWERS.  109 

under  bankruptcy  and  insolvency  proceedings  and  by  analogy  to 
receiverships. 

(3)  That  there  is  no  distinction  between  the  transfer  of  such 
property  by  voluntary  act  of  the  owner  and  by  operation  of  law 
so  far  as  t]ie  effects  regarding  title  are  concerned. 

(4)  That  the  title  to  personal  property  in  a  foreign  jurisdiction 
will  be  protected  in  the  assignee  as  against  an  English  creditor. 

(5)  That  as  to  a  foreign  creditor  not  subject  to  English  laws  he 
will  be  permitted  to  retain  property  acquired  under  attachment 
sul)sequent  to  the  assignment  where  the  local  laws  confer  upon 
him  an  absolute  title.' 

(b)  Ameeican  rule. 
The  doctrine  of  American  courts  is  almost  diametrically  op- 
posite that  of  the  English  courts  in  some  respects,  and  may  be 
summarized  as  follows : 

(1)  As  to  the  disposition  of  personal  property  the  law  of  the 
domicil  of  the  owner  governs  the  transfer  and  if  valid  at  his  place 
of  domicil  the  transfer  is  valid  everywhere,  except  where  the  local 
law  makes  a  preference  in  favor  of  its  own  citizens. 

(2)  As  to  the  disposition  of  personal  property  by  operation  of 
law  as  in  receiverships,  the  law  being  local  has  no  extra  territorial 
effect  so  far  as  the  title  is  concerned.  In  such  cases  the  assignee 
takes  the  j)roperty  subject  to  every  equity  of  foreign  creditors, 
and  subject  to  all  remedies  of  foreign  countries. 

(3)  As  between  the  different  states  in  this  country  there  has 

•A  full  and  a  very  elaborate  opinion  Holmes  v.  Remsen,  4  Johns.  Ch.  460; 

with  an  exhaustive  review  of  English  Wilson's  Case,  cited  in  1  H.  Bl.  691; 

and   other  foreign    authorities  upon  Solomons     v.    Roi^a,    1    H.    Bl.    131, 

this  question  is  given  by  Chancellor  note,     691;     Jollet     v.      Deponthieu, 

Kent  in  Holmes  v.  Remsen,  4  Johns.  1    H.    Bl.    132,    note,   691;  Neale    v. 

Ch.  460,  20  Johns.  229,  and  the  au-  Cottingham,\  H.  Bl.  132,  note;  Royal 

thorities  upon  the  question  will  not  be  Bank  of  Scotland  v.   Cuthbert  {Stein's 

repeated  in  the  connection.     See  also  Case),    1    Rose   Bank  Cases,    Appx. 

2  Bell's  Com.    7th    ed.   by  McLaren  472,  2  Rose  Bank  Cases,  78;  Smith 

p.  568  [680];  and  a  review  of  all  the  v.  BucJianan,  1  East,  6. 

authorities  both  English  and  American  The  foregoing  cases  are  principally 

in   Story's  Conf.    of  Laws,   8th    ed.  bankrupt  cases  but  involve  the  same 

§§  404-418;  Goodwin  v.  Jones,  3  Mass.  principle    involved    in    receivership 

517.     And  see  Sill  v.  Worswick,  1  H.  matters.     Booth  v.  Clark,  58  U.  S.  17 

Bl.  690;  Hunter  v.  Potts,  4  T.  R.  182;  How.  322,  15  L.  ed.  164. 
Phillips    v.    Hunter,   2    H.   Bl.    402; 


110 


RECEIVERSHIPS. 


grown  up  a  species  of  comity,  founded  upon  the  doctrine  of  reci- 
procity, by  means  of  which  foreign  assignments  and  receiverships 
are  recognized  and  enforced  except  where  the  rights  of  the  citi- 
zens of  the  state  where  such  foreign  assignment  is  sought  to  be 
enforced  are  prejudiced.  In  other  words,  where  the  foreign  law 
comes  in  conflict  with  the  law  of  the  forum  the  latter  prevails. 
This  doctrine  is  based  upon  principle,  inter  alia,  that  where  a 
foreign  citizen  places  his  property  under  the  protection  of  another 
state  he  voluntarily  submits  such  property  to  the  remedies  that 
state  gives  to  its  citizens.  The  rule  is :  Quatenus  sine  prejudicio 
vndulgentiwm  fieri  potest.^ 


^Booth  V.  Clark,  58  U.  S.  17  How. 
322,  15  L.  ed.  164;  Blake  v.  Williams, 
6  Pick.  286;  Tully  v.  Htrrin,  44  Miss. 
626;  Very  v.  McHenry,  29  Me.  208; 
Oliver  j.  Townes,  2  Mart.  N.  S.  93; 
Frazier  v.  Fredericks,  24  N.  J.  L.  162; 
Milne  v.  Moreton,  6  Binn.  353;  Wood- 
ward V.  Roane,  23  Ark.  526;  Speed  v. 
May,  17  Pa.  91;  Law  v.  Mills,  18  Pa. 
185;  Saunders  v.  Williams,  5  N.  H. 
213;  Ogden  v.  Saunders,  25  U.  S.  12 
Wheat.  213,  6  L.  ed.  606;  Wallace  v. 
Patterson,  2  Harr.  &  McH.  463. 

The  law  of  New  York  is  most  ably 
reviewed  in  the  late  case  of  Re  Waite, 
99  N.  Y.  433,  by  Mr.  Justice  Earl, 
and  the  following  propositions  estab- 
lished as  the  law  of  that  state  : 

"(1)  The  statutes  of  foreign  states 
can  have  in  no  case  any  force  or  effect 
in  this  state  ex  proprio  vigore  and  hence 
the  statutory  title  of  foreign  assignees 
in  bankruptcy  can  have  no  recognition 
here,  solely  by  virtue  of  the  foreign 
statute. 

(2)  But  the  comity  of  nations  which 
Judge  Denio  in  Petersen  v.  Chemical 
Bank,  32  N.  Y.  21,  said  is  a  part  of 
the  common  law  allows  a  certain  effect 
here  to  titles  derived  under,  and  pow- 
ers created  by  the  laws  of]  other  coun- 
tries, and  from  such  comity  the  titles 
of  foreign  statutory  assignees  are 
recognized  and  enforced  here  when 


they  can  be  without  injustice  to  our 
own  citizens,  and  without  prejudice 
to  the  rights  of  creditors  pursuing 
their  remedies  here  under  our  statutes; 
provided  also  that  such  titles  are  not 
in  conflict  with  the  laws  or  public 
policy  of  our  state. 

(3)  Such  foreign  assignees  can  ap- 
pear, and  subject  to  the  conditions 
above  mentioned,  maintain  suits  in 
our  courts  against  debtors  of  the 
bankrupt  whom  they  represent,  and 
against  others  who  have  interfered 
with  or  withheld  the  property  of  the 
bankrupt."  The  following  cases  are 
cited  as  sustaining  the  propositions 
above  laid  down  :  Peterson  v.  Chem- 
ical Bank,  32  N.  Y.  21;  Eelly  v.  Crapo, 
45  N.  Y.  86;  Cxgood  v.  Maguire,  61 
N.  Y.  524;  Hibernia  Nat.  Bank  v. 
Lacombe,  84  N.  Y.  367;  Re  Bristol,  16 
Abb.  Pr.  184;  Bunk  v.  St.  John,  29 
Barb.  585;  Barclay  v.  Quicksilver 
Min.  Co.  6  Lans.  25;  Hoopes  v,  Tuck- 
erman,  3  Sandf.  311;  Olyphant  v.  At- 
wood,  4  Bosw.  459;  Hunt  v.  Jackson, 
5  Blatchf.  349.  See  also  Humphreys 
v.  Hopkins,  81  Cal.  551,  6  L.  R.  A. 
792;  State  Bank  v.  First  Nat  Bank,  34 
N.  J.  Eq.  450;  Farmers'  &  M.  Ins.  Co. 
V.  Needles,  52  Mo.  17;  Kronberg  v. 
Elder,  18  Kan.  150;  Mosebyy.  Burrow, 
52  Tex.  896;  Hunt  v.  Columbian  Ins. 
Co.   55  Me.   290;  Filki7is  v.  Nunne 


RECEIVER'S  POWERS. 

38.     Power  to  impeach  fraudulent  acts  of  debtor. 


Ill 


A  court  of  chancery  has  no  inherent  power  to  invest  a  receiver 
with  authority  to  impeach  a  sale  that  is  fraudulent  as  to  creditors. 


macher,  81  Wis.  91 ;  McClure  v.  Camp- 
hell,  71  Wis.  350;  Taylor  v.  Boardman, 
25  Vt.  581 ;  Crapo  v.  Kelly,  83  U.  S. 
16  Wall.  610,  21  L.  ed.  430;  Watersy. 
Barton,  1  Coldw.  450;  Pon,d  v.  Cooke, 
45  Conn.  126;  Cagill  v.  Wooldridge,  8 
Baxt.  580;  McAlpin  v.  Jones,  10  La. 
Ann.  552;  Singer lyy.  Fox,  75  Pa.  114; 
Comstock  V.  Frederickson,  51  Minn. 
350. 

Chief  Justice  Mitchell  in  Catlin  v. 
Wilcox  Silver  Plate  Co.  123  Ind.  477,  8 
L.  R.  A.  62,  states  the  law  upon  this 
subject  as  follows: 

(1)  The  rule  may  be  considered  as 
established  that  a  receiver  may  invoke 
the  aid  of  a  foreign  court  in  obtaining 
possession  of  property  or  funds  within 
its  jurisdiction  to  which  he  is  entitled, 
but  aid  will  only  be  extended  as 
against  those  who  were  parties  to,  or 
in  some  way  in  privity  with,  the  pro- 
ceedings in  the  course  of  which  his 
appointment  was  made,  or  who  are  in 
possession  of  the  property  or  fund  to 
which  the  receiver  has  a  right,  and 
not  against  creditors  of  a  nonresident 
debtor,  who  are  seeking  to  subject  the 
property  or  fund  to  the  payment  of 
their  debts,  by  proceedings  only  insti- 
tuted for  that  purpose. 

Hurd  V.  Elizabeth,  41  N.  J.  L.  1; 
Bunk  V.  St.  Jolin,  29  Barb.  585;  Bagby 
V.  Atlantic,  M.  &  0.  B.  Co.  86  Pa.  291; 
Lycoming  F.  Ins.  Co.  v.  Wriglit,  55 
Vt.  526;  Thurston  v.  Bosenfield,  42 
Mo.  474;  Willim  v.  Waite,  25  N.  Y. 
577. 

(2)  It  follows,  hence,  that  the  avail- 
able legal  authority  of  a  receiver  is  co- 
exten.sive  only  with  the  jurisdiction  of 
the  court  by  which  he  was  appointed 


when  the  right  of  precedence  or 
priority  of  creditors  is  asserted  in  re- 
spect to  property  or  funds  of  a  non- 
resident debtor,  which  the  receiver 
has  not  yet  reduced  to  possession. 

Hunt  V.  Columbian  Ins.  Co.  55  Me. 
290;  Warren  v.  Union  Nat.  Bank,  7 
Phila.  156;  Booth  v.  Clark,  58  U.  S.  17 
How.  322, 15  L.  ed.  164;  Statev.  Jack- 
sonvillle,  P.  &  M.  R.  Co.  15  Fla.  201; 
Farmers'  &  M.  Ins.  Co.  v.  Needles,  52 
Mo.  17;  Taylor  v.  Columbian  Ins.  Co. 
14  Allen,  353. 

(3)  It  is  of  course  well  settled  that 
personal  property  is  transferable  ac- 
cording to  the  law  of  the  owner's 
domicil,  and  that  a  voluntary  assign- 
ment or  transfer  made  without  com- 
pulsion or  legal  coercion  is  to  be  gov- 
erned everywhere  by  that  law,  unless 
the  contract  by  which  the  the  transfer 
was  made  is  limited  or  restrained  by 
some  positive  enactment  of  the  state 
in  which  the  property  is  situate  or 
unless  it  affects  citizens  of  the  latter 
state  injuriously. 

Ames  Iron  Works  v.  Warren,  76  lud. 
512;  Martin  v.  Potter,  11  Gray,  37; 
Weider  v.  Maddox,  66  Tex.  372;  War- 
ner V.  Jaffray,  96  N.  Y.  248;  Oreen 
V.  Van  Buskirk,  74  U.  S.  7  Wall.  139, 
19  L.  ed.  109;  Askew  v.  La  Cygne 
Exch.  Bank,  83  Mo.  366;  Law  v.  Mills, 
18  Pa.  185;  Lowry  v.  Hall,  2  Watts  & 
S.  129;  Smith's  Appeal,  104  Pa.  381; 
Chafee  v.  Fourth  Nat.  Bank,  71  Me. 
514;  Ouillander  v.  Howell,  35  N.  Y. 
657;  Faulkner  v.  Hyman,  142  Mass. 
53;  Moore  v.  Church,  70  Iowa,  208; 
Re  Waite,  99  N.  Y.  433. 

(4)  Property  in  a  foreign  state  that 
has  passed  from  an   assignor  to  an 


112 


RECEIVERSHIPS. 


As  a  rule  the  ordinary  receiver  pendente  lite  in  case  of  corpora- 
tions is  regarded  as  representing  the  corporate  body  itself  and  not 


fissignee  by  a  voliininry  deed,  and  not 
by  proceedings  in  imitum  by  process 
of  law,  is  distinguished  from  like 
property  in  the  hands  of  a  receiver  by 
operation  of  law,  or  by  an  assignment 
■made  under  legal  compulsion.  Assign- 
ments of  the  latter  class  are  held 
inoperative  upon  property  not  situate 
within  the  territory  over  which  the 
laws  that  make,  or  compel  its  debtor 
•to  make  them,  have  dominion. 

Rhaion  v.  Pearce,  110  111.  350; 
Smith's  Appeal,  104  Pa.  381 ;  Walters 
V.  Whitluck,  9  Fla.  86. 

(5)  The  principles  of  comity  in 
favor  of  a  foreign  receiver  in  obtain- 
ing possession  of  a  fund  are  not  only 
suspended  as  against  a  citizen  of  the 
-state  where  the  property  is  situate, 
but  also  as  against  nonresident  cred- 
itors of  states  other  than  that  of  the 
debtor.  There  are  some  cases  that 
hold  that  if  the  receiver  reduces  the 
property  to  his  possession  then  in  such 
case  his  possession  will  be  protected- 
in  a  foreign  jurisdiction,  provided  the 
property  is  in  the  foreign  jurisdiction 
for  a  lawful  purpose. 

Cf.  Chicago,  M.  &  St.  P.  R.  Co.  v. 
Keokuk  N.  L.  Packet  Co.  108  111.  317; 
Cagill  V.  Wooidridge,  8  Baxt.  580; 
Killmer  v.  Hobart,  58  How.  Pr.  452; 
Pond  v.  Cooke,  45  Conn.  126;  Cook  v. 
Orange,  48  Conn.  401;  Blake  Crusher 
Co.  v.  New  Haven,  46  Conn.  473. 
Contra,  Ilumphreys  v.  Hopkins,  81 
Cal.  557,  6  L.  R.  A.  792. 

But  not  so  where  the  property  is  in 
a  foreign  jurisdiction  for  an  illegal 
purpose. 

Dick  T.  Bailey,  2  La.  Ann.  974. 

Where  a  receiver  was  appointed  in 
New  York,  and  a  general  assignment 
•was  made  to  him  by  the  debtor,  the 
^receiver  was  permitted  to  file  a  bill  in 


Michigan  to  foreclose  a  mortgage  not 
strictly  as  receiver,  but  as  assignee. 
Graydon  v.  Church,  7  Mich.  36. 

As  to  the  receiver's  right  to  sue  in  a 
foreign  jurisdiction  it  has  been  held 
that  he  has  no  such  right  in  the  follow- 
ing cases: 

Hojye  Mut.  L.  Ins.  Co.  v.  Taylor,  2 
Robt.  278;  Eronberg  v.  Elder,  18  Kan. 
150;  Commercial  Nat.  Bank  v.  Mother- 
well Iron  <fe  8.  Co.  95  Tenn.  172,  29  L. 
R.  A.  164;  Farmers'  &  M.  Ins.  Co.  v. 
Needles,  52  Mo.  17;  Brigham  v.  Lud- 
dington,  12  Blatchf.  237;  Hazard  v. 
Durant,  19  Fed.  Rep.  471;  Olney  v. 
Tanner, 2i  Blatchf.  540;  Day  v.  Postal 
Teleg.  Co.  66  Md.  354;  Bartlelt  v.  Wil- 
bur, 53  Md.  485;  Filkins  v.  Nunne- 
macher,  81  Wis.  91;  McClure  v.  Camp- 
bell, 71  Wis.  350;  Booth  v.  Clark,  58 
U.  S.  17  How.  322,  15  L.  ed.  164.  This 
case  is  the  authority  for  holding  that 
a  receiver  has  no  right  to  sue  in  a  for- 
eign jurisdiction,  on  which  most  of 
the  foregoing  cases  are  based.  It  was 
not  the  law  in  England  when  decided 
[1854],  and  had  not  been  since  the  case 
of  Falliott  V.  Ogden,  1  H.  Bl.  123 
(1789);  nor  was  it  the  law  of  conti- 
nental Europe.  The  doctrine  had 
been  condemned  in  Holmes  v.  Remsen, 
4  Johns.  Ch.  460,  by  Chancellor  Kent, 
and  is  at  variance  with  the  following 
later  cases: 

Boulware  v.  Davis,  90  Ala.  207,  9 
L.  R.  A.  601;  Merchants'  Nat.  Bank 
V.  McLeod,  38  Ohio  St.  174;  Wilkinson 
V.  Culver,  23  Blatchf.  416;  McAlpin 
V.  Jones,  10  La.  Ann.  552;  Lycoming 
F.  Ins.  Co.  V.  Wright,  55  Vt.  526; 
Iglehart  v.  Bierce,  36  111.  133;  Gray- 
don  V.  Church,  7  Mich.  36;  Hunt 
V.  Columbian  Ins.  Co.  55  Me.  290; 
Hurd  V.  Elizabeth,  41  N.  J.  L.  1; 
Chafee  v.  Quidnick  Co.  13  R.  I.  413; 


RECEIVER'S  POWERS. 


113 


its  creditors  or  shareholders.  He  derives  his  power  under  and 
through  it,  and  for  the  purposes  of  litigation  he  takes  only  the 
rights  of  the  corporation  such  as  could  be  asserted  in  its  own 
name.'     But  in  other  cases  by  virtue  of  statutory  provisions  the 


Paine  v.  Lester,  44  Conn.  196;  Cooke 
V.  Orange,  48  Conn.  401;  Merchants' 
Nat.  Bank  v.  McLeod,  38  Ohio  St.  174; 
Bidlack  v.  Mason,  26  N.  J.  Eq.  230; 
Sobernheimer  v.  Wheeler,  45  N.  J.  Eq. 
614;  Metzner  v.  Bauer,  98  Ind.  427; 
Bunk  V.  St.  John,  29  Barb.  585;  Milne 
V.  Moreton,  6  Binn.  353;  Barclay  v. 
Quicksilver  Min.  Co.  6  Lans.  25;  Pugh 
V.  Hurtt,  52  How.  Pr.  22;  Dyer  v. 
Power,  39  N.  Y.  S.  R.  136;  Peters  v. 
Foster,  56  Hun,  607;  New  Jersey  Pro- 
tection &  L.  Bank  v.  Thorp,  6  Cow.  46; 
Hibernia  Nat.  Bank  v.  Lacombe,  84  N. 
Y.  367;  Toronto  General  Trust  Go.  v. 
Chicago,  B.  &  Q.  B.  Co.  123  N.  Y.  37; 
Woodward  v.  Brooks,  128  111.  222,  3 
L.  R.  A.  702;  Bhaicn  v.  Pearce,  110 
111.  350;  SercombY.  Catlin,  128  111.  556. 

"The  course  of  modern  adjudica- 
tions," says  Pinney,  J.,  in  Gilman  v. 
Ketcham,  84  Wis.  60,  23  L.  R.  A.  52, 
"is  in  favor  of  a  liberal  extension  of 
interstate  comity,  and  against  a  narrow 
and  provincial  policy,  which  would 
deny  proper  effect  to  judicial  decisions 
of  sister  states  under  their  statutes, 
and  rights  claimed  under  them  simply 
because  technically  they  are  foreign 
and  not  domestic." 

For  an  instructive  case  on  the  law 
of  international  comity,  see  Hilton  v. 
Guyot,  159  U.  S.  113. 

As  showing  the  power  of  the  court 
over  property  in  a  foreign  jurisdiction 
where  it  has  jurisdiction  over  the  par- 
ties, see  Cole  v.  Cunningham,  133  U. 
S.  107,  33  L.  ed.  538;  Sercomb  v.  Cat- 
lin, 128  111.  556;  Alexander  v.  Tolleston 
Club.  liO  111.  65. 

A  foreign  receiver  of  a  foreign  cor- 
poration, appointed  at  the  place  of  its 
domicil  to  whom  all  its  assets  have 
8 


been  assigned,  has  been  allowed  to 
intervene  in  Massachusetts  and  be 
heard  in  a  proceeding  to  appoint  a  re- 
ceiver in  that  state.  Buswell  v.  Su- 
preme Sitting  0.  of  I.  H.  161  ]Mass.  224. 
But  see  Fatccett  v.  Supreme  Sitting  0. 
of  I.  II.  64  Conn.  170,  24  L.  R.  A.  815. 
A  receiver  of  one  state  will  be  ap- 
pointed over  a  railroad  extending  into 
another  state  by  the  court  of  the  latter 
state  on  grounds  of  comity.  Port 
Boyal  &  A.  R.  Co.  v.  King,  93  Ga. 
63,  24  L.  R.  A.  730.  To  the  same 
effect  is  Baldicin  v.  Hosmer,  101  Mich. 
432. 

A  careful  examination  of  the  fore- 
going cases,  taking  into  consideration 
the  tendency  and  broader  liberality  of 
our  modern  courts,  and  the  increasing 
laxity  in  the  application  of  the  doc- 
trine of  stare  decisis — now  becoming  a 
relic  of  the  past — it  is  believed  will  es- 
tablish the  following  propositions  so 
far  as  personal  property  in  a  foreign 
jurisdiction  is  concerned: 

(1)  The  distinction  between  a  vol- 
untary transfer  and  a  transfer  by 
operation  of  law  is  a  mere  legal  fiction. 

(2)  A  recognition  of  the  rights  of  a 
foreign  receiver  coextensive  with  the 
recognized  rights  of  the  person  or  cor- 
poration over  whose  property  he  is 
appointed  is  conducive  to  the  best  in- 
terests of  interstate  and  international 
commercial  relations,  and  is  in  har- 
mony with  the  fundamental  principles 
of  our  government,  promoting  as  it 
does  due  and  proper  respect  between 
the  courts  of  the  several  states. 

^Republic  L.  Ins.  Co.  v.  Swigcrt,  135 
111.  150,  12  L.  R.  A.  328;  Hyde  v. 
Lynde,  4  N.  Y.  387;  Higgins  v.  Gilles- 
heimer,  26  N.  J.  Eq.  308.     In  this  case 


114 


RECEIVERSHIPS. 


receiver  may,  as  the  representative  of  creditors,  disaffirm  and  im- 
peach the  fraudulent  acts  of  the  insolvent  debtor  or  corporation.* 
This  is  especially  so  in  an  action  brought  to  wind  up  an  insolvent 
corporation,  in  which  case  the  receiver,  represents  the  interests  of 
creditors  rather  than  the  dead  corporation.'  The  receiver  may 
also  disaffirm  the  unlawful  acts  of  a  corporation,  as  where  dividends 
have  been  declared  in  favor  of  stockholders  of  an  insolvent  cor- 
poration in  violation  of  a  statute.* 


the  Vice  Chancellor  says:  "The  ques- 
tion in  this  case  is,  has  the  complainant 
as  receiver  a  right  to  have  them  nulli- 
fied? In  the  absence  of  a  statutory 
provision  a  receiver  is  a  mere  instru- 
ment, or  arm  of  the  court,  by  which 
he  holds  the  property  in  dispute  for 
safe  keeping  and  preservation;  he  is 
not  invested  with  the  legal  title;  he 
acts  or  refrains  as  the  court  directs; 
he  is  so  purely  the  creature  of  the 
court  that  the  property  he  holds  ia 
esteemed  io 'be  in  custodialegis.  .  .  . 
It  is  clear  therefore  that  unless  the  stat- 
ute authorizing  complainant's  appoint- 
ment as  receiver  confers  upon  him  the 
right  to  maintain  this  action  he  cannot 
maintain  it.  His  right  to  appear  here 
as  a  suitor  to  impeach  these  convey- 
ances must  appear  in  the  law  author- 
izing his  appointment,  or  he  has  no 
such  right."  See  also  Seymour  v. 
WiUon,  16  Barb.  294;  Oreen  v.  Hichs, 
1  Barb.  Ch.  309;  Dorr  v.  Noxon,  5 
How.  Pr.  29;  Fo:iier  v.  Townshend,  13 
Abb.  Pr.  N.  S.  469;  Coope  v.  Bowles, 
42  Barb.  87;  Hyde  v.  Lynde,  4  N.  Y. 
387;  Piscataqua  F.  &  M.  Ins.  Co.  v. 
Hill,  60  Me.  178;  Kennebec  &  P.  R.  R. 
Co.  v.  Portland  &  R.  R.  Co.  54  Me. 
181 ;  Brewer  v.  Boston  Theatre  Proprs. 
104  Mass.  378;  Re  Duckioorth,  L.  R.  2 
Ch.  App.  Cas.  577;  LeifcMld's  Case, 
L.  R.  lEq.  231. 

^Pittsburg  Carbon  Co.  v.  McMillin, 
119  N.  Y.  46,  7  L.  R.  A.  46;  Vail  v. 
Hamillon,  85  N.  Y.  453;  Atty.  Gen.  v. 
Guardian  Mut.  L.  Ins.  Co.  77  N.  Y. 


272;  Underwood  v.  Sutdiffe,  77  N.  Y. 
62;  Bostwick  v.  Menck,  40  N.  Y.  383 
Gillett  V.  Phillips,  13  N.  Y.  114 
Tuckerman  v.  Brown,  33  N.  Y.  297 
Curtis  V.  Leavitt,  15  N.  Y.  44;  Porter 
V.  Williams,  9  N.  Y.  142;  Talmage  v. 
Pell,  7  N.  Y.  347;  Gillet  v.  Moody,  3 
N.  Y.  474;  Mann  v.  Pentz,  3  N.  Y. 
415;  Van  Cott  v.  Van  Brunt,  2  Abb. 
JT.  C.  283,  83  N.  Y.  535;  Libby  v. 
Rosekrans,  55  Barb.  217;  Osgood  v. 
Laytin,  48  Barb.  464.  5  Abb.  Pr.  N. 
S.  9;  Barton  v.  Eosner,  24  Hun,  469; 
Buttencorth  v.  O'Brien,  24  How.  Pr. 
438;  Manley  v.  Bassiga,  13  Hun,  288; 
Osgood  V.  Ogden,  4  Key 63,70;  Brouwer 
V.  Appleby,  1  Sandf.  158;  Brouwer  v. 
Hill,  1  Sandf.  629;  Hoyt  v.  Thompson, 
3  Sandf.  416;  Porter  v.  Sabin,  149  U. 
S.  473,  37  L.  ed.  815;  Runyon  v.  Far- 
mers' <&  M.  Bank,  4  N.  J.  Eq.  480; 
Monitor  Furnace  Co.  v.  Peters,  40 
Ohio  St.  575;  Gill  v.  Balis,  72  Mo. 
424;  Alexander  v.  Relfe,  74  Mo.  495; 
Minnesota  Thresher  Mfg.  Co.y.  Lang- 
don,  44  Minn.  37;  but  see  Atchison  v. 
Davidson,  2  Pinney,  48;  Hamlin  v. 
Wright,  23  Wis.  492. 

*  United  States  v.  Church  of  Jesus 
Christ  of  L.  D.  8.  5  Utah,  538;  Re 
Atty.  Gen.  v.  Guardian  Mut.  L.  Ins. 
Co.  77  N.  Y.  272;  Crandallv.  Lincoln, 
52  Conn.  73.  And.see  further  Corpo- 
rations. 

^Minnesota  Thresher  Mfg.  Co.  v. 
Langdon,  44  Minn.  37;  Osgood  v.  Lay- 
tin,  48  Barb.  464,  Afiirmed  in  3  Kejes, 
521. 


KECEIVER'S  POWERS. 


115 


§  39.  Power  to  collect  unpaid  stock  subscriptions. 

A  receiver  of  an  insolvent  corporation  being  aj^pointed  to  ad- 
minister the  whole  estate  so  far  as  it  is  liable  for  the  j)ayment 
of  its  debts  has  power  to  enforce  payment  of  arrearages  of  stock- 
holders for  unpaid  stock,  such  arrearages  being  properly  liable 
for  the  payment  of  the  corporation  debts.'     In  a  proceeding  to 


In  Kennedy  v.  Thorp,  51  N.  T.  174, 
it  was  held  that  where  a  vendor  from 
whom  goods  had  been  fraudulently 
obtained  brings  suit  on  the  contract 
and  prosecutes  it  to  judgment,  neither 
the  vendor  or  his  receiver  appointed  in 
supplementary  proceedings  based  on 
such  judgment  can  set  up  fraud  in  the 
sale. 

In  Olney  v.  Tanner,  10  Fed.  Rep. 
101,  affirmed  in  18  Fed.  Rep.  636,  it 
was  held  that  a  receiver  appointed  in 
supplementary  proceedings  is  not 
vested  by  virtue  of  his  appointment 
with  the  title  of  property  fraudulently 
conveyed  by  the  debtor.  The  court 
appointing  him  cannot  put  him  in 
possession  of  such  property.  It  will 
not  authorize  his  meddling  with  it  nor 
protect  him  if  he  does  so.  But  he  may 
assail  the  fraudulent  transaction  by  a 
suit  for  that  purpose  to  the  extent  a 
creditor  might  do  and  not  otherwise 
and  recover  to  the  extent  such  creditor 
might  recover.  Bostwick  v.  MencTc,  40 
N.Y.  383;  Brown  v.  Gilmore,  16  How. 
Pr.  527;  Field  v.  Sands,  8  Bosw.  685. 
And  in  such  case  if  an  assignee  in 
bankruptcy  of  the  debtor  has  been 
appointed  he  alone  can  file  a  bill  to 
set  aside  the  fraudulent  conveyance. 
Olney  v.  Tanner,  18  Fed.  Rep.  636; 
Cf.  Teller  v.  Randall,  40  Barb.  243; 
Becker  v.  Torrance,  31  N.  Y.  637; 
Miller  v.  MacKemie,  29  N.  J.  Eq.  292. 
But  see  Higgins  v.  Qilleslieimer,  26  N. 
J.  Eq.  308;  Parker  v.  Browning,  8 
Paige,  388.  A  receiver  has  power  to 
obtain  possession  and  control  of  assets 


retained  and  concealed  by  the  officers 
of  a  corporation.  Brandt  v.  Allen,  76 
Iowa,  50,  1  L.  R.  A.  653,  and  in  such 
case  defendants  will  not  be  heard  to 
say  thai  the  assets  are  not  needed  for 
the  payment  of  the  lawful  debts  of  the 
company.  McCarty's  Aj)peal,  110  Pa. 
379. 

Uleman  v.  Britton,  88  Mo.  549;  Sho- 
walter  v.  Laredo  Improv.  Co.  83  Tex. 
162;  Pentz  v.  Hawley,  1  Barb.  Ch.  122; 
Calkins  v.  Atkinson,  2  Lans.  12;  Farm- 
ers' &  M.  Bank  v.  Jenks,  7  Met.  593; 
Rankine  v.  Elliott,  16  N.  Y.  377.  And 
suit  may  be  collectively  or  individ- 
ually against  the  shareholders.  Van 
Wageman  v.  Clark,  22  Hun,  497. 
And  in  some  states  may  make  assess- 
ments as  in  mutual  insurance  compa- 
nies. Tobey  v.  Russell,  9  R.  I.  58; 
Embree  v.  Shideler,  36  Ind.  423;  Mc- 
Donald V.  Ross-Lewin,  29  Hun,  87; 
Sands  v.  Sanders,  28  N.  Y.  416;  Jack- 
son V.  Roberts,  31  N.  Y.  304;  Downs 
V.  Hammond,  47  Ind.  131;  Frank  v. 
Morrison,  58  Md.  423;  Stillman  v. 
Dougherty,  44  Md.  380;  Elderkin  v. 
Peterson,  8  Wash.  674;  Oreat  Western 
Teleg.  Co.  v.  Gray,  123  111.  630;  Clark 
V.  Thomas,  34  Ohio  St.  46;  Merchants' 
Nat.  Bank  v.  Northwestern  Mfg.  & 
Car  Co.  48  Minn.  361;  Minnesota 
Thresher  Mfg.  Co.  v.  Langdon,  44 
Minn.  37;  Stewart  v.  Lay,  45  Iowa, 
604;  Gaslight  &  Bkg.  Co.  v.  Ilaynes, 
7  La.  Ann.  114;  New  Orleans  Gaslight 
Co.  v.  Bennett,  6  La.  Ann.  457;  Stark 
V.  Burke,  5  La.  Ann.  740. 

A   receiver  in   ordinary   creditors' 


116 


RECEIVERSHIPS. 


recover  unpaid  stoclc  in  a  banking  corporation  the  receiver  may 
proceed  in  eciuity,  he  l^eing  the  representative  of  the  creditors, 
not  on  the  ground  of  there  being  no  legal  remedy,  but  upon  the 
ground  that  the  statute  gives  a  new  remedy  for  a  new  state  of 
things,  and  in  such  a  proceeding  the  shareholder  is  not  at  liberty 
to  urge,  as  a  defense,  that  he  is  deprived  of  a  trial  by  jury,  for  the 
reason  that  in  accepting  the  franchises  of  the  corporation  the 
shareholder  voluntarily  subjected  himself  to  the  terms  and  con- 
ditions accompanying  such  franchises.'  He  may  also  proceed 
against  a  bank  director  to  recover  a  penalty  incurred  for  illegally 
paying  out  a  portion  of  the  stock  of  the  bank,  and,  by  statute,  may 
sue  in  his  own  name."  But  it  has  been  held  in  a  recent  case  that 
the  power  of  a  receiver  to  institute  proceedings  against  the  stock- 
holders of  an  insolvent  corporation  to  set  aside  the  transactions 
by  which  unpaid  stock  was  surrendered  and  paid  up  stock  issued 
in  lieu  thereof,  was  derived  solely  from  statutory  authority,  and 
in  the  absence  of  such  statutory  power  the  receiver  could  not  pro- 
ceed.' 


suits  has  no  power  to  enforce  the  stock 
liability  of  shareholders.  Mann  v. 
Pentz,  3  N.  Y.  415.  Nor  has  he  in  a 
proceeding  brought  by  him  to  enforce 
stock  liability,  where  he  represents  the 
corporation  and  the  shareholders  and 
not  the  creditors.  Billings  v.  Robin- 
son,  28  Hun,  122,  affirmed  in  94  K 
Y.  415;  Republic  L.  Ins.  Co.  v.  Swig- 
ert,  135  111.  150, 12  L.  R.  A.  328.  But 
see  Great  Wester7i  Teleg.  Co.  v.  Gray, 
122  111.  630. 

^Sagory  v.  DuBois,  3  Sandf.  Ch.*466. 

As  to  the  right  of  the  receiver  to  en- 
force stock  subscriptions  see  generally : 

Illinois:  Great  Western  Teleg.  Co.  v. 
Gray,  122  111.  630. 

Iowa;  Stewart  v.  Lay,  45  Iowa,  604. 

Louisiana:  Gaslight  &  Bkg.  Go.  v. 
JIaynes,  7  La.  Ann.  114. 

Maryland:  Frank  v.  Morrison,  58 
Md.  423. 

Minnesota:  Merchants''  Nat.  Bank 
V.  Northtcestern  Mfg.  &  Car  Co. 
48  Minn.  361. 


New  York:  Mann  v.  Pentz,  3  N.  Y. 
415;  Billings  v.  Robinson,  28 
Hun,  122. 

Ohio:  Clarke  v.  Thotnas,  34  Ohio 
St.  46. 

Washington:  Elderkin  v.  Peterson, 
8  Wash.  674. 

*Bank  of  Niagara  v.  Johnson,  8 
Wend.  645. 

^Republic  L.  Ins.  Go.  v.  Swigert,  135 
111.  150,  12  L.  R.  A.  328.  Prior  to  the 
adoption  of  the  New  York  Code  it  was 
necessary  to  enforce  such  liability  by 
a  bill  filed  in  behalf  of  all  the  creditors 
against  the  corporation,  making  all 
the  stockholders  also  defendants. 
Mann  v.  Pentz,  3  N.  Y.  415,  reversing 
2  Sandf.  Ch.  257;  Wallace  v.  Milligan, 
110  Ind.  498.  As  to  the  rule  in  Louis- 
iana see  Gaslight  &  Bkg.  Co.  v.  Haynes, 
7  La.  Ann.  114;  New  Orleans  Gaslight 
Co.  V.  Bennett,  6  La.  Ann.  457;  Stark 
V.  Burke,  5  La.  Ann.  740. 

See  this  subject  further  under  title 
Corporations. 


RECEIVER'S  POWERS.  117 

§  40.  Power  to  issue  certificates. 

As  we  have  seen  the  receiver  has  power  in  case  of  a  raih-oad 
corporation  to  pay  operating  expenses  under  the  direction  of  the 
court,  and  he  may  issue  certificates  therefor  to  such  an  amount  as 
the  court  may  direct,  but  he  has  no  right  to  divert  the  funds  de- 
rived from  the  road  to  other  purposes  than  those  considered  and 
passed  upon  by  the  court.'  Wliere  certificates  were  authorized 
for  a  certain  amount,  the  proceeds  to  be  used  in  defraying  operat- 
ing expenses,  and  certificates  were  issued  beyond  that  amount  and 
the  proceeds  were  used  in  paying  coupons  due  on  the  bonds  of  the 
road,  such  certificates  are  void  even  in  the  hands  of  innocent 
holders,  but  the  hona  fide  holders  of  such  certificates  should  be 
subrogated  to  the  rights  of  the  holders  of  such  coupons  as  had 
been  paid  from  the  money  arising  from  the  sale  of  the  void  cer- 
tificates.'' For  further  consideration  of  this  subject  see  Receiver's 
Certificates, 

§  41.  Power  to  appeal. 

Ordinarily  a  receiver  has  no  power  to  appeal  from  an  order  di- 
recting him  to  turn  over  property  in  his  hands,  but  when  the 
order  erroneously  directs  him  to  turn  over  more  than  he  has  he 
may  appeal  from  such  order. ^     In  a  matter  in  which  he  is  a  party 

As  to  what  defenses  may  or  may  Labor  supplies,  taxes,  »fcc.,  for  rail- 
not  be  interposed  to  actions  brought  ways: 

by  receivers  to  recover  unpaid  sub-  Union  Trust  Co.  v.  Illinois  M.  R.  Co. 

Bcriptions  see  Shoonover  v,  Hinckley,  117  U.  S.  434,  29  L.  ed.  963;  Ilumph- 

48  Iowa,  82;  Stewart  v.  Lay,  45  Iowa,  reys  v.  Allen,  101  111.  490. 

604;  Oreat  Western  Teleg.  Go.  v.  Oray,  Rolling  Stock,  Machinery,  etc.: 

122111.  630;  Lamar  Ins.  Co.  y.  Gtilick,  Sicann  v.  Clark,  110  U.  S.  602,  28 

102  111.  41;  Chandler  v.  Broion,  77  111.  L.  ed.  256;  Wallace  v.  Loomis,  97  U. 

833;  Billings  v.  Robinson,  28  Hun,  122,  S.  146,  24  L.  ed.  895. 

affirmed   94  N.  Y.   415;    Ruggles  v.  Repairs: 

Brock,  6  Hun,  164;  Pentz  v.  Haioley,  Ilo'jver  v.  Montclair  &  O.  L.  R.  Co. 

1  Barb.Ch.  122;  Siillman  v.  Dougherty,  29  N.  J.  Eq.  4. 

44  Md.  380.  Completion    of    road,    connecting 

^Co6  V.  New  Jersey  M.  R.  Co,  27  N.  lines,  etc. : 

J.  Eq.  37.  Bank  of  Montreal  v.  Chicago,  C.  & 

^Newhold  v.  Peoria  &  S.  R.  Co.  5  111.  W.  R.  Co.  48  Iowa,  518;  Kneeland  v. 

App.  367.  Luce,  141  U.  S.  491.  35  L.  ed.  830; 

Receiver's  certificates  have  been  au-  Earn  v.  Rarer  Iron  Co.  80  Va.  754. 

thorized  for  the  following  purposes:  ^Tlotne  v.  Jonei\,  60  Iowa,  70;  Uowe  v. 

JoHGs,  71  Iowa,  92. 


118 


RECEIVE  KSHIPS. 


he  lias  no  right  to  appeal  without  leave  of  the  court.'  An  appeal 
by  a  receiver  from  a  decision  against  him  is  not  evidence  of  bad 
faith  on  his  part,  and  may  be  evidence  of  judicious  management." 
As  a  general  rule  it  may  be  stated  that  he  has  a  right  to  the  same 
defenses  that  could  have  been  urged  by  the  person  or  corporation 
over  whose  property  he  appointed  including  the  rights  of  appeal,' 
but  in  all  cases  it  must  be  done  under  the  order  and  direction  of 
the  court.*  His  right  to  appeal  in  matters  relating  to  his  com- 
pensation is  clear  and  unquestioned;^  in  such  case  he  is  in  fact  a 
party  in  interest.'  Of  course  in  all  cases  of  appeal  by  the  receiver 
the  question  of  the  nature  of  the  order  and  whether  it  is  final  or 
simply  interlocutory  are  to  be  taken  into  consideration.'     He  has 


'i?e  City  &  County  Invest.  Co.  L.  R. 
13  Ch.  Div.  475;  Re  Silver  Valley  Mines, 
L.  R.  21  Ch.  Dlv.  381.  An  appeal  will 
not  be  dismissed  because  the  receiver 
did  not  first  obtain  leave  of  the  court. 
The  allowance  of  the  appeal  is  equiv- 
alent to  leave  of  court  to  take  it.  Far- 
low  V.  Kelly,  reported  only  in  U.  S. 
Sup.  Ct.  Reports,  26  L.  ed.  427. 

^Bevendorfv.  Dickinson,  "iX  How.Pr. 
275.  "Defendants  show  no  bad  faith 
or  mismanagement  of  the  action  on 
the  part  of  the  receiver;  that  he  still 
persevered  after  being  beaten  at  spe- 
cial term  and  appealed  to  the  general 
term  clearly  is  not  such  evidence;  it 
is  only  evidence  of  perseverance  and 
nothing  more.  It  may  be  meritorious 
rather  than  censurable." 

^Melendy  v.  Barbour,  78  Va.  544. 
If  he  were  not  permitted  to  appeal, 
injustice  to  the  parties  might  result. 
Steele  v.  White,  2  Paige,  478;  Cuyler  v. 
Moreland,  6  Paige,  273 ;  Stone  v.  Byrne, 
5  Bro.  P.  C.  213. 

*McKinnon  v.  Wolfenden,  78  "Wis. 
237.  And  seeBorsey  v.  Sibert,  93  Ala. 
312.  These  cases  are  based  upon  the 
idea  that  the  receiver  is  the  agent  of 
court  and  not  a  party  in  interest  to 
the  proceeding  and  therefore  not  enti- 
tled to  appeal. 

^Herndon  v.  Hurter,  19  Fla.  397; 


Magce  v.  Cowperthtcaite,  10  Ala.  966; 
Central  Trust  Co.  v.  Grant  Locomotive 
Works,  135  U.  S.  221,  34  L.  ed.  104; 
Hinckley  v.  Oilman,  C.  &  S.  R.  Co.  94 
U.  S.  467,  24  L.  ed.  166.  He  cannot 
appeal  from  an  order  on  a  motion  to 
vacate  the  appointment.  L'Engle  v. 
Florida  C.  R.  Co.  14  Fla.  266. 

^Hinckley  v.  Oilman,  C.  &  S.  B.  Go. 
94  U.  S.  467,  24  L.  ed.  166;  Whitaker 
v.  Sparkman,  30  Fla.  347;  Cf.  Adair 
Co.  v.  Ownby,  75  Mo.  282. 

'See  Appeals.  Also  Rocliat  v.  Gee, 
91  Cal.  355;  Illinois  Trust  &  Sav.  Bank 
V.  Facijic  R.  Co.  99  Cal.  407;  Whitaker 
V.  Sparkman,  30  Fla.  347;  Hinckley  v. 
Oilman,  C.  &  S.  R.  Co.  94  U.  S.  467,  24 
L.  ed.  166;  Washington,  0.  &  A.  R.  Co. 
V.  Wasliington,  74  U.  S.  7  Wall.  577,  19 
L.  ed.  275;  Thompson  v.  McKim,  6 
Har.  &  J.  302. 

As  to  what  are  final  orders,  see  Jeff- 
reys V.  Coleman,  20  Fla.  536;  Williams 
y.  Hutchinson,  2Q  Fla.  513;  Williams 
V.  Morgan,  111  U.  S.  684,  28  L.  ed.  559; 
Savannah  v.  Jessup,  106  U.  S.  563,  27 
L.  ed.  276;  Milwaukee  tfc  M.  R.  Co.  v, 
So^itter,  69  U.  S.  2  Wall.  510,  17  L.  ed. 
900;  Grant  v.  Phoinix  Mut.  L.  Ins.  Co. 
106  U.  S.  429,  27  L.  ed.  237;  Louisiana 
Nat.  Bank  v.  Whitney,  121  U.  S.  284, 
SOL.  ed.  961;  International  Improv. 
Fund  v.  Oreenough,  105  U.  S.  527,  26 


RECEIVER'S  POWERS.  119 

no  right  to  appeal  from  an  order  directing  him  to  close  his  accounts 
and  pay  over.* 

§  42.  Miscellaneous  powers. 

A  receiver  of  an  insolvent  corporation  who  is  authorized  to  sue 
for  and  recover  "all  the  estate  debts  and  things  in  action,"  be- 
longing to  the  corporation  may  maintain  trover  for  the  conversion 
of  the  personal  property  of  the  corporation  before  he  was  ap- 
pointed receiver.''  The  receiver  of  a  bank  who  has  succeeded  to 
all  its  rights  and  interests  may  move  to  set  aside  an  attachment 
against  such  property  on  the  ground  of  irregularity.'  He  has  no 
right  to  summarily  eject  the  occupant  of  land  and  take  j)ossession 
of  his  personalty  without  a  trial  of  the  right  of  such  possessor  to 
such  personalty,  and  an  order  authorizing  him  to  do  so  granted 
on  a  mere  special  proceeding  will  not  be  sustained."  A  receiver 
appointed  to  sue  for  and  collect  such  debts  as  are  or  may  become 
due  and  pay  over  the  proceeds  to  a  third  person  has  authority  to 
receive  money  payable  under  a  contract  before  it  becomes  due  ; 
and  if  they  be  accepted  by  the  third  party  he  nmj  take  notes  in 
place  of  money.^  Having  authority  to  collect  rents  he  has  au- 
thority to  collect  those  which  are  to  become  due  as  well  as  those 
which  are  due."  Courts  have  power  to  compel  a  settlement  of  a 
claim  against  property  in  the  hands  of  a  receiver,  with  or  without 
the  consent  of  the  receiver,  and  in  case  of  his  refusal  the  court 
may  remove  him.' 

L.  ed.  1158;  Williams  v.  Morgan,  111  ^Olcott  v.Heermans,  3  Hun,  434. 

U.  S.  G84,  28  L.  ed.  559;   FuscUck  v.  K'ox  v.Volkeri,  86  Mo.  505. 

Schall,  99  U.  S.  235,  25  L.  ed.  339;  Ex  ''Guardian    Sav.  Inst.     v.  Boicling 

parte  Farmers'  Loan  &  T.  Co.  129  U.  Green  Sav.  Bank,  65  Barb.  275. 

8.  206,  32  L.  ed.   656;   Hovey  v.  Mc-  A  receiver  has  no  right  to  interfere 

Donald,  109  U.  S.  150,  27  L.  ed.  888.  in  a  suit  brought  by  an  executor  be- 

^Re  Colvin,  3  Md.  Ch.  278.     If  a  re-  fore  the  appointment  of  such  receiver, 

ceiver  appeals  and  subsequently  anew  and  then  pending,  without  an  order 

receiver  is  appointed,  the  new  receiver  of  court.    Gadsden  v.  Whaley,  14  S.  C. 

may  be  substituted  in  the  appellate  210;  Tracy  v.  First  Nat.  Bank, '67  N. 

court.     Bowden  v.  Johnson,  107  U.  S.  Y.  523. 

251,  27  L.  ed.  386.  On  a  creditor's  bill  against  a  dece- 

^Gillet  V.  Fairchild,  4  Denio,  80.  dent's  estate,  where  the  adiiiinistrulor 

^Bowen  v.  First  Nat.  Bank,  34  How.  had  been  removed  and  the  sheriff  ap- 

Pr.  408.  pointed  administrator  d.  b.  n. ;  and  tlie 

*McC'ombs  V.  Merryhew,  40    Mich.  unadministered  assets  were  not  sufli- 

721.  cieut  to  pay  the  debts  of  the  estate. 


120  RECEIVERSHIPS. 

A  temporary  receiver  of  a  bank  has  no  power  without  instruc- 
tions of  the  court  to  surrender  collaterals  pledged  as  security  for 
a  loan  and  to  permit  an  offset  of  the  amount  on  deposit  in  the 
bank.'  He  may  execute  on  payment  formal  satisfaction  and  dis- 
charge of  mortgages  in  his  hands  as  receiver,  though  the  amount 
secured  thereby  is  not  due,''  and  may  have  authority  under  the 
New  Jersey  statute  to  compel  a  disclosure  of  the  knowledge  pos- 
sessed by  any  person  of  the  aifairs  and  transactions  of  the  com- 
pany defendant,  and  a  creditor  may  have  such  disclosures  on 
proper  application  for  that  purpose  to  the  receiver.'  "Where  two 
or  more  liquidators  have  power  to  accept  bills  it  is  doubtful  if 
they  have  power  to  delegate  to  one  the  right  to  accept  such  bills,* 
and  one  liquidator  has  no  power  to  use  the  seal  of  the  company, 
even  in  carrving  out  an  agreement  made  by  both  in  the  absence 
of  resolutions  expressly  authorizing  the  same  to  be  used,^  nor  has 
the  surviving  liquidator  power  to  use  such  seal.  A  receiver 
pendente  lite  has  no  power  to  become  a  mortgagee  of  property  in 
his  possession  as  such  officer,'  nor  has  he  power  to  subject  per- 
sonal property  found  upon  the  premises  to  a  lien  for  storage  ex- 
penses which  will  take  precedence  over  a  prior  mortgage.'  A 
receiver  of  a  railroad  corporation  has  no  power  beyond  the  cor- 
porate powers  and  duties  of  the  corporation  conferred  by  its 
charter;  nor  can  the  court  enlarge  or  restrict  such  powers.  He 
is  bound  by  the  charter  the  same  as  the  directory;'  nor  has  a 
liquidator  power  to  recover  in  an  action  by  him  where  the  com- 
pany itself  could  not  have  recovered.'  A  tender  cannot  be  made 
to  a  receiver,  he  not  being  a  contracting  party.'"  He  has  no  right 
to  discriminate  in  freight,  where  such  discrimination  is  prohibited 
by  statute." 

such  administrator  d.  b.  n.  is  not  en-  '^Re  London  &  M.  Bank,  L.  R.  6Ch. 

titled  to  receive  and  bold  the  remain-  App.  206. 

ing  assets,  because  tbey  bad  once  been  ^Re  Metropolitan  Bank,  L.  R.  2  Cli. 

administered, — a  receiver  should  be  Div.  366,  45  L.  J.  Ch.  525. 
appointed,  as  he  is  the  only  one  with  ^Thompson  v.  HoUadap,  15  Or.  34. 

ample  power  in  such  a  case.  Barman  '  Veite  v.  Leonore,  42  Mo.  App.  217. 

V.  McMullin,  85  Va.  187.  ^Safford  v.  People,  85  111.  558. 

^People,  etc.  v.  St.  Nicholas  Bank,  83  ^  Waterhouse  v.  Jamieson,  L.  R.  2  H. 

N.  Y.  522.  L.  (Sc.)  29. 

■^Heermans  v.  Clarkson,  64  N.  Y.  171.  ^^Poague  v.  Greenlee,  22  Gratt.  734. 

^ Smith  V.  Trenton  &  Delaware  Falls  ^^  Cutting  v.  Florida  R.  <&  Nav.  Co.  43 

Co.  4  N.  J,  Eq.  505.  Fed.  Rep.  747. 


CHAPTER  lY. 


RECEIVER'S   POSSESSION, 


§43. 

§44. 

§45. 
§46. 


How  disturbed.  §49. 

Not  disturbed   by  court  of  co- 
ordinate jurisdiction.  §  50. 

Not  to  be  disturbed  by  levy. 

Not  to  be  disturbed  by  strikes,  §  51. 

conspiracies,  etc.  §  52. 

(a)  Courts  will  not  enjoin  employ-  §  53. 

ees  from  quitting  service.  §  54. 

(b)  But  will  enjoin  conspiracies.  §  55. 
§  47.  Leave  of  court,  when  required.  §  56. 
§  48.  Duty  of  receiver  to  take  posses-  §  57. 

sion  of  property. 

§  43.  How  disturbed. 


As  against  public  improve- 
ments. 

Duty  as  to  opening  a  new  busi- 
ness. 

As  to  tenants. 

To  whom  restored. 

Extent  of. 

As  to  taxes. 

As  to  setoff. 

As  to  exemptions. 

As  to  executors  and  adminis- 
trators. 


Modes  of  interference  with  the  possession  of  the  conrt  through 
its  receiver  are  (1)  bj  the  orders  of  other  courts  of  co-ordinate  juris- 
diction ;'  (2)  by  the  levy  of  executions  and  attachments  f  (3)  by 
strikes  f  (4)  ejectments  ;*  (5)  trespasses  f  (6)  distress  for   rent ;' 


^People  V.  Central  City  Bank,  53 
Barb.  412,  35  How.  Pr,  428;  Deming 
V.  New  York  Marble  Co.  12  Abb.  Pr. 
66;  Davis  v.  Alabama  &  F.  B.  Co.  1 
Woods,  661;  Rogers  v.  Corning,  44 
Barb.  229;  Re  Eulst,  7  Ben.  17;  Ward 
v.  Swift,  6  Hare,  309;  Beecher  v.  Bin- 
inger,  7  Blatchf.  170;  Gelpcke  v.  Mil- 
tcaukee  <&  E.  R.  Co.  11  Wis.  454; 
Smith  V.  McNamara,  15  Hun,  447; 
Judd  V.  Bankers'  &  M.  Teleg.  Co.  31 
Fed.  Rep.  182;  Hazelrigg  v.  Bronauyh, 
78  Ky.  62;  Sedgwick  v.  Menck,  6 
Blatchf.  156;  Peoples'  Bank  v.  Win- 
slow  {"^  Peoples''  Bank  V.  CaUioun")  102 
U.  S.  256,  26  L.  ed,  101;  Re  Clark,  4 
Ben.  88;  l)e  Winton  v.  Brecon,  28  Beav. 
200.  Contra,  Phelan  v.  Ganebin,  5 
Colo.  14;  Bond  v.  First  Nat.  Bank,  5 
Colo.  83. 

^Lane  v.  Sterne,  3  Gifif.  629;  Ryanw. 
Eingsbery,  88  Ga.    361;   Uazclrigg  v. 


Bronaugh,  78  Ky.  62;  Wisicall  v 
Sampson,  55  U.  S.  14  How.  52,  14  L 
ed.  322;  Chafee  v.  Quidnick  Co.  13  R 
I.  442;  Edwards  v.  Norton,  55  Tex 
405;  Bugger  v.  Collins,  69  Ala.  324 
Jackson  v.  Laliee,  114  111.  287;  Rich 
ards  V.  People,  81  111.  551;  Try  v.  Try^ 
13  Beav.  423;  Com.  v.  Toung,  11  Phila. 
606. 

^Arthur  v.  Oakes,  63  Fed.  Rep.  310, 
25  L.  R.  A.  414. 

^Angel  v.  Smith,  9  Ves.  .Jr.  335; 
Fort  Wayne,  M.  &  C.  R.  Co.  v.  Mellott, 
92  Ind.  535;  Potter  v.  Spa  Spring  Brick 
Co.  47  N.  J.  Eq.  442. 

'^Parker  v.  Broioning,  8  Paige,  388; 
Re  Day,  34  Wis.  638;  Ex  parte  Coch- 
rane, L.  R.  20  Eq.  282. 

^Marshall  v.  Locket t,  76  Ga.  289; 
Martin  v.  Black,  9  Paige,  641;  Grant 
V.  Davenport,  18  Iowa,  179. 


122 


RECEIVERSHIPS. 


(7)  force ;'  (8)  condemnation  proceedings  y  (9)  tax  officers  ;'  (10) 
unlawfully  withholding;*  (11)  garnishment;^  (12)  bankruptcy  pro- 
ceedings ;'  (13)  untrue  circulars  and  publications ;'  (14)  a  subse- 
quent receiver  of  another  court ;'  (15)  commencing  suits  against 
the  receiver  without  leave  of  court ;'  (16)  manufacturing  a  pat- 
ented article  over  which  the  receiver  has  control  as  manager.'" 

§  44.  Not  disturbed  by  court  of  co-ordiuate  jurisdiction. 

It  has  been  a  rule,  with  scarcely  an  exception,  since  the  days  of 
Chief  Justice  Marshall,  that,  as  between  courts  of  concurrent 
jurisdiction,  the  court  which  first  secures  possession  of  the  sub- 
ject-matter of  the  litigation,  will  retain  jurisdiction."     This  rule 


^AUy.  Gen.  v.  St.  Cross  Hospital,  18 
Beav.  601 ;  Broad  v.  Wickham,  4  Sim. 
611. 

^Tink  V.  Bundle,  10  Beav.  318. 

^Be  Tyler,  149  U.  S.  164,  37  L.  ed. 
689;  King  v.  Wooten,  54  Fed.  Rep, 
612.  2  U.  S.  App.  651.  Contra,  Cen- 
tral Trust  Co.  V.  WabasJi,  St.  L.  &  P. 
B.  Co.  26  Fed.  Rep.  11. 

*Be  Cohen,  5  Cal.  494;  Byan  v. 
Kingshery,  88  Ga.  361 ;  Qoisse  v.  Beall, 
5  Wis.  224;  American  Const.  Co.  v. 
Jacksonville,  T.  &  E.  W.  B.  Co.  53 
Fed.  Rep.  937;  Green  v.  Green,  2  Sim. 
430;  Miller  v.  Joned,  39  111.  54;  Brandt 
V.  Allen,  76  Iowa,  50,  1  L.  R.  A.  653; 
Griffith  V.  Griffith,  2  Ves.  Jr.  400; 
People  V.  Bogers,  2  Paige,  103. 

f-Bichards  v.  People,  81  111.  551; 
Oouverneur  v.  Warner,  2  Sandf.  624; 
Walker  v.  George  Taylor  Commiiision 
Co.  56  Ark.  1;  Killmer  v.  Hobart,  8 
Abb.  N.  C.  426;  Taylor  v.  Gillson,  23 
Tex.  508;  Borer  v.  Chapman,  119  U. 
S.  587,  30  L.  ed.  532;  McGowan  v. 
Myers,  66  Iowa,  99;  Jackson  v.  Lahee, 
114  111.  287;  Field  v.  Jones,  11  Ga.  413; 
Blake  Crusher  Co.  v.  New  Haven,  46 
Conn.  473;  Cooke  v.  Orange,  48  Conn. 
401;  Smith  v.  McNamara,  15  Hun, 
447;  Com.  v.  Hide  &  L.  Ins.  Co.  119 
Mass.  155;  Columbian  Book  Co.  v.  De- 
Oolyer,   115  Mass.  67.      See    contra. 


Farmers'  Bank  v.  Beaston,  7  Gill  &  J. 
421. 

^Skip  V.  Harwood,  3  Atk.  564. 

''Helmore  v.  Smith,  L.  R.  35  Ch. 
Div.  449. 

»Ward  V.  Swift,  6  Hare,  309.  But 
see  Bailey  v.  O'Mahony,  1  Jones  &  S. 
239. 

^Be  Higgins,  27  Fed.  Rep.  443;  Par- 
ker v.  Browning,  8  Paige,  388. 

'oiJe  Woven  Tape  Skirt  Co.  12  Hun, 
HI. 

^^Byers  v.McAuley,  149  U.  S.  608,  37 
L.  ed.  867,  Porter  v.  Sabin,  149  U.  8. 
473,  37  L.  ed.  815;  Moran  v.  Sturges, 
154  U.  S.  2o6,  274,  38  L.  ed.  981,  987; 
Stout  V.  Lye,  103  U.  S.  66,  26  L.  ed. 
428;  Ellis  v.  Davis,  109  U.  S.  485,  27 
L.  ed.  1006;  Buck  v.  Colbath,  70  U.  S. 
3  Wall.  334,  18  L.  ed.  257;  Krippen- 
dorfv.  Hyde,  110  U.  S.  276,  28  L.  ed. 
145;  Freeman  v.  Howe,  65  U.  S.  24 
How  450,  16  L.  ed.  749;  CovellY.  Hey- 
man,  111  U.  S.  176,  28  L.  ed.  390; 
Taylor  v.  Carryl,  61  U.  S.  20  How. 
583,  15  L.  ed.  1028;  Borer  v.  Chap- 
man, 119  U.  S.  587,  30  L.  ed.  532; 
Peck  V.  Jenness,  48  U.  S.  7  How.  612, 
12  L.  ed.  841;  Smith  v.  Mclver,  22  U. 
S.  9  Wheat.  532,  6  L.  ed.  152;  Hagan  v. 
Lucas,  35  U.  S.  10  Pet.  400,  9  L.  ed. 
470;  Wickham  v.  Hall,  60  Fed.  Rep. 
326;  Bruce  v.  Manchester  &  E.  Bail- 


RECEIVER'S  POSSESSION. 


123 


is  founded  not  only  on  comity  but  necessity,  for  if  one  could 
adjudge  and  another  reverse,  the  contest  might  go  on  until  par- 


road,  19  Fed.  Rep.  342;  Briggs  v. 
Stroud,  58  Fed.  Rep.  720;  The  J.  W. 
French,  13  Fed.  Rep.  916;  Masmchu- 
setts  Mut.  L.  Ins.  Co.  v.  Chicago  <& 
A.  R.  Co.  13  Fed.  Rep.  857;  Harrison 
Wire  Co.  v.  Wheeler,  11  Fed.  Rep. 
206;  Walker  v.  Flint,  7  Fed.  Rep.  435; 
Union  Mut.  L.  Ins.  Co.  v.  University 
of  Chicago,  6  Fed.  Rep.  443;  Hamilton 
V.  Chouteau,  6  Fed.  Rep.  339;  Levi^. 
Columbia  L.  Ins.  Co.  1  Fed.  Rep.  206; 
Crane  v.  McCoy,  1  Bond,  422;  Par- 
sons V.  Lyman,  5  Blatchf.  170;  Ex 
parte  Robinson,  6  McLean,  355. 

Mr.  Justice  Bradley  in  Wilmer  v. 
Atlanta  &  R.  A.  L.  R.  Co.  2  Woods, 
409,  in  speaking  of  this  rule  says: 
"The  test  I  think  is  this:  not  which 
action  was  first  commenced,  nor  -which 
cause  of  action  has  priority  or  superi- 
ority but  which  court  first  acquires 
jurisdiction  over  the  property.  .  .  . 
Service  of  process  gives  jurisdiction 
over  the  person, — seizure  gives  juris- 
diction over  the  property;  and,  until  it 
is  seized,  no  matter  when  the  suit  was 
commenced  the  court  does  not  have 
jurisdiction."  See  also  Covell  v.  Hey- 
man.  111  U.  S.  176,  28  L.  ed.  390;  Rio 
Grande  R.  Co.  v.  Vinet,  132  U.  S.  478, 
33  L.  ed.  400;  Heidritter  v.  Elizabeth 
Oil  Cloth  Co.  112  U.  S.  294,  28  L.  ed. 
729;  Wallace  v.  McConnell,  38  U.  S.  13 
Pet.  151,  10  L.  ed.  102;  Williams  v. 
Benedict.  49  U.  S.  8  How.  Ill,  12  L. 
ed.  1008;  Payne  v.  Drewe,  4  East,  538; 
Pulliam  V.  Osborne,  58  U.  S.  17  How. 
471,  15  L.  ed.  154;  Watson  v.  Jones,  %0 
U.  S.  13  Wall.  679,  20  L.  ed.  666; 
O'Mahony  v.  Belmont,  5  Jones  &  S. 
880;  Millikin  v.  Barrow,  55  Fed.  Rep. 
148;  Howlett  v.  Central  Caroline  Land 
<fc  1.  Co.  56  Fed.  Rep.  161;  Remington 
Paper  Co.  v.  Louisiana  Printing  & 
Pub.   Co.  50  Fed.  Rep.  287;  Clyde  v. 


Richmond  <&  D.  R.  Co.  56  Fed.  Rep. 
539;  Wilmer  v.  Atlanta  &  R.  A.  L.  R. 
Co.  2  Woods,  426;  Young  v.  Montgom- 
ery &  E.  R.  Co.  2  Woods,  606;  East 
Tennessee,  V.  &  O.  R.  Co.  v.  Atlanta  & 
F.  R.  Co.  49  Fed.  Rep.  608,  15  L.  R. 
A.  109;  New  York,  P.  &  0.  R.  Co.  v. 
New  York.  L.  E.  <&  W.  R.  Co.  58 
Fed.  Rep.  268;  Coley.  Oil  Well  Supply 
Co.  57  Fed.  Rep.  534;  Re  Langford,  57 
Fed.  Rep.  570;  Re  ScMiyler's  Steam 
Tow  Boat  Co.  136  N.  Y.  169,  20  L.  R. 
A.  391;  Hamilton- Brown  Shoe  Co.  v. 
Mercer,  84  Iowa,  539 ;  Senior  v.  Pierce, 
31  Fed.  Rep.  627;  Witters  v.  Sotcles,  33 
Fed.  Rep.  772;  Oumbel  v.  Pttkin,  124 
U.  S.  131,  31  L.  ed.  378;  Second  Nat. 
Bank  v.  Dunn,  97  N.  Y.  156. 

As  to  interference  with  custody  of 
other  courts  of  property  in  custodia 
legis,  see  Briggs  v.  Stroud,  58  Fed. 
Rep.  720;  Gay  v.  Brierfeld,  94  Ala. 
312;  Byers  v.  McAuley,  149  U.  S.  614, 
37  L.  ed.  871;  Re  Schuyler's  Steam 
Tow  Boat  Co.  136  N.  Y.  175,  20  L.  R. 
A.  391;  Moran  v.  Sturges,  154  U.  S. 
274,  38  L.  ed.  987;  Thompson  v.  Hal- 
laday,  15  Or.  54;  Rio  Grande  R.  Co. 
V,  Vinet,  132  U.  S.  482,  33  L.  ed.  401; 
Thompson  v.  Phenix  Ins.  Co.  136  U.  S. 
297,  34  L.  ed.  413;  Hamilton- Brown 
Shoe  Co.  v.  Mercer,  84  Iowa,  589;  Por- 
ter V.  Sabin,  149  U.  S.  480,  37  L.  ed. 
818;  Ahlhauser  v.  Butler,  50  Fed.  Rep. 
707;  Glenn  v.  Liggett,  47  Fed.  Rep. 
474;  Ball  v.  Tompkins,  41  Fed.  Rep. 
490;  Gates  v.  Bucki,  53  Fed.  Rep.  967; 
East  Tennessee,  V.  &  G.  R.  Co.  v.  At- 
lanta &  F.  R.  Co.  49  Fed.  Rep.  611, 
15  L.  R.  A.  109;  Denny  v.  Bennett,  128 
U.  S.  503,  32  L.  ed.  496;  Mehin  v. 
Robinson,  31  Fed.  Rep.  635;  Farmers' 
Loan  &  T.  Co.  v.  San  Diego  Street  Car 
Co.  49  Fed.  Rep.  197;  The  Daniel 
Kaine,  35  Fed.  Rep,  788;  Tefft  v.  Stern- 


124 


RECEIVERSHIPS. 


ties  became  exliaustcd  and  courts  were  brouo^lit  into  contempt. 
The  application  of  this  rule  is  to  be  made  in  cases  where  courts  of 
concurrent  jurisdiction  appoint  receivers  for  the  same  property. 
Apparently  a  different  rule  prevails  in  a  contest  between  receiv- 
ers and  officers  holding  writs  of  attachment  or  executions.  In 
such  cases  the  rule  is  well-nigh  universal  that  after  the  appoint- 
ment of  a  receiver  the  property  to  which  the  receivership  relates 
is  to  be  deemed  in  custodia  legis,  and  a  levy  of  an  execution  or 
attachment  subsequent  to  such  order  will  not  be  permitted,  as  it 
interferes  with  the  receiver's  right  of  possession.'     As  we  have 


berg,  40  Fed.  Rep.  7;  State,  Klotz,  v. 
Boss,  118  Mo.  53. 

As  to  interfering  with  the  posses- 
sion or  custody  of  oificers  of  other 
courts,  see  Senior  v.  Pierce,  31  Fed. 
Rep.  627;  Qumhel  v.  Pitkin,  124  U.  S. 
144,  31  L.  ed.  378;  Witters  v.  Sowles, 
32  Fed.  Rep.  772;  Second  Nat.  Bank 
V.  Dunn,  97  N.  Y.  156. 

As  to  interfering  with  process  of 
other  courts,  see  Central  Nat.  Bank 
V.  Hazard,  49  Fed.  Rep.  295;  Re  John- 
son, 46  Fed.  Rep.  480;  Ex  parte  Con- 
way, 48  Fed.  Rep.  78;  Be  Fox,  51  Fed. 
Rep.  427. 

As  to  interference  by  state  courts 
with  custody  of  Federal  courts  and 
officers,  see  Benny  v.  Bennett,  128 
U.  S.  502,  32  L.  ed.  496;  Ex  parte 
Tyler,  149  U.  S.  186,  37  L.  ed.  696; 
Boltz  V.  Eagan,  34  Fed.  Rep.  447; 
Aldhamer  v.  Butler,  50  Fed.  Rep.  707; 
American  Asso.  v.  Hurst,  59  Fed.  Rep. 
4;  Morrison  v.  Menhaden  Co.  37  Hun, 
524;  Hill  V.  Corcoran,  15  Colo.  272; 
Gay  V.  Brierjidd  Coal  &  I.  Co.  94  Ala. 
312,  16  L.  R.  A.  564. 

As  to  interference  by  Federal  court 
with  custody  of  state  courts,  see  Melvin 
V.  Robinson,  31  Fed.  Rep.  635;  The  E. 
L.  Cain,  45  Fed.  Rep.  369;  East  Ten- 
nessee, V.  &  O.  R.  Co.  V.  Atlanta  &  F. 
R.  Co.  49  Fed.  Rep.  611,  15  L.  R.  A. 
109;  Tefft  v.  Sternberg,  40  Fed.  Rep. 
5;  Pickett  V.  Filer,  40  Fed.  Rep.  313; 


Oaies  v.  Bucki,  53  Fed.  Rep.  966; 
Howlett  V.  Central  Carolina  Land  &  I. 
Co.  56  Fed.  Rep.  162. 

An  interference  with  the  receiver's 
possession  will  not  be  permitted  on 
the  ground  that  his  appointment  was 
illegal  or  improvidently  made.  Cook 
V.  Citizens'  Nat.  Bank,  73  Ind.  256. 
This  is  based  upon  the  ground  that 
the  appointment  cannot  be  collaterally 
attacked.  Cf.  Ames  v.  Birkenhead 
Docks  Trustees,  20  Beav.  332;  Russell 
V.  East  Anglian  R.  Co.  3  Macn.  &  G. 
104.  In  this  case  Lord  Chancellor 
Truro  said:  "I  am  of  the  opinion  that 
it  is  not  competent  for  any  one  to  in- 
terfere with  the  possession  of  a  re- 
ceiver, or  to  disobey  an  injunction,  or 
any  other  order  of  the  court  on  the 
ground  that  such  orders  were  improv- 
idently made.  Parties  must  take  a 
proper  course  to  question  their  valid- 
ity, but  while  they  exist  they  must  be 
obeyed. 

^  Texas  Trunk  R.  Co.  v.  Lewis,  81 
Tex.  1;  Stoi-m  v.  Waddell,  2  Sandf. 
Ch.  505;  Van  Alstyne  v.  Cook,  25  N. 
Y.  496 ;  Skinner  v.  Maxwell,  68  N.  C. 
400;  Rutter  v.  Tallis,  5  Sandf.  610; 
Maynard  v.  Bond,  67  Mo.  315. 

In  an  action  to  recover  land  covered 
by  a  road-bed  where  a  receiver  has 
been  appointed  the  court  will  not 
issue  a  writ  of  restitution  since  it 
would    be  an  interference  with   the 


EECEIVER'S   POSSESSION. 


125 


already  seen  the  receivership  must  of  necessity  relate  to  the  date 
of  granting  the  order ;  otherwise  the  purposes  of  the  receivership 
would  be  frustrated  in  many  cases.  The  receivership  is,  in  its  na- 
ture, an  equitable  execution  operating,  in  its  effects,  from  the  date 
of  granting.'  Besides,  the  receiver's  possession  does  not  destroy  any 


property  and  be  in  contempt  of  the 
court  appointing  the  receiver.  The 
plaintiff  after  judgment  should  apply 
to  the  court  making  the  appointment. 
Abbey  v.  International  &  G.  N.  B.  Co. 
5  Tex.  Civ.  App.  261. 

The  receiver  being  an  officer  of 
court  will  be  protected  in  his  posses- 
sion and  no  interference  therewith 
will  be  permitted  without  leave. 

It  has  been  held  that  a  failure  to 
obtain  leave  to  sue  the  receiver  does 
not  divest  the  court  of  jurisdiction. 
Failure  to  obtain  leave  is  a  question 
of  contempt  and  not  of  jurisdiction. 
MulcaJiey  v.  Strauss,  151  111.  70. 

Cf.  Wayne  Pike  Co.  v.  State,  134 
Ind.  672;  Davis  v.  Ladoga  Creamery 
Co.  128  Ind.  222;  Elkhart  Car  Works 
Co.  V.  Ellis,  113  Ind.  215;  Keen  v. 
Breckenridge,  96  Ind.  69;  Garver  v. 
Eent,  70  Md.  428;  St.  Joseph  &  D.  C. 
R.  Co.v.  Smith,  19  Kan.  225;  Kinney 
V.  Crocker,  18  Wis.  75;  Melendy  v. 
Barbour,  78  Va.  514;  Beed  v.  Axtell, 
84  Va.  231;  Jo?ies  v.  Browse,  32  W.Va. 
444;  Spalding  v.  Com.  88  Ky.  135;  Ly- 
man v.  Central  Verm-yrd  B.  Co.  59  Vt. 
167;  Martin  v.  Atchison,  2  Idaho,  590; 
Allen  V.  Central  R.  Co.  42  Iowa,  683. 
But  see  contra.  Barton  v.  Barbour, 
104  U.  S.  126,  26  L.  ed.  672;  Taylor  v. 
Mayo,  110  U.  S.  330,  28  L.  ed.  163 
(Injunction);  Central  2'rust  Co.  v.  East 
Tennessee,  V.  &  G.  B.  Co.  59  Fed. 
Rep.  523;  Doio  v.  MempJds  &  L.  R.  R. 
Co.  20  Fed.  Rep.  260;  Walling  v.  Mil- 
ler, 108  N.  Y.  173;  Chautauque  County 
Bank  v.  Bisley,  19  N.  Y.  369;  Re 
Christian  Jensen  Co.  128  N.  Y.  550; 
Smith  V.  New  York  Consol.  Stage  Co. 
18  How.  Pr.  377;  Wiswall  v.  Sampson, 


52  U.  S.  14  How.  52,  14  L.  ed.  322; 
Artisans'  Bank  v.  Treadwell,  34  Barb. 
552;  Wilson  v.  Allen,  6  Barb.  543; 
Davies  v.  LatJirop,  20  Blatchf.  397; 
Steele  v.  Sturges,  5  Abb.  Pr.  442;  Ellis 
V.  Vernon  Ice,  L.  &  W.  Co.  86  Tex. 
109;  Russell  v.  Texas  &  P.  R.  Co.  68 
Tex.  646;  Robinson  v.  Atlantic  <&  G. 
W.  R.  Co.  66  Pa.  160;  Skinner  y.  Max- 
well, 68  N.  C.  400;  Chafee  v.  Quidnick 
Co.  13  R.  I.  442;  Payne  v.  Ba.rter,  2 
Tenn.  Ch.  517;  Olds  v.  Tucker,  35 
Ohio  St.  584;  Thompson  v.  McCleary, 
159  Pa.  189. 

Property  cannot  be  levied  on  and 
sold  so  as  to  confer  any  right  by  virtue 
of  such  levy  and  sale.  Wiswall  v. 
Samp)son,  52  U.  8.  14  How.  52,  14  L. 
ed.  322;  Edwards  v.  Norton,  55  Tex. 
410;  Uackley  v.  Swigert,  5  B.  Mon. 
86. 

'  Clinkscales  v.  Pendleton  Mfg.  Co.  9 
S.  C.  N.  S.  318;  Regenstein  v.  Pearl- 
stein,  30  S.  C.  192;  Re  Christian  Jensen 
Co.  128  N.  Y.  559;  Re  Schuyler's  Steam 
Tow  Boat  Co.  64  Hun,  386,  136  N.  Y. 
169,  20  L.  R.  A.  391;  Re  Berry,  26 
Barb.  55;  Smith  v.  New  York  Consol. 
Stage  Co.  18  Abb.  Pr.  420;  Atlas  Bank 
V.  Nahant  Bank,  23  Pick.  480;  Re 
Mallory,  18  N.  Y.  S.  R.  99;  Deming  v. 
New  York  Marble  Co.  12  Abb.  Pr.  66; 
Steele  v.  Sturges,  5  Abb.  Pr.  442;  Van 
Alstyne  v.  Cook,  25  N.  Y.  489;  Rutter 
V.  Tallis,  5  Sandf.  610;  Lotlimer  v. 
Lord,  4  E.  D.  Smith,  183;  Pope  v. 
Ames,  20  Or.  199;  Maynard  v.  Bond, 
67  Mo.  315;  Ex  parte  Evans,  L.  R.  13 
Ch.  Div.  252.  Contra,  Farmers'  Bank 
V.  Beaston,  7  Gill  &  J.  421 ;  Edwards 
V.  Edwards,  L.  R.  2  Ch.  Div.  291; 
Frayser  v.  Richmond  &  A.  R.  Co.  81 


126 


RECEIVERSHIPS. 


existing  rights,  but  on  the  contrary  protects  and  preserves  them. 
A  receiver  derives  his  authority  from  the  act  of  the  court  and 
not  from  the  act  of  the  parties  at  whose  suggestion  or  by  whose 
consent  he  is  appointed  ;  and  the  utmost  effect  of  his  appointment 
is  to  put  the  property  from  that  time  into  his  custody  as  an  officer 
of  the  court  for  the  benefit  of  the  party  ultimately  proved  to  be 
entitled,  but  not  to  change  the  title  or  even  the  right  of  posses- 
sion in  the  property/  nor  disturb  any  liens  thereon.* 

§  45.  Not  to  be  disturbed  by  levy. 

When  a  receiver  is  in  possession  of  property  under  process  or 
authority  of  the  court,  in  execution  of  a  decree  or  decretal  order, 
his  possession  is  not  to  be  disturbed,  even  by  an  ejectment  under 
an  adverse  title  without  leave  of  the  court,'  nor  will  the  court 
permit  property  in  the  hands  of  its  receiver  to  be  levied  on  and 
sold  under  an  execution  or  attachment/  nor  replevied  from  the 


Va.  388;  Defries  v.  Creed,  34  L.  J.  Eq. 
N.  S.  607;  Chamberlain  v.  Rochester 
Steamless  Paper  Vessel  Co.  7  Hun,  557 
(Statutes). 

The  giving  of  bond,  however,  is  a 
condition  precedent  to  commencing 
suit.  PJiillip  V.  Smoot,  1  Mackey, 
478. 

'  Union  Nat.  Bank  v.  Bank  of  Kan- 
sas City,  136  U.  S.  223,  34  L.  ed.  341; 
Skip  V.  Harwood,  3  Atlj.  564;  Anon. 
2  Atk.  15;  Wiawall  v.  Sampson,  52 
U.  S.  14  How.  52,  14  L.  ed.  322;  Ellis 
V.  Boston,  H.  &  E.  R.  Co.  107  Mass. 
1;  Maynard  v.  Bond,  67  Mo.  315;  Eei- 
man  v.  Fisher,  11  Mo.  App.  275; 
Thompson  v.  Phemx  Ins.  Co.  136  U.  S. 
287,  34  L.  ed.  408;  Porter  y.  Sabin,  149 
U.  S.  479,  37  L.  ed.  818. 

"  Lorch  V.  Altman,  75  Ind.  162;  J.  W. 
Dann  Mfg.  Co.  v.  Parkhurst,  125  Ind. 
317;  Favorite  v.  Deardorff,  84  Ind. 
555;  VanRoun  v.  San  Francisco  Super. 
Ct.  58  Cal.  358;  Loaiza  v.  San  Fran- 
cisco Super.  Ct.  85  Cal.  11,  9  L.  R.  A. 
37;  Coburn  v.  Ames,  52  Cal.  385;  Nil- 
link  V.  Morris  Canal  &  Bkg.  Co.  4 
N.  J.  Eq.  377;  Chase's  Case,  1  Bland. 


Ch.  206;  Bererley  v.  Brooke,  4  Gratt. 
187;  Skip  V.  Harwood,  3  Atk.  564;  Re 
North  American  Outta  Percha  Co.  17 
How.  Pr.  549;  Becker  v.  Torrance,  31 
N.  Y.  631;  Oere  v.  Dibble,  17  How. 
Pr.  31 ;  Rich  v.  Loutrel,  18  How.  Pr. 
121;  Hall  v.  Merrill,  9  Abb.  Pr.  121; 
Davenport  v.  Kelley,  42  N.  Y.  193; 
Bowling  Green  Sav.  Bank  v.  Todd, 
64  Barb.  146;  Union  Trust  Co.  v. 
Weber,  96  111.  346. 

^ Angel  v.  SmitJi,  9  Ves.  Jr.  338;  Fort 
Wayne,  M.  &  C.  R.  Co.  v.  3Iellett,  92 
Ind.  535;  Potter  v.  Spa  Spring  Brick 
Co.  47  N.  J.  Eq.  442. 

*  Parker  v.  Browning,  8  Paige,  388. 
The  reason  for  this  rule  is  that  a  court 
of  equity  will  not  permit  itself  to  be 
made  a  suitor  in  a  court  of  law. 
Chancellor  Walworth  in  Parker  v. 
Browning  says:  "  Where  the  prop- 
erty is  legally  and  properly  in  the 
possession  of  the  receiver  it  is  the 
duty  of  the  court  to  protect  that 
possession,  not  only  against  acts  of 
violence,  but  also  against  suits  at  law; 
so  that  a  third  person  claiming  the 
same  may  be  compelled  to  come  in 


RECEIVER'S  POSSESSION. 


127 


and  ask  to  be  examined  pro  inter  esse 
iuo,  if  he  wishes  to  test  the  justice  of 
such  claim."  See  also  Fessenden  v. 
Woods,  3  Bosw.  550;  Buggen  v.  Collins, 
69  Ala.  324 ;  Wiswall  v.  Sampson.  52 
U.  S.  14  How.  52,  14  L.  ed.  322;  Bob- 
inson  v.  Atlantic  &  O.  W.  B.  Co.  66 
Pa.  160.  In  this  case  the  court  said: 
"  It  was  then  in  gremio  legis,  in  legal 
custody,  and  to  permit  it  to  be  levied 
on  and  sold  under  the  process  of  the 
court  of  common  pleas  would  at 
once  raise  a  conflict  of  jurisdiction 
and  interfere  with  the  rights  of  the 
receiver  of  the  supreme  court  to 
manage  the  property  under  his  ap- 
pointment." See  also  Trustee:  Mar- 
tin V.  Davis,  21  Iowa,  535;  Bentley  v. 
Shrieve,  4  Md.  Ch.  412.  It  has  been 
held,  however,  that  where  the  lien  of 
a  judgment  had  attached  at  the  time 
of  the  appointment  of  a  receiver,  the 
levy  and  sale  by  the  sheriff  do  not 
disturb  the  receiver's  possession  and 
the  sheriff  is  not  in  contempt  of  court. 
Albany  City  Bank  v.  Sehermerliorn, 
9  Paige,  372;  State  v.  Snohomish 
County  Sup.  Ct.  7  Wash.  77.  But  the 
■weight  of  authority  as  well  as  reason 
Is  against  this  position.  In  addition 
to  cases  above  cited,  see  also  Langdon 
V.  Lockett,  6  Ala.  727;  Taylor  v.  Oil- 
lean,  23  Tex.  508;  Thompson  v.  Mc- 
Cleary,  159  Pa.  189;  Couverneur  v. 
Warner,  2  Sandf.  624;  Field  v.  Jones, 
11  Ga.  413;  Walling  v.  Miller,  108 
N.  Y.  173;  Yuba  County  v.  Adams, 
7  Cal.  35;  Noe  v.  Gib&on,  7  Paige,  513; 
Nelson  v.  Connor,  6  Rob.  (La.)  339; 
Qlenn  v.  Gill,  2  Md.  1 ;  Ellis  v.  Vernon 
Ice,  L.  &W.  Cb.  86  Tex.  109;  Edwards 
V.  Norton,  55  Tex.  405;  Bussell  v.  East 
Anglian  B.  Co.  3  Macn.  &G.  104;  Coe 
V.  Columbus,  P.  &  I.  B.  Co.  10  Ohio 
St.  403. 

Following  the  doctrine  of  Albany 
City  Bank\.  Schermerhorn,  is  the  case 
of  Bergin  v.  Deering,  70  Hun,  379, 
where  partners  disagreeing  as  to  the 


management  of  their  business  agreed 
to  the  appointment  of  a  receiver,  but 
after  the  lien  of  judgment  had  at- 
tached the  court  refused  to  order  the 
property  turned  over  to  the  re- 
ceiver. 

As  to  the  exclusive  jurisdiction  of 
the  court  having  property  in  its  pos- 
session see  further:  Taylor  v.  Carryl, 
61  U.  S.  20  How.  596,  15  L.  ed.  1032; 
Peale  v.  Pldpps,  55  U.  S.  14  How. 
375,  14  L.  ed.  461;  Ex  parte  Chamber- 
lain, 55  Fed.  Rep.  708;  Heidritter  v. 
Elizabeth  Oil  Cloth  Co.  112  U.  S.  303, 
28  L.  ed.  732;  Olennv.  Liggett,  47  Fed. 
Rep.  473;  Fox  v.  Hempfield  B.  Co.  2 
Abb.  U.  S.  155;  Waterhouse  v.  Coiner, 
55  Fed.  Rep.  149,  19  L.  R.  A.  403; 
Be  Clark  &  Bininger,  4  Ben.  98; 
LambY.  Ewing,  54  Fed.  Rep.  273;  Be 
Cook  &  Oleason,  3  Biss.  119;  Oay  v. 
Brierfield  Coal  &  I.  Co.  94  Ala.  310, 
16  L.  R.  A.  564;  BeVogel,  7  Blatchf. 
20;  Be  Schuyler  Steam  Tow  Boat  Co. 
64  Hun,  388;  Attleborough  Nat.  Bank 
V.  Northwestern  Mfg.  &  Car  Co.  28 
Fed.  Rep.  114;  Be  Peebles,  2  Hughes, 
ZM\Walker  v.  Flint,  2  McCrary,  343, 
7  Fed.  Rep.  AZQ;Wilmer  v.  Atlanta  & 
B.  Air  Line  B.  Co.  2  Woods,  421. 
As  to  protection  of  the  receiver  in 
custody  of  property,  see  Barton  v. 
Barbour,  104  U.  S.  29,  26  L.  ed.  675; 
Savannah  v.  Jesup,  106  U.  S.  565,  27 
L.  ed.  277;  Blake  v.  Alabama  &  C. 
B.  Co.  6  Bank.  L.  Reg.  332;  Perego 
v.  Bonesieel,  5  Biss.  69;  Andrews  v. 
Smith,  19  Blatchf.  103;  Thompson  v. 
Scott,  4  Dill.  509 ;  Kennedy  v.  India- 
napolis, C.  &  L.  B.  Co.  3  Fed.  Rep. 
99;  Young  v.  Montgomery  &  E.  B. 
Co.  2  Woods,  606 ;  Ellis  v.  Vernon  Ice, 
L.  &W.  Co.  86  Tex.  115;  Chautauque 
County  Bank  v.  Bisley,  19  N.  Y.  377; 
Day  V.  Postal  Teleg.  Co.  66  Md.  354; 
Melendy  v.  Barbour,  78  Va.  557;  Fort 
Wayne,  M.  &  C.  B.  Co.  v.  Melletl,  92 
Ind.  538;  Walling  v.  Miller,  108  N.  Y. 
177;  Be  Tyler,  149  U.  S.  181,  37  L.  ed. 


128 


RECEIVERSHIPS. 


receiver  without  leave  of  court,'  nor  is  the  sheriff  or  other  officer 
in  justiiication  of  his  seizure  permitted  to  question  the  propriety 
or  regularity  of  the  order  under  which  the  receiver  was  ap- 
pointed." Any  unauthorized  interference  with  his  possession 
will  suhject  the  party  interfering  to  an  attachment  for  contempt.' 
The  judgment  iu  a  proceeding  for  contempt  where  the  person 


695 ;  Tliompson  v.  Phenix  Ins.  Co.  136 
U.  S.  297,  34  L.  ed.  413;  Porter  v. 
.Sabin,  149  U.  S.  479,  37  L.  ed.  818; 
Union  H^at.  Bank  v.  Bank  of  Kansas 
City,  136  U.  S.  236,  34  L.  ed.  346; 
Preston  v.  Loughran,  58  Ilun,  216; 
Bogers  v.  Wheeler,  43  N.  Y.  604;  Gar- 
den City  Bkg.  &  T.  Co.  v.  Geilfuss, 
86  Wis.  622;  Pacific  R.  Co.-f.  Wade,  91 
Cal.  455,  13  L.  R.  A.  754;  Littlejohn 
V.  Turner,  73  Wis.  124. 

la  the  case  of  Woerishoffer  v.  North 
River  Const.  Go.  99  N.  Y.  398,  the 
court  of  appeals  sustained  an  order 
granting  permission  to  a  creditor  to 
proceed  to  judgment,  and  permitting 
such  creditor  to  collect  and  enforce 
any  judgment  it  might  obtain  against 
property  attached  before  the  appoint- 
ment of  an  ancillary  receiver. 

The  permission  of  a  court  which 
has  appointed  a  receiver  over  property 
to  make  him  a  party  defendant  to  an 
action  in  another  court  to  foreclose  a 
mechanic's  lien  which  existed  on  the 
property  at  the  time  of  his  appoint- 
ment, is  not  a  relinquishment  of  con- 
trol of  the  property  which  authorizes 
a  judgment  by  such  other  court  direct- 
ing a  public  sale  of  the  property  by 
the  sheriff  with  clear  title  to  the  pur- 
chaser. Premier  Steel  Co.  v.  McEl- 
waine- Richards  Co.  (Ind.)43  N.  E.  876. 

Authority  should  not  be  given  to 
issue  execution  against  the  receiver  of 
an  insolvent  bank  upon  a  judgment 
operating  merely  as  an  established 
claim  against  the  assets  of  the  bank 


held  by  him.  Arnold  v.  Penn  (Tex. 
Civ.  App.)  32  S.  W.  353. 

'  Com.  V.  Toung,  11  Phila.  606. 
When  a  party  claims  title  paramount 
to  that  of  the  receiver  he  must  apply 
to  the  court  for  leave  to  proceed  to 
assert  his  right.  De  Groot  v.  Jay,  30 
Barb.  483.  The  holder  under  a  valid 
bill  of  sale  has  no  right  to  oust  a  re- 
ceiver of  his  possession.  Ex  parte 
Cochrane,  Re  Mead,  L.  R.  20  Eq.  282, 
But  if  the  property  does  not  belong 
to  the  receiver's  estate  it  may  be  re- 
placed. Hills  V.  Parker,  111  Mass. 
508. 

*  Russell  V.  East  Anglian  B.  Co,  3 
Macn.  &  G.  104  (113);  Re  Christian 
Jensen  Co.  128  N.  Y.  550. 

^  Spinning  v.  Ohio  L.  Ins.  &  T.  Co. 
2  Disney,  368;  DeVisser  v.  Blackstone, 
6  Blatchf.  253;  King  v.  Ohio  &  M.  R. 
Co.  7  Biss.  529;  Secor  v.  Toledo,  P.  <& 
W.  B.  Co.  7  Biss.  542;  Vermont  &  C. 
R.  Co.  v.  Vermont  C.  B.  Co.  46  Vt. 
792;  Chafeex.  Quidnick  Co.  13  R.  I. 
442;  Hull  v.  Thomas,  3  Edw.  Ch.  236; 
Noe  V.  Gibson,  7  Paige,  513;  Langford 
V.  Laugford,  5  L.  J.  Ch.  N.  S.  60; 
Russell  V.  East  Anglian  R.  Co.  3  Macn. 
&  G.  104;  Broad  v.  Wickham,  4  Sim. 
511;  Skip  V.  Harwood,  3  Atk.  564; 
Lane  v.  Sterne,  3  Qiff.  629.  As  to 
the  method  of  procedure  by  a  credi- 
tor where  the  receiver  refuses  to  in- 
stitute proceedings  for  contempt  for 
a  wrongful  taking  of  property,  see 
Moore  v.  Mercer  Wire  Co.  (N.  J.)  15 
Atl.  305,  737. 


RECEIVER'S  POSSESSION. 


129 


interfering  is  found  to  be  guilty  is  a  fine  or  imprisonment,  or 
both,  and  not  a  money  judgment/ 

An  attempt  to  disturb  tlie  possession  of  the  receiver  without 
leave  of  the  court  first  obtained  will  be  a  contempt  on  the  part  of 
the  person  making  it,"  as  seen  above,  but  may  be  restrained  by  in- 
junction,' The  reason  of  this  salutary  rule  is  to  be  found  in  the 
necessity  of  protecting  the  receiver  from  litigation  and  vexatious 
actions  in  many  jurisdictions,  and  in  the  fact  that  one  court  with 
the  rights  and  interests  of  all  parties  before  it  can  more  equitably 
and  completely  administer  the  assets;  and  also  in  that  if  the  prop- 
erty as  a  whole  is  permitted  to  be  taken  piece-meal  its  value  will 
be  liable  to  great  depreciation,  if  not  entirely  lost.  This  rule  of  non- 
interference with  the  possession  has  been  carried  to  the  extent  of 
preventing  suits  against  the  receiver  in  the  other  courts  than  that 
in  which  the  receiver  is  appointed;*  but  the  rule  is  not  to  be  ex- 
tended so  far  as  to  exempt  the  receiver  from  suits  in  foreign 


'  Edrington  v.  Pridham,  65  Tex. 
612;  Williamson's  Case,  26  Pa.  1. 

^Southern  Exp.  Co.  v.  Western  N.  C. 
B.  Co.  99  U.  S.  191,  25  L.  ed.  319;  Bob- 
inson  v.  Atlantic  &  G.  W.B.  Co.  66  Pa. 
160;  Davis  Y.  Gray,  83  U.  S.  16  Wall. 
204,  21  L.  ed.  447;  Thompson  v.  Scott, 
4  Dill.  508;  Be  Schuyler's  Steam  Tow 
Boat  Co.  186  N.  Y.  169;  Moore  v. 
Mercer  Wire  Co.  (N.  J.)  15  Atl.  305, 
737;  DeGroot  v.  Jay,  30  Barb.  483; 
DeGraffenried  v.  Brunswick  &  A.  Co. 
57  Ga.  22;  People,  Tremper  v.  Brooks, 
40  Mich.  333 :  Spinning  v.  Ohio  L.  Ins. 
&  T.  Co.  2  Disney,  336;  Wiswall  v. 
Sampson,  52  U.  S.  14  How.  52,  14  L. 
ed.  322;  Ex  parte  Tyler,  149  U.  S.  181, 
37  L.  ed.  695;  Angel  v.  Smith,  Q  Ves. 
Jr.  335;  Ward  v.  Swift,  6  Hare,  312; 
Broad  v  .Wickkam,  4  Sim.  511 ;  Taylor 
V.  Baldwin,  \i  Abb.  Pr.  166;  Thomas 
V.  Thomas,  Flan.  &  K.  621 ;  Woeris- 
hoffer  V.  North  Biter  Const.  Co.  99  N. 
Y.  398;  Atty.  Gen.  v.  Guardian  Mut. 
L.  Ins.  Co.  77  N.  Y.  272.  And  a  per- 
fion  who  takes  forcible  possession  of 
an  estate  over  which  a  receiver  hat 
9 


been  appointed  may  be  committed 
without  an  order  nisi.  Broad  v.  Wick- 
ham,  4  Sim.  511.  But  not  so  in  Ire- 
land, Fitzpatrick,  v.  Eyre,  1  Hog.  171. 
^Ex  parte  Chamberlain,  55  Fed.  Rep. 
704;  Fidelity  Trust  &  8.V.  Co.  v.  Mo- 
bile Street  B.  Co.  53  Fed.  Rep.  687; 
Marshall  v.  Lockett,  76  Ga.  289;  Angel 
V.  Smith,  9  Ves.  Jr.  335;  Evely  v. 
Lewis,  3  Hare,  472;  Turner  v.  Turner, 

15  Jur.  218;  Tink  v.  Bundle,  10  Beav. 
318;  Bussell  v.  East  Anglian  B.  Co.  3 
Macn.  &  G.  104;   Ex  parte  Till,  L.  R. 

16  Eq.  97;  Ex  parte  Cochrane,  L.  R. 
20  Eq.  282;  Be  Persse,  8  Ir.  Eq.  Ill; 
Parr  v.  Bell,  9  Ir.  Eq.  55.  See,  as  to 
receiver's  remedy,  whether  in  original 
action  or  independent  proceeding, 
Andrews  v.  Paschen,  67  Wis.  413.  As 
to  the  proper  course  of  proceeding  as 
to  a  claimant  to  the  property,  see 
Daniels  Ch.  Pr.  6th  Ed.  *1744  & 
1057. 

*Payne  v.  Ba.rter,  2  Tenn.  Ch.  517; 
Brien  v.  Paul,  3  Tenn.  Ch.  357;  Bussell 
V.  East  Anglian  B.  Co.  3  Macn.  &,  G. 
115;  Noe  v.  Gibson,  7  Paige,  515. 


130  RECEIVERSHIPS. 

courts  where  the  receiver  has,  in  addition  to  the  ordinary  duties 
of  receiver,  taken  upon  himself  the  duties  and  responsibilities  of  a 
common  carrier,  and  is  conducting  the  business  as  such  carrier.* 

§  4:Q.  Not  to  be  disturbed  by  strikes,  conspiracies,  etc. 

A  question  has  recently  arisen  in  this  country  as  to  what 
extent  the  possession  and  operation  of  a  railroad  will  be  pro- 
tected by  injunction  as  against  the  employees  of  the  receiver 
engaged  in,  or  threatening  to  engage  in,  a  strike  with  the  object 
and  intent  of  crippling  the  property  in  the  custody  of  the  receiver^ 
and  embarrassing  the  operation  of  the  road.  The  law  upon  this 
subject  may  be  regarded  as  somewhat  in  its  formative  state,  and 
not  yet  final,  but  the  general  scope  and  tendency  is  distinctly  de- 
fined and  may  be  stated  in  general  terms  as  follows : 

(a)  A  court  of  equity  will  not  enjoin  the  employees  of  a  receiver 
from  quitting  his  service,  for  the  reason  that  such  court  cannot 
indirectly  or  negatively  restrain  the  violation  of  a  contract  and 
thus  compel  an  affirmative  performance. 

(b)  A  court  of  equity  will  enjoin  the  receiver's  employees  from 
combining  and  conspiring  together  with  the  object  and  intent, 
not  simply  of  quitting  the  receiver's  service  by  reason  of  reduc- 
tion in  wages,  but  of  crippling  the  property  in  their  hands  and 
embarrassing  the  operation  of  the  road,  the  combination  and  con- 
spiracy having  reference  only  to  acts  of  violence  and  intimidation. 
This  is  based  upon  the  principles  of  the  common  law  that  a  con- 
spiracy on  the  part  of  two  or  more  with  the  intent  by  their  com- 
bined power  to  wrong  others,  or  to  prejudice  the  rights  of  the 
public,  is  illegal,  though  nothing  be  actually  done  in  the  execution 
of  such  conspiracy." 

^BlumentJialv.  Brainard,  38  Yt.  402;  authorities  are  cited  as  sustaining  the 

Sprague  v.  Smith,  29  Vt.  421 ;  Pai(/e  v.  text : 

Smith,  99  Mass.  395;  Kinney  v.  Crock-  Powell  Dt/ffryn  Steam  Coal  Co.  v. 

er,  18  Wis.  74;  Allen  v.  Central  B.  Co.  Taff  Vale  R.  Co.  L.  R.  9  Ch.  App.  331; 

42  Iowa,  683;  Bryan  v.  Cormick,  1  Cox,  Toledo,  A.  A.  &  N.  M.  B.  Co.  v.  Peiin- 

Ch.  422;  Ano7i.  6  Ves.  Jr.  287;  Angel  sylmnia  Co.  54  Fed.  Rep.  730,  19  L. 

\.  Smith,  9  Yes.  Jr.  dS5;   Ban  field  y.  R.   A.    395;    Slierry  v.   Perkins,  147 

Banfield,  3  DeG.  F.  &  .1.  766.  Mass.  212;    Springhead  Spinning  Co. 

*See  opinion  of  Mr.  Justice  Harlan  v.  Biley,   L.    R.  6    Eq.    551 ;     United 

in  Arthur  v.  Oakes.  63  Fed.  Rep.  310,  States    v.  Kane,  23    Fed.    Rep.  748; 

25  L.  R.  A.  414,  where  the  following  Emack  v.   Kane,   34  Fed.   Rep.  46 1 


RECEIVER'S  POSSESSION. 


131 


Casey  v.  Cincinnati  Typograplncal 
Union  No.  3,  45  Fed.  Rep.  135,  12  L. 
R.  A.  193;  Walkerv.  Cronin,  107 Mass. 
555;  Callan  v.  Wilson,  127  U.  S.  540, 
32 L.  ed.  223;  Com.v.  HuntAMei.  Ill; 
Slate  V.  Burnha7n,15  N.  H.  396;  Beg.Y. 
Parnell,  14 Cox,  C.  C.  508;  Com.,  Chew, 
V.  Carlisle,  Bright.  (Pa.)  36;  State  v. 
Stewart,  59  Vt.  273;  State  v.  Buchanan, 

5  Harr.  &  J.  317;  State  v.  Glidden,  55 
Conn.  46;  Reg.  v.  Kenrick,  5  Q.  B.  49; 
Carew  v.  Rutherford,  106  Mass.  1;  OW 
Dominion  S.  S.  Go.  v.  McKenna,  30 
Fed.  Rep.  48;    dsei^T"  JD'Alene  Consol. 

6  Min.  Co.  V.  Miners'  Union  of  Ward- 
ner,  51  Fed.  Rep.  260,  19  L.  R.  A. 
382. 

An  act  of  displaying  banners  with 
devices  as  a  means  of  threats  and  in- 
timidation to  prevent  persons  from 
entering  into  or  continuing  in  the  em- 
ployment of  another  was  il  legal  at  com- 
mon law  and  in  Massachusetts  by  stat- 
ute. Sherry  v.  Perkins,  147  Mass.  212; 
Walker  v.  Cronin,  107  Mass.  555.  And 
in  such  case  the  relief  is  not  confined 
to  a  common  law  action,  but  may  be 
by  injunction.  Id.  It  is  a  nuisance, 
such  as  a  court  of  equity  will  grant 
relief  against.  Gilbert  v.  llickle,  4 
Sandf.  Ch.  357;  Boston  Biatite  Co.  v. 
Florence  Mfg.  Co.  114  Mass.  69;  Pvxi- 
dential  Assur.  Co.  v.  Knott,  L.  R.  10 
Ch.  142;  Saxbey  v.  Easterbrook,  L.  R. 
3  C.  P.  Div.  339;  Thomas  v.  Williams, 
L.  R.  14  Ch,  Div.  864;  Day  v.  Brown- 
rigg,  L.  R.  10  Ch.  Div.  294;  Gaskins 
V.  Balls,  L.  R.  13  Ch.  Div.  324;  Hill, 
V.  Hart-Davis,  L.  R.  21  Ch.  Div.  798; 
Loog  V.  Bean,  L.  R.  26  Ch.  Div.  306. 

It  may  be  stated  in  general  terms 
that  any  illegal  interference  with  the 
receivership  property,  or  the  receiv- 
er's management  thereof,  or  intimida- 
tion of  employees  or  those  desiring  to 
be  employed,  or  acts  of  violence 
against  him,  his  receivership  property, 
or  his  employees  in  pursuance  of  a 
conspiracy  will  constitute  a  contempt 


of  court  and  will  be  punishable  as 
such. 

Re  Acker,  66  Fed.  Rep.  290;  Arthur 
V.  Oakes,  63  Fed.  Rep.  310,  25  L.  R. 
A.  414;  Ames  v.  Union  P.  R.  Co.  62 
Fed.  Rep.  7;  Waterhonse  v.  Comer,  55 
Fed.  Rep.  149,  19  L.  R.  A.  403;  Beers 
V.  Wabash,  St.  L.  &  P.  R.  Co.  34  Fed. 
Rep.  244;  Re  Higgins,  27  Fed.  Rep. 
443;  Re  Doolittle,  23  Fed.  Rep.  545. 

Giving  notice  to  workmen  by  means 
of  placards  and  advertisements  that 
they  should  not  become  employees  of 
a  person  named  pending  a  dispute 
with  such  person  is  illegal  and  persons 
so  offending  will  be  restrained. 

Springhead  Spinning  Co.  v.  Riley,  L. 
R.  6  Eq.  551 ;  United  States  v.  Kane,  23 
Fed.  Rep.  748;  Emack  v.  Kane,  34 
Fed.  Rep.  46;  Casey  v.  Cincinnati 
Typographical  Union  No.  3,  45  Fed. 
Rep.  135,  12  L.  R.  A.  193;  Walker  v. 
Cronin,  107  Mass.  555. 

In  Ames  v.  Union  P.  R.  Co.  62  Fed. 
Rep.  7,  it  was  held  to  be  unnecessary 
to  enjoin  an  interference  with  the 
property  or  employees  of  a  receiver, 
inasmuch  as  the  law  itself  makes  it  ^a 
contempt  to  interfere  with  such  pos- 
session. 

A  receiver  may  make  a  reasonable 
reduction  in  the  wages  of  his  employ- 
ees. Thomas  v.  Cincinnati,  N.  0.  <& 
T.  P.  R.  Co.  62  Fed.  Rep.  17. 

As  to  the  right  to  compel  employees 
to  perform  their  regular  and  accus- 
tomed duty  while  in  the  employment 
of  a  railroad  company,  see  Southern 
California  R.  Co.  v.  Rutherford, 62Fed. 
Rep.  796. 

Where  employees  of  a  receiver  en- 
gaged in  a  general  strike  without 
grievance  of  their  own,  for  the  pur- 
pose of  obstructing  travel  and  hinder- 
ing traffic,  and  their  places  are  filled 
by  others  in  order  to  continue  the 
operation  of  the  road,  they  will  not  bo 
reinstated  by  order  of  the  court.  Booth 
T.  Brown,  62  Fed.  Rep.  794. 


132 


RECEIVERSHIPS. 


§  47.     LeaTe  of  court,  Tviien  required. 

The  possession  of  the  receiver,  beinf^  the  possession  of  the 
court,  such  possession  cannot  be  interfered  with  without  leave  of 
the  court  appointing  the  receiver.  Tlie  permission  of  the  court 
is  a  prerequisite,  even  where  the  claimant  claims  under  a  right 
or  title  paramount  to  the  receiver,'  and  while  the  possession  does 
not  affect  the  rights  of  a  landlord,  yet  he  cannot  enforce  such 
rights  as  against  a  receiver  in  possession  without  leave,*  nor  is  it 
permissible  to  intercept  or  prevent  payment  to  a  receiver  of 
money  he  has  been  appointed  to  receive.'     In  general,  it  is  tlie 


But  on  proper  application  the  court 
may  adjust  difficulties  between  the  re- 
ceiver and  his  employees,  where  in  the 
absence  of  such  adjustment  there  is 
danger  of  loss  to  the  receivership 
property,  or  the  purposes  of  the  re- 
ceivership may  be  frustrated.  Water- 
house  V.  Comer,  55  Fed.  Rep.  149,  19 
L.  R.  A.  403. 

A  receiver  of  a  railroad  has  no  right 
to  refuse  freight  from  a  connecting 
road  for  the  purpose  of  preventing  a 
strike  of  his  own  employees  where  the 
employees  of  the  connecting  road  are 
on  a  strike  and  are  attempting  to  boy- 
cott it.  Beers  v.  Wabash,  St.  L.  &  P. 
B.  Co.  34  Fed.  Rep.  244. 

Receivers  of  a  railroad  are  the  sworn 
officers  of  the  court  and  their  em- 
ployees are  pro  hac  vice  officers  of  the 
court  and  responsible  as  such.  Re 
Higf/ins,  27 Fed.  Rep. 443;  Chattanooga 
Terminal  R.  Co.  v.  Felton,  69  Fed.  Rep. 
273. 

A  simple  request  to  do  or  not  to  do 
a  thing  made  by  one  or  more  of  a 
body  of  strikers  under  such  circum- 
stances as  are  calculated  to  convey  a 
threatening  intimidation,  with  a  de- 
sign to  hinder  or  obstruct  employees 
in  the  performance  of  their  duties  is 
not  less  obnoxious  than  the  use  of 
physical  force  for  the  same  purpose, 
and  will  be  punished  as  a  contempt. 
Re  Doolittle,  23  Fed.  Rep.  544. 


As  to  injunctions  against  strikes 
and  proceedings  under  interstate  com- 
merce act,  see  valuable  note  in  Long- 
shore Printing  &  Pub.  Co.  v.  Uowell,  28 
L.  R.  A.  464. 

'  Bay  V.  Postal  Teleg.  Co.  66  Md. 
354;  Ex  parte  Cochrane,  L.  R.  20  Eq. 
282;  DeWinton  v.  Brecon,  28  Beav. 
203.  In  Iowa  resisting  a  receiver  is 
a  criminal  offense.  State  v.  Rivers, 
66  Iowa,  653;  Spinning  y.  Ohio  L.  Ins. 
&  T.  Co.  2  Disney,  368;  Vermont  &  C. 
R.  Co.  V.  Vermont  C.  R.  Co.  46  Vt. 
792;  Angel  V.  Smith,  9  Ves.  Jr.  315; 
Ex  parte  Cochrane,  L.  R.  20  Eq.  282; 
Russell  V.  East  Anglian  R.  Co.  3  Macn. 
&  G.  104;  Ames  v.  Birkenhead  Dock 
Co.  20  Beav.  332;  Skinner  v.  Maxwell, 
68  N.  C.  400.  How  to  proceed,  see 
Jacobson  v.  Landolt,  73  Wis.  142. 

2  Sutton  v.  Rees,  9  Jur.  N.  S.  456; 
Ex  parte  Cochrane,  Re  Mead,  L.  R.  20 
Eq.  282;  and  the  same  rule  applies  to 
a  claimant  of  real  estate.  Angel  v. 
Smith,  9  Ves.  Jr.  335;  Fort  Wayne, 
M.  &  C.  R.  Co.  V.  Mellett,  92  Ind.  535; 
Potter  V.  Spa  Spriiig  Brick  Co.  47  N. 
J.  Eq.  442;  Palys  v.  Jewett,  32  N.  J. 
Eq.  302. 

3  Hazelrigg  v.  Bronaugh,  78  Ky.  62; 
Thornton  v.  Washington  Sav.  Bank,  76 
Va.  432.  Though  a  person  interfering 
with  property  in  the  possession  of  a 
receiver  does  so  under  a  mistake  of 
the    law,    he    will    nevertheless    be 


RECEIVER'S  POSSESSION. 


133 


duty  of  the  court  in  all  cases  to  protect  its  receiver  in  the  posses- 
sion of  the  property  over  which  he  is  appointed.'  And  this  pro- 
tection extends  to  property  that  may  be  beyond  the  jurisdiction 
of  the  court,  if  the  court  has  jurisdiction  over  the  person  of  the 
offender.^ 

§  48.    Duty  of  receiver  to  take  possession  of  property. 

The  receiver  is  sometimes  empowered  by  statute  with  power 
to  obtain  possession  of  property  over  which  he  has  been  appointed, 
and  on  refusal  by  the  party  in  custody  to  surrender  a  warrant 
may  be  issued  for  the  purpose  of  enforcing  the  orders  of  court,' 
but,  whether  so  empowered  or  not,  it  is  the  duty  of  the  receiver 
to  take  possession  of  all  the  property  covered  by  the  order  of  his 
appointment,  and  he  cannot  assume  a  position  of  indifference  and 
allow  persons  holding  property  to  deliver  it  to  him  or  not  as  they 
see  fit.  He  must  use  active  diligence  on  his  part  to  secure 
possession.* 


chargeable  with  the  costs  of  the  pro- 
ceedings against  him  for  contenipt, 
though  he  may  be  excused  from  fur- 
ther punishment.  Noe  v.  Gibson,  1 
Paige,  513. 

'  Moore  v.  Mercer  Wire  Co.  (N.  J.) 
15  Atl.  305,  737.  Lord  Romilly,  in 
De  Winton  v.  Mayor,  28  Beav.  200, 
says:  "I  apprehend  this  is  clear: 
that  the  court  never  allows  any  per- 
son to  interfere,  either  with  money  or 
property  in  the  hands  of  its  receiver, 
without  its  leave,  whether  it  is  done 
by  the  consent  or  submission  of  the 
receiver  or  by  compulsory  process 
against  him.  The  court  is  obliged  to 
keep  a  strict  hand  over  property  in 
the  hands  of  a  receiver,  or  which  by 
virtue  of  the  order  of  the  court  may 
come  in  his  hands,  in  order  to  pre- 
serve entire  jurisdiction  over  the 
whole  matter  and  to  do  that  which  is 
just  in  the  case  between  the  part- 
ies." 

See  also  Ames  v.  Birkenliead  Dock 
Co.  20  Beav.  322;  Brookav.  Greathead, 
1  Jac.  &  W.  178;  Wordle  v.  Lloyd,  2 
Moll.  388. 


«  Chafee  v.  Quidnick  Co.  13  R.  I. 
442;  Sercomh  v.  Catlin,  128  111.  556. 

3  NoUe  V.  HalUday,  1  N.  Y.  330. 

Withholding  contracts  from  a  re- 
ceiver of  one  of  the  contracting  par- 
ties cannot  be  justified  upon  the 
ground  that  they  are  held  as  security 
for  commissions  earned  by  the  persons 
who  procured  them,  and  wages  due 
them,  where  such  commissions  are 
not  payable  until  collections  have  been 
made  on  the  contracts,  and  no  wages 
are  in  fact  due.  Ex  parte  Corran 
(Cal.)  41  Pac.  464. 

Withholding  contracts  from  the  re- 
ceiver of  one  of  the  contracting  par- 
ties cannot  be  justified  on  the  ground 
that  they  cannot  be  utilized  by  the 
receiver,  or  that  the  withholding  of 
them  will  not  injure  him  or  the  con- 
tracting party.  ExjMrte  Corran  (Cal.) 
41  Pac.  464. 

*  Clapp  v.  Clapp,  49  Hun,  195. 

A  receiver  is  not  required  to  apply 
to  the  court  to  aid  him  in  obtaining 
possession  of  property  which  should 
be  surrendered  to  him.  Filkins  v. 
Adams,  60  111.  App.  410. 


134  RECEIVERSHIPS. 

But  a  receiver  of  an  insolvent  cannot  claim  possession  of  land 
in  which  the  insolvent  had  an  interest  under  contract  which  did 
not  pass  the  title,  in  the  absence  of  a  provision  therein  for  posses- 
sion in  advance  of  the  conveyance  of  title ; '  nor  is  he  entitled  to 
the  possession  of  a  fund  which,  prior  to  his  appointment,  has 
been  placed  in  the  hands  of  a  trustee,  for  special  purposes,  such 
as  a  safety  and  tontine  pension  fund  in  case  of  an  insurance  com- 
pany." Where  property  prior  to  the  appointment  has  been 
fraudulently  assigned  to  an  insolvent  assignee,  the  plaintiff 
should  have  the  receivership  extended  to  sucli  assignee,'  and 
where  complaint  is  made  of  an  act  of  the  defendant  after  the 
decree  appointing  a  receiver  but  before  the  appointment  is  com- 
pleted, the  proper  persons  to  make  complaint  are  the  parties  to 
the  suit  and  not  the  receiver.* 

While  the  decisions  are  not  entirely  harmonious,  the  weight  of 
authority,  as  well  as  reason,  is  in  effect  that  where  the  receiver 
obtains  possession  such  j)OSsession  will  be  protected  in  foreign 
jurisdictions.  If  he  obtains  possession  of  property  in  the  state  of 
his  appointment  and  takes  it  to  another  state  for  a  lawful  pur- 
pose, his  possession  will  be  protected  in  the  latter  state  as  against 
creditors  residing  in  such  state.^ 

'  Stratton    v.    California   Land    &  75  Pa.  112;  Bich  v.  Bailey,  2  La.  Ann. 

T.  Co.  86  Cal.  353.  974;  EiUmerv.  Hohart,  58  How.  Pr. 

^  Re  Home  Provident  Safety  Fund  453;  Cagill  v.Wooldridge,  8  Baxt.  580. 

Asso.    129  N.    Y.   288,   reversing  39  Where  property  has  once  vested  in  an 

N.  Y.  S.  R.  437.  assignee  or  receiver  by  the  lav?  of  the 

2  Cassilear  v.  Simmons,  8  Paige,  273.  state  where  the  property  is  .situated, 

The  court  cannot  make  a  summary  the  law  of  another    state    will    not 

order  on  an  assignee  to  turn  over  prop-  divest  him  of  it  if  he  should  take  it 

erty  to  a  receiver,  the  assignee  acting  into  such  state  in  the  performance  of 

under  orders  of  another  court.     Com.  his  duty.     A  receiver  appointed  by  a 

V.  Order  of  Vesta,  156  Pa.  531.  court  in  such  a  case  stands  in  the 

*  Fox  V.  Toronto  &  N.  B.  Co.  29  same  position  as  an  assignee  or  trus- 
Ch.  (Ont.)  11.  tee  in  insolvency.     Pond  v.  Cooke,  45 

*  Chicarjo,  M.  &  St.  P.  R.    Co.   v.  Conn.  126. 

Keokuk  H.  L.  Packet  Co.  108  111.  317.  See    also     Cammell    v.     Sewell,    5 

Where  a  receiver  takes  possession  of  Hurlst.  &  N.  728;  Clark  v.   Connecti- 

property  within  the   jurisdiction  of  cut  Peat  Co.  35  Conn.  303;  Taylor  v. 

the  court  appointing  him  he  becomes  Boardman,  25  Vt.  581 ;  Crapo  v.  Kelly, 

vested   with  a  special  property  in  it  83  U.  S.  16  Wall.  610,  21  L.  ed.  430; 

similar  to  that  of  a  sheriff.     Boyle  v.  Waters  v.  Barton,  1  Caldw.  450;  Ca- 

To2/)/ies,  9  Leigh,  15Q;  Singerly  v.  Fox,  gill  v.  Wooldridge,  8  Baxt.  580;   Mc 


RECEIVER'S  POSSESSION.  135 

Courts  will  even  punish  for  contempt  persons  who  are  not 
parties  to  the  suit  for  interfering  with  the  property  in  the  re- 
ceiver's possession.'  While  the  receiver  is  not  permitted  to  take 
possession  of  the  receivership  property  until  he  has  given  bond 
yet  if  the  possession  has  been  ordered  the  receiver  will  be  pro- 
tected.* 

§  49.    As  against  public  improvements. 

While  the  court  zealously  guards  the  possession  ot  receivership 
property  in  the  interest  of  the  parties  to  the  litigation,  yet  it  will 
not  permit  the  possession  of  the  receiver  to  be  an  obstacle  to  a 
public  improvement,  as,  for  instance,  to  prevent  the  crossing  of  a 
road  in  the  hands  of  a  receiver  by  the  tracks  of  another  road.* 
The  court  otherwise  would  overrule  the  laws  of  the  state  and 
make  its  will  superior  to  the  sovereign  power  of  a  co-ordinate 
branch  of  the  government. 

§  50.     Duty  as  to  opening  a  new  business. 

The  receiver's  possession  of  property  does  not  justify  him, 
without  an  order  of  court  expressly  authorizing  him,  or  the  busi- 
ness is  such  as  to  imperatively  require  it,  to  open  a  business  with 
the  property  or  moneys  in  his  hands.'  As  we  have  seen,  the 
ordinary  duty  of  the  receiver  relates  to  the  preservation  and  safe 
keeping  of  the  property  or  fund,  and  he  has  no  duty  which  re- 

Alpin  V.  Jones,  10  La.  Ann.  552.  But  ^  Central  Trust  Co.  v.  Wabash,  St.  L. 
see  contra,  Humphreys  v.  Hopkins,  81  &  P.  B.  Co.  2G  Fed.  Rep.  3.  In  this 
Cal.  551,  6  L.  R.  A.  792.  This  case  case  Mr.  Justice  Brewer  says:  "  It 
is  apparently  against  the  weight  of  is  not  gracious  in  the  federal  court 
authority,  and  was  by  a  divided  which  has  taken  possession  of  prop- 
court,  and  against  principles  pre-  erty  by  its  receivers  to  make  that 
viously  enunciated  by  the  same  court.  possession  an  obstacle  to  any  proposed 
Low  V.  Burrows,  12  Cal.  188;  Lewis  v.  public  improvement.  We  should,  so 
Adams,  70  Cal.  403.  far  as  lies  in  our  power,  extend  every 

'  Helmore  v.  Smith,  L.  R.  35  Ch.  facility  to  every  proposed  public  ira- 

Div.  449.     In  this  case  a  former  clerk  provement,  simply  aiming  to  preserve 

by  means  of  a  circular  to  the  custom-  the  rights  which  attach  to  property 

ers  interfered  with  the  business  of  the  while  it  is  in  our  possession,  and  that 

receiver  as  manager  and  was  commit-  is  all." 
ted  for  contempt.  "  Terry  v.  Martin  (N.  M.)  32  Pac. 

*  Morrison  v.  Skerne  Iron  Works  Co.  157. 
60  L.  T.  N.  S.  588. 


136 


RECEIVERSHIPS. 


quires  him  to  build  up  a  business  for  the  benefit  of  the  parties  in 
interest.  Of  course  this  restriction  has  no  application  to  the 
business  of  a  going  concern  where  the  chief  value  arises  from  its 
being  such,  as  in  the  case  of  a  newspaper ;  nor  to  a  business  quasi 
public  in  its  nature  where  public  interests  are  concerned. 

§  51.  As  to  tenants. 

In  a  case  where  the  receiver  is  to  collect  the  rents  and  profits 
the  proper  course  is  to  apply  for  an  order  on  the  tenants  in  pos- 
session to  attorn,  and  it  is  not  necessary  that  they  should  be  par- 
ties to  the  suit,'  but  in  such  case  the  tenants  are  not  liable  for 
costs.'  The  power  of  the  court  as  to  the  property  carries  with  it 
the  implied  power  to  make  all  necessary  and  proper  orders  upon 
those  who  are  in  custody  or  charge  not  inconsistent  with  their 
rights  of  possession,  or  valid  contracts  relating  thereto. 

§  52.  To  whom  restored. 

After  the  dismissal  of  a  bill  for  want  of  jurisdiction,  property 
left  in  the  hands  of  a  receiver  in  such  case  must  be  restored  to  the 
party  from  whom  possession  was  taken,  though  the  opposing 
party  may  have  a  good  claim  to  the  possession  by  reason  of  a  pur- 
chase and  possession  before  the  bill  was  filed,  and  in  such  case  it 
makes  no  difference  to  the  receiver  that  the  party  to  whom  he 
restores  the  property  is  insolvent.^  In  the  very  nature  of  the  case 
the  court,  without  an  adjudication,  cannot  return  the  property  to 
a  person  other  than  the  one  from  whom  the  possession  was  taken. 

§  53.  Extent  of. 

A  receiver  appointed  upon  the  application  of  a  secured  creditor 
has  no  right  to  the  custody  of  funds  not  arising  from  the  property 
which  has  been  pledged  as  security,  and  which  may  be  applied 
upon  the  claims  of   general  unsecured  creditors,*  if   any.     The 


^Reid  V.  Middleton,  Turn.  &  R.  455. 

^Hobhouse  V.  Eollcombe,  2  DeG.  &  S. 
208. 

3  Warren  v.  Bunch,  80  Ga.  124. 

^  Wormser  v.  Merchants'  Nat.  Bank, 
49  Ark.  117.  The  right  of  custody 
extends  only  to  the  property  which  is 
the  subject-matter  of  the  litigation. 
In  a  proceeding  under  a  general  cred- 


itors' bill  of  course  the  receiver  is  en- 
titled to  the  entire  property,  as  in  the 
case  of  bankruptcy  and  insolvency,  or 
proceedings  to  wind  up  banks,  etc. 
Noyes  v.  Rich,  53  Me.  115.  But  in 
case  of  a  mortgage  foreclosure  the 
right  to  possession  extends  only  to  the 
property  mortgaged.     Id. 


RECEIVER'S  POSSESSION. 


137 


possession  in  such  case  is  coextensive  with  the  ris^hts  or  lien  of 
tJie  plaintiff,  and  as  to  the  owner  of  the  property  or  creditors  can- 
not go  beyond  that. 

§  54.  As  to  taxes. 

It  has  been  held  that  the  possession  of  the  receiver  does  not 
prevent  the  seizure  and  sale  of  such  property  for  unpaid  taxes, 
and  in  such  case  if  neither  the  bailiff  nor  the  purchaser  was  aware 
until  after  the  sale  that  it  was  in  tlie  hands  of  a  receiver,  and  in 
fact  had  been  informed  to  the  contrary  in  good  faith  by  the  per- 
son in  charge,  the  sale  will  be  iipheld.'  The  general  rule  is,  how- 
ever, that  the  receiver  takes  the  property  subject  to  all  existing 
liens,  and  such  liens  are  unaffected  thereby,  and  this  rule  is 
especially  true  in  the  case  of  taxes  where  the  lien  therefor  is 
paramount  to  all  other  liens.  But  notwithstanding  the  para- 
mount lien,  the  officer  is  not  entitled  to  levy  on  and  sell  receiver- 
ship property.     It  is  his  duty  to  intervene  and  set  up  his  lien." 


^Gibsonv.  Lovell,  19  Grant  Ch.(Ont.) 
197. 

^  In  King  v.  Wooten,  2  U.  S.  App. 
651,  the  court  say:  "  The  recognized 
mode  of  protecting  property  in  the 
custody  of  the  court  is  by  treating  as 
null  all  attempts  to  withdraw  it  there- 
from without  leave  of  the  court, 
whether  by  color  of  other  legal  pro- 
cess or  otherwise  than  by  order  of  the 
court  in  possession,  and  when  neces- 
sary such  possession  is  protected  by 
proceedings  to  attach  and  punish  for 
contempt  all  persons  who  persist  in 
attempting  to  disturb  the  possession 
of  the  court." 

Mr.  Ch.  J.  Fuller,  in  Be  Tyler,  149 
U.  S.  164,  183,  37  L.  ed.  689,  695, 
says:  "The  levy  of  a  tax  warrant, 
like  the  levy  of  an  or  dmnry  fieri  facias, 
sequestrates  the  property  to  answer 
the  exigency  of  the  writ;  but  property 
in  the  possession  of  the  receiver  is  al- 
ready in  sequestration,  already  held 
in  equitable  execution,  and  while  the 
lien  for  taxes  must  be  recognized  and 
enforced,  the  orderly  administration 
of  justice  requires  this  to  be  done  by 


and  under  the  sanction  of  the  court. 
It  is  the  duty  of  the  court  to  see  to  it 
that  it  is  done;  and  a  seizure  of  the 
property  against  its  will  can  only  be 
predicated  on  the  assumption  that  the 
court  will  fail  in  the  discharge  of  its 
duty,  an  assumption  carrying  a  con- 
tempt upon  its  face." 

Prince  George's  County  Comrs.  v. 
Clarke,  36  Md.  206;  Greeley  v.  Provi- 
dent Sav.  Batik,  98  Mo.  458;  Central 
Trust  Co.  V.  JVew  York  C.  d  JST.  B.  Co. 
110  N.  Y.  250,  1  L.  R.  A.  260;  Yuba 
County  V.  Adams,  7  Cal.  35. 

Philadelphia  &  B.  B.  Co.  v.  Com. 
104  Pa.  80;  Union  Trust  Co.  v.  Weber, 
96  111.  346;  Be  North  American  Gutta 
Percha  Co.  17  IIow.  Pr.  549;  Gere  v. 
Dibble,  17  How.  Pr.  31;  Bich  v.  Lou- 
irell,  18  How.  Pr.  121;  Lorch  v.  Ault- 
man,  75  Ind.  162. 

An  attempt  to  seize  or  sell  lands  in 
the  custody  of  receivers  of  a  railroad 
company,  for  taxes,  without  the  con- 
sent of  the  court  appointing  such  re- 
ceivers, may  be  enjoined.  Oakes  v. 
Myers  86  Fed.  Rep.  807. 


138 


RECEIVERSHIPS. 


§  55.  As  to  set-off. 

The  receiver  lias  only  tlie  ris^hts  of  the  company  over  whose 
property  he  is  placed,  and  all  propert}^  rights  pass  to  him  as  they 
existed  prior  to  his  appointment  and  are  subject  to  the  same 
equities,'  and  the  right  of  set-off  exists  against  a  note  in  the  hands 
of  a  receiver  of  an  insolvent  corporation  to  the  same  extent  as 
would  have  existed  against  it  in  the  hands  of  the  corporation." 
The  receiver  can  have  no  greater  or  better  rights  than  the  debtor 
had.'  In  a  proceeding  by  receivers  if  the  defendant  is  entitled 
to  a  set-off  and  holds  security  from  the  debtor  he  must  first  ex- 
haust the  security  and  prove  up  the  balance  only,  and  tliis  is 
based  upon  the  principle  that  equality  is  equity.*  The  right  of 
set-off  does  not  exist,  however,  unless  the  indebtedness  and  set-off 
grow  out  of  the  same  right.  Thus  if  the  receiver  sues  to  recover 
an  unpaid  subscription  to  the  capital  stock  of  a  corporation,  and 
the  set-off  grows  out  of  a  deposit  in  the  bank,  the  capital  stock  in 


'  FaUcenbach  v.  Patterson,  43  Ohio 
St.  359;  Bellv.  Shihley,  33  Barb.  610; 
Coope  V.  Boicles,  42  Barb.  87;  Lincoln 
V.  FitcTi,  42  Mo.  456. 

^  Berry  v.  Brett,  6  Bosw.  627;  Hol- 
brook  V.  American  F.  Ins.  Co.  6  Paige, 
220;  Colt  V.  Brown,  12  Gray,  233;  Scott 
V.  Armstrong,  146  U.  S.  499,  36  L.  ed. 
1059;  Armstrong  v.  Warner,  49  Ohio 
St.  376,  17  L.  R.  A.  466;  Hade  v.  Mc- 
ray,  31  Ohio  St.  231. 

2  Wisco7isin  M.  &  L.  F.  Ins.  Co.  Bank 
V.  Manistee  Salt  &  L.  Co.  77  Mich.  76; 
Farrington  v.  Sexton,  43  Mich.  454; 
Lentz  V.  Flint  &  P.  M.  R.  Co.  53  Mich. 
444;  Byles  v.  Kellogg,  67  Mich.  318. 

See  also  notes  to  following  §  56. 

^  State  Bank  v.  Bank  of  New  Bruns- 
wick, 3  N.  J.  Eq.  266. 

In  Scoit  V.  Armstrong,  146  U.  S.  449, 
36  L.  ed.  1059,  it  was  held  that  the 
ordinary  equity  rule  of  setoff  in  case 
of  insolvency  is  that  where  the  mu- 
tual obligations  have  grown  out  of 
the  same  transaction,  insolvency,  on 
the  one  hand  justifies  the  set-off  of  the 


debt  due  on  the  other;  and  this  rule 
applies  to  a  receiver  of  an  insolvent 
national  bank,  as  where  a  customer 
of  a  bank  gives  his  note  for  borrowed 
money  due  at  a  future  day  and  depos- 
its the  amount  borrowed  to  be  drawn 
against,  any  balance  remaining  due 
him  on  the  dissolution  of  the  bank 
and  the  appointment  of  a  receiver  is  a 
proper  off-set  to  the  note  to  the  extent 
it  may  go.  Cf .  Adams  v.  Spokane  Drug 
Co.  57  Fed.  Rep.  889,  23  L.  R.  A.  334; 
Bell  V.  Hanover  Nat.  Bank,  57  Fed. 
Rep.  822;  Snyder  v.  Armstrong ,  37 
Fed.  Rep.  18;  Yardley  v.  Clothier,  49 
Fed.  Rep.  337;  Armstrong  Y.Warner, 
21  Ohio  L.  J.  136,  27  Ohio  L.  J. 
100.  The  same  rule  is  applicable  in 
a  suit  by  a  receiver  upon  a  premium 
insurance  note.  Berry  v.  Brett,  6 
Bosw.  627.  And  upon  a  note  due  a 
bank.  Van  Dyck  v.  McQuade,  85  N. 
Y.  616;  Lanier  v.  Gayoso  Sav.  Inst.  9 
Heisk.  506;  Stone  v.  Bodge.  96  Mich. 
514,  21  L.  R.  A.  280;  Van  Wagoner  v. 
Paterson  Oaslight  Co.  23  N.  J,  L.  283. 


RECEIVER'S  POSSESSION.  139 

snch  case  being  a  trust  fund  for  the  benefit  of  all  creditors,  the 
right  of  set-off  does  not  exist.' 

Where  the  receiver  is  directed  to  pay  a  certain  person  an 
amount  of  money,  the  receiver  has  no  right  to  offset  his  individ- 
ual claims  against  such  person. °  This  principle  is  based  on  the 
fact  that  the  receiver  holds  the  funds  for  the  court,  and  no  dis- 
cretion is  allowed  him  as  to  any  application  or  disjDOsition  thereof ; 
he  holds  subject  to  the  order  of  court,  to  be  j)aid  out  as  the  court 
shall  adjudge. 

§  56.  As  to  exemptions. 

As  we  have  seen,  the  taking  of  possession  of  property  by  a 
receiver  does  not  destroy  existing  rights  in  such  property,  and 
therefore  does  not  deprive  the  debtor  of  his  right  to  exemption 
given  him  by  the  statute.^ 

§  57.  As  to  executors  and  administrators. 

As  a  rule  an  administrator  is  entitled  to  the  possession  of  the 
property  of  the  intestate  held  by  him  at  the  time  of  his  death, 
but  where,  prior  to  administration,  the  property  had  been  placed 
in  the  hands  of  a  receiver  on  the  application  of  an  adverse  claim- 
ant, the  receiver  will  hold  possession." 

I  Williams  v.  Trapliagen,  38  N.  J.  Tillotson  v.  Wolcott,  48  N.  Y.  188; 

Eq.  57.  Finnin  v.  Malloy,  1  Jones  &  S.  382; 

^Johnson  v.  Gunter,  6  Bush.  534.  Cooney  v.  Cooney,  65  Barb.  524;  Sands 

3  Weinrich  v.  Koelling,  21  Mo.  App.  v.  Roberts,  8  Abb.  Pr.  343;  Hudson  v. 

133.    The  claim  for  exemption  should  Plets,  11  Paige,  180;  Andi'ews v. Bowan, 

be  made  when  the  property  is  seized,  28  How.  Pr.  12G. 

or  threatened  to  be  seized.     It  is  held  *  Johnson  v.  Stewart,  41  Ga.  549. 

that   an    individual    partner  has  no 

claim  for  exemption  on  partnership 

property. 


CHAPTEE  y. 

RECEIVER'S  TITLE. 

§  58.  Defined.  §  64.  To  choses  \n  action  generally. 

§  59.  By  possession.  ^  65.  To  real  estate  in  foreign  states. 

§60.  In  supplementary  proceedings.  §66.  To  real  estate  generally. 

§  61.  In  statutory  proceedings.  §  67.  Extent  of. 

§63.  In  acVwns  pendente  lite.  §68.  Subject  to  all  liens. 
§  63.  To  choses  in  action  due  from 
nonresidents. 

§  58.  Defined. 

The  word  "title"  as  used  in  receivership  matters  has  various 
significations,  and  has  been  the  occasion  of  no  little  confusion  bj 
those  using  the  term.  "  Title  in  modern  usage  points  to  the 
rights  rather  than  the  actual  ownership),"  says  Mr.  Abbott,  "  and 
to  say  that  title  is  such  a  claim  to  the  exclusive  control  and 
enjoyment  of  a  thing  as  the  law  will  recognize  and  enforce,  per- 
haps expresses  the  idea  conveyed  by  the  modern  use  of  the 
word."  The  receiver's  title  has  reference  more  particularly  ta 
the  right  to  the  possession  and  control  of  the  property,  real  or 
personal,  for  the  time  being,  rather  than  to  the  ownership  thereof. 
There  are  cases  in  matters  of  insolvency  and  winding  up  proceed- 
ings where  the  absolute  legal  title  becomes  vested  in  the  receiver,. 
and  not  unfrequently  in  the  earlier  practice  the  owner  was  re- 
quired to  execute  and  deliver  to  the  receiver  a  formal  convey- 
ance of  the  property  owned  by  him  at  the  date  of  granting  the 
receivership.  In  other  cases  the  receiver  is  the  mere  custodian 
for  the  time  being  of  the  property  of  the  debtor,  charged  with 
the  duty  of  caring  for  the  same,  collecting  the  rents  in  case  of 
real  estate,  and  the  income  and  profits  in  case  of  personal  prop- 
erty, and  transferring  the  title  as  an  officer  of  and  as  ordered  by 
the  court.  In  this  latter  case  the  receiver,  strictly  speaking,  has 
no  title  to  the  property,  and  where  the  title  of  such  a  receiver  is 
referred  to  it  has  reference  solely  to  his  right  of  possession  under 
the  order  of  court,  and  as  an  officer  of  the  court,  the  scope  of  his 
authority  in  all  cases  being  measured  by  the  order  of  his  appoint- 
ment, having' reference  to  the  character  of  the  property,  and  the 


RECEIVER'S  TITLE. 


141 


rights  therein  of  the  plaintiffs  at  -whose  instance  he  is  appointed, 
and  the  owner  over  whose  property  he  is  placed  in  custody.  In 
many  cases  the  actual  manual  possession  of  the  property  is  not 
intended  to  be  placed  in  the  receiver,  but  he  is  only  charged  with 
the  collection  of  the  rents  and  profits,  and  in  such  case  his  posses- 
sion is  only  constructive,  and  rights  so  far  as  third  parties  are 
concerned  are  largely  dependent  on  the  doctrine  of  lis  pendens.^ 


'  In  Union  Nat.  Bank  v.  Bank  of 
Kansas  City,  136  U.  S.  223,  34  L.  ed. 
236,  341,  342,  Mr.  Justice  Gray  says: 
"A  receiver  derives  his  authority 
from  the  act  of  the  court  appointing 
him  and  not  from  the  act  of  the  par- 
ties at  whose  suggestion  or  by  whose 
consent  he  is  appointed;  and  the 
utmost  effect  of  his  appointment  is  to 
put  the  property  from  that  time  into 
his  custody  as  an  officer  of  the  court 
for  the  benefit  of  the  parly  ultimately 
proved  to  be  entitled,  but  not  to 
change  the  title  or  even  the  right  of 
possession  in  the  property."  Skip  v. 
Harwood,  3  Atk.  564;  Anon.  2  Atk. 
15;  Wiswall  v.  Sampson,  52  U.  S.  14 
How.  52,  14  L.  ed.  322;  Ellis  v.  Bos- 
ton, H.  &  E.  R.  Co.  107  IMass.  1; 
Maynard  v.  Bo7id,  67  Mo.  315;  Hei- 
man  v.  Fisher,  11  Mo.  App.  275.  In 
Yeager  v.  Wallace,  44  Pa.  294,  it  was 
held  that  a  receiver  of  partnership 
effects  could  not  maintain  trover  for 
the  converted  assets  of  the  firm  before 
the  appointment,  on  the  ground  that 
the  receiver  does  not  become  the  legal 
owner  of  the  property  which  he  is  re- 
quired to  take  in  charge.  The  ap- 
pointment does  not  transfer  to  the 
receiver  the  legal  rights  of  the  part- 
nership in  any  of  their  choses  in  pos- 
session or  in  action.  Wilson  v.  Allen, 
6  Barb.  545.  In  Mann  v.  Pentz,  2 
Sandf,  Ch.  257,  it  was  held  that  the 
effect  of  the  order  was  to  vest  the 
property  in  the  receiver  as  effectually 
in  equity  as  if  an  assignment  had 
been  made  in  due  form.     The  prop- 


erty is  transferred  by  operation  of 
law  by  means  of  the  order  of  the 
court;  and  equity  looking  at  the  sub- 
stance will  hold  the  transfer  accom- 
plished which  has  been  decreed.  In 
re  Eagle  Iron  Works,  8  Paige,  386; 
Eldred  v.  Hall,  9  Paige,  640.  In  a 
foreclosure  proceeding  in  Harland  v. 
Bankers  &  M.  Teleg.  Co.  32  Fed.  Rep. 
305,  it  was  held  that  a  receiver  pen- 
dente lite  is  a  mere  custodian  of  the 
mortgaged  property.  And  not  being 
appointed  under  a  statute  acquired 
no  title  to  the  property  which  be- 
longed to  the  mortgagee. 

In  Union  Trust  Co.  v.  Weber,  96  111. 
346,  it  is  said:  "  We  are  aware  of  no 
rule  of  law  or  any  adjudged  case  in- 
dependent of  a  statute  that  holds  the 
appointment  of  a  receiver  transfers 
the  title  of  real  or  personal  property 
to  the  person  thus  appointed.  Nor 
do  we  conceive  by  what  means  such 
an  appointment  can  have  that  effect. 
That  officer  by  his  appointment  is 
authorized  to  take  and  hold  possession 
of  property  under  the  control  and 
direction  of  the  court."  In  Atty. 
Oen.  V.  Atlantic  &  Mut.  L.  Ins.  Co. 
100  N.  Y.  279,  it  was  held  that  under 
the  New  York  statute  (Act  1869,  §  7) 
the  title  to  real  estate  of  the  debtor 
became  vested  in  the  receiver  by  his 
appointment,  as  well  as  personal  prop- 
erty. And  if  this  were  not  true  the 
receiver  is  the  holder  of  the  equitable 
title  accompanied  by  possession,  and 
a  conveyance  could  be  ordered  by  the 
court  if  necessary.     See  also  Decker 


142 


RECEIVERSHIPS. 


§  59.  By  possession. 

In  the  absence  of  a  formal  transfer  or  assignment  a  receiver 
pendente  lite  acquires  no  title  in  the  sense  of  ownership  to  the  re- 
ceivership property,  and  his  rio-ht  is  one  merely  of  possession  as 
an  officer  of  conrt,  the  leo-al  title  of  the  owner  remaining  nn- 
aii'ected  until  transferred  by  operation  of  law  by  decree  and  sale.' 


V.  Gardner,  124  N.  Y.  334, 11  L.  R.  A. 
480;  ^yim|  v.  Bis^^e,  15  Hun,  190;  Os- 
good V.  Mnguire,  6J  N.  Y.  524;  Owen 
V.  Smith,  81  Barb.  641;  Atlan  Bank  v. 
Nahant  Bank,  23  Pick,  480.  The 
power  of  the  court  to  invest  the  re- 
ceiver with  the  legal  as  well  as  the 
equitable  title  would  seem  to  be  un- 
questioned. Atty.  Gen.  v.  Atlantic  & 
Mut.  L.  Ins.  Co.  100  N.  Y.  279;  Chau- 
taiique  County  Bank  v.  Bisley,  19 
N.  Y.  369;  Hoyt  v.  Thomiison,  5  N.Y. 
320;  Scott  V.  Elmore,  10  Hun,  68 
Union  Trust  Co.  v.  Weher,  96  111.  348 
Adams  v.  Hoicard,  22  Fed.  Rep.  656 
Wilmer  v.  Atlanta  &  B.  Air  Line  B. 
Co.  2  Woods.  409;  Noyes  v.  Bich,  52 
Me.  115;  Ellis  v.  Boston,  B.  &  E.  B. 
Co.  107  Mass.  1.  In  Coates  v.  Cun- 
ningham, 80  111.  467,  the  court  say: 
"  The  appoincment  of  a  receiver  does 
not  determine  any  rights  nor  affect 
the  title  of  either  party  in  any  manner 
whatever.  He  is  the  officer  of  the 
court,  and  his  holding  is  the  holding 
of  the  court  for  him,  from  whom  the 
possession  was  taken.  He  is  ap- 
pointed on  behalf  of  all  parties,  and 
his  appointment  is  not  to  oust  any 
party  of  his  rights  to  the  possession, 
but  merely  to  retain  it  for  the  benefit 
of  the  party  ultimately  entitled;  and 
where  he  is  ascertained  the  receiver 
will  be  considered  as  his  receiver. 
Ellicott  V.  Warford,  4  Md.  80;  Be  Col- 
vin,  2  Md.  Ch.  280;  Porter  v.  Williams, 
9.  N.  Y.  142. 

Real  estate  is  vested  in  the  receiver 
only  by  a  conveyance  to  him.  St. 
Louis  &  S.  Coal  &  M.  Co.  v.  Sandoval 


Coal  &  M.  Co.  Ill  III.  32;  Chautau- 
que  County  Bank  v.  Bisley,  19  N.  Y. 
369;  In  re  Calvin,  3  Md.  Ch.  278; 
Williamson  v.  Wilson,  1  Bland.  418. 
In  Tillingliast  v.  Champlin,  4  R.  I. 
173,  it  was  held  that  a  receiver  of  a 
dissolved  copartnership  appointed  by 
a  court  of  equity  is  invested  with  the 
whole  equitable  title  to  the  partner- 
ship property,  without  an  assignment; 
and  in  Fincke  v.  Funke,  25  Hun,  616, 
it  was  held  that  a  receiver  in  a  part- 
nership case  pendente  lite  has  no 
powers  except  such  as  have  been  con- 
ferred upon  him  by  the  order,  and  is 
a  common  law  receiver  whose  duty 
it  is  to  merely  protect  the  fund  pend- 
ing litigation.  The  order  appointing 
him  makes  no  change  in  the  title. 
Keeney  v.  Home  Ins.  Co.  71  N.  Y. 
396.  In  proceedings  supplementary 
to  execution,  however,  and  in  cases 
of  embarrassed  or  insolvent  corpora- 
tions, and  statutory  proceedings,  his 
powers  are  greater. 

1  Decker  v.  Gardner,  124  N.  Y.  334, 
11  L.  R.'A.  480;  Herring  v.  Neio  York, 
L.  E.  &  W.  B.  Co.  105  N.  Y.  372,  875; 
Keeney  V.  Home  Ins.  Co.  71  N.  Y.  396; 
( or?i  Exchrmge  Bank  v.  Blye,  101  JST. 
Y.  303;  Devlin  v.  JSfew  York,  4  Miss. 
106;  Wilson  v.  Allen,  6  Barb.  545; 
Leonard  v.  Wallace,  44  N.  Y.  294; 
Harland  v.  Bankers'  <&  M.  Teleg.  Co. 
32  Fed.  Rep.  305;  Skip  v.  Earwood,  3 
Atk.  564;  Qresley  v.  Adder  ley,  1 
Swanst.  573;  Thomas  v.  Brigstack,  4 
Russ.  65;  Bertrandv.  Davies,  31  Beav. 
436;  Green  v.  Bosticick,  1  Sandf.  Ch. 
185;  Singerly  v.  Fox,  75  Pa.  112. 


RECEIVER'S  TITLE.  143 

"While  receivers  of  this  class  have  many  powers  and  duties  pecu- 
liar to  themselves  they  are  such  only  as  flow  from  the  nature  and 
character  of  the  property  committed  to  their  charge.  Pendente 
lite  receivers  of  corporations  do  not  represent  the  corporations  in 
their  individual  or  personal  character;  nor  do  they  supersede  the 
corporations  in  the  exercise  of  their  corporate  functions,  except  in 
so  far  as  the  custody  and  preservation  of  the  property  is  con- 
cerned. The  power  of  the  court  to  protect  the  receiver's  posses- 
sion is  based  upon  the  fact  that  the  fund  or  property  is  in  custodia 
legis  rather  than  the  fact  of  title  or  ownership.  The  possession, 
however,  will  be  protected  as  jealously  as  if  the  absolute  title  was 
vested  in  the  receiver,  and  it  is  this  condition  of  protection 
that  is  sometimes  referred  to  as  the  receiver's  title.  It  is  true  that 
the  receiver  may  be  considered  as  having  a  special  property  in 
the  fund  or  res  in  the  sense  that  a  sheriff,  or  other  officer  is  said 
to  have,  but  in  all  such  cases  the  officer's  powers  and  duties  in  re- 
lation to  the  property  are  referrable  to  the  peculiar  nature  of  his 
possession  rather  than  to  any  interest  in  or  title  to  the  propertv. 

§  60.  In  sui)i)lemeiitary  proceedings. 

The  code  of  procedure  in  many  of  the  states,  regulating  pro- 
ceedings supplementary  to  execution,  vests  the  title  of  the  judg- 
ment debtor  to  both  real  and  j)ersonal  j)roperty  in  the  receiver, 
and  no  formal  assignment  is  required.  The  receiver  in  such  case 
stands  in  the  position  of  a  trustee  for  the  creditors  of  all  the  prop- 
erty the  debtor  held  at  the  time  of  the  appointment.'     The  title 

While  the  appointment  of    a    re-  and  distribute.     Re  Beechcr's  Estate, 

ceiver  may  not  convey  the  title  yet  19  N.  Y.  Supp.  971. 

the  appointment  is  in  the  nature  of  an  When  a  person  wrongfully  obtains 

injunction  or  a  writ  of  sequestration,  payment  of  a  debt  adversely  to  the 

preventing  any  alienation  of  or  inter-  rights  of  a  receiver  he  will  be  ordered 

ference  with  the  property  without  the  to  pay  the  same  to  the  receiver  and  in 

con-sent  of  court.     Thus  a  lease  by  a  default  will  be  committed.     Parker  v. 

parly  to  the  suit  of  land  in  the  hands  Pocock,  30  L.  T.  N.  S.  458. 

of  a  receiver  made  to  a  third  party,  '  Porter  v.    Williams,  9  N.  Y.  142; 

however  valid    between  the  parties,  Manning    v.    Evans,    19    Ilun,    500; 

confers  no  rights  upon  the  assignee.  Wring  v.  Disse,  15  Hun,  191;   Fessen- 

Thornton  v.   Washington  Sav.  Bank,  den -v.  Woods,  3  Bosw.  550;  ^1%.  Gen. 

76  Va.  433.  v.  Atlantic  Mut.  Ins.  Co    100  N.  Y. 

A  receiver  of   the  property  of  a  279. 

beneficiary  may  reach  the  proceeds  of  As  to   the   title   of   receivers  indc- 

real  estate  devised  in  trust  to  convert  pendent  of  statutes,  see  Wihon  v.  Wit- 


144  RECEIVERSHIPS. 

of  the  receiver  in  snch  a  case  relates  to  such  indebtedness  as  may- 
be due  the  debtor  at  the  tune  of  his  appointment  and  not  such  as 
may  become  due  thereafter,'  and  the  same  rule  applies  in  the  case 
•  of  a  receiver  of  a  corporation,  as  to  property  subsequently  ac- 
quired by  the  corporation."  And  where  the  vendor  of  merchan- 
dise reserves  title  thereto  until  the  payment  of  the  purchase  price, 
,a  receiver  of  the  vendee  obtains  no  title  to  such  merchandise  and 
■  can  convey  no  title  thereto.* 

§  61.  Ill  statutory  proceedings. 

Under  statutes  designed  to  facilitate  the  dissohition  and  wind- 
ing up  of  insolvent  corporations,  both  in  this  country  and  in  Eng- 
land, provision  is  usually  made  for  the  appointment  of  statutory- 
receivers,  with  enlarged  powers  and  duties.  As  a  rule  this  class 
of  receivers  are  invested  by  law  with  the  title  to  both  the  real  and 
personal  property  of  the  insolvent  corporation,  independent  of 
any  assignment  or  formal  transfer.^  No  general  rules,  of  course, 
can  be  laid  down  concerning  statutory  proceedings,  as  all  such  are 
governed  by  the  peculiar  provisions  of  the  statutes  under  which 
the  appointment  is  made  and  there  is  no  uniformity  in  their  pro- 
visions. In  many  states  the  statute  vests  the  legal  title  to  re- 
ceivership property  in  the  receiver  under  supplementary  proceed- 

son,  1  Barb.  Ch.  592.     Cf.  Mann  v.  judgment  debtor  has  in  the  estate  of 

Pentz,  2   Sandf.    Ch.  257;   Wilson  v.  which  he  takes  possession   (Bell   v. 

Allen,  6  Barb.  542;  Scouton  v.  Bender,  Shibley,  33  Barb.  614)  and  that  the  re- 

3  How.  Pr.  185.  ceiver's  rights  in  the  property  are  sub- 

This  subject  will    be  further  dis-  ject  to  all  the  equities  existing  against 

cussed  under  the  title"Supplementary  the  debtor.     Hyde  v.  Lynde,  5  N.  Y. 

Proceedings."  392;  Ford  v.  Cobb,  20  N.  Y.  348. 

'  Willison  V.  Salmon,  45  N.  J.  Eq.  ■•  Atty.  Oen.  v.  Atlantic  Mui.  L.  Ins. 
257.  It  must  be  a  debitum  in  prmenii.  Co.  100  N.  Y.  279;  Atty.  Gen.  v.  Con- 
In  this  case  the  contract  was  incom-  tinental  L.  Ins.  Co.  28  Hun,  360, 
plete.  affirmed  in  93  N.  Y.  630;  Osgood  v. 

« Qabert  v.   Olcott  (Tex.)  22  S.  W.  McOuire,  61  N.  Y.  524;  Re  Berry,  26 

286  (not  officially  reported,  and  re-  Barb.  55;   People,  Atty.   Oen.,  v.  Se- 

versed    in    86   Tex.    121,    on    other  curity  L.  Ins.  &  A.  Co.  23  Hun,  596. 

grounds  sub  nom  Olcott  v.  Qabert).  71  N.  Y.  226;  Morgan  v.  New  York  & 

^Sayles  v.  National  Water  Purify-  A.  R.   Co.  10  Paige,  290;   Decker  v. 

ing  Co.  41  N.  Y.  S.  R.  856,  affirmed  Gardner,  124  N.  Y.  334,  11  L.  R.  A. 

without   opinion  in  141   N.  Y.  603.  480;  Porter  v.  Williams,  9  N.  Y.  142. 

The  basis  of  this  decision  is  that  the  See  further  chapter  on  Corporations, 
receiver  gets  no  better  title  than  the 


RECEIVER'S  TITLE.  145 

ings,  as  seen  in  the  preceding  section,  but  it  will  be  observed  that 
in  such  case  the  receiver's  title  depends  upon  the  provisions  of 
the  statute. 

§  62.  In  actions  pendente  lite. 

'Receivers  j)e7idente  lite  are  mere  temporary  officers  of  the  court 
and  do  not  possess  the  powers  of  a  permanent  receiver  unless 
specially  conferred  upon  them  by  the  court.  They  possess  no 
legal  powers,  and  their  functions  are  limited  to  the  care  and  j)res- 
ervation  of  the  projDerty  or  fund  committed  to  their  charge.* 
The  power  of  appointment  of  a  receiver  of  this  character  is  an  in- 
cident to  the  jurisdiction  of  a  court  of  chancery,  and  is  un- 
affected by  the  character  of  the  parties  before  it,  whether  an  indi- 
vidual or  a  corporation,  or  by  the  nature  of  the  property,*  and  is 
usually  brought  into  exercise  in  mortgage  foreclosure  cases. 
While  this  class  of  receivers  have  many  duties  and  powers  pecu- 
liar to  themselves  they  are  such  only  as  flow  from  the  nature  and 
character  of  the  property  committed  to  their  charge.  Of  course, 
in  case  of  the  foreclosure  of  railway  mortgages  the  powers  and 
duties  of  the  receiver  are  increased  by  reason  of  the  public  nature 
of  the  property  and  the  franchises  involved,  but  the  title  of  the 
receiver  is  essentially  the  same  in  all  cases. 

§  63.  To  choses  in  action  due  from  nonresidents. 

A  court  of  equity  under  its  general  powers  and  independent 
of  statutory  authority  has  no  power  to  compel  a  general  assign- 
ment of  all  the  property,  or  the  choses  in  action,  of  a  debtor  in 
an  action  by  a  judgment  creditor  to  collect  his  judgment,  nor 
does  the  title  to  choses  in  action  due  the  debtor  from  persons  in 
a  foreign  jurisdiction  pass  to  a  receiver  by  virtue  of  his  appoint- 
ment, nor  will  a  receiver  have  power  to  bring  suits  on  such  choses 
in  action  in  a  foreign  jurisdiction.'     As  will  be  seen  in  the  fol- 

'  Herring  v.  Neic  York,  L.  E.  &  W.  Booth  v.  Clark,  58  U.  S.  17  How.  322, 

R.  Co.  105  N.  y.  372;  Keeiiey  v.  Home  15  L.  ed.  164;  Brighnm  v.  Luddington, 

Jus.  Co.  71  N.  Y.  396.  12  Blatchf.  237;   Yeager  v.  Wallace,  44 

^  United  States   Trunt    Co.   v.    New  Pa.  204. 

York,  W.  S.  &  B.  R.   Co.  101  N.  Y.  Prior  to  the  passage  of  the  Massa- 

478.  chusetts  statute  of  1884,  a  creditor's 

"^  Amy  V.  Manning,  149  Mass.  487;  suit  under  the  statute  could   not  be 

Harvey  v.    Varney,    104    Mass.    436;  maintained    against    the    judgment 
10 


146 


RECEIVERSHIPS. 


lowing  section,  the  common  law  of  New  York  is  directly  con- 
trary to  the  principles  here  laid  down.  Under  the  provisions  of 
the  code  of  procedure  in  that  state  relating  to  proceedings  sup- 
plementary to  execution  it  is  not  within  the  power  of  the  court 
to  order  the  debtor  to  execute  deeds  of  conveyance  for  real  estate 
situated  in  another  state.' 

§  64.  To  choses  in  action  generally. 

The  rule  that  a  receiver's  title  dates  from  the  time  of  granting 
the  order  for  his  appointment  does  not  apply  to  choses  in  action 
in  all  cases ;  thus,  where  a  debtor  made  an  assignment  for  the 
benefit  of  his  creditors  and  subsequently  a  creditor  of  such  debtor 
filed  a  bill  to  set  aside  the  assignment,  in  which  action  a  receiver 
was  appointed,  and  subsequently  a  decree  was  rendered  setting 
the  assignment  aside,  it  was  held  that  the  receiver's  title  to  cer- 
tain promissory  notes  given  to  and  lield  by  the  assignees,  dated 
from  the  time  of  filing  the  bill  to  set  aside  the  assignment ;  that 
the  filing  of  the  bill  created  a  lien  on  the  choses  in  action  in  the 
hands  of  the  assignees  from  that  date,'  though  ordinarily  the 


debtor  and  an  assignment  compelled 
to  be  made  by  him  of  his  choses  in 
action  due  from  non-resident  parties, 
■without  making  such  persons  parties 
defendant.  PIkeiux  Ins.  Co.  v.  Abbott, 
127  Mass.  558.  The  statute  (1884)  in 
eubstance  provides  that  the  fact  that 
the  property  sought  to  be  reached 
and  applied  is  in  the  hands,  possession 
or  control  of  the  debtor  independently 
of  any  other  person,  or  that  it  is  not 
within  the  state,  shall  not  prevent  the 
plaintifE  from  maintaining  his  bill. 
Since  the  passage  of  this  statute  it  has 
been  held  that  such  intangible  prop- 
erty as  letters  patent  in  the  possession 
of  the  debtor  can  be  reached  without 
making  any  other  person  a  party  de- 
fendant to  the  suit,  and  both  before 
and  since  the  passage  of  the  statute 
promissory  notes  have  been  reached 
by  this  process  without  making  the 
makers  of  the  notes  parties.  McCann 
V.  Randall,  147  Mass.  81;  WiUon  v. 


Martin-  Wilson  Automatic  Fire  Alarm 
Go.  149  Mass.  24;  Amy  v.  Manning, 
149  Mass.  457. 

^  Smith  V.  Tozer,  42  Hun,  22.  It 
seems  that  this  inability  of  the  court 
arises  by  reason  of  the  provisions  of 
the  code  vesting  the  real  estate  in  the 
receiver  from  the  time  of  his  filing 
with  the  clerk  of  the  county  where 
the  property  is  situated,  a  copy  of  the 
order;  this  could  only  be  construed 
with  reference  to  property  in  New 
York.  It  was  otherwise  under  the 
code  prior  to  1877,  Fenner  v.  San^ 
born,  37  Barb.  610. 

'^  Clark  v.  Brockway,  1  Abb.  App. 
Dec.  351. 

Receivers  appointed  by  the  court 
upon  a  creditors'  bill,  to  take,  receive 
and  hold  property  assigned  by  an  in- 
solvent bank,  acquire  all  the  rights  of 
the  assignees  under  their  assignment. 
Hill  V.  Western  &  A.  B.  Co.  86  Ga. 
284. 


RECEIVER'S  TITLE.  147 

receiver's  title  dates  from  the  time  of  granting  the  order,  and  not 
from  the  time  of  giving  the  bond/  or  of  filing  the  bill. 

§  65.  To  real  estate  in  foreign  states. 

"While  the  receiver  does  not  become  vested  with  title  to  real 
estate  situated  in  a  foreign  state  by  virtue  of  his  appointment  as 
receiver,  yet  the  inherent  powers  of  an  equity  court  are  such 
that  where  the  court  has  jurisdiction  of  the  person,  it  may  re- 
quire him  to  transfer  to  the  receiver  any  property  the  judgment 
debtor  may  own  in  a  foreign  state,  where  such  transfer  is  i^ces- 
sary  to  the  payment  of  his  debts.''  The  principles  here  an- 
nounced, it  will  be  observed,  are  directly  opposed  to  those  laid 
down  in  a  preceding  section  in  force  in  Massachusetts.  In 
England  where  the  court  has  jurisdiction  of  the  person,  and 
wliile  it  cannot  send  its  oflficers  into  a  foreign  jurisdiction  to 
carry  into  effect  its  orders,  yet  it  has  power  to  enforce  obedience 
to  its  orders  by  punishment  for  contempt ;°  and  this  power  exists 
where  the  person  or  corporation  committing  the  alleged  contempt 
is  not  a  party  to  the  suit,  provided  such  party  is  within  the  juris- 
diction of  the  court  appointing  the  receiver.* 

^  Maynard  v.    Bond,   67    Mo.    315;  w.  Tozer,  swpra).     Penn  v .  Lord  BalU- 

Pope  V.  Ames,  20  Or.  199;  Re  Chris-  more,  1  Ves.  Sr.  444;  Farley  v.  Sfiip- 

tian  Jensen  Co.  128  N.  Y.  550;  Chau-  pen,  Wythe,  135;  Toller  v.  Carteret,  2 

tauque  County  Bank  v.  Risley,  19  N.  Vern.  494;  Hughes  v.  Hall,  5  Munf. 

Y.  369;   Porter  v.  Williams,  9  N.  Y.  431;  Cro7istown  v .  Johnston,  3  Ves.  Jr. 

142;   Van  Alstyne  v.  Cook,  25  N.  Y.  170,  5  Ves.  Jr.  277;  Kildare  v.  Eus- 

489:  Bockerv.  Torrance,  31  N.Y.  631.  tace,  1  Vern.  419;  Berby  v.  Athol,  1 

It  would  seem,  however,  that  as  to  Ves.  Sr.  203;  Guerrant  v.  Fowler,  1 

choses  in  action  not  subject  to  levy  Hen.  &  M.  5;  Massee  y.  Watts,  10  U. 

and  sale,  the  filing  of  this  bill  creates  S.  6  Cranch,  148,  3  L.  ed.  181;   Ward 

a  lien  and  the  rights  of  the  parties  re-  v.Arredondo,  1  Hopk.  Ch.  213. 

late  to  that  date.     Clark  v.  Brockway,  ^  Langford  v.  Langford,  5  L.  J.  Ch. 

supra.  N.  S.  60;  Richards  v.  People,  81  111. 

^Mitchell  V.  Bunch,  2  Paige,  606;  551;  Chafee  v.  Quidnick  Co.  13  R.  I. 

Le  Loy -v.  Rogers,  3  Paige,  237;  Bailey  442;    Delion  v.  Foster,  4  Allen,  545; 

V.  Ryder,  10  N.Y.  623;  Fenner  v.  San-  Vermont  &  C.  R.  Co.  v.  Vermont  C.  B. 

born,  37  Barb.  610;  Smith  v.  Tozer,  43  Co.  46  Vt.  792. 

Hun,  22.     And  see  Newton  v.  Bron-  '^Sercomb   v.   Catlin,   128    111.    556. 

son,  13  N.  Y.  587;  Gardner  v.  Ogden,  And  it  is  not  necessary  that  the  re- 

22  N.Y.  327;  Williams  v.  Fitzhugh,  37  ceiver  shall  have  reduced  the  prop- 

N.Y.  444;  ^A««McAv.  C'amVZ^/,  3  Ed w.  erty  to   his   possession.     Hazelrigg  y. 

Ch.  152.     (See  limitation  by  Code  of  Bronaugh,  78  Ky.  62;  Richards  v.  Peo- 

1877,chap.  417,  as  determined  in  Smith  pie,  81  111.  551. 


148 


RECEIVERSHIPS. 


§  6Q.  To  real  estate  generally. 

In  proceedings  supplementary  to  execution,  where  the  debtor 
has  made  no  conveyance  of  his  real  estate  to  the  receiver,  pursu- 
ant to  an  order  of  court,  and  independent  of  statutory  enactment, 
the  receiver  takes  no  title  in  the  sense  of  ownership  to  real  estate 
of  the  debtor.  In  this  class  of  proceedings  the  receiver's  title  is 
a  qualified  title  in  the  nature  of  a  security  for  the  plaintiff  of  the 
judgment,  and  such  title  thus  qualified  and  limited,  does  not 
exhaust  the  title  of  the  judgment  debtor.  Subject  to  the  right 
of  the  receiver  to  resort  to  the  land  to  pay  the  judgment  the  title 
remains  in  the  judgment  debtor,  and  a  conveyance  by  him  trans- 
fers the  title  subject  to  the  claim  of  the  receiver.'     The  court  has 


^Scott  V.  Elmore,  10  Hun,  68;  Wilson 
V.  Wilson,  1  Barb.  Ch.  572;  Chautauque 
County  Bank  v.  Eidey,  19  N.  Y.  375; 
Moak  V.  Coates,  33  Barb.  498;  St. 
Louis  &  S.  Coal  &  M.  Co.  v.  Sandoval 
Coal  &  M.  Co.  Ill  111.  32.  But  see 
Porter  v.  Williams,  9  N.  Y.  142,  as  to 
application  of  the  then  existing  code. 

A  land  company  having  conveyed 
its  lands  by  trust  deed  to  secure  its 
preferred  stockholders,  allowed  its 
equity  to  be  sold  on  execution  and  the 
time  for  redemption  to  pass,  all  before 
the  filing  of  a  bill  in  which  a  receiver 
of  the  company  was  appointed.  Held, 
that  the  receiver  took  nothing  by  his 
appointment  nor  by  conveyance  from 
the  company.  Fitch  v.  Wetherbee,  110 
111.  475. 

The  appointment  of  a  receiver  only 
invests  him  with  the  title  to  such  real 
estate  as  the  debtor  has  within  the 
state.  Smith  v.  Tozer,  42  Hun,  22. 
See  Code  Civ.  Proc.  §  2468. 

A  receiver  derives  his  authority 
from  the  court  appointing  him  and 
not  from  the  act  of  the  parties  at 
whose  suggestion  he  is  appointed. 
The  effect  is  to  put  the  custody  in  his 
hands  as  an  officer  of  the  court  for  the 
benefit  of  the  party  entitled  to  it,  but 
does  not  change  the  title  or  even  right 
of  possession. 


Union  Nat.  Bank  v.  Bank  of  Kansas 
City,  136  U.  S.  223,  34  L.  ed.  341; 
Maynard  v.  Bond,  67  Mo.  315;  Heiman 
v.  Fisher,  11  Mo.  App.  275. 

A  receiver  of  a  corporation  is  not 
authorized  to  take  possession  of  chat- 
tel property  formerly  owned  by  the 
company,  but  which  has  been  sold  on 
execution  against  it  before  his  ap- 
pointment. 

Mcllrath  v.  Snure,  22  Minn.  391. 

The  refusal  by  the  defendant  in  a 
creditor's  bill,  to  make  an  assignment 
to  the  receiver,  in  pursuance  of  an  or- 
der of  court,  is  no  ground  for  a  re- 
fusal by  the  master,  to  decide  that  the 
property  is  within  the  control  of  the 
defendant  and  to  order  it  to  be  deliv- 
ered to  the  receiver. 

Eldred  v.  Hall,  9  Paige,  640. 

Under  the  usual  order  appointing  a 
receiver,  in  a  creditor's  bill,  thedebtor 
is  bound  to  execute  to  the  receiver  a 
formal  assignment  of  all  his  property, 
although  he  has  stated  under  oath 
that  he  has  no  property. 

Chipman  v.  Sabhaton,  7  Paige,  47. 

Where  a  receiver  was  appointed  in 
a  case  in  which  a  large  number  of  im- 
portant interests  were  held  by  various 
parties, — held,  that  as  he  became 
vested  with  the  title  of  all  the  prop- 
erty involved  in  the  suit,  by  virtue  of 


RECEIVER'S  TITLE. 


149 


jurisdiction  of  course  by  its  decree  to  divest  the  title  of  the  debtor 
and  vest  the  same  in  a  purchaser  under  the  decretal  sale.  In 
New  York  the  rule  is  that  a  receiver  of  an  insolvent  person  or 
corporation  takes  title  without  a  formal  conveyance.  This  how- 
ever is  by  reason  of  the  statute.'  In  a  proceeding  to  dissolve  a 
partnership  the  receiver  takes  the  equitable  title  without  an  as- 
signment.'' 

§  67.  Extent  of.  . 

The  general  rule  is  well  established  that  a  receiver  takes  the 
title  of  the  corporation  or  individual  whose  receiver  he  is  and  that 
any  defense  which  would  have  been  good  against  the  individual 
or  corporation  may  be  asserted  against  the  receiver.'  But  to  this 
rule  there  is  a  well  recognized  exception  which  permits  a  receiver 
of  an  insolvent  individual  or  corporation  in  the  interest  of  cred- 
itors to  disaffirm  dealings  of  the  debtor  in  fraud  of  their  rights," 
but  as  we  have  seen  elsewhere  this  rule  is  dependent  upon  stat- 
utory powers  and  not  upon  the  inherent  equity  powers  of  the 
court.'  Under  the  Michigan  voluntary  assignment  law  the  re- 
ceiver gets  no  better  title  than  the  assignee  had.'     In  general  the 


the  decree  appointing  him,  he  was  en- 
titled to  the  carriage  of  the  decree  into 
the  master's  office  to  compel  the  deliv- 
ery of  the  property  to  him  and  that  he 
was  responsible  for  the  exercise  of  his 
best  judgment  and  good  faith  to  all 
parties  interested  and  was  not  to  be 
controlled  by  any  of  the  parties. 

Iddings  v.  Bruen,  4  Sandf.  Ch.  417; 
Moore  v.  Duffy,  74  Hun,  78. 

A  license  to  manufacture  or  sell  a 
patented  improvement,  containing  no 
words  indicating  an  intention  that  it 
is  lassignable,  is  purely  personal,  and 
will  not  pass  to  a  receiver  appointed 
in  proceedings  supplementary  to  exe- 
cution on  the  property  of  the  licensee. 

Waterman  v.  Shipman,  55  Fed. 
Rep.  982,  64  Pat.  Off.  Gaz.  713. 

A  receiver  took  property  claimed  by 
a  stranger,  upon  which  the  claimant, 
to  relieve  the  property,  paid  a  sum  of 
money  into  court,  to  abide  the  further 
order  of  the  court.     Held,  that  an  or- 


der authorizing  a  suit  at  law,  to  try 
the  right  to  the  property,  without 
making  any  provision  for  the  disposi- 
tion of    the  money,    was   irregular. 

Parker  v.  Browning,  8  Paige,  388. 

^Atty.  Gen.  v.  Atlantic  Mut.  L.  Ins. 
Co.  100  N.  Y.  279. 

^Tillinghast'v.  Ghamplin,  4  R.  I.  173. 

^Republic  L.  Ins.  Co.  v.  Sioigert,  135 
111.  150,  12  L.  R.  A.  338;  Hyde  v. 
Lynde,  4  N.  Y.  387;  Uiggins  v.  Gil- 
lesheiner,  26  N.  .J.  Eq.  308. 

'^Pittsburg  Carbon  Co.  v.  McMillin, 
119  N.  Y.  46,  7  L.  R.  A.  46;  Gillet  v. 
Moody,  3  N.  Y.  479 ;  Porter  v.  Williams, 
9  N.  Y.  142;  Curtis  v.  Leavitt,  15  N. 
Y.  108. 

''Chapter  on  Corporations. 

^Wisconsin  Marine  &  F.  Ins.  Co. 
Bank  v.  Manistee  Salt  <£•  L.  Co.  77 
Mich.  76;  Farrington  v.  Sexton,  43 
Mich.  454;  Lentz  v.  Flint  &  P.  M.  R. 
Co.  53  I\Iich.  444;  Bylea  v.  Kellogg,  67 
Mich.  312. 


150  RECEIVERSHIPS. 

rights  and  powers  of  the  person  or  corporation  over  whose  prop- 
erty the  receivership  extends,  measures  tlie  rights  and  powers  of 
the  receiver  in  his  relation  to  third  parties,  and  all  causes  of  ac- 
tion, or  defenses,  existing  in  favor  of  the  former  are  available  to 
the  latter. 

§  68.  Subject  to  all  liens. 

A  receiver  appointed  under  the  provisions  of  section  7,  Act  of 
1869  (Stat,  of  N.  Y.)  "of  all  the  assets  and  credits  of  an  insolvent 
insurance  company"  is  entitled  to  a  surplus  arising  from  a  fore- 
closure of  a  real  estate  mortgage,  and  even  if  there  is  no  formal 
conveyance  of  the  land  to  the  receiver.'  And  so  after  the  sale  of 
property  under  a  chattel  mortgage,  the  receiver  is  entitled  to  any 
surplus  arising  on  such  sale,  as  against  the  mortgagor,  and  also  as 
against  a  judgment  creditor  who  obtained  judgment  and  levied 
on  the  property  three  days  prior  to  the  appointment  of  the  re- 
ceiver." Where  it  appeared  that  certain  funds  were  pledged  to  a 
person  as  security  for  liabilities  incurred  by  him,  and  prior  to  re- 
ducing such  funds  to  his  possession  the  pledgor  died,  but  subse- 
quently the  pledgee  did  reduce  them  to  his  possession,  the  court 
refused  to  order  the  pledgee  to  turn  over  the  funds  to  the  receiver, 
there  appearing  to  be  no  danger  of  loss  and  the  liability  of  the 
pledgee  as  indorser  still  remaining.'  And  so  where  a  note  is 
given  to  a  company  for  a  particular  purpose,  a  receiver  of  such 
company  stands  in  no  better  position  than  the  company  and  can 
treat  such  note  only  as  the  company  could  have  done."     And 

^Atty.  Gen.  v.  Atlantic  Mut.  L.  Ins.  pealed  from  (32  N.  Y.  S.  R.  890),  that 

Co  100  N.  Y.  279.  the  mortgagor  had  no  interest  in  the 

*Leadbetter  v.  Leadbetter,  125  N.  Y.  surplus,  as  against  the  receiver,  after 

290.     The  principle  upon  which  this  default  in  the  payment  of  the  mort- 


case  is  based  is  that  the  mortgagor, 

having  made  default  in  the  payment  '^Brady  v.  FuHow,  22  Ga.  613. 

of  the  mortgage  had  no  interest  re-  *BeU  v.  Shibley,  33  Barb.  610,  and 

maining  in  the  property  liable  to  the  authorities  cited.     The  receiver  of   a 

lien  of  an  execution  {Hull  v.  Carnley,  corporation  has  the  same  right  which 

11  N.  Y.  502;  Hall  v.  Sampson,  35  N.  it  had  to  perfect  title  to  property  in  its 

Y.  274;  Oalen  v.  Brown,  22  N.  Y.  37;  possession  under  a  contract  with  the 

Manchester  v.  Tibbetts,  121  N.  Y.  223),  vendor  that  title  should  not  pass  to  it 

and  it  was  determined  in  the  lower  until  the  property  was  paid  for.  Moore 

court,  in  the  same  case,  and  not  ap-  v.  Mercer  Wire  Co.  (N.  J.)  15  All.  305. 


RECEIVER  S  TITLE. 


151 


generally  the  receiver  takes  the  property  of  the  debtor  subject  to 
all  liens  attaching  thereto  at  the  time  of  the  appointment,'  and 
all  equitable  defenses  and  set-offs.' 


^Kneeland  v.  American  Loan  &  T. 
Co.  136  U.  8.  89,  34  L.  ed.  379;  Becker 
V.  Torrance,  31  N.  Y.  631;  Scott  v. 
Armstrong,  146  U.  S.  499,  36  L.  ed. 
1059;  Davenport  v.  Kelly,  42  N.  Y. 
193;  Oere  v.  Dibbs,  17  How.  Pr.  31; 
VanAlstyne  v.  Cook,   25  N.  Y.  489. 


^ Adams  v.  Spokane  Drug  Co.  57  Fed. 
Rep.  889 ;  Bell  v.  Hanover  Kat.  Bank, 
57  Fed.  Rep.  822.  A  receiver  occu- 
pies tlie  position  of  the  debtor  so  far 
as  the  proceeds  of  the  fund  or  prop- 
erty are  concerned.  Crine  v.  Davis, 
68  Ga.  138. 


CHAPTER  YI. 


SUITS  BY  RECEIVERS— DEFENSES  TO. 


§  69.  Authorityof  the  court  necessary. 
Exceptions. 

(a)  Where  decree  authorizes  suit. 

(b)  Where  receivership  is  of  part- 

nership debts. 

(c)  Where  debt  is  due  the  re- 

ceiver officially.  §  73. 

(d)  Where  suit   is  in  the  court 

appointing. 

(e)  Where  waste  is  being  com- 

mitted. 

(f)  Where  the  statute  authorizes 

suit. 

(g)  Leave  is  in  the  discretion  of 

the  court. 
§  70.  Receiver's  right  to  sue  limited. 

(a)  Except  when  by  statute  he 

represents  creditors.  §  74. 

(b)  Except   where  the  act  com- 

plained of  is  ultra  vires.  §  75. 

(c)  Except  in  supplementary  pro- 

ceedings. §  76. 

§  71.  Receiver's    authority   must    be 

shown.  §  77. 

(a)  That  his    principal  had  a 

valid  cause  of  action.  |  78. 

(b)  The  time  and  mode  of  ap- 

pointment. §  79. 

(c)  His  qualification  by  giving      §  80. 

bond  when  required. 

(d)  Permission  to  sue.  §  81. 
§  72.  Receiver's  power  to  sue  in  his 

own  name. 


(a)  Must  be  so  empowered  by 

court. 

(b)  Authorized  by  statute. 

(c)  When    not  so    authorized 

must  sue  in  name  of  prin- 
cipal. 
Power  of  receiver  to  sue  in  for- 
eign jurisdiction. 

(a)  (Jrenerally. 

(b)  Early  English  doctrine. 

(c)  Later  English  doctrine. 

(d)  Earlj'  doctrine  in  United 

States. 

(e)  Later    doctrine  in  United 

States. 

(f)  Present  doctrine  in  United 

States. 

Power  to  sue  in  foreign  juris- 
diction as  to  realty. 

Power  of  receiver  to  sue  in  mat- 
ters of  fraud,  trusts,  etc. 

Suits  against  officers  of  corpo- 
rations. 

Suits  against  stockholders  on 
unpaid  subscriptions. 

Suits  against  stockholders  on 
statutory  liability. 

Suits  to  invalidate  liens. 

Suits  on  debtor's  bond,  replevin, 
distraint,  etc. 

Defenses  to  actions  brought  by 
receivers — set-oflf. 


§  69.    Authority  of  the  court  necessary. 

The  primary  purpose  in  procuring  the  appointment  cf  a  re- 
ceiver being  the  custody  and  preservation  of  the  tangible  prop- 
erty in  the  possession  of  the  defendant  at  the  date  of  the 
appointment,  it  has  been  deemed  not  only  expedient,  but  an 
essential  prerequisite  that  the  receiver  shall  have  the  sanction  and 


SUITS  BY  RECEIVERS-DEFENSES  TO.  153 

order  of  the  court,  whose  ministerial  officer  he  is,  before  institut- 
ing suits  concerning  the  property  over  which  he  is  appointed,  or 
for  the  collection  of  the  assets  belonging  to  the  estate.  As  an 
officer  of  the  court  tlie  receiver  occupies  a  position  of  disinterest- 
edness, so  far  as  the  parties  are  concerned,  and  he  is  also  held  to 
a  strict  accountability  for  every  act  that  he  does  in  his  official 
capacity,  so  that  ordinary  prudence  would  suggest  that  he  should 
not  involve  the  estate  in  what  may  be  expensive  litigation  witli- 
out  leave  of  court.  Besides,  as  we  have  already  seen,  the  discre- 
tionary powers  of  the  receiver  are  exceedingly  limited,  and 
however  able  and  competent  the  receiver  may  be,  he  is,  with  few 
exceptions,  purely  a  ministerial  officer,  and  in  all  cases  will 
be  slow  to  encroach  upon  the  functions  belonging  exclusively  to 
the  court.  So  careful  were  the  earlier  English  courts,  in  guard- 
ing the  rights  and  interests  of  all  parties,  it  was  not  deemed 
expedient  that  the  receiver  should  make  application  to  the  court 
for  leave  to  originate  legal  proceedings,'  or  at  least  without  the 
plaintiff's  concurrence."  It  may  be  stated  as  a  general  rule,  and 
to  which  there  are  but  few  exceptions  originating  in  the  increased 
powers  of  statutory  receivers,  that  as  a  condition  precedent  to  the 
receiver  instituting  any  suit  or  proceeding  he  must  have  the  con- 
sent and  authority  of  the  court  either  general  or  special,' 

^Ireland  v.  Eade.  7  Beav.  55;  Clark  Winter,  1  Johns.  Ch.  60;  Wymi  v.  Lord 

V.  Fisher,  Sausse  &  S.  684;  Parker  v.  NewhorougJi,  3  Bro.  C.  C.  88;  Ward  v. 

Dunn,  8  Beav.  497.  Swift,  6  Hare,  312;  Conyers  v.  CroMe, 

^CollagJian  v.  Reardon.  Sausse  &  S.  6  Ir.  Eq.  657;  Anon.  6  Ves.  Jr.  287; 

682.  Swaby  v.  Dickon,  5  Sim.  629;  Melendy 

^Davis  V.  Ladoga  Creamery  Co.  128  v.  Barbour,  78  Va.  544;  Reed  v.  Axtell, 
Ind.  222;  Keen  v.  Breckenridge,  96  84  Va.  231;  Re  Christian  Jensen  Co. 
Ind.  69;  Elkhart  CarWorks  Co.  v.  El-  128  N.  Y.  550  (40  N.  Y.  S.  R.  621); 
Us,  113  Ind.  215;  Oarver  v.  Kent,  70  Pendleton  v.  Russell,  144  U.  S.  640,  36 
Ind.  428;  Moriarty  v.  Kent,  71  Ind.  L.  ed.  574;  Barton  v.  Barbour,  104  U. 
601 ;  Barren  v.  Kent,  71  Ind.  602;  S.  126,  26  L.  ed.  672.  But  see  Til- 
Manlovew.  Burger,  ZS  Ind.  2\\;  Her-  lingJiast  v.  Charnplin,  4  R.  I.  173; 
ron  V.  Vance,  17  Ind,  595;  Battle  v,  Thomas  v.  Torrance,  1  Chamb.  Ch, 
Davis,  66  N.  C.252.  But  see  Gray  v.  (Ont.)  9;  Brien  v.  Paxil,  7  Tenn.  Ch. 
Lewis,  94  N,  C.  392  (statutory  proceed-  357;  King  v.  Cuits,  24  Wis.  627;  Lath- 
ing). Davis  V.  Snead,  33  Gratl.  705;  rop  v.  linapp,  37  Wis.  307;  IMme  v, 
Screvess  v.  Clark,  48  Ga.  41;  mil  v.  Littlejohn,  12  La.  Ann.  298;  Uarland 
Western  &  A.  R.  Co.  80  Ga.  284;  Mer-  v.  Banker's  &  M.  Teleg.  Co.  32  Fed. 
ritt  V.  Merritt,  16  Wend.  405,  affirm-  Rep.  305;  Wayne  Pike  Co.  v.  State, 
ing /eeil/€rn«,  5  Paige,  125;  Greeny.  134    Ind.  672;    Glenn    v.    Bussey,    5 


154 


RECEIVERSHIPS, 


Under  the  Act  of  Congress  of  June  3,  1804,  it  was  held  that  a 
receiver,  appointed  by  the  comptroller  of  the  currency,  and  where 
the  language  of  the  statute  provided  that  the  receiver  "may  if 
necessary  to  pay  the  debts  of  such  association  enforce  the  indi- 
vidual liability  of  the  stockholders,"  must  have  the  consent  of  the 


Mackey,  233  (assignee);  Martin  v. 
Davis,  31  Iowa,  538;  Bentlcyv.  Shrieve, 
4  Md.  Ch.  412;  Dugger  v.  Collins,  69 
Ala.  324. 

In  England  it  has  been  held  that  a 
receiver  has  the  right  to  distrain  for 
rent  due  without  applying  to  the 
court  for  an  order  to  sue,  unless  the 
right  to  the  rent  is  in  dispute.  Pitt  v. 
Snowden,  3  Atk.  750.  And  especially 
so  if  the  tenant  has  attorned  to  the  re- 
ceiver. Baincock  v.  Simpson,  Dick. 
120,  note;  Jollp  v.  Arbuthnot,  4  DeG. 
&  J.  224. 

He  must  not  only  show  leave  of 
court  but  he  must  also  show  the  equity 
of  the  party  whose  rights  under  the 
order  of  court  appointing  him  he  rep- 
resents, to  maintain  the  action  which 
he  attempts  to  prosecute.  A  receiver 
in  general  is  not  clothed  with  any 
right  to  maintain  an  action  which  the 
parties  or  the  estate  which  he  repre- 
sents could  not  maintain.  Coope  v. 
Bowles,  28  How.  Pr.  10. 

In  Tiliinghast  v.  Champlin,  supra, 
the  court  say:  "According  to  what 
is  understood  to  have  been  the  old 
English  practice  and  at  all  events  the 
most  convenient  practice,  and  that 
generally  adopted  in  this  country  he 
may,  in  order  to  enable  him  to  per- 
form his  trust  suo  motu,  and  without 
special  leave  (which  he  must  accord- 
ing to  the  present  inconvenient  prac- 
tice in  England  obtain  from  the  court 
appointing  him)  bring  suits  to  possess 
himself  of  the  estate  to  which  he  is  offi- 
cially entitled,incurring  no  risk  except 
as  to  costs."  This  case  is  based  upon 
Green  v.  Bostwick,  1  Sandf.  Ch.  186; 
Iddings  v.  Bruen,  4  Sandf.  Ch.  424, 


but  they  do  not  sustain  the  doctrine 
announced. 

In  Weill  V.  First  Nat.  Bank,  106  N. 
C.  1,  in  a  supplementary  proceeding, 
the  court  made  an  order  that  the  re- 
ceiver should  take  charge  and  custody 
of  all  property,  choses  in  action  and 
thingsof  value  of  the  defendants,  with 
all  the  rights,  powers  and  privileges 
of  a  receiver  under  the  law.  The 
court  say:  "While  the  court  may  ex- 
ercise very  great  control  over  the  re- 
ceiver and  may  direct,  in  appropriate 
cases,  that  he  shall  or  shall  not  do 
particular  things,  yet,  ordinarily, 
where  he  is  invested  with  full  power 
as  receiver,  he  will  have  authority  to 
bring  appropriate  necessary  actions 
without  special  leave  or  direction  of 
the  court." 

In  Everett  v.  State,  McKaig,  28  Md. 
190,  where  an  appeal  was  allowed 
from  an  order  appointing  receivers, 
and  the  appeal  was  not  sustained,  it 
was  held  that  it  was  the  duty  of  the 
receivers  to  institute  action  on  the 
bond  immediately  upon  the  affirmance 
of  the  order  appointing  them,  and  no 
order  directing  them  to  do  so  was  re- 
quired. 

In  Helme  v.  Littlejohn,  12  La.  Ann. 
298,  where  a  receiver  was  appointed 
to  collect  partnership  assets,  the  order 
was  held  to  be  sufficient  authority  to 
bring  suit  against  a  debtor  of  the  part- 
nership. 

Where  the  statute  gives  the  receiver 
authority  to  sue,  special  leave  is  not 
required.  Hayes  v.  Brotzman,  46  Mo. 
519;  Baker  V.  Cooper,  57  Me.  388;  Man- 
love  V.  Burger,  38  Ind.  211. 


SUITS  BY  RECEIVERS— DEFENSES  TO.  155 

comptroller,  and  this  must  be  distinctly  averred,  and,  if  put  in 
issue,  proved/ 

(a)  Where  bj  the  decree  it  is  provided  that  an  administra- 
tor shall  pav  a  certain  sum  to  a  receiver,  and  that  an  execution 
issue  therefor,  and  that  in  default  the  receiver  enforce  the  decree 
against  the  executor  and  sureties,  the  receiver  is  authorized  to 
sue;^  (b)  and  where  the  decree  appoints  a  receiver  to  collect  part- 
nership debts  it  is  sufficient;'  and  where  the  judgment  or  decree 
does  not  expressly  authorize  the  receiver  to  sue,  he  may  be 
authorized  by  a  subsequent  order;*  and  it  seems  that  such  order 
may  be  granted  without  notice/  (c)  No  authority  to  sue  is  re- 
quired where  the  debt  is  due  to  the  receiver  in  his  official  capacity/ 
(d)  Where  the  receiver  prosecutes  his  suit  in  the  court  of  his 
appointment  and  with  its  sanction,  an  express  order  is  not  required 
to  be  produced;'  or  (e)  where  waste  is  being  committed/  (f) 
Where  by  virtue  of  a  statute,  under  the  provisions  of  which 
the  receiver  is  appointed,  the  receiver  is  authorized  to  sue,  no 
leave  of  court  is  required,  and  none  need  be  shown;'  (g)  The 
leave  is  to  be  exercised  in  the  sound  judicial  discretion  of  the 
court,  or  chancellor,  and  will  not  be  granted  where  the  pro- 
ceedings  probably  would  be  oppressive  to   those  interested  in 

^Kennedy  v.  Gibson,  75  U.  S.  498, 19  waiting  for  an  order  for  that  purpose. 

L.  ed.  476;    Smith  v.  Manufacturer's  Nangle  v.  Fingall,  1  Hog.  142.   Waste 

Nat.  Bank,  9  Bank.  Reg.  128;  Strong  however  may  be  restrained  by  an  or- 

V.  SoutJmortJi,  8  Ben.  832;  Re  Manu-  der  of  court  without  a  bill  for  that 

facturer's  Nat.  Bank,  5  Biss.  506;  Bly  purpose.     Cronin  v.  McCarthy,  Flan. 

V.  United  States,  4  Dill.  464;  Harvey  v.  «fe  K.  49. 

Lord,  10   Fed.  Rep.  237;    Bowden  v.  ^Hayes  v.  Brotzman,   46  Md.  519; 

Morris,! Hughes,  dSO;  Welles V. Grates,  Wilkiiison  v.  Butherford,  49  N.  J.  L. 

41  Fed.  Rep.  464;   Welles  v.  Stout,  38  241.     And  when  the  statute  provides 

Fed.  Rep,  68.  that  the  court  may  make  all  "needful" 

'^Elliott  V.  Trahern,  35  W.  Va.  634.  orders,  the  court  may  under  this  gen- 

2.ffe?TOev.  izMe/o/m,  12La.  Ann.298.  eral  power  authorize  the  receiver  to 

*Lathrop  v.  Knapp,  37  Wis.  307.  sue.     Gill  v.  Balis,  72  Mo.  424. 

^Hill  V.  Western  &  A.  B.  Co.  86  Ga.  A  receiver  appointed  by  a    state 

284.  court  cannot  defend  an  action  in  a 

^Ex  parte  Harris,  Re  Lewis,  45  L.  J.  federal  court  without  the  express  au- 

Bkr.  71;  Armstrong  v.  Armstrong,  L.  thority  of  the  court  whose  officer  he 

R.  12  Eq.  614.  is,  so  as  to  bind  any  property  or  effects 

''Cox  V.  Volkert,  86  Mo.  505.  in  his  hands  as  receiver.    Pendleton  v. 

8If  waste  is  being  committed  and  Russell,  144  U.  S.  640,  36  L.  ed.  574; 

the  case  is  pressing,  a  receiver  may  Reynolds  v.  Stockton,  140  U.  S.  254,  35 

file  a  bill  for  an  injunction  without  L.  ed.  464. 


156  RECEIVERSPIIPS. 

the  proceedings,  or  where  it  is  unlikely  that  advantage  -wonld  be 
derived  from  the  suit ; '  but  as  a  rule  permission  to  sue  will  be 
granted  unless  it  is  clear  that  there  is  no  foundation  for  the  suit ; ' 
and  though  a  receiver  may  have  power  to  collect  a  judgment  it 
does  not  follow  that  an  action  thereon  should  be  instituted  by 
him,  no  sufficient  reason  being  shown  why  the  real  parties  in 
interest  cannot  sue.' 

§  70.  Receiver's  right  to  sue  limited. 

As  a  rule  the  power  of  the  receiver  to  sue  is  limited  to  the 
rights  of  the  person  or  corporation  over  whose  property  he  is 
receiver,  and  has  no  power  or  authority  beyond  what  such  person 
or  corporation  could  have  exercised  had  the  receivership  not  been 
granted,  for,  as  we  have  seen,  the  appointment  does  not  change 
the  relation  of  the  parties  or  increase  or  diminish  the  rights  of 
any  of  them.*  To  this  rule  there  are  the  following  exceptions  : 
(a)  Where  the  receiver  by  force  of  some  statute  is  made  the  rep- 
resentative of  the  creditors;  (b)  Where  the  act  complained  of 
and  which  is  sought  to  be  avoided  by  the  receiver  is  ultra  vires 
and  not  binding  on  the  corporation ;  (c)  Where  the  receiver  is 
appointed  in  a  proceeding  carried  on  by  creditors,  usually  supple- 
mentary to  execution,  in  which  the  receiver  is  the  representative 

•  Dacie  v.  John,  McClel.  575.  -where  there  has  been  no  enlargement 
»  Lane  v.  Capsey  [1891],  3  Ch.  411.  of  their  powers  by  legislative  enact- 
This  was  a  proceeding  against  the  re-  ment,  that  they  have  such  rights  of 
ceiver,  but  the  principle  is  the  same.  action  only  as  were  possessed  by  the 
8  Murrell  v.  McAllister,  79  Ky.  311.  persons  or  corporations  upon  whose 
*Wallacev.  Milligan,  WO  In^.  4SiS;  estate  they  administer."  .  .  .  "A 
La  Follett  v.  Aiken,  36  Ind.  1 ;  Cas-  receiver  mrtute  officii,  and  without  re- 
serly  v.  Witherbee,  119  N.  Y.  522;  gard  to  any  expansion  of  his  powers 
Republic  L.  Ins.  Co.  v.Sicigert,  135  111.  by  statute,  or  by  an  authorized  decree 
150,  13  L.  R.  A.  328.  In  this  case,  of  court,  is  only  a  custodian  of  prop- 
Mr.  Justice  Baker,  speaking  for  the  erty.  He  is  ordinarily,  in  respect  to 
majority  of  the  court,  says:  "We  do  his  title  and  in  regard  to  the  litiga- 
not  wish  to  be  understood  as  saying  tions  in  which  he  may  engage,  merely 
that  there  is  no  conflict  in  the  authori-  the  representative  of  the  owners  of 
ties  in  regard  to  the  matter  under  con-  the  property  submitted  to  his  control." 
Bideration;  but  we  think  the  decided  See  Billings  v.  Robinson,  94  N.  Y.415j 
weight  of  authority  sustains  the  rule  Coope  v.  Bowles,  42  Barb.  87. 
in  respect  to  the  powers  of  receivers, 


SUITS  BY  RECEIVERS— DEFENSES  TO. 


157 


of  the  creditors  alone  and  for  the  securing  of  whose  claims  he  is 
appointed.* 


*  Beptiblic  L.  Ins.  Co.  v.  Swigert,  135 
111.  150,  12  L.  R.  A.  328;  Hi/de  v. 
Lynde,  4  N.  Y.  387.  And  see  Porter 
V.  Williams,  9  N.  Y.  142;  Curtis  v. 
Leavitt,  15  N.  Y.  44;  Alexander  v. 
Relfe,  74  Mo.  495;  Farnsworth  v. 
Wood,  91  N.  Y.  308;  Coope  v.  Bowles, 
42  Barb.  87;  PiscaJiaqua  F.  &  M.  Ins. 
Co.  V.  Hill,  60  Me.  178;  WaterJiouse  v . 
Jamieson,  2  Pat.  H.  L.  (Sc.)  1812;  Be 
Duckworth,  L.  R.  2  Ch.  App.  Cas. 
577;  Leif child's  Case,  L.  R.  1  Eq.  231. 
In  the  following  cases  the  receiver 
was  held  to  represent  creditors  as  well 
as  the  company:  Upton  v.  Tribilcock, 
91  U.  S.  45,  23  L.  ed.  203;  Sawyer  v. 
Eoag,  84  U.  S.  610,  21  L.  ed.  731; 
Covington  Draiobridge  Co.  v.  ShepJiei'd, 
62  U.  S.  21  How.  112,  16  L.  ed.  38; 
Stokes  V.  New  Jersey  Pottery  Co.  46 
N.  J.  L.  237;  National  Trust  Co.  v. 
Miller,  33  N.  J.  Eq.  155;  Poicers  v. 
Hamilton  Paper  Co.  60  Wis.  23;  Alex- 
ander V.  Relfe,  74  Mo.  495;  Atty.  Oen. 
V.  Ouardian.  Mut.  L.  Ins.  Co.  77  N.Y. 
272;  Whittlesey  v.  Delaney,  73  N.  Y. 
571;  Bane  v.  Toung,  61  Me.  160; 
Eyton  V.  Denbigh,  R.  &  C.  R.  Co. 
L.  R.  6  Eq.  488.  But  most  of  these 
cases,  so  far  as  they  relate  to  the  re- 
ceiver's power  to  sue,  are  based  upon 
statutes. 

A  receiver  of  a  corporation  has  a 
right  to  redeem  from  a  foreclosure 
sale  of  its  property  in  the  same  man- 
ner as  the  corporation  would  have 
had,  if  no  receiver  had  been  ap- 
pointed. Casserly  v.  Witherbee,  119 
N.  Y.  522.  In  supplementary  pro- 
ceedings see:  Porter  v.  Williains,  9 
N.  Y.  142;  Osborne  v.  Moss,  7  John. 
IGl;  Jackson  v.  Oarnsey,  10. John.  184; 
Jackson  v.  Cadwell,  1  Cow.  022;  Leach 
V.  Kelsey,  7  Barb.  466:  Jewett  v.  Pal- 
mer, 7  John.  Ch.  65;  Padgett  v.  Law- 


rence, 10  Paige,  170;  De  Mott  v.  Star- 
key,  3  Barb.  Ch.  403.  In  fraudulent 
or  illegal  acts  of  corporations  see: 
Oillett  V.  Moody,  3  N.  Y.  479;  Leavitt 
V.  Palmer,  3  N.  Y.  19;  Brouwer  v. 
Hill,  1  Sandf.  629;  Hyde  v.  Lynde,  4 
N.  Y.  392.  In  Whittlesey  v.  Delaney, 
73  N.  Y.  571,  suit  was  brought  by  a 
receiver  to  set  aside  and  vacate  a 
judgment  recovered  against  the  party 
for  whom  he  was  appointed  receiver 
on  the  ground  that  it  was  without 
consideration  and  was  obtained  by 
collusion  in  fraud  of  the  rights  of 
creditors.  It  was  held  that  the  action 
was  properly  brought  in  the  name  of 
and  by  the  receiver  as  the  representa- 
tive, as  well  of  creditors  as  the  debtor. 
And  that  it  was  his  duty  in  behalf  of 
the  creditors  to  resist  the  judgment 
and  assert  the  rights  of  creditors 
against  the  fraudulent  or  illegal  acts 
of  the  corporation  by  which  their 
rights  were  affected.  Gillet  v.  Moody, 
3  N.  Y.  479;  Bate  v.  Graham,  11 
N.  Y.  237;  Talmage  v.  Pell,  7  N.  Y. 
328;  Hackley  v.  Draper,  60  N.  Y.  88; 
Tracy  v.  First  Nat.  Bank,  37  N.  Y. 
523.  He  would  have  no  standing  in 
a  court  in  a  case  to  which  he  was  not 
a  party. 

The  court  say  in  Atty.  Oen.  v. 
Ouardian  Mut.  L.  Ins.  Co.  11  N.  Y. 
272:  "  It  is  the  settled  doctrine  that 
the  receiver  of  an  insolvent  corpora- 
tion represents  not  only  the  corpora- 
tion but  also  creditors  and  stockhold- 
ers, and  that  in  his  character  as  trus- 
tee for  the  latter  he  may  disaftirm  and 
maintain  an  action  as  receiver  to  set 
aside  illegal  or  fraudulent  transfers 
of  the  property  of  the  corporation 
made  by  its  agents  or  ollicers,  or  to 
recover  its  funds  or  securities  invested 
or  misapplied. 


158 


RECEIVERSHIPS. 


In  an  action  supplementary  to  execution  the  receiver  is  not  in 
a  position  as  representing  tlie  debtor  to  impeach  a  completed  sale 
of  the  debtor  on  the  ground  that  it  is  fraudulent  as  to  creditors, 
and  as  a  representative  of  the  judgment  creditors  he  can  only 
impeach  such  sale  by  an  action  instituted  by  him  for  such  pur- 
pose.' A  receiver  has  no  right  to  interfere  with  a  suit  pending 
at  the  time  of  his  appointment,  without  an  order  of  court  so 
directing  him,'  but  the  court  may,  on  a  summary  application, 
direct  the  suit  to  be  continued  in  the  name  of  the  receiver,  or  in 
the  name  of  the  corporation,  on  its  giving  security  for  costs/ 

§  71.  Receiver's  authority  must  be  shown. 

Inasmuch  as  the  receiver  is  the  representative  of  the  person  or 
corporation  whose  estate  he  is  to  administer,  and,  as  a  rule,  has  no 
powers  or  rights  beyond  his  princij^al,  it  follows  (a)  that  in  order 
to  recover  he  must  allege  and  show  a  right  of  action  on  the  part 
of  such  person  or  corporation,*  and  in  addition  he  must  allege  and 


'  Brown  v.  Oilmore,  16  How.  Pr. 
527. 

2  Gadsden  v.  Whaley,  14  S.  C.  210; 
Tracy  v.  First  Nat.  Bank,  37  N.  Y, 
523. 

3  Talmage  v.  Pell,  9  Paige,  410. 
*Manlove  v.    Burger,  38  Ind.  211; 

Manlove  v.  Naylor,  38  Ind.  424;  Bil- 
lings V.  Robinson,  94  N.  Y.  415. 

To  enable  the  receiver  of  a  bank  to 
maintain  in  behalf  of  its  claimants  an 
action  against  the  stockholders  for 
contribution,  in  which  losses  by  offi- 
cial mismanagement  are  alleged  as  a 
specific  ground  for  enforcing  such 
liability,  it  must  appear  from  a  judi- 
cial determination  that  there  has  been 
a  loss  thus  occasioned  in  the  capital 
stock  and  that  the  directors  are  unable 
to  make  good  the  loss.  Hewett  v. 
Adams,  50  Me.  271. 

In  order  for  the  receiver  to  recover 
an  assessment  upon  a  premium  insur- 
ance note  he  must  show  the  time  cov- 
ered by  the  policy  for  which  the  note 
was  given,  and  that  the  losses  for 


which  the  assessment  was  made  oc- 
curred during  the  existence  of  the 
policy.  Embree  v.  Shideler,  36  Ind. 
423.  In  making  the  assessment  the 
receiver's  authority  depends  not  upon 
the  order  of  court  but  upon  the  exist- 
ence of  the  facts  rendering  an  assess- 
ment necessary.  The  promise  of  the 
assured  is  to  pay  upon  certain  condi- 
tions and  the  existence  of  those  con- 
ditions must  be  shown  by  the  party 
seeking  to  enforce  the  contract.  Id. 
Where  there  is  no  averment  in  the 
complaint,  and  therefore  no  founda- 
tion laid  for  the  introduction  of  evi- 
dence of  the  liabilities  of  the  company 
and  there  was  no  proof  of  the  exist- 
ence of  any  liabilities  for  the  payment 
of  which  an  assessment  was  necessary, 
the  plaintiff  cannot  recover.  Id. 
Thomas  v.  Whallon,  31  Barb.  172; 
Savage  v.  Medbury,  19  N.  Y,  32.  The 
complaint  must  show  a  right  of  ac- 
tion in  the  receiver.  Garver  v.  Kent, 
70  Ind.  428;  Manlove  v.  Naw,  39  Ind. 
289. 


SUITS  BY  RECEIVERS— DEFENSES  TO. 


159 


ehow  (b)  the  time  and  mode  of  liis  appointment ;'  and  (c)  that  he 
has  tiled  the  bond  required  by  the  order  of  appointment,  where 
it  is  made  a  condition  precedent  to  liis  taking  possession  that  he 
shall  give  bond.  Mere  irregularity  in  giving  bond  will  not  invali- 
date the  proceedings,  however ;  it  is  only  where  there  is  no  at- 
tempt to  give  bond,  or  absence  of  proof  on  that  subject.^  A  de- 
cree of  court  appointing  a  receiver  to  collect  partnership  debts  is 
of  itself  sufficient  authority  to  authorize  a  suit  by  the  receiver 
against  a  debtor  of  the  partnership,  and  in  such  case  a  certified 
copy  of  the  entry  of  appointment  is  all  that  is  required.'  It  must 
be  alleged  (d)  that  the  receiver  had  leave  of  court  to  bring  suit.* 


^Dayton  v.  Connah,  18  How.  Pr. 
326.  It  is  not  sufficient  to  allege  "hav- 
ing been  duly  appointed  receiver  of," 
etc.,  and  "  bringing  this  suit  by  order 
of  the  supreme  court; "  it  is  not  neces- 
sary, however,  to  set  out  the  grounds 
on  which  the  appointment  was  based. 
Hottenstein  v.  Conrad,  9  Kan.  435. 
See  also  Gillet  v.  FaircMld,  4  Denio, 
80;  Bangs  v.  Mcintosh,  23  Barb.  596; 
Hdbart  v.  Frost,  5  Duer,  672;  Hulhert 
V.  Toung,  13  How.  Pr.  413;  White  v. 
Joy,  13  N.  Y.  83;  White  v.  Low,  7 
Barb.  204.  It  will  not  answer  for  a  re- 
ceiver merely  to  describe  himself  as 
receiver,  or  aver  that  he  was  duly 
appointed. 

^Heyewisch  v.  Silver,  50  N.  Y.  S.  R. 
448;  Re  Christian  Jensen  Co.  128  N. 
Y.  550:  Wilson  v.  Welch,  157  Mass.  77. 

^Helme  v.  Littlejohn,  12  La.  Ann. 
298.  A  transcript  of  the  proceedings 
is  not  necessary.  A  certified  copy  of 
the  entry  of  appointment  established 
prima  facie  proof  that  the  court  had 
the  proper  parties  before  it  at  the  time 
of  the  appointment. 

*  Davis  V.  Ladoga  Creamery  Co.  128 
Ind.  222;  Keen  v.  Brecke?iridge,9G  Ind. 
69,  602;  Moriartyv.  Kent,  71  Ind.  601; 
Qarver  v.  K^ent,  70  Ind.  428;  Uarrell 
V.  Kent,  71  Ind.  602;  Ilerron  v.  Vance, 
17  Ind.  595;  Coope  v.  Bowles,  28  How. 
Pr.  10;  Wynn  v.  Loi'd  Newhorough,  3 


Bro.  C.  C.  88;  Qreen  v.  Winter,  1 
.Tohns.  Ch.  60;  Ward  v.  Sioift,  6  Hare, 
312;  Re  Merritt,  5  Paige,  125;  Merritt 
v.  Merritt,  16  Wend.  405;  Davis  v. 
Snead,  33  Gratt.  705;  Screven  v.  Clark, 
48  Ga.  41;  Swaby  v.  Dickon,  5  Sim. 
629;  Battle  v.  Davis,  66  N.  C.  252. 
See  as  to  general  authority,  Rockwell 
V.  Merwin,  8  Abb.  Pr.  N.  S.  330. 

Where  the  authority  of  the  plaintiff 
to  sue  as  receiver,  in  his  own  name,  is 
denied,  it  is  incumbent  on  him  to 
show  a  valid  appointment,  by  order 
of  the  court,  vesting  in  him  the  title 
to  the  choses  in  action  of  the  firm 
whose  assets  he  is  attempting  to  col- 
lect; an  order  "that  A  do  collect  any 
insurance  money  due  to  the  firm  of  B 
as  well  as  all  notes,  accounts,  and 
choses  in  action  due  to  said  firm;  and 
also  that  he  sell  all  property  belong- 
ing to  the  firm,  except  the  real  estate, 
and  that  he  keep  and  hold  the  entire 
proceeds  from  said  sources  until  the 
future  order  of  court;  and  by  like 
consent  it  is  ordered  that  the  question 
of  the  continuance  of  the  temporary 
injunction  and  the  appointment  of  a 
receiver  be  continued  without  preju- 
dice to  the  ne.xt  term,"  does  not  vest 
in  A  the  legal  title  to  the  assets;  he  is 
not  a  receiver  nor  a  real  party  in  in- 
terest, and  cannot  maintain  an  action 
in  his  own  name.     Boyd  v.  Royal  Ins. 


160 


RECEIVERSHIPS. 


"Where  an  action  is  pending  at  tlie  time  of  the  appointment  of 
a  receiver,  lie  may  continue  sucli  action  in  the  name  of  the  corpo- 
ration which  instituted  the  suit/  but  he  has  no  right  to  interfere 
in  an  action  until  he  is  made  a  party  to  the  suit  by  order  of  court, 
■or  by  an  order  directing  him  to  continue  in  the  name  of  the  orig- 
inal party. 

I  72.  Receiver's  power  to  sue  in  his  own  name. 

A  receiver  appointed  by  a  court  of  chancery,  in  the  absence  of 
statutory  power,  and  in  the  absence  of  an  assigmnent  by  the  legal 
owner  to  the  receiver  pursuant  to  the  order  of  court,  or  other  con- 
veyance of  the  legal  title  to  the  fund  or  property  cannot  in  his 
own  name  maintain  a  suit  in  another  jurisdiction  to  recover  the 
receivership  property  or  debts,  even  when  so  authorized  by  the 
■decree  of  appointment,'     The  power  of  the  receiver  to  sue  in  his 


€o.  Ill  N.  C.  372;  Battle  v.  Davis,  66 
N.  C.  253;  Oray  v.  Lewis,  94  N.  C. 
596;  Wynne  v.  Heck,  92  N.  C.  414; 
Ahrams  v.  Cureton,  74  N.  C.  523. 

Where  a  statute  provided  that  "the 
receiver  has,  under  the  control  of  the 
oourt,  power  to  bring  and  defend  ac- 
tions, to  take  and  keep  possession  of 
the  property,"  etc.,  and  the  power  to 
;appoint  a  receiver  is  given  "when 
there  is  property  or  a  fund,  the  right 
to  which  is  involved  in  the  action," 
the  receiver  has  no  right  even  under 
the  order  of  the  court  to  bring  an  ac- 
tion involving  title  to  real  estate 
against  third  parties,  or  to  submit  a 
-controversy  concerning  title  to  real 
estate  with  third  parties,  and  thus 
bind  the  real  parties  in  interest  with- 
out their  consent.  He  can  only  bind 
the  interests  of  such  parties  by  join- 
ing them  with  him.  Caldwell  v.  Mc- 
Whorter,  84  Ky.  130.  The  point  does 
not  seem  to  have  been  raised  in  this 
case,  but  it  would  seem  to  be  an  ex- 
ceedingly doubtful  proceeding  in  any 
•case  for  a  receiver  to  undertake  to 
litigate  in  a  court  of  chancery  the  title 
■oi  third  parties  to  real  estate,  in  the 


absence  of  express  statutory  power 
authorizing  him  so  to  do,  and  especi- 
ally so  where  he  is  not  in  the  actual 
possession  of  the  property  about 
which  the  title  is  in  controversy. 
Except  in  statutory  cases  a  court  of 
chancery  is  not  the  proper  forum  to 
adjudicate  upon  legal  titles. 

^Albany  City  Ins.  Co.  v.  Van  Vran- 
ken,  42  How.  Pr.  281;  Phanix  Ware- 
housing Co.  V.  Badger,  67  N.  Y.  294; 
Tracy  v.  First  Nat.  Bank,  37  N.  Y. 
523.  Otherwise  he  is  a  stranger  to 
the  proceedings  and  has  no  right  to 
be  heard  therein.  Be  Oriswold,  13 
Barb.  412;  Ketchum  v.  Ketchum,  1 
Abb.  Pr.  N.  S.  157;  Isham  v.  Ketchum, 
46  Barb.  43;  Thacher  v.  Bancroft,  15 
Abb.  Pr.  245. 

•^Booth  V.  Clark,b%  U.S.  17  How.  322, 
15  L.  ed.  164;  Hazard  v.  Durant,  19 
Fed.    Rep.  471,    McGuin  v.    Fretts, 

13  Ont.  Rep.  699;   Stuart  v.  Orough, 

14  Ont.  Rep.  255;  Bade  v.  Jo7m, 
McClel.  575;  Dickey  v.  McCaul,  14 
Ont.  App.  166;  Alexander  v.  Relfe, 
9  Mo.  App.  133  (reversed  in  74  Mo. 
495,  upon  the  application  of  the  stat- 
ute touching  the  right  of  the  receiver 


SUITS  BY  RECEIVERS— DEFENSES  TO. 


161 


own  name  has  been  reco_o;nized  however  (a)  where  tlie  order  of 
court  so  directs,'  (b)  or  the  statute  so  authorizes/  (c)  But  in  the  ab- 
sence of  such  power  he  must  sue  in  tlie  name  of  the  person  or 
corporation  over  whose  property  he  is  appointed/  unless  he  sues 


to  sue  in  his  own  name).  Yeager  v. 
Wallace,  44  Pa.  294;  Battle  v.  Davis, 
66  N.  C.  252;  King  v.  CiUts,  24  Wis. 
627;  Newell  v.  Fiaher,  24  Miss.  342; 
Manlove  v.  Burger,  38  Ind.  211;  Dick 
V.  StrutJiers,  25  Fed.  Rep.  103;  Ken- 
edy V.  Benson,  54  Fed.  Rep.  836;  but 
see  contra  in  Wilkinson  v.  Rutherford, 
49  N.  J.  L.  241,  where  a  receiver  was 
permitted  to  sue  on  a  negotiable  bond 
when  he  had  been  appointed  receiver 
of  an  insolvent  savings  institution. 
The  suit  was  maintained  on  the  ground 
that  he  was  an  assignee  by  legal  in- 
tendment. 

The  Supreme  Court  of  Massachu- 
setts in  a  recent  case,  Wilson  v.  Welch, 
157  Mass.  77,  says:  "Although  the 
practice  in  this  commonwealth  has  not 
been  uniform  (see  Farmers'  &  M. 
Bank  v.  Jenks,  7  Met.  592;  Boot  & 
Shoe  Mfrs.  Mut.  F.  Ins.  v.  Melrose  Or- 
thodox Cong.  Soc.  117  Mass.  199; 
Sohier  y.  Lamh,  134  Mass.  275;  Par- 
ker V.  Nickerson,  137  Mass.  487), 
we  consider  the  law  to  be  that  a  re- 
ceiver of  a  corporation  appointed  by 
a  court  of  equity  cannot  bring  suit  in 
his  own  name  to  recover  property  of 
the  corporation  which  has  never  been 
in  his  possession  unless  he  is  author- 
ized no  to  do  by  statute,  or  by  the  de- 
cree of  a  court  competent  to  give  him 
such  authority,  or  unless  the  title  to 
the  property  has  been  conveyed  to 
him.  Courts  of  equity  cannot  transfer 
the  title  to  property  by  decree  unless 
authorized  by  statute,  although  they 
can  compel  the  defendant  to  transfer 
the  title.  Cf.  Moriartyy.  Kent,  71  Ind. 
601;  Harrell  v.  Kent,  71  Ind.  G02; 
Garver  v.  Kent,  70  Ind.  428;  Justice  v. 

11 


Kirlin,  17  Ind.  588;  Harland  v.  Bank- 
ers' &  M.  Teleg.  Co.  32  Fed.  Rep.  305; 
Freeman  v.  Winchester,  10  Smedes  & 
M.  577;  Ligersoll  v.  Cooper,  5  Blackf. 
426.  But  see  Eenning  v.  Raymond, 
35  Minn.  303;  Baker  v.  CooiJer,  57  Me. 
388.  Wray  v.  Jamison,  10  Humph. 
186;  St.  Louis  &  8.  Coal  &  M.  Co.  v. 
Sandoval  Coal  &  M.  Co.  Ill  111.  32; 
Inglehart  v.  Bierce,  36  111.  133. 

'  There  are  cases  which  hold  that 
under  proper  circumstances,  the  court 
appointing  a  receiver  may  authorize 
him  to  bring  and  prosecute  suits  in  his 
own  name. 

Manlove  v.  Burger,  38  Ind.  211; 
Oarver  v.  Kent,  70  Ind.  428;  Freeman 
v.  Winchester,  10  Smedes  &  M.  577; 
King  v.  Cutts,  24  Wis.  627;  Leonard 
V.  Starrs,  31  Ala.  488;  Rardioick  v. 
Hook,  8  Ga.  354. 

*  Or  he  may  be  authorized  by  statute 
to  sue  in  his  own  name,  as  where  the 
statute  provides  that  the  receiver  shall 
"reduce  the  assets  of  such  corpora- 
tion to  possession,  and  pay  the  debts 
thereof  under  the  same  rules  pre- 
scribed for  the  government  of  adminis- 
trators." Manlove  v.  Burger,  38  Ind. 
211. 

2  But  if  the  receiver  is  not  author- 
ized either  by  statute  or  in  a  proper 
case  by  the  order  of  court  from  which 
he  receives  his  appointment  to  sue  in 
his  own  name  he  cannot  do  so,  but 
must  bring  the  action  in  the  name  of 
the  corporation  or  party  in  whom  was 
the  right  of  action  before  the  appoint- 
ment of  the  receiver.  Yeager  v.  Wal- 
lace, 44  Pa.  294;  King  v.  CxUts,  24 
Wis.  627;  Nexoell  v.  Fisher,  24  Miss. 
392;  Manlove  v.  Burger,  38  Ind.  211. 


162 


RECEIVERSHIPS. 


upon  a  contract  made  with  himself,  or  upon  an  obhi^ation  due  to 
him  as  receiver/  or  wliere  a  tenant  has  attorned  to  him/ 

Where  a  court  of  chancery  in  the  order  of  appointment  con- 
fers power  on  the  receiver  to  sue,  he  may  do  so  on  the  principle 
that  the  receiver  is,  by  operation  of  law,  subrogated  to  all  the 
rights  of  the  real  parties  in  interest.^ 


A  receiver  appointed  "to  lease  or 
rent  the  premises,  to  take  care  of  the 
same,  and  to  collect,  receive  and  take 
care  of  the  said  rents  during  the  pen- 
dency of  the  action,"  has  no  right  to 
bring  an  action  in  his  own  name 
against  a  tenant  for  unlawful  detainer. 
King  v.  Cutts,  24  Wis.  627.  But  it  is 
otherwise  if  the  tenant  holds  under 
the  receiver.  Ponder  y.  Catierson,  127 
Ind.  434. 

A  chancery  receiver  ordered  by 
court  to  collect  the  notes  and  debts 
due  to  a  partnership  which  the  parties 
themselves  are  enjoined  from  col- 
lecting may  sue  in  his  own  name. 
Leonard  v.  Starrs,  31  Ala.  488.  A  re- 
ceiver of  a  partnership  cannot  main- 
tain trover  in  his  own  name  against  a 
person  who  had  converted  assets  of 
the  firm  before  his  appointment;  he 
must  sue  in  the  name  of  the  firm  in 
■whom,  was  the  legal  right  of  action. 
Teager  v.  Wallace,  44  Pa.  294. 

At  common  law  a  receiver  has  no 
power  to  institute  suit  as  such  to  set 
aside  a  fraudulent  conveyance.  Por- 
ter V.  Williams,  9  N.  Y.  142.  To  au- 
thorize a  receiver  to  sue  he  must  have 
the  legal  title  to  the  thing  in  contro- 
versy.    Newell  v.  Fcsher,  24  Miss.  392. 

'  While  the  general  rule  is  that  a  re- 
ceiver in  the  absence  of  a  statute  or 
an  order  of  court  cannot  sue  in  his 
own  name  this  rule  does  not  apply 
to  a  case  where  the  receiver  brings 
suit  upon  a  contract  made  with  him- 
self as  receiver,  or  upon  an  obligation 
due  to  him  as  receiver.  Ponder  v. 
Catterson,  127  Ind.  434;  Singerly  v. 
Fox,  75  Pa.  112. 


"^Babcock  v.  Brooks,  9  L.  J.  (U.  C.) 
185.  Where  the  receiver  has  reduced 
the  property  to  possession  and  it  is 
thereafter  stolen  from  him  the  title  in 
an  indictment  may  be  alleged  to  be  in 
the  receiver.  State  v.  Rivers,  60  lowa^ 
381. 

''Hardwick  v.  Hook,  8  Ga.  354;  Wil- 
son V.  Welch,  157  Mass.  77;  Frank  v. 
Morrison,  58  Md.  423;  Dorsey  v.  Mor- 
rison, 48  Md.  461;  Musgrarey.  Morri- 
son, 54  Md.  161;  Rider  v.  Morrison, 
54  Md.  429;  Frank  v.  Morrison,  55 
Md.  399;  Garver  v.  Kent,  70  Ind.  428; 
Moriarty  v.  Kent,  71  Ind.  601;  Man- 
Icoey. Burger,  38  Ind.  211;  Eenning  v. 
Raymond,  35  Minn.  303;  Leonard  v. 
Storrs,  31  Ala.  488;  Frankle  v.  Jack- 
son, 30  Fed.  Rep.  398.  But  see  Battle 
V.  Davis,  66  N.  C.  252. 

In  a  case  where  the  legal  title  is  in 
a  third  person,  in  whose  name  the  re- 
ceiver is  obliged  to  prosecute,  he  must 
first  obtain  an  order  of  court  for  that 
purpose  after  notice  to  such  person. 
Merritt  v.  Merritt,  16  Weed.  405. 

Where  a  defendant  company  after 
decree  appointing  a  receiver  but  before 
the  appointment  is  completed  makes  a 
payment  alleged  to  be  fraudulent  and 
preferential  the  proceedings  must  be 
by  those  who  are  affected  by  the  pay- 
ment and  not  by  the  receiver.  Fox  v. 
Toronto  &  N.  R.  Co.,  29  Ch.  (Ont.)  11; 
Gooderliam  v.  Toronto  &  N.  R.  Co.  29 
Ch.  (Ont.)  11. 

If  a  bill  is  filed  by  a  receiver  for 
the  creditors  and  stockholders  of  a 
corporation  it  is  not  necessary  to  make 
the  creditors  and  stockholders  parties. 
Mann  v.  Bruce,  5  N.  J.  Eq.  413. 


SUITS  BY  EECEIVERS— DEFENSES  TO.  163 

In  most  of  the  states  by  codes  V)f  procedure,  or  other  statutory 
provisions,  and  especially  in  insolvency  proceedings,  and  proceed- 
ings for  winding  up  corporations,  the  receiver  is  specifically  au- 
thorized and  empowered  to  sue  in  his  own  name  in  all  proceed- 
ings relating  to  the  property  over  which  his  receivership  extends.' 

§  73.     Power  of  receivers  to  sue  in  foreign  jurisdiction. 

(a)  Generally. 
The  principle  involved  in  the  question  as  to  the  power  of  a 
receiver  to  sue  in  a  foreign  jurisdiction,  and  to  what  extent  he 
will  be  recognized  and  protected  in  such  foreign  jurisdiction  ha& 
been  the  subject  of  very  much  discussion  both  in  this  country  and 
in  England  for  nearly  two  hundred  years.  It  first  originated  in 
the  discussion  of  the  extra-territorial  power  of  assignees  in  bank- 
ruptcy, and  has  received  the  consideration  of  the  leading  great 
jurists  of  both  countries."  The  history  of  the  discussions  upon 
this  subject  would  form  sufiicient  matter  for  a  volume,  but 
epitomized  is  as  follows  : 

(b)  Early  English  doctrine. 
From  about  ITll,  and  for  more  than  fifty  years  thereafter,  the 
law  of  England  was  to  the  effect  that  no  extra-territorial  force  was 

A  receiver  of  a  firm  having  power  Ficlitenkamp,  v.  Oambs,  68  Mo.  289. 
to  receive  and  reduce  to  his  possession  The  case  of  IStanton  v.  Wilkeson, 
all  the  firm's  assets  and  choses  in  action  «M^ra,relates  to  the  rights  of  a  receiver 
may  maintain  in  his  own  name,  with-  of  a  national  bank  to  sue  the  stock- 
out  joining  the  firm  or  its  members,  an  holders  of  such  bank  in  his  own  name 
action  on  a  fire  policy  payable  to  the  and  it  is  held  he  has  such  power  under 
firm.  Boyd  v.  Boyal  Ins.  Co.  Ill  N.  the  provisions  of  U.  S.  Rev.  Stat. 
C.  372;  Oray  v.  Lewis,  94  N.  C.  396,  §  5234;  it  is  also  held  that  the  receiver 

^Alexander   v.    Relfe,    74  Mo.   495;  is  not  required  to  proceed  in  equity 

Oill  V.  Balis,  72  Mo.  424;  Stanton  v.  but  may  bring  separate  actions  at  law 

Wilkeson,  8  Ben.  357;  Oi'ay  v.  Lewis,  to  recover  the  amount  due  from  each 

94  N.  C.  392;  Case  v.  Berwin,  22  La.  stockholder. 

Ann.  321;    Comer  v.  Bray,   83  Ala.  ^  Lord  Kaymond,  Sir  Joseph  Jekyl, 

217;  Leavitt  v.  Yates,  4  Edw.  Ch.  134.  Lord   Mansfield,  Lord   Talbot,  Lord 

Where  the  statute    authorizes  the  Chancellor  Camden,  Lord  Ilardwicke, 

receiver  to  sue  in  his  own  name  in  Lord  Thurlow,  and  others  in  England, 

certain  enumerated  cases,  it  does  not  and    Chancellor    Kent,    Mr.    Justice 

authorize  the  receiver  to  bring  suit  in  Story,  Chief  Justice  Parsons,  Mr.  Jus- 

his  own  name  against  the  sureties  on  tice  Wayne,  and  many  others  in  this 

the  bond  of  his  predecessor.     State,  country. 


164  RECEIVERSHIPS. 

to  be  given  to  the  bankrupt  laws  of  a  foreign  state,  and  the  rights 
of  an  assignee  or  curator  in  bankruptcy  to  recognition  in  foreign 
courts  was  not  recognized.  Foreign  assignees  were  not  recog- 
nized in  England  and  their  local  assignees  were  not  supposed  to 
have  any  rights  as  against  creditors  seeking  the  collection  of  their 
debts  in  foreign  countries  where  some  of  the  property  of  the 
bankrupts  might  be  located.* 

(c)  Later  English  doctrine. 
Commencing  with  1764/  and  particularly  with  1788'  and  1789/ 
the  English  courts  modified  the  earlier  doctrine  of  that  country, 
to  the  extent  that  assignees  in  bankruptcy  were  protected  in  their 
title  and  possession  of  the  bankrupt  property  in  foreign  countries, 
and  the  title  and  possession  of  foreign  assignees  were  upheld  in 
England.  In  either  case,  however,  if  by  the  laws  of  the  foreign 
country,  the  title  to  the  property  became  vested  in  a  creditor 
through  legal  proceedings  prior  to  the  act  of  bankruptcy,  then 
such  right  would  be  respected,  but  where  the  act  of  bankruptcy 
was  previous  to  the  completion  of  the  judicial  act  instituted  by 
the  creditor,  the  assignees  would  hold.  The  distinction  supposed 
to  exist  growing  out  of  a  vested  legal  title  in  the  assignee  or  re- 
ceiver by  means  of  a  formal  conveyance  and  a  mere  possessory 
right,  in  such  assignee  or  receiver,  was  never  recognized  in  that 
country,  his  possession  in  either  case  being  free  from  molestation 
or  interference.*     The  international  effect  to  be  given  to  transfers 

'Burge,  Colonial  Law,  vol.   3,  pp.  be    is  governed.     They  are  subject 

907-924  et  seq.  and  cases  cited.  therefore  to  such  disposition  of  them 

^Solomons  v.    Ross,  1   H.  Bl.    133,  as  that  law  makes,  whether  it  transfers 

note.  the   property   to  the  trustees    or  as- 

^  Wright  v.  JVuti,  1  H.  Bl.  136.  signees,  and  commits  to  them  only  the 

*Folliott  V.  Ogden,  1  H.  Bl.  123.  possession  and  administration,  but  at 

^Hunter  V.  Potts,  ^T.'R.  182;  Phil-  the  same  time  prevents  and  avoids  any 

ip$  V.  Hunter,  2  Tenn.  402;    Sill  v.  alienation  of  them  which  the  debtor 

Worswick,  1  H.  Bl.  693;  Burge,  Colo-  might  make.     It  would  be  a  strange 

nial  Law,  vol.  3,  p.  914.  anomaly  in  jurisprudence  if  the  trans- 

The  later  law  of  England  is  the  es-  fer  of  personalty  by  operation  of  law 

tablished   law   of   Scotland,  Ireland,  as    in    bankruptcy    proceedings,    in- 

Holland,  Spain   and  France,   and  so  solvency   proceedings,  and  the  like, 

far  as  personalty  is  concerned  is  based  through  the  instrumentality  of  an  as- 

upon  the  principle  that  movables  fol-  signee  or  receiver  under  the  order  and 

low  the  person  of   their  owner,  and  direction  of  the  court,  should  not  be 

are    subject    to    the   law  by    which  as  effective  and  valid,  to  all  intents 


SUITS  BY  RECEIVERS— DEFENSES  TO.  165 

of  property  by  operation  of  law  throiifrli  the  instrumentality  of 
assignees  and  receivers,  and  the  extra-territorial  operation  of  the 
title  of  such  officers  as  established  in  England,  and  other  foreign 
countries,  is  based  upon  the  broad  and  constantly  growing  system 
of  international  comity,  and  fosters  in  no  little  degree  the  spirit 
and  beneficial  results  of  international  commerce. 

(d)  Early   doctkine   in  United  States. 
Following  the  line  of  decisions  of  the  earlier  English  courts  upon 

the  subject  the  courts  in  the  American  colonies  prior  to  the  Revo- 
lution, and  many  of  the  state  and  United  States  courts  since  that 
period,  established  the  doctrine  that  an  assignee  or  receiver's  title  to 
personal  property  extended  only  to  such  property  of  the  debtor  as 
had  a  situs  within  the  state  of  the  assignee  or  receiver's  appoint- 
ment, and  that  beyond  the  state  line  lie  had  no  title  or  right  of 
possession,  or  at  least  such  as  the  court  would  enforce.  As  a 
corollary  of  this  doctrine  it  was  held  that  a  foreign  receiver  could 
not  sue  or  defend  and  had  no  standing  in  a  court  of  foreign 
jurisdiction.' 

(e)  Later  doctrine  in  United  States. 

"While  some  of  the  features  of  the  earlier  doctrine  are  still 
recognized  and  enforced  in  some  of  the  American  courts  upon 
the  principle  of  stare  decisis,  yet  the  modern  doctrine  as  to  the 
receiver's  rights  to  sue  in  a  foreign  jurisdiction,  and  reduce  to 
possession  the  assets  of  his  principal,  or  recover  his  c/ioses  in 
action  is  well  established  by  the  great  weight  of  authority  as  well 

and  purposes,  the  world  over,   as  in  Crowder,  4  McCord,  L.  519;  Taylors. 

case  of  succession,  or  voluntary  trans-  Geary,  Kirby  (Conn.)  313;  Ingraliam 

fer,  when  the   owner's   domicil  gov-  v.  Oeyer,  13  Mass.  146;  Fox  v.  Adams, 

erns  the  transfer,  and  where  the  title  5  Me  245;  Ogdcn  v.  Saunders,  25  U. 

soconveyed  is  recognized  and  prevails  S.  12  Wheat.  218,  6  L.  ed.  600;  Uope 

wherever  the  property  may  be  found.  Mut.  L.  Ins.   Co.  v.  Taylor,  2  Robt. 

'^Greenwood  v.  Curtis,  6  Mass.  358;  278;  Farmers  &  M.  Ins.  Co.  v.  Needles, 

Olivier  v.    Townes,  2  Mart.   N.  S.   93;  52  Mo.  17;  Brigham  v.  Luddington,  13 

Burk  V.  McClain,  1  Harr.    &   McII.  Blalchf.    237;  Uamrd  v.  Durant,  19 

236;   Wallace  v.  Patterson,  2  Harr.  &  Fed.  Rep.  471;  Day  v.  Postal  Teleg. 

McH.  463.  Milne  v.  Moreton,  6  Binn.  Co.  66  Md.  354;  Booth  v.  Clark,  58  U. 

353;    McNeil  v.   Colquhoon,  2  Hayw.  S.  17  How.  322,  15  L.  ed.  164;  Ilarri- 

(N.  C.)  24;  Milliken  v.  Aughinbaugh,  son  v.  Sterry,  9  U.  S.  5  Crauch.  289,  3 

1  Penr  &  W.  117;  Ihpham  v.   Chap-  L.  ed.  104;  Ogden  v.  Saunders,  25  U. 

man^  1  Mill,  Const.  283;  BoUnson  v.  S.  12  Wheat.  359.  6  L.  ed.  656. 


166  RECEIVERSHIPS. 

as  by  reason,  though  there  are  still  some  limitations  that  will  be 
noticed  hereafter.  Courts  of  this  country  have  recognized  the 
justice  and  cogent  reasoning  of  the  modern  English  courts  and 
jurists  and  have  sought  to  break  away  from  the  docrine  of  the 
court  in  Booth  v.  ClarJc,  which,  though  not  the  earliest,  yet  has 
been  regarded  as  the  leading  case  upon  the  subject,  sometimes  by 
compelling  the  debtor  to  make  a  formal  transfer  of  his  property 
to  the  receiver  and  thus  vesting  in  him  the  absolute  legal  title  by 
act  of  the  parties  which  is  recognized  and  enforced  in  all  juris- 
dictions. Sometimes  the  same  end  has  been  accomplished  by  the 
establishment  of  a  species  of  interstate  comity,  by  which  the 
judgment,  and  decrees  of  other  states,  and  the  rights  and  powers 
of  receivers  thereunder  have  been  given  an  extra-territorial  virtue 
and  force,  and  the  right  of  the  receiver  to  sue  and  enforce  his 
property  rights  in  a  foreign  jurisdiction  recognized  and  respected. 
It  is  believed  that  the  modern  doctrine  on  this  subject  will 
soon  become  universal,  and  perhaps  be  still  further  extended  in 
the  same  direction.  It  would  seem  that  there  is  no  occasion  for 
recognizing  a  distinction  between  the  rights  of  a  receiver  to  pro- 
tection from  interference  with  his  possession  in  whatever  juris- 
diction he  may  be,  whether  he  has  the  absolute  legal  title  to  the 
property  of  the  debtor,  or  has  a  mere  possessory  right.  In  either 
case  the  property  is  in  custodia  legis.  Moreover,  it  would  seem 
that  where  a  receiver  becomes  vested  by  operation  of  law  v/ith 
the  legal  title,  or  right  of  possession  of  property  or  assets,  that  his 
rights  therein  ought  to  receive  the  same  recognition  and  protec- 
tion from  all  courts  no  matter  where  situated  and  against  all 
persons  whomsoever.  Such  is  believed  to  be  in  accordance,  with 
the  genius  of  our  institutions,  if  not  indeed  a  constitutional  guar- 
antee. The  farthest  our  courts  have  gone,  as  will  be  seen  by  a 
subsequent  section,  is  to  recognize  the  right  of  the  receiver  to  sue 
for  and  recover  the  receivership  property  in  a  foreign  jurisdiction 
except  as  against  creditors  of  the  debtor  residing  in  such  juris- 
diction. This  class  of  creditors  have  been,  and  are  now,  supposed 
to  enjoy  unique  privileges  based  solely  upon  local  citizenship,  and 
which  are  enforcible  as  against  a  receiver,  wholly  at  variance 
with  the  law  applicable  to  voluntary  transfers.  If  the  domicil 
of  the  owner  carries  with  it  the  rights  of  transfer  recognized  by 
the  law  of  his  domicil  no  sound  reason  is  perceived  why  a  dis- 


SUITS  BY  RECEIVERS— DEFENSES  TO. 


167 


tinction  should  be  made  between  a  transfer  bj  operation  of  law 
and  a  voluntary  transfer.  If  the  right  of  possession  of  the  owner 
of  movable  property  receives  the  protection  of  all  courts,  foreifi;;n 
as  well  as  domestic,  why  not  award  the  same  protection  to  liim 
who  succeeds  to  those  rights  by  operation  of  law  ? 

(f)  Present  doctrine  in  United  States. 

The  great  weight  of  authority  in  this  country  at  the  present 
time  may  be  stated  in  general  terms  as  follows: 

(1)  The  receiver  as  a  strict  matter  of  right,  by  leave  of  court, 
may  sue  and  defend  in  all  courts  of  the  state  where  he  is  ap- 
pointed. 

(2)  He  will  be  permitted  to  sue  and  defend  as  a  foreign  receiver 
in  all  courts  of  other  states  than  that  in  which  he  is  appointed  on 
the  principle  of  comity,'except  where  the  rights  of  citizens  of  the 


'  Phelps  V.  McCann,  123  N.  Y.  641; 
Toronto  Gen.  Trust  Co.  v.  Chicago,  B. 
<fc  Q.  R.  Go.  123  N.  Y.  87;  Re  Waite, 
99  N.  Y.  433;  Hibernia  Nat.  Bank  v. 
Lacomhe,  84  N.  Y.  367;  Osgood  v.  Mc- 
Guire,  61  N.  Y.  524;  Kelly  v.  Crajw, 
45  N.  Y.  86;  Dyer  v.  Poicer,  39  N.  Y. 
S.  R.  136;  Pugh  v.  Hurtt,  52  How.  Pr. 
22;   Petersen  v.    Chemical    Bank,    32 
N.  Y.  21;  Re  Bristol,  16  Abb.  Pr.  184 
Peters  v.  Foster,  56  Hun,  607;  Runkv 
St.   John,  29  Barb.    585;   Barclay  v 
Quicksilver    Min.    Co.    6    Lans.    25 
Hooper  v.   Tuckerman,  3  Sandf.  311 
Olyphant  v.    Atuood,   4  Bosw.    459 
Holmes  v.  Remsen,  4  Johns.  Ch.  460 
Sobernheimer  v.  Wheeler,  45  N.  J.  Eq 
€14;  Falk  v.  Janes,  49  N.  J.  Eq.  484 
Hurdv.  Elizabeth,  41  N.  J.  L.  1;  Bid- 
lack  V.    Mason,    26  K    J.   Eq.    230; 
Lewis  V.   Grognard,  17  N.  J.  Eq.  425; 
Comstock  V.    Frederickson ,  51   Minn. 
350;  Henning  v.  Raymond,  35  Minn. 
303;  Cagill  v.  Wooldridge,  8  Baxt.  580; 
Woodward  v.    Brooks,    128    111.    222. 
3  L.  R.  A.  702;  Chicago,  M.  &  St.  P. 
R.  Co.  V.  Keokuk  N.  L.  Packet  Co.  108 
111.  317;  Iglehart  v.  Bierce,  36  111.  133; 
Catlin  V.  Wilcox  Siher-Plate  Co.    123 
Ind.  477.  8  L.  R.  A.  62;  Metzner  v. 


Bauer,  98  Ind.  425;  Merchants  Nat. 
Bank  v.  McLeod,  38  Ohio  St.  174; 
Fuller  V.  Stilglitz,  27  Ohio  St.  355; 
Sortwell  V.  Jeicett,  9  Ohio,  181 ;  Kan- 
aga  v.  Taylor,  7  Ohio  St.  134;  Chafee 
V.  Fourth  Nat.  Bank,  71  Me.  514; 
Hunt  V.  Columbia  Ins.  Co.  55  Me.  290; 
Bacon  v.  Home,  123  Pa.  452,  2  L.  R.  A. 
355;  Baglyy.  Atlantic,  M.  &  0.  R.  Co. 
86  Pa.  291 ;  Morgan  v.  Neville,  74  Pa. 
51;  McAlpin  v.  Jones,  10  La.  Ann. 
552;  Paradise  v.  Farmers  &  M.  Bank, 
5  La.  Ann.  710;  Graydon  v.  Church, 
7  Mich.  36;  Winans  v.  Gibbs  &  S.  Mfg. 
Co.  48  Kan.  777;  Boulware  v.  Davis, 
90  Ala.  207,  9  L.  R.  A.  601;  Lycoming 
F.  Ins.  Co.  V.  Wright,  55  Vt.  526; 
Cooke  V.  Orange,  48  Conn.  401 ;  Paine 
V.  Lester,  44  Conn.  196;  Thurston  v. 
Rosenfield,  42  Mo.  474  (Assignment); 
Finer  v.  Beste,  32  Mo.  240  (Assign- 
ment); Green  v.  Gross,  12  Neb.  117 
(Assignment);  Gilman  v.  Ketcham,  84 
Wis.  60,  23  L.  R.  A.  52;  {Contra, 
Filkins  V.  Nunnemacher,  81  Wis.  91); 
McClure  v.  Campbell,  71  Wis.  350; 
Chandler  v.  Siddle,  3  Dill.  477;  Ex 
parte  Norwood,  3  Biss.  3U4. 

Where  the  defendant  was  a  citizen 
of  New  Jersey  and  the  receiver  prose- 


168 


RECEIVERSHIPS, 


cuted  In  behalf  of  a  citizen  of  New 
Jersey,  the  suit  was  permitted  to 
proceed  even  if  a  citizen  of  the  state 
should  be  injuriously  affected  thereby. 
Falk  V.  Janes,  49  N.  J.  Eq.  484. 

But  the  rule  of  protecting  the  citi- 
zens of  the  state  where  suit  is  brought 
does  not  apply  to  a  case  where  the 
receiver  in  the  place  of  his  appoint- 
ment has  reduced  property  in  that 
state  to  his  possession  and  takes  it  to 
a  foreign  state  on  legal  business.  His 
possession  will  be  protected.  CJdcago, 
M.  &  St.  P.  R.  (Jo.  V.  Keokuk  N.  L. 
Packet  Co.  108  111.  317;  Boyle  v. 
Toicnes,  9  Leigh,  158;  Singerly  v.  Fox, 
75  Pa.  112;  Dick  v.  Bailey,  2  La.  Ann. 
974;  Po7id  v.  Cooke,  45  Conn.  126; 
Killmer  v.  Hobart,  58  How.  Pr.  452; 
Cagillv.Wooldridge,9i'Qaxi.  580.  But 
see  contra,  Humiihreys  v.  Hopkins,  81 
Cal.  551,  6  L.  R.  A.  792,  and  see  note 
by  Mr.  Freeman  in  Alley  v.  Caspari 
(Me.)  6  Am.  St.  Rep.  185. 

The  protection  given  to  a  foreign 
receiver  of  a  corporation  was  recog- 
nized and  enforced  in  Bidlack  v. 
Mason,  26  N.  J.  Eq.  230,  where  the 
officers  of  the  corporation  by  fraud  or 
subterfuge  were  endeavoring  to  with- 
hold its  property  from  the  receiver, 
on  the  authority  of  Bunk  v.  St,  John, 
29  Barb.  585;  Murray  v.  Vanderbilt,  39 
Barb.  140;  Hoyt  v.  Thompson,  5  N.Y. 
320;  Dayton  v.  Borst,  7  Bosw.  115. 

Allen,  J.,  in  Willitts  v.  Waite,  25 
N.  T.  577,  says:  "A  quasi  effect  may 
be  given  to  the  law  (of  a  foreign  state) 
as  a  matter  of  comity,  and  interstate 
or  international  courtesy,  when  the 
rights  of  creditors  or  bona  fide  pur- 
chasers, or  the  interests  of  the  state 
do  not  interfere  by  allowing  the 
foreign  statutory  or  legal  transferee 
to  sue  for  it  in  the  courts  of  the  state 
in  which  the  property  is,"  and  that 
"  the  slate  will  do  justice  to  its  own 
citizens  so  far  as  it  can  be  done  by 
administering   upon  property  within 


its  jurisdiction,  and  will  yield  to 
comity  in  giving  effect  to  foreign 
statutory  assignments,  only  so  far  as 
may  be  done  without  impairing  the 
remedies  or  lessening  the  securities 
which  our  laws  have  provided  for 
our  own  citizens."  The  rules  above 
announced  have  been  sustained  in 
New  York  in  the  following  cases: 
Petersen  v.  Chemical  Bank,  32  N.  Y. 
21;  Kelly  v.  Crapo,  45  N.  Y.  86;  Os- 
good V.  McOuire,  60  N.  Y.  524;  Eiber- 
nia  Nat.  Bank  v.  Lacombe,  84  N.  Y. 
367;  Be  Bristol,  16  Abb.  Pr.  184; 
Bunk  V.  St.  John,  29  Barb.  585;  Bar- 
clay V.  Quicksilcer  Min.  Co.  6  Lans. 
25;  Hooper  v.  Tuckerman,  3  Sandf. 
311;  Olyphant  v.  Atwood,  3  Bosw.  459; 
Be  Waite.  99  N.  Y.  433;  Phelps  v.  Bor- 
land, 103  N.  Y.  406;  Toronto  Gen. 
Trust  Co.  v.  Chicago,  B.  &  Q.  R.  Co. 
123  N.  Y.  37;  Barih  v.  Backus,  140 
N.  Y.  230,  23  L.  R.  A.  47.  Many  of 
the  above  cases  are  assignment  cases 
in  which  the  rights  of  foreign  as- 
signees were  involved,  but  the  princi- 
ples are  equally  applicable  to  re- 
ceivers. The  law  upon  this  subject 
in  Indiana  is  stated  in  Catlin  v.  Wilcox 
Silver  Plate  Co.  123  Ind.  477,  8  L.  R.  A. 
62,  as  follows:  "The  rule  may  be 
considered  as  established  that  a  re- 
ceiver may  invoke  the  aid  of  a 
foreign  court  in  obtaining  possession 
of  property  or  funds  within  its  juris- 
diction to  which  he  is  entitled,  but 
aid  will  only  be  extended  as  against 
those  who  were  parties  to,  or  in  some 
way  in  privity  with  the  proceedings 
in  the  course  of  which  his  appoint- 
ment was  made,  or  who  are  in  the 
possession  of  the  property  or  fund  to 
which  the  receiver  has  a  right,  and 
not  against  the  creditors  of  a  non- 
resident debtor  who  are  seeking  to 
subject  the  property  or  fund  to  the 
payment  of  their  debts  by  proceedings 
duly  instituted  for  that  purpose." 
"  The  available  legal  authority  of  a 


SUITS  BY  RECEIVERS— DEFENSES  TO 


169 


state  of  the  fonim  are  prejudiced  thereby,  or  where  it  would  be 
in  contravention  of  the  policy  of  such  state.' 


receiver  is  coextensive  only  with  the 
jurisdiction  of  the  court  by  which  he 
was  appointed  when  the  risht  of 
precedence  or  priority  of  creditors  is 
asserted  in  respect  to  property  or 
funds  of  a  nonresident  debtor  which 
the  receiver  has  not  yet  reduced  to 
possession."  Cf.  Hunt  v.  Columbian 
Ins.  Co.  55  Me.  290;  Warren  v.  Union 
Wat.  Bank,  7  Phil  a.  156;  Booth  v. 
Clark,  58  U.  S.  17  How.  323,  15  L.  ed. 
164;  State  v.  Jacksonville,  P.  &  M.  R. 
Co.  15  Fla.  201;  Farmers  &  M.  Ins. 
Co.  V.  Needles,  53  Mo.  17;  Taylor  v. 
Columbian  Ins.  Co.  14  Allen,  353. 

>  Hurdv.  Elizabeth,  41  N.  J.  L.  1; 
Merchants'  Nat.  Bank  v.  McLeod,  38 
Ohio  St.  174;  Day  v.  Postal  Teleg. 
Co.  66  Md.  354;  National  Trust  Co.  v. 
Miller,  33  N.  J.  Eq.  155.  In  this  case 
the  court  says:  "  Independent  of 
statutory  provision  and  simply  as  a 
matter  of  comity  this  court  will  ex- 
tend its  aid  to  a  receiver  of  a  foreign 
corporation  for  the  purpose  of  enabl- 
ing him  to  get  the  possession  of  prop- 
erty which  should  in  equity  be  ap- 
plied in  payment  of  its  debts."  And 
where  by  statute  a  foreign  corpora- 
tion, doing  business  in  a  state,  is  made 
subject  to  the  statute  concerning  do- 
mestic corporations,  the  court  has  the 
same  power  over  such  corporation  in 
matters  of  insolvency,  and  the  distri- 
bution of  its  assets  legal  and  equitable, 
as  over  domestic  corporations  and 
may  appoint  an  ancillary  receiver 
and  invest  him  with  the  same  power, 
so  far  as  may  be  necessary  to  the  col- 
lection and  recovery  of  its  assets,. as  it 
is  authorized  to  grant  to  a  receiver  of 
a  domestic  corporation.  And  this 
power  is  not  dependent  upon  the 
statute,  but  may  be  exercised  on  the 
principles    of    a    just   comity.      Cf. 


Sohernheimer  v.  Wheeler,  45  N.  J.  Eq. 
614.  Williams  v.  Hintermeister,  26 
Fed.  Rep.  889. 

Following  the  doctrine  announced 
in  the  above  case  of  National  Trust 
Co.  v.   Miller,  33  N.  J.  Eq.  155,  the 
Supreme  Court  of  Massachusetts  in 
Busicell  V.  Supreme  Sitting  0.  of  I.  H. 
161  Mass.  224,  23  L.  R.  A.  846,  sus- 
tained the  appointment  of  a  foreign 
receiver  as  ancillary  receiver  in  that 
state,  and  where  it  appeared  that  such 
receiver  in  the  state  of  Indiana,  the 
home  of  the  corporation,  had  been, 
by  an  assignment  of  the  corporation, 
invested  with  "all  the   moneys  and 
securities  of  every  kind  belonging  to 
the  reserve  fund    .     .     .     and  held 
by  each  of  the  branches  thereof,"  it 
was  held  that  as  receiver  and  assignee 
in  Massachusetts,  after  deducting  all 
expenses,  he  should  transfer  the  re- 
mainder of  the  reserve  and  benefit 
funds  in  his  possession  to  the  receiver 
in  Indiana,  if  it  should  appear  that 
the  decree  of  distribution  in  the  latter 
state  protected  the  certificate  members 
of  Massachusetts  by  placing  them  on 
an  equality  with  the  other  members 
of   the   association.     (Cf.  Parsons  v. 
Charter  Oak  L.  Ins.  Co.  31  Fed.  Rep. 
305;  Fry  v.  Charter  Oak  L.  Ins.   Co. 
31  Fed.  Rep.  197;  Jennings  v.  Phila- 
delphia  &  B.  R.  Co.  23  Fed.' Rep.  569.) 
This  case  probably  carries  the  doctrine 
of  comity  to  the  farthest  extent,  but 
the  tendency  of  courts  is  in  the  direc- 
tion of  a  liberal  extension  of  the  doc- 
trine of    interstate   comity,     and    is 
against     a    narrow     and     provincial 
policy    which    would    deny    proper 
effect  to  judicial  proceedings  of  sister 
states  simply  because  they  are  foreign 
and  not  domestic.     If  it  be  true  that 
the  assets  of  an  insolvent  corporation 


170  RECEIVERSHIPS. 

§  74.  Power  to  sue  in  foreign  jurisdiction  as  to  realty. 

The  I'io-lit  of  a  receiver  to  sue  respecting  real  estate  in  a  foreign 
state  does  not  seem  to  liave  been  discussed  by  our  courts  to  any 
great  extent.  It  may  be  stated,  however,  in  general  terms,  that 
the  mere  order  of  appointment  of  a  receiver  in  one  state  cannot 
have  the  effect  of  transferring  real  estate  in  another  jurisdiction, 
for  the  reason  that  as  to  realty  the  law  of  the  situs  governs  its 
transfer  and  so  far  as  the  title  is  concerned  the  decree  of  a  for- 
eign court  could  not  possibly  affect  it;  so  that  so  far  as  any  right 
of  action  in  the  receiver  growing  out  of  the  decree  of  appoint- 
ment is  concerned  he  has  none.  It  is  different,  however,  where 
the  debtor  makes  a  transfer  to  tlie  receiver  in  proper  form,  which 
is  placed  of  record  in  the  proper  office  of  the  county  where  the 
real  estate  is  situated;  but  in  such  case  the  receiver's  right  of  ac- 
tion is  based  on  the  assignment  and  not  the  decree  of  appoint- 
ment.' It  is  a  fundamental  rule  that  as  to  real  estate  the  lex  rei 
sitae  governs  not  only  as  to  the  title  but  its  enjoyment,  right  of 
mortgage,  pledge,  lien,  and  equitable  ownership,  and  they  must 
of  necessity  determine  the  rights  of  a  receiver  in  regard  thereto, 
except  in  so  far  as  the  rights  of  the  parties  may  be  determined  in 
the  court  in  which  the  receiver  is  appointed,  where  the  parties 
affected  are  subject  to  the  jurisdiction  of  such  court.'* 

are  a  trust  fund  for  the  benefit  of  all  Bundle  "),  103  U.  S.  223,  26  L.  ed. 
its  creditors  alike,  it  would  seem  that  337.  And  as  to  the  right  of  assignees 
a  foreign  creditor  should  not  be  per-  in  insolvency  or  bankruptcy  to  sue  in 
mitted  merely  by  reason  of  his  resi-  other  jurisdictions,  see  Long  v.  Tor- 
deuce,  to  secure  a  prior  right  to  its  rest,  150  Pa.  413,  23  L.  R.  A.  33,  note; 
property.oranunequal  advantage  over  Cole  v.  Cminingham,  133  U..  S.  107, 
the  other  creditors,  their  contractual  33  L.  ed.  538;  Reynolds  v.  Adden,  136 
relations  being  the  same.  Such  a  U.  S.  353,  34  L.  ed.  362;  Wbodwa7'd  v. 
policy  is  not  based  upon  equitable  Brooks,  128  111.  222,  3  L.  R.  A.  702. 
principles,  and  is  apparently  the  Bat  see  Rhawn  v.  Pearce,  110  IW.'SdO; 
essence  of  selfishness.  Smith  v.   Chicago  &  N.W.  B.  Co.  23 

As  to  the  law  regarding  trustees  of  Wis.  267. 

a  foreign  corporation   to  sue,  or  be  ^Oraydon  v.  Church,   7  Mich.    36; 

substituted   for  the  corporation,  see  Simpkins  v.  Smith  &  P.  Gold  Co.  50 

NeiD  Jersey  Protection  &  L.  Bank  v.  How.  Pr.  56;    Moseby  v.  Burrow,  52 

Thorp,  6  Cow.  46.  Tex.  396. 

As  to  the  superintendent  of  the  in-  ''Whart.  Conf.  Law,  g§  286,  287,288, 

surance  department  of  one  state  ap-  and  cases  cited;  Harrison  v.  Sterry, 

pearing  in  another  state  to  intervene,  9  U.  S.  5  Cranch,  289,  302,  3  L.  ed. 

see  Life  Asso.  v.  Bundle  {"  Belfe  v.  104,  107;  Oakey  v.  Bennett,  52  U.  S. 


SUITS  BY  RECEIVERS— DEFENSES  TO. 


171 


§  75.  Power  of  receiver  to  sue  in  matters  of  fraud,  trusts,  etc. 

Under  the  direction  of  the  court  the  receiver  may  maintain  a 
suit:  (1)  against  the  judgment  debtor  to  recover  property  con- 
verted by  him  to  his  own  use  after  the  receivers  appointment/ 
as  well  as  against  strangers/  (2)  or  a  bill  of  discovery  under  the 
iS'^ew  Jersey  statutes/  (3)  or  to  remove  fraudulent  liens  from  the 
debtor's  property/  (4)  or  to  reach  assets  in  the  hands  of  a  mort- 
gagee under  a  mortgage  invalid  as  to  creditors/  (5)  or  to  reach 
concealed  assets  or  misappropriated  property/  (6)  or  for  the  col- 
lection of  money  held  in  trust  for  the  benetit  of  the  debtor/  (7) 
or  to  recover  interest  illegally  paid  to  a  national  bank/  (8)  or  to 
set  aside  a  conveyance  obtained  by  undue  influence,  the  grantee 
being  insolvent/  (9)  or  to  recover  securities  of  a  corporation  il- 
legally transferred/"  (10)  or  to  determine  the  validity  of  a  mort- 
gage lien  uj)on  the  property/'  (1 1)  or  to  set  aside  a  judgment 
unlawfully  obtained  against  the  debtor/'  (12)  or  to  set  aside  a 
mortgage  illegally  executed/^  (13)  or  to  restore  all  property  un- 
lawfully abstracted  before  his  appointment.'* 


11  How.  33,  13  L.  ed.  593  (Bankrupt- 
cy); Barnett  v.  Pool,  23  Tex.  517 
(Bankruptcy);  Moseby  v.  Burrow,  52 
Tex.  396;  Paschal  v.  Acklin,  27  Tex. 
173;  White  V.  White,  7  Gill  &  J.  210; 
Page  v.  McEee.  3  Bush,  135;  Walts  v. 
Waddle,  31  U.  S.  6  Pet.  400,  8  L.ed.442. 

^Gardner  v.  Smith,  29  Barb.  68. 

^Wilson  V.  Allen,  6  Barb.  542;  Oillet 
V.  Fairchild,  4  Denio,  82 ;  Brouicer  v. 
Hill,  1  Sandf.  629;  Porter  v.  Williams, 
9  N.  Y.  142;  Osgood  v.  Ogden,  3  Abb. 
App.  Dec.  425. 

^Bergen  v.  Littell,  41  N.  J.  Eq.  18. 

'^Miller  V.  Mackenzie,  29  N.  J.  Eq. 
291. 

^Gallagher  v.  Rosenficld,  47  Minn. 
607. 

^South  Bend  Toy  Mfg.  Co.  v.  Dakota 
F.  &  M.  Ins.  Co.  3  S.  D.  205;  Gillet 
V.  Moody,  3  N.  Y.  479. 

''Terhune  v.  Bell  (N.  J.)  7  Cent.  469. 

^Barbour  v.  National  Exch.  Bank. 
45  Ohio  St.  133;  National  Bank  v. 
Trimble,  40  Ohio  St.  629. 

'Mitchell  V.  Barnes,  22  Hun,  194. 


^''Oillet  V.  Moody,  3  N.  Y.  479;  Cur- 
tis V.  Leavitt,  15  N.  Y.  9,  108;  Baiter- 
tcorth  V.  O'Brien,  24  How.  Pr.  438; 
Gillet  V.  Phillii)s,  13  N.  Y.  114;  Whit- 
tlesey V.  Delaney,  73  N,  Y.  571;  Atty. 
Gen.  V.  Guardian  Mut.  L.  Ins.  Co.  11 
N.  Y.  275;  Vail  v.  Hamilton,  85  N.  Y. 
453;  Tracy  v.  First  Nat.  Bank,  37  N. 
Y.  523;  Crandall  v.  Lincoln,  52  Conn. 
73;  Osgood  v.  Ogden,  4  Keyes,  70;  Por- 
ter V.  Williams,  9  X.  Y.  142;  Osgood  v. 
Laytin,  3  Keyes,  521;  Pittsburg  Carbon 
Co.  V.  McMillin,  119  N.  Y.  46,  7  L.  R. 
A.  46;  Minnesota  Thresher  Mfg.  Co.  v. 
Langdon,  44  Minn.  37;  Farmers'  Loan 
&  T.  Co.  V.  Minneaiwlis  Engine  & 
3Iac7i.  Works,  (i5  Minn.  543;  Ruddv. 
Robinson,  54  Hun,  339;  Tallmage  v. 
Pell,  7  N.  Y.  328;  Hackley  v.  Draper, 
60  N.  Y.  88. 

^Ulubbell  V.  Syracuse  IronWorks,  42 
Hun,  182. 

^■Stokes  V.  New  Jersey  Pottery  Co.  46 
N.  J.  L.  237. 

^^Vail  V.  Hamilton,  85  N.  Y.  453. 

^*Terry   v.    Bamberger,  14    Blatcbf. 


172  RECEIVERSHIPS. 

A  receiver  who  has  been  appointed  after  judgment  in  an  action 
for  a  liinited  divorce  to  receive  personal  property  and  the  rents 
and  profits  of  real  estate  may  maintain  an  action  to  set  aside  a 
fraudulent  conveyance  where  he  is  directed  to  bring  such  pro« 
ceeding,  but  this  case  was  based  on  the  statutory  ground  that 
the  receiver  was  authorized  to  sue  in  his  own  name,  and  also  that 
he  was  a  trustee  of  an  express  trust.'  A  receiver  appointed  in  a 
supplementary  proceeding  in  Wisconsin  was  allowed  to  bring  a 
suit  as  receiver  to  set  aside  an  alleged  fraudulent  conveyance, 
compel  a  conveyance  to  liim,  remove  obstructions  and  settle  ad- 
verse claims,  the  supplementary  proceedings  being  based  upon  a 
judgment  for  alimony.'' 

§  76.  Suits  against  oificers  of  corporations. 

A  court  of  general  equity  jurisdiction  has  power  to  authorize 
a  receiver  to  prosecute  a  suit  against  the  officers  of  an  insolvent 
corporation  for  misconduct;'  and  where  a  receiver  of  a  corporation 
is  applied  for,  partly  by  reason  of  the  alleged  insolvency  of  the 
corporation,  such  receiver  may  maintain  a  summary  proceeding, 
entitled  in  the  original  action  for  the  purpose  of  compelling  the 
ofiicers  of  the  company  to  surrender  assets  which  they  are  charged 
with  concealing.*  In  a  proceeding  by  a  receiver  to  recover  from 
the  corporate  ofiicers  the  corporation  assets  it  is  no  defense  that 
such  assets  are  not  needed  for  the  payments  of  debts."     The  re- 

234;    Gillet    v.    FairchUd  (trover),   4  l^.Y.iy%;  Pittsburg  Carbon  Co.  v.  Mc- 

Denio,  80.  Millin,  119  N.  Y.  46,  7  L.  R.  A.  46; 

^Donnelly  v.  West,  24  Hun,  564;  For-  Stephens  v.  Perrine,  143  N.  Y.  476. 
ter  V.  Williams,  9  N.  Y.  150;  Foster  v.  ^Barker  v.  Dayton,  28  Wis.  367  (see 

Townshend,  2  Abb.  N.  C.  29.  statute) ;    Cf .  Cook  v.  Cook,  56   Wis. 

A  receiver  of  an  insolvent  corpora-  195. 
tion  in  New  York  is  permitted  to  ques-  ^Thompson  v.  Greeley,  107  Mo.  577; 

tion  the  fraudulent  and  illegal  acts  of  Hannah  v.  Moberly  Bank,  67  Mo.  678; 

his  principal,  the  corporation.  Cox  v.  Volkert,  86  Mo.  511  (he  does  not 

Porter  v.  Williams,  9  N.  Y.  142.    He  have  statutory  power    in  Missouri), 

represents  both  creditors  and  stock-  See  also  Haywood  v.  Lincoln  Lumber 

holders.  Co.  64   Wis.  639;  Alexander  v.  Relfe, 

Gillet  V.  Moody,  3  N.  Y.  479;  Leav-  74  Mo.  495. 
itt  v.  Palmer,  3  N.  Y.  19;  Brouwer  v.  ^Brandt  v.  Allen,  76  Iowa,  50,  1  L. 

Hill,  1  Sandf.  629;  Hyde  v.  Lynde,  4  R.  A.  653;   Young  v.  Rollins,  90  N.  C. 

N.  Y.  392;   cf.  Bostwick  v.  Menck,  40  125;  Gindrat  v.  Dane,  4  Cliff.  260. 
N.  Y.  383;   Underwood  v.  Sutdiffe,  77  ^McGarty's  Appeal,  110  Pa.  379. 


SUITS  BY  RECEIVERS— DEFENSES  TO. 


173 


ceiver  may  avoid  all  acts  of  the  officers  of  a  corporation,  even  if 
authorized  by  a  resolution  of  the  board  of  directors  where  such 
acts  are  forbidden  and  unauthorized  by  law;'  or  where  corporate 
property  is  placed  in  the  hands  of  one  of  its  directors  to  secure 
an  indebtedness  in  fraud  of  the  rights  of  creditors,  he  may  avoid 
the  transfer  ;^  and  so  where  a  chattel  mortgage  was  not  filed  as 
required;^  or  where  an  officer  appropriates  the  corporate  property 
to  his  own  use/  Under  a  statute  which  made  the  ofiicers  and 
directors  of  a  corporation  assenting  to  an  indebtedness  in  excess 
of  the  capital  stock  personally  liable  for  the  excess  to  the  credit- 
ors generally,  such  excess  becomes  a  trust  fund  distributable  pro 
rata  among  all  creditors  and  is  recoverable  in  an  equitable  pro- 
ceeding;" he  may  hold  the  directors  liable  for  acts  ultra  vires;' 
or  file  a  bill  against  state  officials  to  quiet  title;'  or  to  recover  ille- 
gal dividends/ 

§  77.  Suits  against  stockholders  ou  unpaid  subscriptions. 

Where  a  statute  authorizes  a  receiver  to  sue,  and  the  court 


^Hoyt  V.  Tliompson,  5  N.  Y.  320; 
Leavitt  Y.Yates,  4  Edw.  Ch.  134;  and 
see  Market  Nat.  Bank  v.  Pacific  Nat. 
Baixk,  102  N.  Y.  464;  Talmage  v.  Pell, 
7  N.  Y.  328;  Tracy  v.  Talmage,  14  N. 
Y.  162. 

'^Bradley  v.  Converse,  4  Cliff.  375; 
Bradley  v.  Farwell,  Holmes,  433;  Rudd 
V.  Bobinson,  54  Hun, 339;  Southard  v. 
Benner,  72  N.  Y.  424;  Underwood  v. 
Sutcliffe,  77  N.  Y.  58;  Haywood  v.  Lin- 
coln Lumber  Co.  74  Wis.  639;  Nathan 
V.  Wliitlock,  9  Paige,  152 ;  Robinson  v. 
Bank  of  Attica,  21  N.Y.406;  Atkinson 
V.  Rochester  Printing  Co.  114  N.Y.168. 

^Stephens  v.  Perrine,  143  N.  Y.  47G. 
In  all  such  cases  of  supplementary 
proceedings  the  receiver  has  a  right 
to  prosecute  all  actions  to  set  aside 
transfers  of  property  made  to  defraud 
creditors.  Mandeville  v.  Avery,  124 
N.  Y.  370;  Becker  v.  Torrance,  31  N. 
Y.  631 ;  Bosticick  v.  Menck,  40  N.  Y. 
383;  Wright  v.  Nostrand,  94  N.  Y.  31 
(see  N.  Y.  Code  Civ.  Proc). 


'^Brandt  v.  Allen,  76  Iowa,  50,  1  L. 
R.  A.  653;  Gillet  v.  3foody,  3  K  Y. 
479;  Oillet  v.  Phillips,  13  N.  Y.  114; 
Hayes  v,  Kenyon,  7  R.  I.  136;  United 
States  V.  Church  of  Jesus  Christ  of  L. 
I>.  S.  5  Utah,  361;  Holden  v.  Upton, 
134  Mass.  177;  Osgood  v.  Laytin,  3 
Abb.  App.  Dec.  418.  But  see  Repub- 
lic L.  Ins.  Co.  V.  Swigert,  135  111.  150, 
12  L.  R.  A.  328. 

^Low  v.  Buchanan,  94  111.  76. 

^Austin  V.  Daniels,  4  Denio,  299; 
Thompson  v.  Greely,  107  Mo.  577; 
Gray  v.  Davis,  1  Woods,  420,  affirmed 
in  83  U.  S.  16  Wall.  203.  21  L.  ed. 
447. 

''Minnesota  Thrasher  Mfg.  Co.  v. 
Langdon,  44  Minn.  37. 

^The  appointment  of  a  receiver  does 
not  preclude  the  corporation  from  su- 
ing to  try  the  legal  title  to  property, 
(St.  Louis  &  3.  Coal  &  M.  Co.  v.  San- 
doval Coal  &  M.  Co.  Ill  111.  32)  unless 
the  court  has  forbidden  it.     Id. 


174  RECEIVERSHIPS. 

directs  him  to  do  so,  a  receiver  may  maintain  an  equitable  pro- 
ceeding in  behalf  of  all  the  creditors  of  an  insolvent  corporation 
for  an  accounting,  and  to  compel  its  stockholders  to  contribute 
unpaid  subscriptions  to  the  payment  of  its  debts,  and  such  suit 
may  be  brought  by  the  receiver  in  his  own  name  although  neither 
the  statute  nor  the  order  in  terms  directs  the  suit  to  be  brought.' 
In  such  a  proceeding  it  is  not  competent  for  a  defendant  stock- 
holder to  set  up  as  a  defense  fraud  in  procuring  the  appointment, 
of  the  receiver,  or  that  the  corporation  is  not  indebted.  These 
matters  are  adjudicated  in  the  action  resulting  in  the  appoint- 
ment of  the  receiver.'^  A  proceeding  of  this  nature  may  be  main- 
tained by  a  receiver  against  stockholders  and  creditors  for  the 
purpose  of  obtaining  an  accounting  of  the  amounts  due  the  cred- 
itors, and  to  ascertain  the  individual  liability  of  the  stockholders, 
and  compel  payment  thereof  for  the  purpose  of  meeting  the  cred- 
itors' demands,  and  in  the  meantime  may  restrain  the  individual 
creditors  from  prosecuting  separate  suits  on  the  individual  liabil- 
ity of  the  creditors.  All  equities  may  be  settled  and  adjusted  in 
one  action.^  When  a  dividend  has  been  declared  and  received  by 
stockholders  the  effect  of  which  has  been  to  impair  the  capital  of 
the  company,  the  receiver  may  maintain  an  action  against  the 
stockholders  and  creditors  to  recover  from  the  stockholders  such 
dividend,  when  it  appears  that  some  of  the  creditors  are  prose- 
cuting suits  against  the  stockholders  to  secure  such  illegal  divi- 
dends, and  when  such '  funds  so  misappropriated  are  necessary  to- 
pay  the  debts  of  the  corporation." 

'  Matliis  V.  Pridham,  1   Tex.    Civ.  cover  unpaid  stock  subscriptions  wa» 

App.  58;  Dayton  v.  Borst,  31  N.  Y.  held  to  be  a  cumulative  remedy  mere- 

435;  Frank  v.  Morrison,  58  Md.  423;  \j,\n  Mannv.  (7M7Tie,  3  Barb.  294.    In 

Stillman  v.  Dougherty,  44  Md.  380.  a  suit  by  a  receiver  of  an  insolvent 

'^  Schoonover  v.  Hickley,  48  Iowa,  82.  bank  to  recover  moneys  of  the  bank 

2  Calkins  v.  Atkinson,  2  Lans.   13;  received  by  one  of  its  creditors  subse- 

Whittlesey  v.  Frantz,  74  N.  Y.  456;  quent  to  his  appointment,  the  proceed- 

Stark  V.  Burke,  5  La.  Ann.  740;  New  ing  is  by  bill,  and  not  by  a  petition; 

Orleans  Gaslight  Co.  v.  Bennett,  6  La.  because  the  receiver  is  an  officer  of 

Ann.  456;  Clarke  v.  Thomas,  34  Ohio  court  he  has  no  more  privileges  than 

St.  46.  any  other  suitor.     State  Bank  v.  First 

•»  Osgood  V.  Laytin,  48  Barb.  463.  JSfat.  Bank,  34  N.  J.  Eq.  450. 
The  provisions  of  the  New  York  stat-  A  stockholder  liable  on   his  sub- 

ute  authorizing  receivers  of  an  insol-  scription  as  called  for  by  the  directors 

vent  corporation  to  sue  for  and  re-  may  in  equity  be  compelled  to  pay  tO' 


SUITS  BY  RECEIVERS— DEFENSES  TO. 


175 


It  may  be  stated  as  a  general  rule  that  a  receiver  is  authorized 
and  it  is  his  duty  to  collect  the  unpaid  subscriptions  so  far  as 
such  collection  may  be  essential  to  the  payment  of  the  debts.' 
But  he  has  no  authority  to  call  upon  a  subscriber  for  his  unpaid 
balance  until  the  amount  of  the  unpaid  balance  has  been  deter- 
mined by  the  court  and  thus  the  ^ro  rata  liability  of  each  share 
fixed.' 

Where  corporations  have  attempted  to  distribute  their  stock 
among  their  stockholders  leaving  corporation  debts  unpaid,  the 
creditors,  by  proper  suits,  may  compel  the  stockholders  to  refund 
sufficient  amount  to  pay  these  debts.'  And  upon  the  same  prin- 
ciple when  stock  has  not  been  all  paid  in  the  delinquent  stock- 
holders may  be  compelled  to  contribute  sufficient  to  pay  such 
debts,  and  where  the  statute  is  silent  as  to  the  method  to  be  pur- 
sued in  enforcing  such  liability,  a  court  of  equity  is  the  proper 


the  receiver  representing  the  credit- 
ors, even  in  the  absence  of  action  by 
the  directors,  requiring  payment. 
Sagory  v.  Dubois.  3  Sandf.  Ch.  466; 
Upton  V.  Hansbrough,  3  Biss.  417. 
But  an  assessment  or  its  equivalent  is 
essential  to  the  liability  of  the  share- 
holder. Chandler  v.  Siddle,  3  Dill. 
477.  And  the  stockholder  must  have 
been  a  party  to  the  proceeding  in 
which  the  receiver  was  appointed  to 
be  held  liable  in  Illinois.  Chandler  v. 
Broicn,  77  111.  333;  Rowell  v.  Chandler, 
83  111.  288;  Chandler  v.  JDore,  84  111. 
275;  Chemut  v.  Pennell,  92  111.  55; 
Lamar  Ins.  Co.  v.  Gvlick,  102  111.  41 
(see  Statute  of  1872,  §  25).  But  see 
contra,  Great  Wedern  Teleg.  Co.  v. 
Gray,  122  111.  630. 

In  Wincoclc  v.  Turpin,  96  111.  135. 
it  is  held  that  where  a  liability  is  cre- 
ated by  statute  the  remedy  is  at  law, 
and  a  proceeding  in  equity  will  not 
be  entertained  unless  authorized  by 
Btatute;  but  if  the  statute  makes  the 
liability  joint,  then  equity  would  be 
the  proper  forum.  Cf .  Culver  v.  Hard 
Nat.  Bank,  04  111.    528;    Corwith  v. 


Culver,  69  111.  502;  Tihballs  v.  Lib- 
by,  87  111.  142;  Arem  v.  Weir,  89  111. 
25;  McCarthy  v.  Lavasche,  89  III.  270; 
Fuller  V.  Ledden,  87  111.  310.  But  see 
Low  V.  Buchanan,  94  111.  76. 

^Dayton  v.  Borst,  31  N.  Y.  435; 
Nathan  V.  Whitlock,  9  Paige,  152;  Dor- 
ris  V.  French,  4  Hun,  292;  Van  Wag- 
enen  v.  Clark,  22  Hun,  497;  Calkins 
V.  Atkinson,  2  Lans.  12;  Tucker  v. 
Oilman,  45  Hun,  193;  Rankine  v.  El- 
liott, 16  N.Y.  377;  Frank  v.  Morrison, 
58  Md.  423;  Hall  v.  United  States  Ins. 
Co.  5  Gill,  484;  Chandler  v.  Brown, 
77  111.  333;  Means'  Appeal,  85  Pa.  75. 

'^Chandler  v.  Keith,  42  Iowa,  9!); 
Mills  v.  Scott,  99  U.  S.  25,  25  L.  ed. 
294. 

^Vose  V.  Grant,  15  Mass.  505;  Spear 
V.  Grant,  16  Mass.  9;  Wood  v.  Bum- 
mer, 3  Mason,  308;  Nathan  v.  Whit- 
lock, 9  Paige,  152.  In  Minnesota,  by 
statute  the  right  to  sue  in  such  case 
passes  to  the  receiver,  as  the  repre- 
sentative of  all  the  creditors.  Minne- 
sota Thresher  Mfg.  Co.  v.  Langdon,  44 
Minn.  37. 


176 


RECEIVERSniPS. 


forum.'  But  in  this  proceeding,  in  the  absence  of  authority  to 
the  receiver,  except  such  as  belongs  to  ordinary  receivers,  and  in 
the  absence  of  statutory  power,  the  creditor  and  not  the  receiver 
is  the  proper  person  to  sue."  An  order  of  court  directing  a  sale 
of  all  the  assets,  property  and  business  of  an  insolvent  corpora- 
tion, must  be  construed  as  applicable  only  to  the  sale  of  such 
property  as  belonged  to  the  corpoi'ation,  or  such  causes  of  action 
as  it  might  have  enforced  in  its  own  right,  and  not  causes  of 
action  which  the  receiver  might  have  maintained  in  the  right  of 
creditoi'S,  such  as  the  recover}'^  of  capital  withdrawn  and  refunded 
to  the  shareholders,  leaving  debts  unpaid.' 

Where  a  receiver  is  appointed  to  take  charge  of  the  property 
.and  assets  of  an  insolvent  corporation,  he  cannot  maintain  an 
action  against  the  stockholders  to  enforce  an  alleged  liability 
which  could  not  have  been  enforced  by  the  corporation  itself." 
Under  the  U.  S.  Kev.  Stat.,  §  563,  sub.  4,  the  action  authorized 
is  a  suit  at  common  law  by  a  receiver  to  enforce  a  stock  liability 
within  the  jurisdiction  of  the  federal  courts."  Suits  of  this 
nature  are  usually  authorized  by  statute.' 


^Mann  v.  Pentz,  3  N.  Y.  415,  and 
•cases  cited  in  last  note  above. 

^Mann  v.  Pentz,  3  N.  Y.  415,  over- 
ruling same  case  in  2  Sandf.  Ch.  257; 
■Stringer's  Case,  L.  R.  4  Ch.  App.  475; 
Pance's  Case,  L.  R.  6  Ch.  104;  Be 
National  Funds  Assur.  Soc.  L.  R.  10 
Ch.  Div.  118;  Be  Alexandra  Palace 
Co.  L.  R.  21  Ch.  Div.  149. 

^Minnesota  Thresher  Mfg.  Co.  v, 
Langdon,  44  Minn.  37. 

^Pepublic  L.  Ins.  Co.  v.  Swigert,  135 
111.  150,  12  L.  R.  A.  328. 

^  Stephens  v.  Bernays,  41  Fed.  Rep. 
401.  The  section  referred  to  giving 
jurisdiction  to  district  courts  in  mat- 
ters of  national  banks  is  not  taken 
away  by  act  of  Congress  of  July  12, 
1882.  g  4,  and  of  Aug,  13,  1888,  §  4. 

« Illinois:  Great  Western  Teleg.  Co. 
V.  Gray,  122  111.  630;  Woolverton, 
V.  George  H.  Taylor  Co.  43  111. 
App.  424. 

Iowa:  Stewart  v.  Lay,  45  Iowa,  604. 


Louisiana:  Gaslight  &  Bkg.  Co.  v. 
Haynes,  7  La.  Ann.  114;  New  Or- 
leans Gaslight  Co.  v.  Bennett,  6 
La.  Ann.  457;  Stark  v.  Burke,  5 
La.  Ann.  740. 

Maryland:  Frank  v.  Morrison,  58 
Md.  433;  Stillman  v.  Dougherty, 
44  Md.  380. 

Minnesota:  Merchants'  Nat,  Bank 
V.  Northwestern  Mfg.  &  Car.  Co. 
48  Minn.  361  (Liability);  i/mn*- 
sota  Thresher  Mfg.  Co.  v.  Lang 
don,  44  Minn.  37. 

New  York:  Calkins  v.  Atkinson,  2 
Lans,  12;  Bankine  v.  Elliott,  16 
N.  Y.  377;  Pe7itz  v.  Hawley,  1 
Barb.  Ch.  122;  Van  Wagenen  v. 
Clark,  22  Hun,  497.  But  a  re- 
ceiver under  a  creditor's  bill  can- 
not sue  for  such  subscriptions. 
Mann  v.  Pentz,  3  N.  Y.  415.  And 
see  Billings  v.  Bobinson,  28  Hun, 
122;  Phoenix  Warehousing  Co.  v. 
Badger,  67  N.  Y,  294;  Dayton  v. 


SUITS  BY  RECEIVERS-DEFENSES  TO. 


177 


Defenses  to  tins  class  of  actions  instituted  by  a  receiver  in  a 
statutory  proceeding  are  not,  as  a  rule,  available.  Thus,  it  is  no 
defense  that  the  entire  stock  had  not  been  subscribed  ;'  nor  is  error 
in  the  appointment  f  nor  fraudulent  acts  of  the  officers  of  the 
corporation ;'  nor  the  fraudulent  character  of  the  corporation,  or 
misrepresentation  in  procuring  the  subscription  ;*  nor  fraud  in 
procuring  the  appointment  of  the  receiver  ;^  nor  that  the  incorpo- 
ration is  not  indebted  f  or  that  its  assets  have  not  been  collected ;'' 
nor  that  fraudulent  claims  have  been  allowed.*  But  the  share- 
holder is  not  liable  to  the  receiver  if  he  was  not  liable  to  the  cor- 
poration ;'  nor  can  the  receiver  collect  subscriptions  in  a  fore- 
closure case  if  the  bonds  are  invalid.'" 

§  78.  Suits  against  stockholders  on  statutory  liability. 

In  general  the  statutory  liability  of  stockholders  is  a  liability  to 
the  creditors  of  the  corporation  and  a  receiver  of  an  insolvent 
corporation  in  the  absence  of  statutory  power  has  no  authority  to 
enforce  such  liability,  and  this  inability  is  based  upon  the  fact 
that  such  liability  is  not  a  corporate  asset  and  does  not  go  to  the 
receiver  as  such."     Upon  the  same  princij)le  the  receiver  has  no 


Borst,    31   N.  Y.  435;    Tracy  v. 

First  Nat.   Bank,  37  N.  Y.  523; 

Weeks  v.  Love,  50  N.  Y.  571;  Os- 
good V.  Laytin,  5  Abb.  Pr.  N.  S. 

1;  Briggs  v.  Penniman,  8  Cow. 

387;   Mills  v.  Stewart.  41  N.  Y. 

384;  Morgan  v.  New  York  &  A. 

R.  Co.  10  Paige,  290. 
Ohio:    Clarke  v.    Thomas,  34  Ohio 

St.  46;  Jewetty.  Valley  R.  Co.  34 

Ohio  St.  601. 
Rhode  Island:  Tobey  v.  Russell,  9  R. 

I.  58;  Attooocl  v.  Rhode  Island  Ag- 

ricuUural  Bank,  1  R.  I.  376. 
Washington:   Elderkin  v.  Peterson, 

8  Wash.  674. 
» Slillman  v.  Dougherty,  44  Md.  380; 
Buggies  v.  Brock,  6  Hun,  164. 
^Stewart  v.  Lay,  45  Iowa,  604. 
^Stewart  v.  Lay,  Ao  Iowa,  604;  Rvg- 
gles  V.  Brock,  6  Hun,  164. 

*  Litchfield  Bank  v.  Church,  29  Conn. 
137;  Schoonover  v.  Uinckley,  48  Iowa, 
i52. 

12 


^Schoonover  v.  Hinckley,  48  Iowa, 
82;  Steicart  v.  Lay,  45  Iowa,  604. 

^Schoonover  v.  Hinckley,  48  Iowa, 
82. 

">  Stark  V.  Burke,  9  La.  Ann.  341. 
But  see  Chandler  v.  Keith,  42  Iowa, 
99;  Mills  V.  Scott,  99  U.  S.  25,  25  L. 
ed.  294. 

8  Foote  V.  Glenn,  52  Fed.  Rep.  529. 

^Billings  v.  Robinson,  94  N.  Y.  415; 
WiiUers  V.  Armstrong,  37  Fed.  Rep. 
508. 

1°  Farmers'  Loan  &  T.  Co.  v,  San 
Diego  Street  Car  Co.  49  Fed.  Rep.  188. 

^^Arenz  v.  Weir,  89  111.  25  (statu- 
tory); Butler  V.  Walker,  80  111.  345; 
Liberty  Female  College  Asso.  v.  Wat- 
kins,  70  Mo.  13;  Billings  v.  Robinson, 
94  N.  Y.  415;  Cutting  v.  Damerel,  88 
N.  Y.  410;  Cuykendall  v.  Corning,  88 
N.  Y.  129;  Jacobson  v.  Allen,  20 
Blatchf.  525;  Laiie  v.  Morris,  8  Ga. 
468;  Davis  v.  Cray,  83  U.  S.  16  Wall. 
203,  21  L.  ed.  447;  Wright  v.  McVor- 


178 


EECEIVERSHIPS. 


right  to  enforce  the  individual  liability  of  a  partner  to  the  firm 
in  behalf  of  the  firm  creditors,'  or  his  assignee. 

§  79.  Suits  to  invalidate  Hens. 

In  the  absence  of  special  statutory  powers,  and  in  the  absence 
of  a  conveyance  to  him  from  the  mortgagee,  a  receiver  cannot 
maintain  a  suit  to  determine  the  validity  of  liens  of  parties  in,  and 
parties  out  of  possession,  as  against  the  lien  of  a  mortgage  in  the 
foreclosure  of  which  he  is  appointed,  where  neither  the  mortgagee 
nor  mortgagor  is  a  party.  If  complainant  claims  the  legal  title 
to  real  estate  he  cannot,  in  a  court  of  equity,  sustain  an  action 
against   persons  in   possession  claiming  adversely;*  nor   can   he 


mack,  17  Ohio  St.  86;  Farnsworth  v. 
Wood,  91  N.  Y.  308.  Cf.  Chemical 
Nat.  Bank  v.  Colwell,  132  N.  Y.  250; 
Story  V.  Furman,  25  N.  Y.  214. 

1  Wallace  v.  Milligan,  110  Ind.  498. 

The  court  in  Wincock  v.  Turpin,  96 
111.  135,  says:  "It  maybe  a  state  of 
facts  might  exist  which  would  au- 
thorize a  court  of  equity  to  bring  be- 
fore it  all  the  stockholders  and  depos- 
itors and  determine  their  rights  and 
adjust  equities,  marshall  the  fund  and 
distribute  it  pro  rata,  but  no  such 
case  is  made  by  this  bill;  and  until 
such  a  case  shall  be  made  we  must 
leave  the  depositors  to  pursue  their 
remedies  under  the  law.  We  have 
held  in  a  number  of  cases  that  as  the 
right  is  given  by  statute  the  remedy  is 
at  law.  Culver  v.  Third  Nat.  Bank, 
64  111.  528;  Corwith  v.  Culver,  69  111. 
502;  Tibhalls  v.  Libhy,  87  111.  142; 
Arem  v.  Weir,  89  111.  25;  McCarthys. 
Lavasche,  89  111.  270;  Fuller  v.  Ledden, 
87  111.  310. 

The  authorities  upon  this  subject  in 
other  jurisdictions  are  not  uniform. 
If  the  liability  was  joint  then  equity 
would  be  the  proper  forum,  as  was 
held  in  Fames  v.  Davis,  102  111.  350. 
Where  the  liability  creates  a  common 
fund  for  the  benefit  of  all  creditors 
entitled  to  share  in  it,  and  the  secur- 


ing of  a  ratable  distribution  of  it 
among  all  such  creditors,  it  is  a  proper 
case  for  equitable  jurisdiction.  Mer- 
chants' Bank  v.  Stevenson,  5  Allen, 
401;  Crease  v.  Bahcock,  10  Met.  532; 
Briggs  v.  Penniman,  8  Cow.  387;  Hor- 
nor  V.  Eenning,  93  U.  S.  228,  23  L. 
ed.  879. 

Low  v.  Buchanan,  94  III.  81;  Har- 
per v.  V7iion  Mfg.  Co.  100  111.  225. 
And  equitable  jurisdiction  may  also 
be  maintained  on  the  ground  of  avoid- 
ing a  multiplicity  of  suits. 

Some  courts  have  given  creditors  iu 
case  of  a  personal  statutory  liability  of 
stockholders  a  concurrent  remedy  by 
suit  at  law  or  suit  in  equity  for  the 
enforcement  of  the  liability.  Bank  of 
Poughkeepsie  v.  Ibbotson,  24  Wend. 
473;  Van  Hook  v.  Whitlock,-^  Paige, 
409;  Norris  v.  Johnson,  34  Md.  485; 
Perry  V.  Turner,  55  Mo.  418;  Adkin  v. 
Thornton,  19  Ga.  325;  Robinson  v. 
National  Bank,  95  N.  Y.  637. 

^Harland  v.  Bankers'  &  M.  Teleg. 
Co.  32  Fed.  Rep.  305;  Frost  v.  Spitley, 
121  U.  S.  556,  30  L.  ed.  1012;  Alexan- 
der V.  Pendleton,  12  U.  S.  8  Cranch, 
462,  3  L.  ed.  624;  Peirsoll  v.  Elliott,  31 
U.  S.  6  Pet.  95,  8  L.  ed.  332;  Orton  v. 
Smith,  59  U.  S.  18  How.  263,  15  L. 
ed.  393;  Crews  v.  Burcham,  66  U.  S.  1 
Black,    352,  17  L.   ed.  91;   Ward  v. 


SUITS  BY  RECEIVERS— DEFENSES  TO.  179 

rnaintain  a  bill  for  an  accounting  for  damages  suffered  by  tlie 
mortgagor,  growing  out  of  a  breach  of  contract  made  with  him, 
where  it  is  claimed  that  the  mortgage  covered  the  property  em- 
braced in  such  contract.*  But  a  receiver  appointed  under  the 
provisions  of  the  New  York  Code  of  Civil  Procedure  was  ordered 
to  commence  a  proceeding  to  determine  what  bonds  issued  by  the 
company  were  secured  by  the  mortgage,  and  what  bonds,  if  any, 
were  to  be  excluded  from  particij)ation  in  the  proceeds,  and  also 
to  determine  the  ownership  of  such  bonds,  and  the  validity  of 
others,  it  was  held  that  the  receiver's  action  was  sustainable  as  a 
proceeding  in  equity.'^  Where  the  receiver  desires  to  test  the 
validity  of  a  levy  upon  the  receivership  property,  his  proper 
course  is  to  bring  an  independent  action  to  set  aside  the  levy,  and 
not  by  motion  for  a  rule  on  the  sheriff  to  show  cause.  The  rea- 
son of  this  rule  is  based  upon  the  fact  that  neither  the  receiver, 
the  creditor,  nor  the  sheriff,  was  a  party  to  the  proceeding  in 
which  the  receiver  was  appointed.^ 

§  80.  Suit  on  debtor's  bond,  replevin,  distraint,  etc. 

The  receiver  of  an  insolvent  debtor  has  no  right  of  action  on  an 
official  l)ond  of  the  debtor  and  his  sureties,  the  general  rule  being, 
as  we  have  seen,  that  a  receiver  has  no  right  of  action  other  than 
is  vested  in  the  debtor  himself,  except  where  he  sues  as  the  i-ep- 
resentative  of  creditors."  j^or  has  he  a  right  to  maintain  a  suit  in 
replevin  for  personal  property  mortgaged  by  the  judgment 
debtor,  and  reduced  to  possession  by  the  mortgagee  before  the 
commencement  of  the  proceedings  in  which  the  receiver  is  ap- 
pointed." His  right  to  distrain  has  been  recognized,  and  he  may 
appoint  a  bailiff  for  that  purpose,"  but  he  connot  distrain  and  at- 
tach at  the  same  time.' 

An  action  cannot  be  sustained  bv  a  receiver  ao-ainst  an  assiffneo 

Chamberlain,  67  U.  S.  2  Black,  430, 17  And  see  Oelpeke  v.  Milioaiikee  cfi  n. 

L.  ed.  319;   United  States  v.  Wilson,  R.  Co.  11  Wis.  454. 

118  U.  S.  86,  30  L.  ed.  110;  Fussell  v.  ^State,   Shepard,   v.    Sullivan,   120 

Gregg,  113  U.  S.  550,  28  L.  ed.  993.  Ind.  197;  Coffin  v.  Ilansdell,  110  Ind. 

^Harland  v.  Bankers'   &  M.   Teleg.  417;  Wallace  y.  Milligan,  110  InAA'dQ. 

Co.  32  Fed.  Rep.  305.  ''Campbell  y.  Fish,  8  Daly,  162. 

"■Ilultbell  V.  Syracuse  Iron  Works,  42  '^Birch  v.  Oldis,  Sau.ss.  &  S.  146. 

Hun,  182.  "^Eyre  v.  Eyre,  1  Uog.  252. 

^Andrews  v.  Paschen,  67  Wis.  413. 


180 


RECEIVERSHIPS. 


of  the  judgment  debtor  under  an  assignment  for  the  benefit  of 
creditors  to  recover  damages  resulting  to  the-  judgment  debtor 
from  failure  of  the  assignee  to  properly  discharge  his  duty  as 
such  assignee.* 
§  81.  Defenses  to  actions  l)rouglit  by  receivers  —  set-off. 

The  general  rule,  in  all  actions  brought  by  a  receiver  is  that 
the  defendant  may  interpose  such  defenses  as  might  have  been 
available  to  him  had  suit  been  instituted  by  the  person  or  corpo- 
ration for  whose  estate  the  receiver  is  appointed.'  Thus  in  an 
action  by  the  receiver  the  defendant  may  interpose  a  counter- 
claim or  set-off,"  provided  the  right  of  set-off  accrued  before  the 
receiver's  appointment,"  and  the  respective  rights  of  action  are  of 
the  same  nature,"  and  the  receiver  sues  as  the  representative  of 
the  debtor  and  not  creditors,"  and  where  the  claim  of  defendant  is 
free  from  fraud,'  and  if  the  demands  are  liquidated.*     The  debts 


'Za  Follelt  v.  Akin,  36  Ind.  1. 

"^Cox  V.  Volkert,  86  Mo.  505;  Colt  v. 
Brown,  12  Gray,  233;  Brooks  v.  Big- 
elow,  142  Mass.  6;  Moise  v.  Chapman, 

24  Ga.  249 ;  Litchfield  Bank  v.  Peck,  29 
Conn.  384;  Clarke  v.  Hawkins,  5  R.  I. 
219;  Van  Wagoner  v.  Paierson  Gas- 
light Co.  23  N.  J.  L.  283;  Chase  v. 
Petroleum  Bank,  66  Pa.  169;  Hyde  v. 
Lynde,  4  N.  Y.  387;  Thomas  v.  Whal- 
lon,  31  Barb.  172;  Williams  v.  Babcock, 

25  Barb.  109;  Devendorf  v.  BearcMey, 
23  Barb.  656 ;  Berry  v.  Brett,  6  Bosw. 
627;  Clarke.  Brockicay,  3  Keyes,  18. 

^Armstrong  v.  Warner,  49  Ohio  St. 
376,  17  L.  R.  A.  466;  Hadev.  McVay, 
81  Ohio  St.  231;  Lindsay  v.  Jackson, 
2  Paige,  581:  Com.  v.  Shoe  &  L. 
Dealers'  F.  Ins.  Co.  112  Mass.  131; 
Scott  V.  Armstrong,  146  U.  S.  499,  36 
L.  ed.  1059;  Holbrook  v.  American  F. 
Ins.  Co.  6  Paige,  220;  Colt  v.  Brown, 
12  Gray,  233;  Be  Van  Allen,  37  Barb. 
225;  State  Bank  v.  Bank  of  New 
Brumwick,  3  N.  J.  Eq.  266;  Be  Middle 
District  Bank,  1  Paige,  585;  Cook  v. 
Cole,  55  Iowa,  70;  Berry  v.  Bi'ett,  6 
Bosw.  627;  Davis  v.  Stover,  58  N.  Y. 
473;  Com.  v.  Phanix  Bank,  11  Met. 


129;  Scammon  v.  Kimball,  92  U.  S. 
362,  23  L.  ed.  483. 

As  to  the  rule  in  mutual  insurance 
companies  see  Lawrence  v.  Nelson,  21 
N.  Y.  158;  Hillier  v.  Allegheny  County 
Mut.  Ins.  Co.  3  Pa.  470.  But  seeBen-y 
V.  Brett,  6  Bosw.  627;  Vanatta  v.  New 
Jersey  Mut.  L.  Ins.  Co.  31  N.  J.  Eq. 
15.  And  savings  banks  see  Osboi'n  v. 
Byrne,  43  Conn.  155;  Stockton  v.  Me- 
chanics' <&  L.  Sav.  Bank,  32  N.  J.  Eq. 
163. 

^  Smith  V.  Mosby,  9  Heisk.  501; 
Lanier  v.  Oayoso  Sav.  Inst.  9  Heisk. 
506;  United  States  Trust  Co.  v.  Harris, 
2  Bosw.  75;  Cook  v.  Cole,  55  Iowa,  70; 
Smith  V.  Felton,  43  N.  Y.  419;  Bradley 
V.  A77gel,  3  N.  Y.  475;  Smith  v.  Fox, 
48  N.  Y.  674;  Newcomb  v.  Almy,  96 
N.  Y.  308;  Van  Dyck  v.  McQuade,  85 
N.  Y.  6 16  ■,Jordan  v.  Sharlock, 84  Pa.  366. 

^Williains  v.  Traplmgen,  38  N.  J. 
Eq.  57;  Singerly  v.  Fox,  75  Pa.  112. 

^Osgood  V.  Ogden,  4  Keyes,  70; 
Clark  V.  Brockway,  3  Keyes,  13;  Os- 
good V.  Maguire,  61  N.  Y.  524. 

''Gillet  V.  Phillips,  13  N.  Y.  114. 

^Olyphant  v.  St.  Louis  Ore  &  S.  Co. 
39  Fed.  Rep.  308. 


SUITS  BY  RECEIVERS— DEFENSES  TO.  181 

must,  however,  be  due  to  and  from  the  same  persons,  at  least 
equitably.' 

The  defendant  in  an  action  by  a  receiver  is  entitled  to  a  set-ofE 
of  any  debts  due  to  him  by  the  insolvent,  at  the  time  of  the  stop- 
ping payment  by  the  insolvent,  and  the  appointment  of  a  receiver 
as  a  rule  does  not  change  the  relationship  of  the  parties."  The 
receiver  will  not  be  permitted  to  allow  as  a  partial  accord  and 
gatisfaction  an  uncompleted  agreement  of  an  insolvent  made  prior 
to  his  suspension, °  and  the  receiver  has  no  right  to  set  up  as  a  de- 
fense to  the  claim  of  a  judgment  creditor,  matters  which  might 
have  been  pleadable  in  behalf  of  the  corporation  against  the  re- 
covery of  a  judgment.*  In  a  suit  brought  by  a  receiver  it  is  no 
defense  that  he  has  not  filed  a  bond,  where  the  decree  of  appoint- 
ment does  not  make  the  giving  of  such  bond  a  condition  to  his 
appointment,^  nor  can  the  validity  of  the  appointment  of  the  re- 
ceiver be  questioned. °  The  sufficiency  of  the  allegations  in  regard 
to  the  time  and  place,  and  court  in  which  the  receiver  was  ap- 
pointed cannot  be  raised  on  a  motion  in  arrest  of  judgment.' 

^Ee  Van  Allen.  37  Barb.  225;  Ifew-  set-offs  existing  between  the  original 

comb  V.  Almy,  96  N.  Y.  308;  Bale  v.  parties.    Cox  v.  Volkert,  86  Mo.  505. 

Cooke,  4  Johns.    Ch.    11;    Barber  v.  ^Clarke  y.  Hawkins,  5  R.  I.  219. 

Spencer,   11    Paige,    517;    MoUan  v.  ^Statev.  Clinton  &  P.  H.  R.  Co.  21 

Griffith,  3  Paige,  402.  La.  Ann.  156;  it  is  res  judicata  as  to 

^In  Re  Middle  Bistrict  Bank,  1  Paige,  him. 

585,  it  was  held  the  debt  may  fall  due  *  Wilson  v.  Welch,  157  Mass.  77. 

after  the  act  of  insolvency  and  be  a  ^Corner  v.  Bray,  83  Ala.  217. 

proper  matter  of  set-off.  See  also  Van  ''Griesel  v.Schmal,  55  lud.  475;  Spahr 

Wagoner  v.  Paterson  Oaslight   Co,  23  v.  Nickla^is,  54  Ind.  221;  Toledo,  W.  & 

N.  J.  L.  283.      The   general   rule  is  W.  R.   Co.  v.  Millifjan,  52  Ind.   505; 

that  in  a  suit  by  the  receiver  the  de-  Harris  v.  Rivers,  53  Ind.  216. 
fendant  has  a  right  to  all  defences,  or 


CHAPTER  yil. 

SUITS  AGAINST  THE  RECEIVER. 

§  82.  Generally.  (g)  Where  he  defends  without  ob- 

§  83.  Order  of  court  necessary.  jection. 

§  84.  Exceptions  to  the  rule.  §  85.  In  what  court  receiver  may  be 

(a)  Not  necessary  in  United  Statss  sued. 

courts.  g  86.  Suits  against  receiver  for  negli- 

(b)  Receiver  operating  railroad  in  gence. 

foreign  state.  §  87.  When  suits  against  him  may  be 

(c)  In    cases     of     garnishment,  enjoined. 

when.  §  88.  Receiver's  defenses. 

(d)  Where  suit  is  to  fix  damages      §  89.  Character  of  judgment  against 

merely.  receiver. 

(e)  Levy  and  sale  by  judgment      §90.  Receiver  aparty, when  necessary. 

creditor.  §  91.  Receiver  may  be  restrained. 

(f)  When  receiver  has  sold  prop-       §  93.  Effect  of  discharge  of  receiver 

erty  illegally.  as  to  suits  against  him. 

§  82.  GenerrJly. 

As  we  have  already  seen,  the  court  appointing  a  receiver  will 
not  permit  liim  to  sue  or  engage  in  litigation  unless  authorized  so 
to  do  by  the  court  to  which  he  owes  his  appointment,  and  not 
then  unless  his  right  appears  clear,  and  favorable  results  are  most 
probable,  or  the  statute  expressly  empowers  him  to  sue.  The 
purpose  of  this  rule  is  to  secure  an  economical  administration  of 
the  estate,  a  speedy  winding  up  of  the  litigation,  and  a  fair  and 
equitable  adjustment  of  the  rights  of  all  parties  in  interest. 
"Where  all  conflicting  interests  can  be  drawn  to  the  samo  jurisdic- 
tion, a  much  more  comprehensive  and  intelligent  adjudication  can 
be  had  and  entire  justice  to  all  parties  can  be  secured  thereby. 
Much  stronger  reasons  exist  in  regard  to  suits  against  a  receiver, 
or  the  property  in  his  charge,  or  any  interference  with  or  molesta- 
tion of  his  administration  of  the  estate,  as  td  the  control  which 
the  court  will  exercise  over  litigation  affecting  the  receivership 
property.  Courts  are  jealous,  and  rightfully  so,  in  regard  to 
their  possession  through  the  receiver,  of  the  funds  or  property 
which  they  are  called  upon  to  administer  and  distribute,  or  adju- 
dicate and  determine  the  rights  of  parties  thereto.     It  would  not 


SUITS  AGAINST  THE  RECEIVER. 


183 


be  conducive  to  justice  or  good  government,  or  in  harmony  with 
the  fundamental  pi-inciples  of  equity  jurisprudence  if  the  posses- 
sion of  a  court  of  competent  jurisdiction  could  be  liarrassed  and 
interfered  with  at  the  wdiim  or  will  of  litigants,  in  their  unseemly 
scramhles  for  advantage. 

§  83.  Order  of  court  necessary. 

Unless  expressly  authorized  by  statute  a  suit  cannot  be  brought 
against  a  receiver  without  the  permission  of  the  court  which  ap- 
pointed him.'     The  court  in  granting  leave  to  sue  must  be  satis- 


^Moran  v.  Slurges,  154  U.  S.  275,  38 
L.  ed.  987;  Be  Swan,  150  U.  S.  648,  37 
L.  ed.  1209;  Porter  v.  Sahin,  149  U. 
S.  473.  37  L.  ed.  815;  Ex  parte  Tyler, 
149  U.  S.  181,  37  L.  ed.  694;  Terns  & 
P.  R.  Co.  V.  Cox,  145  U.  S.  593,  36  L. 
ed.  839;  Reynolds  v.  Stockton,  140  U. 
S.  254,  35  L.  ed.  464;  Union  Nat.  Bank 
V.  Bank  of  Kansas  City,  136  U.  S.  236, 
34  L.  ed.  346;  TJwmpson  v.  Phenixlns. 
Co.  136  U.  S.  297,  34  L.  ed.  413;  Sa- 
vannah V.  Jesup,  106  U.  S.  565,  27  L. 
ed.  276;  Barton  v.  Barbour,  104  U.  S. 
126,  26  L.  ed.  672;  Southern  Exp.  Co. 
V.  Western  N.  C.  R.  Co.  99  U.  S.  191, 
25  L.  ed.  319;  Davis  v.  Gray,  83  U.  S. 
16  Wall.  203,  21  L.  ed.  447;  Wiswall 
V.  Sampson,  55  U.  S.  14  Wall.  52,  14 
L.  ed.  322;  Avery  v.  Boston  Safe  De- 
posit &  T.  Co.  72  Fed.  Rep.  700;  Wer- 
ner V.  Murphy,  60  Fed.  Rep.  772;  Cen- 
tral Trust  Co.  V.  East  Tennessee,  V.  & 
G.  B.  Co.  59  Fed.  Rep.  523,  528;  The 
St.  NichoUs,  49  Fed.  Rep.  676;  Mis- 
souri P.  B.  Co.  V.  Texas  P.  R.  Co.  41 
Fed.  Rep.  311;  Olyphant  v.  St.  Louis, 
Ore.  &  S.  Co.  28  Fed.  Rep.  729;  Pal- 
mer V.  Scriven,  21  Fed.  Rep.  354;  Ken- 
nedy V.  Indianapolis  C.  &  L.  R.  Co.  3 
Fed.  Rep.  99;  Jordan  v.  Wells,  3 
Woods,  527;  Young  v.  Montgomery  & 
E.  R.  Co.  2  Woods,  619;  Thompson  y. 
Scott,  4  Dill.  508;  Barton  v.  Barbour, 
3  McArth.  219;  Farmers'  Loan  &  T. 
Co.  V,  Central  R.  Co.  2  McCrary.  181 ; 
Andrews  v.  Smith,  19  Blatchf.  103; 


Perego  v.  Bonesteel,  5  Biss.  69;  Blake 
V.  Alabama  &  C.  R.  Co.  6  Nat.  Bankr. 
Reg.  332;  Talladega  Mercantile  Co.  v. 
Jenifer  Iron  Co.  102  Ala.  259;  Ex  parte 
Printup,  87  Ala.  148;  Carlin  v.  Jo7ies, 
55  Ala,  624;  Pacific  R.  Co.  v.  Wade,  91 
Cal.  449,  13  L.  R.  A.  754;  Phelan  v. 
GaneUn,  5  Colo.  14;  DeGraffenried  v. 
Brunsicick  &  A.  R.  Co.  57  Ga.  22; 
Render S071  v.  Walker,  55  Ga.  481;  Mar- 
tin V.  Atchison,  2  Idaho,  590;  Mulca- 
hey  V.  Strauss,  151  111.  70;  Smith  v. 
United  States  Exp.  Co.  135  111.  279; 
Wyatt  V.  Ohio  &  M.  R.  Co.  10  111.  App. 
289;  Andrews  v.  Stanton,  18  111.  App. 
163;  Wayne  Pike  Co.  v.  State,  134  Ind. 
672;  Davis  v.  Ladoga  Creamery  Co. 
128  Ind.  222;  Elkhart  Car  Woi-ks  Co. 
V.  Ellis,  113  Ind.  215;  Keen  v.  Breck- 
enridge,  96  Ind.  69;  FortWayne,  M.  & 

C.  R.  Co.  V.  Mellett,  92  Ind.  538;  Mori- 
arty  V.  Kent,  71  Ind.  601 ;  Garver  v. 
Kent,  70  Ind.  428;  Herron  v.  Vance, 
17  Ind.  595;  Allen  v.  Central  R.  Co. 
42  Iowa,  683;  Conwell  v.  Lowrance,  46 
Kan.  83;  Meredith  Village  Sav.  Bank 
V.  Simjjsoji,  22  Kan.  414;  St.  Joseph  & 

D.  C.  R.  Co.  V.  Smith.  19  Kan.  225; 
Spalding  v.  Com.  88  Ky.  138;  Eazel- 
rigg  v.  Bronaugh,  78  Ky.  62;  Porter  v. 
Kingman,  126  Mass.  141 ;  Day  v.  Pos- 
tal Teleg.  Co.  66  Md.  369;  Citizens 
Sav.  Bank  V.  Person,  98  Mich.  173; 
Kenney  v.  Ranney,  96  Mich.  617;  Peo- 
ple, Tremper,  v.  Brooks,  40  Mich.  333; 
Harding    v.    Nettleton,    80   Mo.    608; 


184 


RECEIVERSHIPS. 


Heath  v.  Missouri,  K.  C.  &  T.  R.  Co. 

83  Mo.  617;  Palys  v.  Je'>rett,  33  N.  J. 
Eq.  303;  Little  v.  Dusenberry,  46  N. 
J.  L.  614;  Re  Christian  Jensen  Co.  128 
N.  Y.  550;  Walling  v.  Miller,  108  N. 
Y.  177;  Rogers  v.  Wheeler,  48  N.  Y. 
604;  Chautanque  County  Bank  v.  Ris- 
ley,  19  N.  Y.  369 ;  James  v.  JaTnes  Ce- 
ment Co.  8  N.  Y.  S.  R.  490;  Read  v. 
Brayton,  72  Hud,  633;  Preston  v. 
I^oughran,  58  Hun,  210;  i?e  Zoos,  50 
Hun,  67;  Riggs  v.  Whitney,  15  Abb. 
Pr.  388;  2)/?/to?-  v.  Baldicin,  14  Abb. 
Pr.  166;  Miller  v.  Zoei,  64  Barb.  454; 
Merritt  v.  Merritt,  16  "Wend.  405;  Z>e- 
(??wi;  V.  Jay,  30  Barb.  483;  J?e  Merritt, 
5  Paige,  139;  iVbe  v.  Gibson,  7  Paige, 
513;  Parker  v.  Broicning,  8  Paige,  388; 
Skinner  v.  Maxioell,  68  N.  C.  400;  OWs 
V.  Tucker,  85  Ohio  St.  584;  Robinson 
V.  Atlantic  &  O.  W.  R.  Co.  66  Pa.  160; 
TTmjf  V.  Hazlett,  6  Phila.  155;  CT///ee 
V.  Quidnick  Co.  18  R.  I.  442;  Payne 
V.  i?«a;i;er,  2  Tenn.  Ch.  517;  Ellis  v. 
Ferwow  Ice,  L.  &W.  Co.  86  Tex.  115; 
Re  Merrill,  54  Vt.  200;  Reed  v.Axtell, 

84  Va.  231;  Melendy  v.  Barbour,  78 
Ya.  544,  2>«««s  v.  Snead,  33  Gratt.  705; 
Brown  Y.  Ranch,  1  Wash.  500;  Garden 
City  Bkg.  &  T.  Co.  v.  Geilfim,  86  Wis. 
632;  Littlejohnv.  Tiirner,  73  Wis.  124; 
Jones  V.  Browse,  32  W.  Va.  444;  i?MS- 
se^^  V.  East  Anglian  R.  Co.  3  Macn.  & 
G.  104;  Ex  2jarte  Cochrane,  L.  R.  20 
Eq.  383;  Searle  v.  Choate,  L.  R.  25  Ch. 
Div.  723;  Lane  v.  Capsey \\%^\'\Z  Ch. 
411;  Evelyn  v.  Lewis,  8  Hare,  473; 
Ware?  V.  Swift,%  Hare,  312;  Parr  v. 
5e^?,  9  Ir.  Eq.  55;  Re  Persee.  8  Ir.  Eq. 
Ill;  Tink  v.  Bundle,  10  Beav.  318; 
Swaby  v.  Dickon,  5  Sim.  629;  Angel  v. 
Smith,  9  Ves.  Jr.  335;  Randfield  v. 
Randfield,  8  DeG.  F.  &  J.  776. 

The  rule  of  not  allowing  suits  against 
receivers  without  leave  applies  to 
United  States  courts,  and  will  be  main- 
tained in  those  courts  where  the  re- 
ceiver has  been  appointed  in  a  state 
court,  even  though  the  state  court  has 


refused  to  permit  the  receiver  to  sue 
or  be  made  a  defendant.  Porter  v. 
Sabin,  149  U.  S.  473,  37  L.  ed.  815. 
And  the  rule  applies  to  an  action  for 
personal  injuries  received  on  a  rail- 
road in  the  hands  of  a  receiver;  the 
recovery  of  a  money  demand,  dam- 
ages, or  for  the  recovery  of  the  prop- 
erty in  the  receiver's  possession.  Bar- 
ton V.  Barbour,  104  U.  S.  126,  36  L. 
ed.  672.  And  where  the  action  is  on 
a  money  demand,  the  complaint  must 
allege  leave  of  court  obtained.  li^een 
V.  Brecken7'idge,  9Q  Ind.  69.  It  also 
applies  to  an  action  in  tort  where  the 
permission  is  asked  to  pursue  redress 
in  an  action  at  law.  Palys  v.  Jewett, 
82  N.  J.  Eq.  302.  This  is  based  on 
the  ground  that  a  chancery  court  will 
not  try  questions  of  tort. 

Where  a  receiver  appointed  by  the 
supreme  court  dies,  a  purchaser  from 
one  of  the  litigants  pending  the  litiga- 
tion will  not  be  allowed  to  interfere 
with  the  possession  of  a  new  receiver 
by  an  independent  suit,  without  leave 
of  court  first  had  and  obtained  by  per- 
mission pro  interesse  suo. 

Brien  v.  Paul,  3  Tenn.  Ch.  357. 

Any  title  such  purchaser  might  ac- 
quire at  a  tax  sale  of  the  property 
would  inure  to  the.  successful  liti- 
gant. 

Brien  v.  Paul,  supra. 

The  rule  that  leave  should  be 
granted  by  the  court  appointing  a 
receiver,  before  bringing  suit  against 
him,  is  sufficiently  complied  with 
where  such  leave  is  granted  by  the 
judge  in  vacation  and  the  suit  is  after- 
wards tried  by  him  in  term  time. 
Wade  V.  Ringo,  63  Mo.  App.  414. 

A  service  of  summons  on  a  receiver 
will  be  set  aside  where  the  plaintiff 
has  not  obtained  permission  of  the 
court  to  maintain  the  action.  Mala- 
ney  v.  Atkins  1  Lack.  L.  News,  252. 

Permission  of  the  court  appointing 
a  receiver  must    be  obtained  before 


SUITS  AGAINST  THE  RECEIVER.  185 

fied  that  there  is  a  prima  facie  case  established  against  the  re- 
ceiver," and  the  petition  can  only  be  entertained  by  the  court  of 
equity  making  the  appointment,"  but  where  the  court  has  once 
granted  permission  to  sue  it  is  a  breach  of  judicial  discretion  to 
revoke  such  an  order  when  costs  have  accrued  in  pursuance  of 
such  order  by  the  person  to  whom  permission  is  given/  Where 
the  leave  of  court  is  asked  permission  will  not  be  denied  unless 
the  claim  is  manifestly  unfounded  and  vexatious.*  It  is  the  duty 
of  the  court  to  enquire  into  the  facts  before  action  is  taken  on 
the  petition  for  leave/  The  claimant  must  present  his  claim  in 
the  nature  of  a  formal  bill  or  petition  containing  appropriate  alle- 
gations so  that  issues  may  be  formed  thereon/  Leave  to  serve 
the  receiver  of  a  corporation  does  not  determine  that  the  cause  of 
action  is  a  good  one  against  the  receiver,  or  that  the  receiver  is 
liable/  A  motion  for  leave  to  sue  cannot  be  made  in  one  judi- 
cial district  while  a  general  order  made  by  the  court  in  another 
district  restraining  all  interference  with  the  receiver  is  in  force; 
the  general  order  must  first  l^e  vacated  or  modified;*  nor  will  the 
court  grant  leave  to  sue  its  receiver  out  of  its  jurisdiction/  Where 
property  has  passed  into  the  actual  possession  of  the  receiver, 

commencing  an  action   against   him.  Iron  Go.  102  Ala.  259;  Renfrov.  Goet- 

Melaney   v.    Atkins,  4  Pa.    Dist.    R.  ter,  78  Ala.  314;  Gowles  v.  Andreics,  39 

644.  Ala.  130. 

The  receivers  of  a  railroad  company  In  Ex  parte  Printup,  87  Ala.  148, 

located  in  another  state  may  be  sued  the  court  say:     "When  a  person  not 

in  the  courts  of   New  York  where  a  party  to  a  pending  suit  between 

leave  is  granted  by  the  court  appoint-  whom  and  the  complainant  there  is 

ing  them.    Carrey  v.  Spencer,  oluievs.  no  privity,  but  who  has  a  claim  or 

Com.    Rep.    636,    72    N.    Y.    S.    R.  lien  on  the  property,  or  is  interested 

108.  in  the  subject-matter  of  the  suit,  de- 

^ Jordan  v.  Wdls,  3  Woods,  527;  Uills  sires  for  his  own  protection  to  present 

V.  Parker,  111  Mass.  508.  his  claim,  to  assert  his  independent 

^Palmer  v.  Scriven,   21   Fed.  Rep.  right,  and  raise  new  issues,  he  must 

354;  Martin  v.  Atchison,  2  Idaho,  590.  do  so  by  formal  bill  containing  appro- 

3  Conwell    v.    Lowrance,    46     Kan.  priate  allegations — an  original  bill  in 

83.  the  nature  of  a  cross-bill  or  of  a  sup- 

*Palys  V.  Jewett,  82  N.  J.  Eq.  302;  plemental  bill  as  the  case  may  be. 

Lane    v.    Gapsey   [1891]   3   Ch.   411;  f Fleiscliauer     v.    Diltenhoefer ,     17 

Randfield  v.  Randfidd,  3  DeG.  F.  &  Jones  &  S.  311. 

J.  766.  ^  Wilkinson  v.  North  River  Gonst.  Go. 

^Lehigh  Goal  &  Nav.  Co.  v.  Central  66  How.  Pr.  423. 

B.  Co.  38  N.  J.  Eq.  175.  ^Central  Trust  Go.  ^.Wabash,  St.  L. 

^Talladega  Mercantile  Go.  v.  Jenifer  &,  P.  R.  Co.  23  Fed.  Rep.  858. 


186  RECEIVERSHIPS. 

leave  to  sue  is  necessary,  even  though  tlie  corporation  for  whose 
property  the  receiver  is  appointed  obtained  and  retained  jDosses- 
sion  wrongfully.'  Leave  will  not  be  granted  to  establish  a  lien 
where  the  receiver  has  been  appointed  to  prevent  a  multiplicitj^ 
of  suits  and  to  determine  all  claims.^ 

As  illustrating  the  extreme  jealousy  with  which  the  court  guards 
the  possession  of  the  receiver,  and  protects  him  from  interference 
it  has  been  held  that  where  a  judgment  creditor  obtained  a  judg- 
ment prior  to  the  receiver's  appointment,  and  levied  on  real  estate 
and  sold  it  afterwards  without  leave  of  court  the  deed  issued  on 
such  sale  was  void,  for  the  reason  that  the  land  being  in  the  cus- 
tody of  the  receiver  was  in  gremio  legis  and  no  rights  were  ob- 
tained by  the  purchaser,^  though  it  is  proper  to  state,  in  this  con- 
nection, that  the  authorities  upon  the  doctrine  are  not  uniform. 

§  84.    Exceptions  to  the  rule. 

To  the  foregoing  rule  requiring  from  the  court  appointing  the 
receiver  permission  to  sue  the  receiver,  there  are  the  following 
exceptions :  (a)  By  act  of  Congress  March  3,  1887,  corrected  by 
act  of  March  13,  1888,  and  known  as  the  "Judiciary  Act,"  it  is 

'i?e  Christian  Jensen  Co.  128  N.  Y.  or  by  sequestration  the  title  is  bound 

550.  from  the  filing  of  the  bill;  and  any 

'i?e  Eerbst,  63  Hun,  247.     An  orig-  purchaser  2^endente  lite,  even  if  for  a 

inal  bill  against  a  receiver  by  a  party  valuable  consideration  comes  in  at  his 

to  the  suit  in  which  the  receiver  is  ap-  peril,"   citing    Crcfts    v.    Old-field,    3 

pointed  is  unwarranted  and   a  con-  Swanst.  278  note;  Bird  v.  LittleJiales,  3 

tempt  of  court.     Payne  v.  Baxter,  2  Swanst.  299  note;  Anon.  6  Ves.  Jr.  287 

Tenn.  Ch.  517.  (where  a  cause  was  referred  to  a  mas- 

^Dugger  v.  Collins,  69  Ala.  324;  to  ter  to  determine  whether  the  parties 

the  same  effect  are  Wisicall  v.  Samp-  would  be  benefited  by  directing   the 

son,  55  U.  S.  14  How.  52,  14  L.  ed.  receiver  to  defend  in  an  action  of  eject- 

322;  Robinson  v.  Atlantic  &  6.  W.  R.  ment);  Angel  v,  Smith,  9  Ves.  Jr.  335. 
Co.  66  Pa.  160;  Martin  v.  Davis,  21  Where  permission  is  given  to  sue 

Iowa,  585;    Bentley  v.  Shrieve,  4  Md.  the  receiver  and  after  suit  was  brought 

Ch.  412.     But  see  Albany  City  Bank  the  party  to   whom  permission   was 

v.  Schermerhoi'n,  9  Paige,  372.  granted  took  proceedings  to  remove 

In  Wiswall  v.  Sampson,  supra,  the  the  cause  to  the  United  States  court 

court  says:  "  The  settled  rule  also  ap-  it  was  held  the  court  granting  such 

pears  to  be  that  where  the  subject-  permission  could  revoke   the    order 

matter  of  the  suit  in  equity  is  real  es-  and  dismiss  the  suit.     Meredith  Vil- 

tate  and  which  is  taken  into  the  pos-  lage  Sav.  Bank  v.  Simpson,  22  Kan. 

session  of  the  court  pending  the  litiga-  414. 
tion,  by  the  appointment  of  a  receiver, 


SUITS  AGAINST  THE  RECEIVER, 


187 


provided  in  section  3  as  follows :  "That  every  receiver  or  mana- 
ger of  any  property  appointed  by  any  court  of  the  United  States 
may  be  sued  in  respect  of  any  act  or  transaction  of  his  in  carryiuo- 
on  the  business  connected  with  such  property  without  the  previ- 
ous leave  of  the  court  in  which  such  receiver  or  manager  was  ap- 
pointed ;  but  such  suit  shall  be  subject  to  the  general  equity  juris- 
diction of  the  court  in  which  such  receiver  or  manager  was  ap- 
jDointed,  so  far  as  the  same  shall  be  necessary  to  the  ends  of  jus- 
tice." " 

(b)  Where  a  receiver  is  engaged  in  operating  a  railroad  in  an- 
other state  than  the  one  in  which  he  is  appointed,  and  is  thus 
engaged  in  the  business  of  a  common  carrier,  he  is  liable  to  such 
actions  at  law  as  may  be  brought  against  him  therein.  Such  receiv- 
ers cannot  be  awarded  exemptions  from  the  ordinary  common  law 


»25  Gen.  Stat.  433.  It  Las  been  held 
that  the  terms  of  this  statute  are  to  be 
construed  to  extend  to  any  court  of 
competent  jurisdiction,  federal  and 
state  courts  alike,  and  are  not  con- 
fined to  the  court  appointing  the  re- 
ceiver. Central  Trust  Co.  v.  East 
Tennessee,  V.&  G.  R.  Co.  59  Fed.  Rep. 
523;  3IcNnlta  v.  Lochridge,  141  U.  S. 
327,  35  L.  ed.  796;  Texas  &  P.  R.  Co. 
V.  Johnson,  151  U.  S.  81,  38  L.  ed.  81; 
Dillingham  v.  Russell,  73  Tex.  47,  3 
L.  R.  A.  634.  Garnishment  proceed- 
ings are  not  proceedings  against  a  re- 
ceiver for  any  act  of  his  and  are  not 
subject  to  the  provisions  of  said  act. 
Central  Trust  Co.  v. East  Tennessee,  V. 
<fc  G.  R.  Co.  supra.  As  to  matters  rela- 
tive to  the  seizure  of  receivership 
property  for  the  nonpayment  of  taxes, 
and  the  proper  course  of  procecdure, 
see  Re  Tyler,  149  U.  S.  164,  37  L. 
ed.  689;  consent  not  necessary  to  re- 
cover personal  injuries  by  a  passenger; 
Fullerton  v.  Fordyce,  121  Mo.  1;  For- 
dyce  v.  Withers,  1  Tex.  Civ.  App.  540. 
The  general  rule  not  allowing  suit 
against  a  receiver  without  leave  of  the 
court  appointing  him  does  not  apply 
to  suits  under  federal  laws  involving 


questions  as  to  the  validity  of  and 
infringements  of  letters  patent.  Rup- 
feld  v.  Automaton  Piano  Co.  66  Fed. 
Rep.  788. 

A  state  statute  exempting  a  receiver 
from  garnishment  has  no  effect  in  a 
federal  court  outside  the  state.  Cen- 
tral T.  Co.  V.  Chattanooga,  R.  &  C.  R. 
Co.  2  Am.  &  Eng.  Corp.  Cas.  No. 
493. 

The  Act  of  Congress  of  Aug.  13, 
1888,  allowing  suits  against  federal 
receivers  without  leave,  has  no  appli- 
cation to  garnishment  of  a  receiver  in 
the  court  of  his  appointment.  Cen- 
tral T.  Go.  V.  Chattanooga  R.  &  C.  R. 
Co.  2  Am.  &  Eog.  Corp.  Cas.  N.  S. 
493. 

A  garnishment  proceeding  against 
a  receiver  is  not  within  Sayles's  (Tex.) 
Civ.  Stat.  art.  1468,  providing  that  a 
receiver  in  possession  of  property  un- 
der order  of  the  court  may  be  sued  in 
his  official  capacity,  and  if  a  judg- 
ment is  recovered  against  him  it  shall 
be  the  duty  of  the  court  to  order  it 
paid  out  of  funds  in  his  hands  as  re- 
ceiver. Kreisle  v.  Campbell  (Tex.)  33 
S.  W.  852,  denying  writ  of  error  in 
32  S.  W.  581. 


188 


RECEIVERSHIPS. 


liabilities  of  common  can-iers  more  extensive  than  tliey  are  allowed 
in  the  state  in  which  they  are  appointed  and  in  the  state  in  which 
the  cause  of  action  occurred.' 

(c)  Where  the  court  issuinj^  a  garnishee  process  is  in  another 
state  than  tlie  one  in  which  the  receiver  is  appointed,  consent  of 
the  latter  court  has  been  held  not  to  be  necessary.^ 

(d)  "Where  the  purpose  of  the  suit  is  not  to  disturb  the  re- 
ceiver but  fix  the  amount  of  damages  sustained  by  reason  of  per- 
sonal injuries,  there  being  no  injunction  from  the  cliancery  court, 
and  no  leave  to  prosecute  obtained,  the  judgment  is  held  to  be 
good.^ 

(e)  Where  a  creditor  obtains  a  judgment  and  levies  upon  and 
sells  real  estate  of  the  debtor  by  virtue  of  a  lien  acquired  under 
his  judgment,  he  obtains  a  good  title  to  the  real  estate  as  against 
a  purchaser  from  the  receiver  who  receives  his  title  from  the 
debtor  by  virtue  of  a  conveyance  made  by  order  of  court,  subse- 
quent to  the  attaching  of  the  judgment  lien,  though  no  leave  of 
court  is  asked  or  obtained,* 


^ Paige  v.  Smith,  99  Mass.  395;  Fol- 
ger  v.  Columbian  Ins.  Co.  99  Mass. 
276;  Blumenthal  v.  Brainard,  38  Vt. 
408.  Where  the  same  person  is  re- 
ceiver of  one  railroad  and  lessee  of  an- 
other, both  being  operated  by  him  to- 
gether, a  suit  may  be  maintained  at 
law  without  leave  for  injuries  result- 
ing from  the  negligence  of  his  servants 
in  operating  the  leased  road.  Lyman 
V.  Central  Vermont  R.  Co.  59  Vt.  167. 
And  such  action  may  be  maintained 
against  the  receiver  where  the  injury 
occurred  at  a  point  where  the  receiver 
was  in  charge.  Lyman  v.  Central 
Vermoyit  R.  Co.  59  Vt.  167. 

^Phelan  v.  Ganebin,  5  Colo.  14.  In 
this  case  it  was  held  that  where  leave 
might  be  properly  sought,  a  failure  to 
do  so  was  nothing  more  than  a  con- 
tempt of  the  appointing  court,  and 
■was  not  a  bar  to  the  jurisdiction  of  a 
court  of  law,  and  no  defense  to  an 
otherwise  legal  action,  and  is  contrary 
to  the  doctrine  announced  in  Wiswall 


V.  Sampson,  55  U.  S.  14  How.  52,  14 
L.  ed.  322;  Robinson  v.  Atlantic  &  G. 
W.  R.  Co.  66  Pa.  160;  and  other  Eng- 
lish and  American  authorities,  but  is 
sustained  in  principle  by  Albany  City 
Bank  v.  Schermerhorn,  9  Paige,  372. 
See  also  Fithian  v.  New  York  &  E. 
R.  Co.  31  Pa.  114. 

^Kinney  v.  Crocker,  18  Wis.  74; 
Allen  v.  Central  R.  Co.  42  Iowa,  683. 
See  also  Paige  v.  Smith,  99  Mass.  395; 
Hill  V.  Parker,  111  Mass.  508;  Camp 
v.  Barney,  4  Hun,  373;  Chautauque 
County  Bank  v.  Risley,  19  N.  Y.  376; 
Contra,  Wiswall  v.  Sampson,  55  U.  S. 
14  How.  52,  14  L.  ed.  322. 

*C7iautauque  County  Bank  v.  Risley, 
19  N.  Y.  369;  the  principle  upon  which 
this  decision  is  based  in  that  the  ob- 
taining of  leave  of  the  chancery  court 
appointing  a  receiver  is  not  a  juris 
dictional  fact  affecting  the  legality  of 
the  sale,  or  the  validity  of  the  title 
thereunder,  though,  perhaps,  subject- 
ing the  person  to  punishment  for  con- 


SUITS  AGAINST  THE  RECEIVER 


189 


(f)  Where  the  receiver  has  sold  property  that  does  not  belong 
to  or  is  not  a  part  of  the  receivershijD  property  he  may  be  sued  by 
the  owner  in  an  action  of  trover  without  obtaining  an  order  for 
leave  to  sue.' 

(g)  Where  a  receiver  has  joined  issue  without  objection  it  is  too 
late  to  urge  that  leave  to  sue  was  not  obtained.^ 

Although  the  general  rule  is  that  a  j^arty  must  apply  to  the 
court  for  leave  before  he  sues  a  receiver,  yet  an  action  brought 
against  a  receiver  without  leave  is  regular  until  the  court  inter- 
feres, and  a  judgment  therein  is  valid.' 


tempt,  but  see  contra  Wmcall  v.  Samp- 
eon,  55  U.  S.  14  How.  53,  14  L.  ed. 
322. 

^Eenney  v.  Eanncy,  96  Mich.  617; 
in  this  case  Hooker,  Ch.  J.,  says: 
"We  understand  it  to  be  the  settled 
law,  that  when  one  by  a  trespass  takes 
the  property  of  another  and  sells  it  he 
is  liable  for  the  conversion,  and  that 
no  demand  is  necessary,  and  the  ques- 
tion of  good  or  bad  faith  is  not  neces- 
sarily involved.  This  doctrine  is  ap- 
plied solely  in  cases  against  sheriffs 
and  constables  where  property  is  un- 
lawfully seized  and  sold  upon  execu- 
tion. The  defendant  wrongfully  took 
property  of  the  plaintiff  and  sold  it. 
It  is  no  defense  to  say,  'I  supposed  I 
had  authority  to  do  so.'  He  should 
have  seen  to  it  that  he  sold  no  prop- 
erty except  that  mortgaged." 

In  the  case  of  llills  v.  Parker,  111 
Mass.  508,  the  court  say:  "The decree 
of  a  court  of  chancery  appointing  a 
receiver  entitled  him  to  its  protection 
only  in  the  possession  of  property 
which  he  is  authorized  or  directed  by 
the  decree  to  take  possession  of. 
When  he  assumes  to  take  or  hold 
possession  of  property  not  embraced 
in  the  decree  appointing  him  and  to 
■which  the  debtor  never  had  any  title, 
he  is  not  acting  as  the  officer  or  repre- 
sentative of  the  court  of  chancery, 
but  is  a  mere  trespasser,  and  the  right- 


ful owner  of  the  property  may  sue 
him  in  any  appropriate  form  of  ac- 
tion for  damage  or  to  recover  posses- 
sion of  the  property  illegally  taken  or 
detained."  Citing  Parker  v.  Brown- 
ing, 8  Paige,  388;  Paige  v.  Smith,  99 
Mass.  395;  Leighton  v.  Haririood,  111 
Mass.  67;  In  Re  Young,  7  Fed.  Rep. 
855,  Curran  v.  Craig,  22  Fed.  Rep. 
101;  but  see  Barton  v.  Barbour,  104 
U.  S.  126,  26  L.  ed.  672. 

^Elkhart  Car  Works  v.  Ellis,  113 
Ind.  215;  Jay's  Case,  6  Abb.  Pr.  293; 
Hubbell  V.  Dana,  9  How.  Pr.  424;  Re 
Young,  7  Fed.  Rep.  855;  Naumburg 
V.  Hyatt,  24  Fed.  Rep.  898. 

^Ilackley  v.  Draper,  4  Thomp.  &  C. 
614,  affirmed  in  GO  N.  Y.  88.  It  has 
been  held,  however,  that  leave  to  sue 
is  a  jurisdictional  requisite  which  can- 
not be  waived  by  the  receiver,  and 
under  the  Washington  Code  can  be 
raised  at  any  time.  Brown  v.  Rauch, 
6  Wash.  500;  Barton  v.  Barbour,  104 
U.  S.  126,  26  L.  ed.  672;  Ecen  v. 
Breckenridge,  96  Ind.  69;  Martin  v. 
Atchison,  2  Idaho,  590,  and  T/wmpson 
V.  Scott,  4  Dill.  508.  The  contrary 
doctrine  is  held  in  St.  Joseph  cfe  D.  C. 
R.  Co.  V.  Smith,  19  Kan.  225;  in  that 
case  it  was  conceded  that  thQ  court 
appointing  a  receiver  might  draw  to 
itself  all  controversies  to  which  the 
receiver  is  a  party,  or  which  affect 
the  property  under  his  control,  yet  it 


190 


RECEIVERSHIPS. 


§  85.  In  what  court  receiver  may  be  sued. 

Wliere  it  is  claimed  that  the  plaintiff  has  equitable  ino-hts  which 
are  superior  to  the  rights  of  the  receiver  derived  under  the  order 
of  court,  the  court  in  which  the  receiver  was  appointed  is  the  only- 
court  that  can  pass  upon  such  conflicting  rights,  and  it  must  be  in 
the  cause  in  which  the  receiver  was  appointed  and  not  by  an  in- 
dependent suit.'  But  in  a  case  where  disputed  facts  are  involved 
the  court  may,  on  its  own  motion,  or  on  the  proper  application  of 
the  parties  permit  a  suit  at  law  to  be  brought  for  the  purpose  of 
determining  and  settling  the  disputed  facts,  or  direct  the  trial 


does   so  only  by  direct  action  upon 
parties  by  way  of  injunction  or  pro- 
ceedings as  for  contempt,  and  the  ap- 
pointment in  no  manner  affects  the 
ordinary  jurisdiction  of  oilier  tribu- 
nals.  And  to  the  same  effect  is  Mul- 
cahey  v.  Strauss.  151  111.  70;  Kinney 
V.    Crocker,  18  Wis.   74;   Roxbury  v. 
Central  Vermont  R.  Co.   60  Vt.    121; 
Lyman  v.     Central  Vermont  R.    Co. 
59  Vt.  187,  and  Allen  v.   Central  R. 
Co.  42  Iowa,  683.     In  BlumentJial  v. 
Brainerd,  38  Vt.  402,  the  court  say: 
"A  court  of  chancery  will  protect  a 
person  acting  under    its  process  on 
authority,  in  the  execution  of  a  decree 
or  decretal  order  against  suits  at  law; 
and   will  compel  parties  to  apply  to 
that  court  for  relief.     This  protection 
is  accorded  by  that  court  to  its  offi- 
cers only  on    their  own   application 
and  is  granted  by  the  chancellor  in 
the  exercise  of  his  discretion  and  it  is 
to  be  presumed    that    it    would   be 
granted  in   any  necessary  or  proper 
case  for  such  relief."      Whether  the 
court  will  try  all  controversies  in  the 
case  in  which  the  receiver  is  appointed 
or  refer  the  matter  to  another  court  in 
an  independent  proceeding  is  wholly 
a  matter  in  its  discretion.     Kennedy 
V.  Indianapolis,  C.  &  L.  R.  Co.  3  Fed. 
Rep.  97;  Melendy  v.  Barbour,  78  Va. 
544.     If  equitable  rights  are  involved 
the  court  will  hear  them  on  petition. 


Porter  v.  Kingman,  126  Mass.  141 ; 
Olds  v.  Tucker,  85  Ohio  St.  581.  The 
right  to  appeal  in  such  cases  is  not 
granted  except  for  abuse.  Mechanics 
Nat.  Bank  v.  Landauer,  65  Wis.  44. 

Every  claim  presented  against  a 
fund  in  the  hands  of  a  receiver,  if 
contested  before  the  court  appointing 
the  receiver,  becomes,  in  effect,  a  suit 
against  the  receiver  and  is  ended  by  a 
final  judgment  allowing  or  rejecting 
the  claim;  and  any  party  in  the  contest 
desiring  to  appeal  may  do  so.  Fagan 
v.  Boyle  Ice  M.aeh.  Co.  65  Tex.  324. 
Cf  Coicdrey  v.  Oalveston,  H.  &  H.  R. 
Co.  93  U.  S.  352,  23  L.  ed.  950. 

'^Porter  v.  Kingman,  126  Mass.  141 ; 
citing  Columbia  Book  Co.  v.  De  Oolyer, 
115  Mass.  67;  Atlas  Bank  v.  Naliant 
Bank,  23  Pick.  480;  Wiswall  v.  Samp- 
son, 55  U.  S.  14  How.  52,  14  L.  ed. 
322;  Noe  v.  Gibson,  7  Paige,"  513;  An- 
drews V.  Stanton,  18  111.  App.  163; 
Robinson  v.  Atlantic  &  G.  W.  R.  Co. 
66  Pa.  160;  Russell  v.  Kast  Anglian R. 
Co.  3  Macn.  &  G.  104;  Mechanics' 
Nat.  Bank  v.  Landauer,  68  Wis.  44; 
Pacific  R.  Co.  V.  Wade,  91  Cal.  449, 
13  L.  R.  A.  754;  Re  Merrill,  54  Vt. 
200;  Olyphant  v.  St.  Louis,  Ore.  &  8. 
Co.  28  Fed.  Rep.  729;  Central  Trust 
Co.  V.  Wabash,  St.  L.  &  P.  R.  Co.  28 
Fed.  Rep.  871;  Olds  v.  Tucker,  35 
Ohio  St.  581. 


SUITS  AGAINST  THE  RECEIVER. 


191 


of  a  feigned  issue  to  settle  the  facts.*  It  has  been  contended  that 
by  reason  of  the  chancery  court,  in  which  the  receiver  is  ap- 
pointed, drawing  to  itself  all  matters  of  claims  against  the  re- 
ceiver and  compelling  a  trial  of  the  issues  in  that  court,  it  is,  in 
effect,  a  violation  of  the  constitutional  right  of  trial  by  jurv,^  but 
inasmuch  as  the  constitutional  right  of  a  trial  by  jury  does  not 
extend  to  cases  of  equity  jurisdiction,  that  question  has  no  valid 
significance/  Xeither  is  the  rule  requiring  consent  altered  by  the 
constitutional  right  to  sue  in  federal  courts  in  certain  cases.* 
The  granting  of  leave  to  sue  in  an  independent  action,  or  refusal, 
rests  in  the  sound  discretion  of  the  court  to  which  application  is 
made,  and  the  appellate  court  will  not  interfere  unless  there  has 
been  a  manifest  abuse  of  the  discretion.' 


^Barton  v.  Barbour,  104  U.  S.  126, 
26  L.  ed.  672;  Wyatt  v.  Ohio  &  M.  R. 
Co.  10  111.  App.  289.  This  was  a  suit 
against  a  railroad  company  over  which 
a  receiver  had  been  appointed.  A 
federal  court  receiver  maj^  be  sued  in 
a  state  court.  Southern  P.  R.  Co.  v. 
Maddox,  75  Tex.  300;  St.  Joseph  &  D. 
G.  R.  Co.  v.  Smith,  19  Kan.  225. 

^Palys  v.  Jeicett,  32  N.  J.  Eq.  302; 
Kiniuy  v.  Crocker,  18  "Wis.  74;  Allen 
v.  Central  R.  Co.  42  Iowa,  683;  Pacific 
R.  Co.  v.  Wade,  91  Cal.  449,  13  L.  R. 
A.  754. 

^Barton  v.  Barbour,  104  U.  S.  126, 
26  L.  ed.  672;  Providence  Rubber  Co.  v, 
Goodyear,  76  U.  S.  9  Wall,  788,  19  L. 
ed.  566;  Illinois  C.  R.  Co.  v.  Turrill 
VCawood  Patent"),  94  U.  S.  695,  24  L. 
ed.  238;  2Iarsh  v.  Seymour,  97  U.  S. 
348,  24  L.  ed.  963. 

*Reed  v.  Axtell,  84  Va.  231;  Melendy 
V.  Barbour,  78  Va.  544,  but  see  Barton 
V.  Barbour,  140  U.  S.  126,  26  L.  ed. 
672;  Brown  v.  Ranch,  1  Wash.  497, 
where  it  is  held  that  obtaining  leave  is 
a  jurisdictional  fact. 

^Mechanics''  Nat.  Bankv.  Landauer, 
68  Wis.  44;  Meeker  v.  Sprar/ue,  5 
Wash.  242.  Though  the  receiver  can- 
not appeal  in  a  suit  against  him  the 


opposite  party  may.  Melendy  v.  Bar- 
bour, 78  Va.  544;  Mecha7iics'  Kat. 
Bank  v.  Landauer,  68  Wis.  44.  And 
permission  may  be  revoked  by  the 
court  granting  permission.  Meredith 
Village  Sav.  Bank  v.  Simpson,  22 
Kan.  414;  Henderson  v.  Walker,  55  Ga. 
481. 

The  discretion  above  referred  to 
resting  with  the  court  relates  to  the 
matter  of  granting  leave  to  bring  an 
independent  suit,  or  of  requiring  the 
applicant  to  intervene,  in  the  original 
suit  in  which  the  receiver  is  ap- 
pointed, by  petition.  Davis  v.  Michel- 
bacher  (Wis.)  31  N.  W.  160;  Melendy 
V.  Barbour,  78  Va.  544;  Central  'Trust 
Go.  V.  Wabash.  St.  L.  &  P.  R.  Co.  23 
Fed.  Rep.  858;  and  if  the  interested 
parties  are  required  to  intervene  it 
likewise  is  in  the  discretion  of  the 
court  whether  the  issue  shall  be  tried 
by  a  jury  or  referred  to  a  master. 
Kennedy  v.  Indianapolis,  G.  &  L.  R. 
Go.  3  Fed.  Rep.  97.  It  is  an  excep- 
tional case  under  peculiar  facts  and 
circumstances  where  the  court  will 
permit  a  suit  against  a  receiver  in  an- 
other court.  Meredith  Village  Sav. 
Bank  v.  Simpson,  23  Kan.  414;  Re 
Piatt,   52  How.    Pr,   468;   Palmer  v. 


192  RECEIVERSHIPS. 

In  all  cases  where  it  is  necessary  to  make  the  receiver  a  defend- 
ant by  leave  of  court,  the  bill  or  petition  must  alle*^e  that  it  is 
filed  by  such  leave  of  court.' 

Actions  ag-ainst  a  receiver  are  in  law  actions  aj^ainst  the  receiv- 
■ership,  or  the  funds  in  the  hands  of  the  i-eceiver,  and  his  con- 
tracts, misfeasance,  neglii>ence  and  liability  are  official  and  not 
personal,  and  judgments  against  him  as  receiver  are  payable  only 
from  the  funds  in  his  hands." 

§  SQ.     Suits  against  receiver  for  negligence. 

After  leave  of  court  the  receiver  of  an  insolvent  railroad  com- 
2)any  may  be  sued  for  the  negligence  of  his  employees,  resulting 
in  a  passenger's  death,'  but  he  is  not  a  proper  defendant,  and 
ought  not  to  be  substituted  for  the  railroad  company  in  an  action 
for  a  trespass  committed  by  the  company  before  his  appointment.* 
But  he  may  be  a  defendant  in  an  action  of  tort  growing  out  of 
the  acts  of  the  servants  of  his  predecessor  f  not,  however,  for 
injuries  resulting  in  death  caused  by  negligence  of  his  employees, 
where  the  suits  are  exclusively  statutory.^  It  is  otherwise,  however, 
where  the  proceeding  is  based  upon  the  negligence  of  his  agents 
in  operating  a  railroad,  where  the  suit  is  a  common  law  proceed- 

Scriven,   21   Fed.  Rep.  354.     Where  *  Deckers.  Ga?-(Z?ier,  124  N.  Y.  334, 

permission  is  given  to  sue  in  another  11  L.  R.  A.  480,  reversing  33  N.  Y.  S. 

court,     the    judgment    if    rendered  W.  ^il;  Pringle\.Woohoorth,^O^.Y. 

against  the  receiver  must  be  presented  502;  Arnold  v.  Suffolk  Bank,  27  Barb, 

as  a  claim  and  the  method  of  payment  424;    Fleischauer  v.  Dittenhoefer,   17 

determined    by  the    court    granting  Jones  &  S.  311;    Metropolitan  Trust 

leave  to  sue  and  in  which  the  receiver  Co.  v.  Tonawanda  S.  &  0.  B.  Co.  103 

was  appointed.     Harding  \.  Nettleton,  N.  Y.  245;  Raid  v.  Attrill,  106  N.  Y. 

86  Mo.  658.  423.     But  see  Pickersgill  v.  Myers  i& 

^  Burk  Y.  Muskegon  Mach.  &  F.  Co.  L.  F.  Ins.   Co.  99  Pa.  602;   Combs  v. 

98  Mich.  614;  Steel  Brick  Siding  Co.  Smith,  78  Mo.  32. 

V.  Muskegon  Mach.  &  F.  Co.  98  Mich.  ^  Mc Nulla  v.  Lockridge,  137  111.  270, 

016.  aflfirming  32  111.  App.  86,  and  affirmed 

^McNulta  v.  LochHdge,  141  U.   S.  in  141  U.  S.  327,  35  L.  ed.  796.     Or  a 

327,  35  L.  ed.  796,  affirming  137  111.  tort  of  the  corporation  before  his  ap- 

270;  Texas  &  P.  R.  Co.  v.  Cox,  145  U.  pointment.     Combs  v.  Smith,  78  Mo. 

S.  593,  36  L.  ed.  829;  The  St.  Nich-  32;  Com.  v.  Bunk,  26  Pa.  235. 

olas,  49  Fed.  Rep.  671;    Woodruff  v.  ^Houston  &  T.  C.  R.  Co.  v.  Roberts 

Jewett,  37  Hun,  205.  (Tex.)  19  S.W.  512;  Texas  &  P.  R.  Co. 

'*  Little  v.  Dusenberry,  46  N.  J.  L.  v.    Collins,  84  Tex.   121;    Yookum  v. 

614;  The  St.  Nicholas,  49  Fed.  Rep.  Selph,  83  Tex.  607;   Turner  v.  Cross, 

671.  «3  Tex.  218,  15  L.  R.  A.  262. 


SUITS  AGAINST  THE  RECEIVER. 


193 


ing.'  Mandamus  is  not  sustainable  against  a  corporation  and 
receiver  where  the  latter  is  proceeding-  in  the  execution  of  his 
trust  under  the  directions  and  orders  of  the  court  appointing 
■him.' 

§  87.     When  suits  a;^ainst  him  may  be  eiijoiiied. 

In  proceedings  for  the  dissolution  of  an  insurance  company 
where  a  receiver  has  been  appointed,  the  court  may  enjoin  an 
action  brought  by  a  policy  holder  against  such  receiver  for  the 
purpose  of  declaring  the  debts  and  obligations  of  the  company 
and  distributing  the  assets,^  and  generally  where  the  result  of  the 


1  Little  V.  Dusenherry,  46  N.  J.  L. 
614.  In  this  character  of  case  it  has 
been  held  that  leave  of  court  is  not 
required. 

^  State,  WasJiington  County  Comrs.  v. 
Marietta  &  C.  B.  Co.  35  Ohio  St.  154; 
Merrill  v.  Lake,  16  Ohio,  405. 

^Atty.  Gen.  v.  North  America  L. 
Ins.  Co.  6  Abb.  N.  C.  293.  In  an  ac- 
tion brought  by  the  attorney  general 
under  the  statutes,  such  policy  hold- 
ers may  appear,  even  after  the  ap- 
pointment of  a  receiver,  and  be  made 
parties  to  the  action,  and  thus  give 
them  the  right  to  appeal  in  matters 
affecting  their  interests.  So  also  will 
a  suit  be  enjoined  where  the  defend- 
ant in  an  action  brought  by  a  widow 
entitled  to  dower,  where  such  defend- 
ant has  been  placed  in  possession  by 
a  receiver.  Coleman  v.  Qlanville,  18 
-Grant  Ch.  (Ont.)  42.  If  an  action 
to  recover  though  friendly  will  ham- 
per the  court  and  receiver  in  the  per- 
formance of  their  duties,  and  greatly 
increase  the  costs  and  expenses  of  the 
trust,  it  should  be  enjoined.  Atty. 
■Gen.  V.  North  American  L.  Ins. 
Co.  supra.  The  rule  is  stated  in 
Evelyn  v.  Lewis,  3  Hare,  472,  by 
the  vice  chancellor  as  follows;  "If 
a  party  claiming  a  right  in  the  same 
subject-matter  was  in  possession  of 
the  rights  which  he  claimed  at  the 
13 


time  the  receiver  was  appointed,  the 
appointment  of  the  receiver  left  him 
in  such  possession;  if,  on  the  other 
hand,  the  claimant  was  out  of  posses- 
sion, he  must  apply  for  the  leave  of 
this  court  before  he  instituted  any 
legal  proceedings  affecting  the  pos- 
session which  the  receiver  had  ac- 
quired. The  court  had  then  an  op- 
portunity of  considering  and  in  a 
sense  of  trying  the  right  of  the  appli- 
cant to  proceed  at  law  before  it  sanc- 
tioned the  proceeding.  How  far  that 
preliminary  trial  in  this  court  should 
go  might  depend  on  the  circumstances 
of  the  case.  Whether  the  party  pro- 
ceeding at  law  did  or  did  not  know 
that  a  receiver  had  been  appointed 
over  the  property,  or  however  clear 
the  right  of  the  claimant  might  be, 
the  court  would  restrain  the  prosecu- 
tion of  the  claim  if  it  were  instituted 
without  the  leave  of  this  court."  Cf. 
Tink  V.  Bundle,  10  Beav.  318;  Be 
Persse,  8  Ir.  Eq.  Ill;  Batchelor  v. 
Bloke,  1  Hog.  98;  Swahy  v.  Dickon,  5 
Sim.  620;  Parr  v.  Bell,  9  Ir.  Eq.  55. 

And  where  a  petition  is  filed  in  the 
court  in  which  the  receiver  was  ap- 
pointed for  leave  to  sue  the  receiver, 
the  petition  must  state  a  prima  facie 
cause  of  action  against  him.  The 
court  should  not  allow  its  receiver  to 
be  harrassed  by  a  suit  where,  accord- 


194:  RECEIVERSHIPS. 

suit  will  disturb  the  possession  of  the  receiver,  the  suit  will  be 
restrained  if  prosecuted  without  the  consent  of  the  court. 

In  a  special  proceeding  to  wind  up  a  corporation  and  distribute 
its  assets,  where  a  suit  is  Ijrought  against  the  receiver,  the  inevita- 
ble effect  of  which  is  to  interfere  with  the  action  of  the  receiver 
and  hamper  and  annoy  him  in  tlie  performance  of  his  duty,  and 
when  the  person  suing  has  ample  opportunity  in  the  original  pro- 
ceeding in  which  the  receiver  is  appointed  to  obtain  all  his  rights, 
the  court  will  enjoin  a  suit  instituted  against  a  receiver.'  But 
this  protection  by  injunction  will  not  be  extended  to  a  case  in 
which  it  is  uncertain  whether  the  receiver  is  personally  or 
officially  liable.^  The  court  will  not  permit  a  suit  against  a 
receiver  to  restrain  him,  even  when  the  act  complained  of  is 
beyond  the  scope  of  the  receiver's  power.'  But  in  such  case  the 
application  for  relief  should  be  made  in  the  case  in  which  the 
receiver  was  appointed.  In  regard  to  the  protection  of  the  court 
to  the  receiver,  by  injunction  or  otherwise,  it  must  be  under- 
stood to  have  reference  to  the  receivership  property,  and  not 
property  which  the  receiver  may  take  possession  of  not  embraced 
in  the  order  of  appointment.* 

§  88.  Receiver's  defenses. 

Unless  restricted  by  order  of  court,  the  receiver  in  an  action  to 
liquidate  partnership  affairs,  may  intervene  in  a  suit  against  the 
firm  and  set  up  as  many  defenses  as  he  may  have  reason  to  be- 
lieve can  be  sustained,  notwithstanding  such  defenses  might  inure 
to  the  benefit  of  the  members  of  the  firm,  though  not  pleaded  by 
them ; '  and  in  an  action  for  personal  injuries  received  during  the 
time  he  is  operating  a  railroad  he  may  plead  the  statute  of  limi- 
tations.' The  fact  that  a  railroad  is  in  the  hands  of  a  receiver  is 
no  defense  to  an  action  brought  on  a  statutory  liability  for  a 

ing  to  his  own  showing,  the  plaintiff  ^  Searle  v.  Choat,  L.  R.  25  Ch.  Div. 

has  no  cause  of  action.     Jordan  v.  723.     And  this  is  especially  so  under 

Wells,  3  "Woods,  527.     And  it  seems  the  Judicature  Acts. 

that  leave  may  be  granted   without  *  Curran  v.  Craig,  22  Fed.  Rep.  101 ; 

notice.     Potter  v.  Brunnell,  20  Ohio  Re  Young,  7  Fed.  Rep.  855. 

gt.  150.  '  Honegger    v.    Wettsiein,  15  Jones 

'  Atty.    Gen.  v.  North  America  L.  «fc  S.  125. 

Ins.  Co.  6  Abb.  N.  C.  293.     But  see  «  Bartlettv.  Eeim,  50  N.  J.  L.  2C0. 
Jay's  Case,  6  Abb.  Pr.  293. 

'^  Re  The  Original  Harileypool  Col- 
leries  Co.  51  L.  J.  Ch.  508. 


SUITS  AGAINST  THE  RECEIYER.  195 

failure  to  fence  the  road.'  In  general,  a  receiver  may,  and  it  is 
his  duty,  to  defend  on  all  legal  grounds  where  the  action  may 
result  in  a  judgment  against  funds  or  property  in  his  possession, 
and  as  a  rule  all  defenses  that  might  have  been  available  had  a 
receiver  not  been  appointed,  are  available  to  him  in  his  official 
capacity.^  To  be  entitled  to  costs  for  defending  he  must  procure 
consent  of  the  court  to  do  so/ 

§  89.  Character  of  jiulgnient  against  receiver. 

In  an  action  brought  by  a  creditor  of  a  corporation  against  a 
receiver  thereof  no  personal  judgment  can  be  rendered  against 
the  receiver ;  it  must  be  against  him  in  his  official  character,  and 
nmst  be  payable  out  of  the  funds  of  the  receiver  held  by  him  in 
his  official  character,"  A  judgment  in  a  state  court  is  not  con- 
clusive as  against  a  receiver  in  a  United  States  court,  where  suit 
was  brought  without  leave,  and  the  latter  court  may  inquire 
whether  the  intervenor,  in  whose  favor  the  state  court  rendered 
judgment,  has  a  lien  and  the  rank  and  amount  thereof."  The 
contracts,  misfeasances,  negligence,  and  liabilities  of  the  receiver 
are  official,  and  not  personal.^     A  judgment  against  a  corporation 

'  Ohio  &  M.  R.   Co.  V.  Russell,  115  '^11;  McEversY.  Laicrence,'S.oS.m.  Ch.. 

II!.  52.  172. 

The  fact  that  a  receiver  has  been  ^  Conyers  v.  Croshie,  6  Ir.  Eq.  657; 

discharged  is  no  answer  to  a  motion  Anon.    6    Ves.    Jr.   287;  Reynolds  v. 

for  leave  to  bring  an  action  against  PeUyjohn,  79  Va.  827. 

him   for   the   claim   and    delivery  of  *  Woodruff  y.  Jewett,  37  Hun,  205; 

property,  where  it  appears  that  the  Hall  v.  Smith,  2  Bing.  15G;   Combs  v. 

claip-.ants  of  the  property  had  no  no-  Smith,  78  Mo.  32;   Camp  v.  Barney,  4 

tice  of  the  motion  to   discharge  the  Hun,  373;  Com.  v.  Runk,  26  Pa.  235; 

receiver,  although  he  was  aware  of  Barton  v.  Barbour,  104  U.  S.  12G,  26 

the  claim;  and  that  the  receiver  had  L.  ed.  (il2;  Meara  v.  Ilolhrook,  2Q0h\o 

sold  the  property  claimed,  after  notice  St.  137;  Thompson  v.  Scott,  4  Dill.  508; 

of  the  claim,  and  after   the  service  Brown  v.  Brown,  71  Tex.  355.     If  the 

upon  him  of  a  petition  and  notice  of  judgment    is    against  a    receiver    in 

motion  for  leave  to  prosecute.    Miller  another  court  than  that  in  which  he  is 

V.   Loeh,  64  Barb.  454.     After  a  re-  appointed  it  is  error  to  attempt  to  fix 

ceiver  has  distributed  money  in  his  the  fund  out  of  which  the  judgment 

hands,  however,  after  notice  to  credi-  is  payable.     Id. 

tors,  the  court  will  not  maintain  a  bill  '  Missouri  P.  R.  Co.  v.  Texas  P.  R. 

by  a  creditor  who  did   not  file  his  Co.  41  Fed.  Rep.  311. 

claim.     Keene  v.    Snowden,   56    Md.  "  McNulta  v.  Lochridge,  141  U.  S. 

343.  837,  35  L.  ed.  796. 

'  Davis  V.   Duncan,  19  Fed.   Rep.  When  a  corporation  is    dissolved 


196 


RECEIVERSHIPS. 


in  another  state  after  the  dissolution  of  the  corporation  in  the 
state  of  its  domicile  where  the  receiver  was  not  a  party  to  the 
proceeding  in  which  the  judgment  was  rendered,  is  a  nullity. 

§  90.  Receiver  a  party,  when  necessary. 

In  a  case  pending  at  the  time  of  the  appointment  of  a  receiver 
growing  out  of  the  negligent  construction  of  a  railroad,  it  is  not 
necessary  to  make  the  receiver  a  party ;  he  may  intervene  and 
make  defense  if  he  desires  to  do  so.'  ]S'or  is  he  a  necessary  party 
to  an  action  brought  by  creditors  to  establish  the  right  of  parties 
to  the  assets,""  nor  to  a  foreclosure  proceeding  where  the  bill  was 
taken  for  confessed  before  the  receiver  was  appointed ;  ^  but 
where  the  receiver  asks  to  be  made  a  party  it  can  be  done  at  any 
stage  of  the  proceedings.'*  When  a  suit  is  brought  to  enforce  a 
contract  of  the  defendant  railroad  company,  the  receiver,  being 
in  possession  of  the  property,  is  the  only  necessary  party.* 


and  its  franchises,  rights  and  privi- 
leges forfeited  in  the  state  of  its 
domicile  from  that  time,  it  has  no 
legal  existence,  and  a  judgment  sub- 
sequently rendered  in  another  state 
against  the  corporation  is  invalid 
where  the  receiver  is  not  made  a  party 
to  the  proceeding,  and  it  seems  that 
in  order  to  be  made  a  party  so  as  to 
bind  the  receivership  effects  it  must 
be  done  by  order  of  the  court  ap- 
pointing. Pendleton  v.  Russell,  144 
U.  S.  640.  36  L.  ed.  574,  affirming  106 
N.  Y.  619;  sub  nam.  People  v.  Knicker- 
bocker L.  Ins  Co.,  reversing  43  Hun, 
574.  And  see  McCulloch  v.  Norwood, 
58  N.  Y.  562,  modifying  4  Jones  &  S. 
180. 

'  Mercantile  Trust  Co.  v.  Pittsburg 
&W.  R.  Co.  29 Fed.  Rep.  732;  Tracy 
V.  First  Nat.  Bank,  37  N.  Y.  523. 

'  Mechanics'  Nat.  Bank  v.  Landauer, 
68  Wis.  44. 

^  Willink  V.  Morris  Canal  &  Bkg.  Co. 
4  N.  J.  Eq.  377.  That  the  receiver 
is  not  a  party  cannot  be  made  as  an 
objection  by  a  third  party;  a  receiver 
has  no  standing  in  a  case  pending 


vphen  appointed  until  he  has  become 
a  party  to  the  suit.  Tracy  v.  First 
Nat.  Bank,  37  N.  Y.  523. 

*  Willink  V.  Morris  Canal  &  Bkg.  Co. 
supra.  The  court  exercises  its  dis- 
cretion as  to  allowing  the  receiver 
permission  to  defend  an  action  against 
the  person  or  corporation  for  vphom 
he  is  appointed,  and  is  not  subject  to 
review.     Patrick  v.  Eells,  10  Kan.  680. 

*  Southern  Exp.  Co.  v.  Western  N. 
a  R.  Co.  99  U.  S.  191,  25  L.  ed.  319. 

A  surviving  partner  was  made  a 
receiver  of  the  partnership  property, 
with  the  power  usually  conferred 
upon  receivers.  In  his  individual 
capacity,  but  not  as  receiver,  he  was 
made  a  co-defendant  in  a  foreclosure 
suit.  Held,  that  as  receiver  he  was 
not  a  necessary  party,  and  that  his 
successor  in  the  receivership  could 
not  maintain  a  bill  to  redeem.  Kirk- 
Patrick  v.  Corning,  37  N.  J.  Eq.  54. 

When  the  receiver  alleges  upon  in- 
formation and  belief  collusion  be- 
tween the  plaintiff  and  defendant, 
and  asks  leave  to  intervene  and 
defend,  it  was  held  that  he  had  no 


SUITS  AGAINST  THE  RECEIVER. 


197 


§  91.  Receiver  may  he  restrained. 

If  it  appears  that  a  receiver  is  prosecuting  a  suit  which  is  un- 
just and  vexatious  he  may  be  restrained  by  the  court  making  the 
appointment  and  the  application  may  be  made  by  any  person  af- 
fected by  the  unjust  prosecution  whether  he  be  a  party  to  the 
suit  or  not.*  The  general  rule,  however,  is  that  the  court  will  not 
permit  its  receiver  to  be  enjoined  in  another  action,  the  proper 
course  for  parties  aggrieved,  being  to  appear  in  the  action  in 
which  the  receiver  is  appointed  and  apply  for  relief.* 


§  92.  Eifect  of  discharge  of    receiver  as  to   suits  against 

him. 

After  a  receiver  has  been  discharged  and  the  receivership  prop- 
erty, by  action  of  the  court,  has  all  been  taken  out  of  his  hands, 
thereafter  the  receiver  ceases  to  represent  anyone  and  he  cannot 


such  interest  in  the  controversy  as 
authorized  him  to  defend;  that  the 
most  the  receiver  had  a  right  to  claim 
was  the  protection  of  the  funds  in  his 
possession,  and  if  protected  by  the 
judgment  it  was  all  he  could  demand. 
Eonegger  v.  Wettstein,  94  N.  Y.  252. 
In  Decker  v.  Gardner,  124  N.  Y. 
334,  11  L.  R.  A.  480,  a  receiver  was 
appointed  in  a  mortgage  foreclosure 
proceeding  of  a  railroad,  and  at  the 
time  of  such  appointment  a  trespass 
proceeding  was  pending  against  the 
railroad  company,  and  it  was  held 
that  the  functions  of  the  receiver 
were  confined  to  the  care  and  preser- 
vation of  the  property  included  in  the 
mortgage;  that  he  did  not  represent 
the  corporation  or  supersede  it  in  the 
exercise  of  its  powers  except  in  re- 
lation to  the  possession  and  manage- 
ment of  the  property  committed  to 
his  charge;  and  that  with  the  particu- 
lar cause  of  action  set  out  in  the  com- 
plaint he  had  no  connection,  and  it 
could  in  no  possible  way  be  charged 
upon  the  property  in  the  receiver's 
possession.     Metropolitan  Trust  Co.  v. 


Tonawanda  S.  &  C.  R.  Co.  103  N.  Y. 
245;  Eaht  v.  Atirill,  106  N.  Y.  423; 
Ar7iold  V.  Suffolk  Bank,  27  Barb.  434. 
When  a  receiver  has  been  duly  ap- 
pointed in  proceedings  supplementary 
to  execution  he  ought  not  to  be  made 
a  party  defendant  to  an  action  pray- 
ing to  enjoin  him  from  discharging 
his  trust.  The  proper  proceeding  is 
to  apply  to  the  appointing  court  for 
instructions.  Van  Rensaelwr  v.  Em- 
ery, 9  How.  Pr.  135.  Cf.  Smith  v. 
Eaflof  Effingham,  3  Beav.  232;  \Yin- 
jield  V.  Bacon,  34  Barb.  154. 

^Alspaugh  v.  Adams,  80  Ga.  345; 
Field  V.  Jo7ies,  11  Ga.  418;  Lehigh  Coal 
&  JS'av.  Co.  V.  Central  E.  Co.  41  N.  J. 
Eq.  167;  Merritt  v.  MerriU,  16  Wend. 
405.  In  this  case  an  order  was  en- 
tered directing  a  receiver  to  discon- 
tinue a  suit  at  law  prosecuted  by  him, 
which  appeared  to  be  for  the  purpose 
of  harrassing  the  defendant. 
Ee  Merritt,  5  Paige,  125. 
^  Win  field  v.  Bacon,  24  Barb.  154; 
Smith  V.  Earl  of  Effingham,  2  Beav. 
232. 


198 


RECEIVERSHIPS. 


act  for  or  represent  the  company,  or  its  creditors  or  any  other 
person,  and  manifestly  for  this  reason  the  court  cannot  make  an 
order  that  the  receiver  shoukl  pay  a  creditor,  having  no  funds  out 
of  which  to  make  sucli  payment.'  And  the  court  will  not  permit 
a  person  thereafter  to  litigate  a  claim  against  the  discharged  re- 
ceiver,^ even  where  the  proceeding  was  pending  when  the  re- 
ceiver was  discharged,  and  the  claimant  had  no  notice  of  the  dis- 
charge or  proceedings  therefor.* 


^Farmers'  Loan  &  T.  Co.  v.  Central 
B.  Co.  2  McCrary,  181. 

A  judgment  cannot  be  rendered 
against  a  receiver  after  his  discharge 
and  after  he  has  surrendered  the  as- 
sets in  his  hands  to  the  corporation, 
though  he  was  in  possession  when 
suit  was  commenced.  Bo?id  v.  State, 
68  Miss.  648;  Reynolds  v.  Stockton,  140 
U.  S.  271,  35  L.  ed.  469. 

^NeiD  York  &  W.  U.  Teleg.  Co.  v. 
Jewett,  115  N.  Y.  166;  MUicaukee  & 
M.  R.  Co.  V.  Soutter,  69  U.  S.  2  Wall. 
510,  17  L.  ed.  900. 

*Note  2,  ante;  Herring  v.  New  York, 
L.  E.  &  W.  B.  Co.  105  N.  Y.  340, 
376;  but  see  contra.  Miller  v.  Loeh,  64 
Barb.  454.  The  court  itself  has  the 
care  of  the  property  and  the  receiver 
is  but  its  creature.  Bostwick  v.  Menck, 
40  K  Y.  383;  Rinn  v.  Astor  F.  Ins. 
Co.  59  N.  Y.  147.  The  proceeding 
though  in  form  against  the  receiver  is 


in  substance  a  proceeding  in  rem 
against  the  fund  in  possession  of  the 
court,  and  in  no  event  involves  a  lia- 
bility of  the  receiver  either  directly  or 
indirectly.  Winfield  v.  Bacon,  24 
Barb.  161;  Barton  v.  Barbour,  104  U. 
S.  126,  26  L.  ed.  672;  Cardot  v.  Bar- 
ney, 63  N.  Y.  281. 

In  Woodruff  v.  Jewett,  115  N.  Y. 
267,  the  claimant  had  reduced  the 
claim  to  a  judgment  and  the  liability 
of  the  receiver  was  fixed,  and  under 
this  state  of  facts  the  receiver  made 
application  and  was  discharged  with- 
out notice  to  the  claimant,  and  it  was 
held  that  the  liability  of  the  receiver 
to  pay  the  judgment  was  a  question 
of  doubt  under  the  particular  circum- 
stances of  the  case,  though  the  court 
reaffirmed  the  doctrine  of  New  York 
&  W.  U.  Teleg.  Co.  v,  Jewett,  supra, 
under  the  circumstances  therein.  Cf, 
Johnson  v.  Powers,  21  Neb.  293. 


CHAPTER  YIII. 


LIABILITY   OF  RECEIVER. 


109. 

Generally. 

§  124. 

(a)  When  liable. 

(b)  Whea  not  liable. 

§125. 

110. 

Must  obey  orders  of  court. 

§  126. 

111. 

Liability  for  use  of  property, 
money,  etc.,  contempt. 

§127. 

112. 

As  common  carrier. 

113. 

As   common  carrier  for  per- 
sonal injuries. 

114. 

As  common  carrier  for  dam- 

ages. 

§128. 

115. 

Corporation  in   hands  of    re- 

§129. 

ceiver  not  liable. 

§130. 

116. 

Liability  for  use  of  receivership 

§131. 

funds. 

§  132. 

117. 

For  default  of  another. 

118. 

For  supplies,  labor,  etc. 

§133. 

119. 

For  money  deposited  in  bank. 

§  134. 

120. 

For  costs  and  expenses. 

121. 

For  rents. 

§135. 

122. 

On  unexpired  leases. 

123. 

Adoption  of  lease  by  receiver. 

§136. 

Liability  on  leases  made  with- 
out order  of  court. 

On  contracts  other  than  leases. 

On  contracts  of  predecessor. 

Order  of  payment;  preferred 
payments. 

(a)  As  between  judgment  cred- 

itor and  mortgagee. 

(b)  In  proceedings  for  foreclos- 

ure of  railways. 
When  personally  liable. 
Liability  for  attorney's  fees. 
For  disobeying  orders  of  court. 
To  account. 
Order  on  receiver  to  pay;  effect 

of. 
Effect  of  discharge. 
Liability   for   unjust    freights 

exacted. 
Power  of  court  over  executors 

of  receivers. 
Liability  for  contempt  of  court. 


§  109.    Generally. 

Being;  an  officer  of  court,  and  being  placed  in  custody  of  the 
property  or  funds  which  the  court  is  called  upon  to  preserve  until 
the  right  of  parties  thereto  are  determined,  and  in  the  end  to  dis- 
tribute according  to  the  equities  as  established,  the  receiver  occu- 
pies towards  the  court,  and  to  the  parties,  a  quasi  trust  rela- 
tionship, and  assumes  responsibilities  so  far  as  the  safety  of  the 
trust  property  is  concerned  commensurate  with  the  character  of 
the  duties  assumed.  It  has  been  said  that  absolute  safety  is  to  be 
aimed  at,  and  not  only  that,  but  it  is  the  duty  of  the  receiver  to 
put  the  property  in  such  shape  as  to  lessen  the  expense  of  cai-e 
and  oversight.  And  it  is  necessary  for  him,  in  all  things,  to  act 
in  the  utmost  good  faith,  concerning  the  property  in  his  charge, 
and  use  his  best  judgment  in  his  management  of  the  trust  estate. 
He  has  no  power  to  pay  claims  at  will,  and  generally,  can  exer- 

199 


200 


RECEIVERSHIPS. 


cise  only  such  powers  as  are  given  to  him  by  the  order  of  his  ap- 
pointment, or  as  are  given  by  the  usual  course  of  practice  in 
courts  of  equity,'  and  while  he  should,  as  a  rule,  pay  out  nothing 
except  on  order  of  court,  yet  the  rule  is  not  so  unbending  and  in- 
equitable as  to  disallow  the  receiver  credit  in  his  account  for  pay- 
ments made  in  good  faith  where,  if  authority  had  been  applied 
for,  it  would  have  been  granted;'  and  the  receiver  will  be  pro- 
tected in  paying  out  money  in  good  faith  although  the  order  of 
payment  may  have  been  improvidently  made.^     Where  the  re- 


^Demndorf  v.  Dickinson,  21  How. 
Pr.  275.  Under  the  early  English 
practice  a  receiver  was  not  allowed  to 
pay  out  anything  on  account  of  the 
estate  without  a  previous  order,  but 
under  the  later  practice  the  matter  of 
payment  is  referred  to  a  master  to  see 
if  the  payment  is  for  the  benetit  of  the 
parties  interested.  Tempest  v.  Ord,  2 
Meriv.  55. 

'■Ada77is  V.  Woods,  15  Cal.  206. 

Brown  v.  Hazlelmrst,  54  Md.  26. 
In  this  case  the  court  say:  "As  a  gen- 
eral rule  a  receiver  will  not  be  per- 
mitted to  lay  out  more  than  a  small 
sura  at  his  own  discretion  in  the  pres- 
ervation and  improvement  of  prop- 
erty, yet  this  general  rule  should  not 
be  applied  so  as  to  work  injustice 
where  the  receiver  has  acted  in  good 
faith  and  under  such  circumstances 
as  will  enable  the  court  to  see  that  if 
previous  authority  had  been  applied 
for  it  would  have  been  granted.  Cf. 
Willis  V.  Sharp,  124  N.  Y.  406,  where 
it  is  held  that  if  he  pays  out  money 
in  good  faith  and  in  obedience  to  the 
orders  of  court  to  parties  not  entitled 
to  it  he  cannot  be  compelled  to  make 
restitution;  and  in  Adams  v.  Haskell, 
6  Cal.  475,  it  is  said  that  receivers  and 
other  custodians  of  money  coming  to 
their  hands  under  the  order  of  court, 
being  bound  to  obey  the  orders  of 
court  in  regard  as  well  to  its  safe  cus- 
tody as  to  its  return,  are  correlatively 


entitled  to  the  protection  of  the  court 
against  loss  for  disbursements  which 
were  such  as  a  reasonable  and  pru- 
dent man  acting  as  receiver  would 
have  been  justified  in  making.  In 
Edee  v.  Struiik,  35  Neb.  807,  an  order 
appointing  a  receiver  was  regular  on, 
its  face  and  apparently  within  the  ju- 
risdiction of  the  court  and  therefore 
prima  facie  valid  under  which  the  re- 
ceiver collected  money  and  applied 
the  same  in  payment  of  taxes  and  for 
repairs  which  were  necessary,  such 
an  order  is  a  sufficient  justification  in 
a  suit  brought  against  the  receiver  to 
recover  rents  collected  by  him  after 
the  order  appointing  him  has  been  va- 
cated for  want  of  suflicient  notice  of 
the  application.  If,  however,  the  re- 
ceiver claims  rights  or  property  he,  in 
such  case,  is  required  to  show  a  valid 
appointment,  though  it  is  unneces- 
ary  to  show  each  step  taken  in  the 
proceeding.  (See  Johnson  v.  Powers, 
21  Neb.  292,  distinguished.)  Cf.  B» 
O'Connor,  47  N.  Y.  S.  R.  415;  Bock- 
well  V.  Merwin,  45  N.  Y.  166. 

^Re  Home  Provident  Safety  Fund 
Asso.  39  N.  Y.  S.  R.  437,  reversed 
on  other  grounds  but  sustained  in  this 
particular  in  129  N.  Y.  288.  Cf. 
Willis  V.  Sharp,  124  N.  Y.  406. 

Palmer  v.  Truby,  136  Pa.  556. 
"Where  a  receiver  has  accounted  to  a 
guardian  of  au  infant  he  will  not  be 
obliged  to  account  again  to  the  infant 


LIABILITY  OF  RECEIVER. 


201 


ceiver  has  acted  with  evident  caution  and  for  what  he  deemed 
the  best  interests  of  the  estate  and  a  loss  occurs,  without  fault  on 
his  part,  he  will  not,  ordinarily,  be  required  to  make  good  such 
loss.'  In  making  payments  he  should  in  all  cases  take  receipts 
from  the  persons  to  whom  payments  are  made. ' 

(a)  "When  liable. 
In  general  the  receiver  will  be  liable : 

(1)  For  mingling  the  receivership  funds  with  his  private  funds, 
whereby  the  funds  are  lost  through  the  failure  of  the  bank;'  or 
where  he  deposits  the  receivership  funds  in  a  bank  and  receives 
interest  on  the  deposits  and  the  bank  fails;'  or  where  the  funds 
are  deposited  with  a  bank  in  such  a  way  as  to  be  beyond  his  con- 
trol, and  the  bank  fails;'  or  deposits  the  funds  in  a  bank  without 
authority  of  court." 

(2)  The  receiver  of  a  bank  will  be  responsible  to  a  creditor  of 
the  bank  for  funds  of  such  creditor  received  by  it  and  mingled 
with  the  funds  of  other  creditors  in  such  a  way  as  to  be  undistin- 
guishable,  but  only  to  the  extent  of  the  pro  rata  share  of  such 


on  his  becoming  of  age.  Glatering" » 
Case,  Piec.  Ch.  535;  Wildridge  v.  J/o 
Eane,  2  Moll.  545. 

^Poicers  V.  LougJiridge,  38  N.  J.  Eq. 
896;  Knight  v.  Lord  Plyynouth,  3  Atk. 
480;  Re  Union  Bank,  37  N.  J.  Eq. 
420,  424,  affirmed  on  appeal  as  Sand- 
ford  V.   Clark,  38  N.  J.  Eq.  265. 

In  Powers  v.  Longhridge,  the  re- 
ceiver intrusted  a  claim,  for  which  a 
suit  was  not  actually  necessary,  in 
good  faith,  in  the  hands  of  a  lawyer 
of  another  state  of  whose  integrity, 
on  inquiry,  he  was  satisfied,  and  such 
lawyer  absconded,  it  was  held  the  re- 
ceiver was  not  liable  for  the  loss. 

Properly  lost  while  in  the  hands  of 
a  receiver, — as  here,  slaves  eraancipa- 
ed, — being  m  custodia  legis,  cannot 
be  considered  as  lost  by  conversion, 
80  as  to  render  the  obligors  of  any 
bond  for  its  return,  etc.,  liable  there- 
for.     Wall  V.  Pulliam,  5  Heisk.  365. 

^Heffron  v.  Rice,  40  111.  App.  244. 

Expenses  incurred  by  a  delator  in 


carrying  into  effect  a  scheme  which 
he  believes  will  enable  him  to  pay 
interest  to  security-holders,  but  which 
in  fact,  does  not  accomplish  such 
result,  cannot  be  charged  to  the 
receiver.  Loxmville,  E.  &  St.  L.  R. 
Co.  V.  Wilson,  138  U.  S.  501,  34  L.  ed. 
1023. 

An  "officer"  or  "employee"  within 
the  meaning  of  the  statute  means 
those  who  are  regularly  employed  by 
the  company,  and  not  those  who  are 
employed  for  a  special  transaction. 
Louisville,  E.  &  St.  L.  R.  Co.  v.  Wil- 
son, 138  U.  S.  501,  34  L.  ed.  1023. 

^Wren  v.  Kirton,  11  Ves.  Jr.  377. 

^Drecer  v.  Maudesley,  13  L.  J.  Ch. 
N.  S.  433. 

'••Sabnay  v.  Salimy,  2  Russ.  &  M.  215; 
Atiy.  Gen.  v.  North  American  L.  Ins. 
Co.  89  N.  y.  94. 

^State,  Collins,  v.  Gooch,  97  N.  C. 
186;  Ricks  v.  Broyles,  78  Ga.  610.  But 
see  Rowth  v.  Uoicell,  3  Ves.  Jr.  505. 


202 


RECEIVERSHIPS. 


creditor.'  He  will,  however,  be  responsible  for  goods  consigned 
to  a  commission  merchant,  where  such  goods  can  be  traced  and 
identified,  the  title  in  such  case  not  having  passed  from  the  con- 
signor to  the  consi<i:nee  and  then  to  the  receiver." 

(3)  He  will  be  liable  personally  for  trespass  and  torts  commit- 
ted by  him,  his  ofiicial  position  being  no  protection  in  such  cases.' 

(4)  Where  operating  a  railroad  as  a  common  carrier,  he  will  be 
liable  as  such." 

(5)  And  for  disobeying  the  orders  of  court;' 

(6)  And  for  loss  occasioned  by  his  negligence;* 

(7)  And  for  negligence  in  the  management  of   receivership 
property.' 


^People  V.  Merchants  &  M.  Bank,  78 
N.  Y.  269;  Atty.  Qen.  v.  Continental 
L.  Tns.  Co.  71  N.  Y.  325;  Butler  v. 
Sprague,  66  N.  Y.  392;  Otis  v.  Gross, 
96  111.  612;  Illinois  Trust  tfc  Sav.  Batik 
V.  Smith,  21  Blatchf.  275;  St.  Louis 
<fc  S.  F.  B.  Co.  V.  Johnston,  27  Fed. 
Rep.  243.  But  see  Thompson  v.  Olou- 
cesler  City  Sav.  Inst.  (N.  J.)  8  Atl.  97. 

^Francklyn  v.  Sprague,  10  Hun,  589. 

^Staples  V.  May,  87  Cal.  178;  Hills 
V.  Parker,  111  Mass.  508.  But  see 
Walling  v.  Miller,  108  N.  Y.  173;  Man- 
ning V.  Monaghan,  1  Bosw.  459,  23  N. 
Y.  539;  Eenney  v.  Banney,  96  Mich. 
617;  Giitsch  v.  Mcllhargey,  69  U\ch. 
377;  Hartell  v.  Tilghman,^^  U.  S.  547, 
25  L.  ed.  357;  Curran  v.  Craig,  23 
Fed.  Rep.  101. 

*Paige  v.  Smith,  99  Mass.  395,  Ex 
parte  Brown,  15  S,  C.  518;  Howe  v. 
Gibson,  3  Tex.  Civ.  App.  263;  Yoakum 
V.  Dunn,  1  Tex.  Civ.  App.  524;  Bo'X- 
bury  v.  Central  Vermont  B.  Co.  60  Vt. 
121;  Melendy  v.  Barbour,  78  Va.  544; 
People  V.  Yoakum  (Tex.  Civ.  App.)  25 
S.  W.  1001;  Barton  v.  Barbour,  104 
U.  S.  126,  26  L.  ed.  672;  Turner  v. 
Indianapolis,  B.  &  W.  R.  Co.  8  Biss. 
527;  Bavenport  v.  Alabama  &  C.  R. 
Co.  2  Woods,  579;  Easton  v.  Houston 
<fe  T.  C.  R.  Co.  38  Fed.  Rep.  12;  Penn- 


sylvania Finance  Co.  v.  Charleston,  G. 
<&  C.  R.  Co.  46  Fed.  Rep.  508. 

estate  V.  Gibson,  21  Ark.  140;  Cart- 
wriglit's  Case,  114  Mass.  230;  People  v. 
Jones,  33  Mich.  303;  McCay  v.  Black, 
14  Phila.  635;  Carr  v.  Morris,  85  Va. 
21;  Chicago  Deposit  Vault  Co.  v.  Mc- 
Nulla,  153  U.  S.  554,  38  L.  ed.  819; 
Harman  v.  Foster,  1  Hog.  318;  Fetnam 
V.  Eirby,  4  Ir.  Eq.  320;  Hicks  v.  Hicks, 
3  Atk.  274;  Davies  v.  Cracraft,  14  Ves. 
Jr.  143;  Bs  Bell's  Estate,  L.  R.  9  Eq. 
172. 

^Re  Union  Bank,  37  N.  J.  Eq.  420; 
Wood  Y.Wood,  4  Russ.  558;  Re  Sker- 
reits,  2  Hog.  192;  Livingston  v.  Petti- 
grew,  7  Lans.  405;  Newman  v.  Daven- 
port, 9  Baxt.  538. 

"^Thurman  v.  Cherokee  R.  Co.  56  Ga. 
376;  Henderson  v.  Walker,  55  Ga.  481; 
Sloan  v.  Central  Iowa  R.  Co.  62  Iowa, 
728;  Ohio  &  M.  R.  Co.  v.  Davis,  23Ind. 
553;  Nichols  v.  Smith,  115  Mass.  332  ; 
Paige  v.  SmiVi,  99  Mass.  395;  Fijieldv. 
Northern  R.  Co.  42  N.  H.  225;  Klein 
V.  Jewett,  26  N.  J.  Eq.  474;  Cardot 
v.  Barney,  63  N.  Y.  281;  ifeara  v.  Hol- 
brook,  20  Ohio  St.  137;  Potter  v.  5wra- 
neZ?,  20  Ohio  St.  159;  Cleveland,  C.  <& 
C.  R.  Co.  V.  Kearny,  3  Ohio  St.  201; 
Ex  parte  Broicn,  15  S.  C.  518;  Ex  parte 
Johnson,  19  S.  C.  492;  Erwin  v.  Da- 


LIABILITY  OF  RECEIVER 


203 


In  such  case  the  HabiKtj  is  official.' 

(8)  And  for  any  benefit  or  profit  made  from  trust  funds;" 

(9)  And  for  interest  on  funds  improperly  held,'  or  interest  neg- 
ligently lost;^ 

(10)  And  for  costs  incurred  in  defending  a  suit/  or  prosecuting 
one;* 

(11)  And  for  rent  when  possession  of  premises  is  taken  and  held/ 

(12)  And  for  labor  and  materials  furnished  him;'^ 

(13)  And  for  violation  of  Act  of  Congress  relating  to  receivers;' 

(14)  And  for  money  paid  out  without  order  of  court,'"  or  mis- 
appropriating the  same;" 

(15)  And  for  money  collected  under  a  void  appointment;'" 

(16)  And  for  illegal  freights  collected." 


venport,  9  Heisk.  44;  Lyman  v.  Central 
Vermont  R.  Co.  59  Vt.  167;  Blumen- 
ihal  V.  Brainard,  38  Vt.  402;  Hornnby 
V.  Eddy,  50  Fed.  Rep.  461 ;  Missouri 
P.  R.  Co.  V.  Texas  P.  R.  Co.  30  Fed. 
Rep.  167;  Central  Trust  Co.  v.  Wabash, 
St.  L.  &  P.  R.  Co.  26  Fed.  Rep.  12. 
But  see  Central  Trust  Co.  v.  Wabash, 
St.  L.  &  P.  R.  Co.  30  Fed.  Rep.  344; 
Brydon  v.  Stewart,  2  IMacq.  H.  L.  30. 
'^McNulta  V.  Lockridge,  137  111.  270, 
141  U.  S.  327,  35  L.ed.  796;  McNulta 
V.  Ensch,  134  111.  46;  Combs  v.  Smith, 

78  Mo.   32;    Bonner  v.  May  field,    82 
Tex.  234:  Texas  &  P.  R.  Co.  v.  Geiger, 

79  Tex.  13. 

^Boojyer  v.  Winston,  24  111.  353;  Bat- 
taille  V.  Fisher,  36  Miss.  321 ;  Adair  Co. 
V.  Ownoy,  75  Mo.  282;  Re  Com.  F.  Ins. 
Co.  32  Hun,  78;  Utica  Ins.  Co.  v.  Lynch, 
11  Paige,  520;  Planning  v.  Manning, 
1  Johns.  Ch.  527;  Hinckley  v.  Gilman, 
C.  &  S.  R.  Co.  100  U.  S.  153,  25  L. 
ed.  591;  Potts  v,  Leighton,  15  Ves.  Jr. 
273;  Baldwin  v.  Crawford,  2  Chamb. 
Ch.  (Ont.)  9. 

^Re  Carter,  3  Paige,  146;  Fletcher  v. 
Dodd,  1  Ves.  Jr.  85;  Re  Seaman,  2 
Paige,  409. 

^Syracuse  Sav.  Bank  v.  Hess,  23  N. 
Y.  Week.  Dig.  280. 

^Loc/ce  V.  Covert,  42  Hun,  484. 


^Dudgeon  v.  Bov^en,  Hayes  &  J.  717; 
Bourdon  v.  Martin,  74  Hun,  246;C'a»i^ 
V.  Niagara  Bank,  2  Paige,  283;  Com. 
V.  Franklin  Ins.  Co.  115  Mass.  278; 
Wells  V.  Biggins,  132  N.  Y.  458. 

''Frank  v.  New  York,  L.  E.  &W.  B. 
Co.  122  N.  Y.  197;  Woodruff  v.  Erie 
R.  Co.  93  N.  Y.  609;  People  v.  Univer- 
sal L.  Ins.  Co.  30  Hun,  142;  Downs  v. 
Allen,  10  Lea,  652;  Quincy,  M.  &  P. 
R.  Co.  V.  Humphreys,  145  U.  S.  82.  36 
L.  ed.  632. 

*See  Railway  Receivers;  Kneeland 
V.  Bass  Foundry  Mach.  Works,  140  U. 
S.  592,  35  L.  ed.  543;  Kneeland  v. 
American  Loan  &  T.  Co.  136  U.  S.  89, 
34  L.  ed.  379;  Union  Trust  Co.  v. 
Souther,  107  U.  S.  591,  27  L.  ed.  488; 
Miltenberger  v.  Logansport,  C.  &  S.  W. 
R.  Co.  106  U.  S.  289.  27  L.  ed.  119; 
Wallace  v.  Loo7nis,  97  U.  S.  146,  24  L. 
ed.  895;  Missouri  P.  R.  Co.  v.  Texas  & 
P.  R.  Co.  41  Fed.  Rep.  319. 

9See  Act  of  March  3,  1887.  §  2,  25 
Stat.  at.  L.  436. 

^'^  Willis  V.  Sharp,  124  N.  Y.  400. 

"C'oTO.  V.  Eagle  F.  Ins.  Co.  14  Allen, 
344. 

^''Johnson  v.  Powers,  21  Neb.  292. 

^'^Cuiting  v.  Florida  R.  &  Nav.  Co. 
43  Fed.  Rep.  743. 


204- 


RECEIVERSniPS. 


(h)  When  not  liable. 
In  general  tlie  receiver  will  not  be  liable  :  (1)  For  the  covenants 
and  contracts  of  the  person  or  corporation  over  whose  property 
he  is  appointed.' 

(2)  Nor  for  a  loss  occurring  through  no  fault  of  his.' 

(3)  Nor  is  he  liable  when  he  has  distributed  the  funds  in  his 
hands  pursuant  to  the  orders  of  the  court,  and  has  been  discharged.* 

(4)  Nor  for  injuries  on  a  railroad  occurring  prior  to  the  ap- 
pointment,* and  in  some  states  for  injuries  during  his  manage- 
ment except  where  he  is  personally  negligent,"  or  where  he  is  a 
foreign  receiver  operating  a  railroad  by  contract,'  or  assumes  tlie 
obligations  of  a  lessee  company.  He  is  not  liable  where  by  stat- 
ute the  company  is  made  liable,'  or  where  by  its  contract  as  lessee 
it  alone  is  liable.' 

(5)  Nor  is  he  liable  for  the  contracts  of  the  person  or  corpora- 
tion over  which  he  is  appointed  when  not  adopted  by  him,"  or 


^Oaither  v.  Stockbridge,  17  Md.  222; 
Com.y.  Franklin  Ins.  Co.  115  Mass.  278. 

^Powers  V.  Loughridge,  38  N.  J. 
Eq.  396;  EeUnion  Bank,  37  N.  J.  Eq. 
420,  s.c.  sub  nam.  Sandford  v.  Clarke,  38 
N.  J.  Eq.  265;  Knight  v.  Plymouth,  3 
Atk.  480. 

^Keene  v.  Oaehle,  56  Md.  343;  Texas 

6  P.  M.  Co.  V.  Comstock,  83  Tex.  537; 
Boggs  v.  Brown,  82  Tex.  41;  Texas  & 
P.  R.  Co.  V.  Adams,  78  Tex.  372; 
Brown  v.  Oay,  76  Tex.  444;  Davis  v. 
Duncan,  19  Fed.  Rep.  477;  Farmers' 
Loan  &  T.  Co.  v.  Central  Railroad, 

7  Fed.  Rep.  537. 

^HolcomJ)  V.  Johnson,  27  Minn.  353; 
Decker  v,  Gardner,  124  N.  Y.  334,  11 
L.  R.  A.  480;  Pennsylvania  Finance 
Co.  V.  Charleston,  C.  <&  C.  B.  Co.  46 
Fed.  Rep.  508. 

^Cardot  v.  Barney,  63  N.  Y.  281; 
Metz  V.  Buffalo,  C.  &  P.  R.  Co.  58  N. 
Y.  61.  But  see  Camp  v.  Barney,  6 
Thomp.  &  C.  622,  4  Hun,  373. 

^Frank  v.  New  York.  L.  E.  dW.  R. 
Co.  122  N.  Y.  197;  Woodruff  v.  Erie 
R.  Co.  93  N.  Y.  609;  Kain  v.  Smith. 
80  N.  Y.  458;  Fuller  v.  Jeweit,  80  N. 


Y.  46;  Sunflower  Oil  Co.  v.  Wilson, 
142  U.  S.  313,  35  L.  ed.  1025;  A?neri- 
can  File  Co.  v.  Garrett,  110  U.  S.  288, 
28  L.  ed.  149;  Glenny  v.  Langdon,  98 
U.  S.  20,  25  L.  ed.  43;  Fidelity  Safe 
Deposit  &  T.  Co.  v.  Armstrong,  35  Fed. 
Rep.  567;  Re  Oak  Pits  Colliery  Co.  L. 
R.  21  Ch.  Div.  322. 

"^Ohio  &  M.  R.  Co.  V.  Russell,  115  111. 
52;  Louisville  N.  A.  &  C.  R.  Co.  v. 
Cauble,  46  Ind.  277;  McKinney  v.  Ohio 
&  M.  R.  Co.  22  Ind.  99;  Ohio  &M.R. 
Co.  V.  Fitch,  20  Ind.  498.  Contra. 
Brockert  v.  Central  Iowa  R..  Co.  82 
Iowa,  369.  Cf.  Kansas  P.  R.  Co.  v. 
Wood,  24  Kan.  619;  Texas  &  P.  R.  Co. 
V.  Collins,  84  Tex.  121;  Yoakum  v. 
Selph,  83  Tex.  607;  Turner  v.  Cross,  8S 
Tex.  218,  15  L.  R.  A.  262. 

^Powell  V.  Dayton,  S.  <&  G.  R.  R.  Co. 
16  Or.  33. 

^Brown  v.  Warner.  78  Tex.  543,  11 
L.  R.  A.  394;  Southern  Exp.  Co.  v. 
Western  N.  C.  R.  Co.  99  U.  S.  191,  25 
L.  ed.  319:  Central  Trust  Co.  v.  Mari- 
etta &  G.  R.  Co.  51  Fed.  Rep.  15,  16 
L.  R.  A.  90. 


LIABILITY  OF  RECEIVER.  205 

contracts  personal  to  such  person  or  corporation,"  or  personally  on 
his  official  contracts,"  or  contracts  of  a  predecessor.' 

(6)  Xor  for  acts  done  pursuant  to  the  orders  of  court.* 

(7)  JN'or  for  speculative  prohts  where  he  accounts  for  the  pro- 
ceeds of  property.' 

(8)  Nor  for  money  expended  in  good  faith  and  for  the  best  in- 
terests of  the  estate." 

(9)'  Nor  for  attorney's  fees  for  services  rendered  to  the  corpora- 
tion after  his  appointment.' 

§  110.     Must  obey  orders  of  court. 

A  receiver  cannot,  without  an  order  of  court  authorizing  him 
so  to  do,  turn  over  to  a  firm  creditor  specific  funds  of  an  estate,  a 
secured  note  not  inventoried,  in  payment  of  debts  due  by  the  es- 
tate to  such  transferee,  and  a  foreclosure  by  such  transferee  of  the 
deed  of  trust  and  sale  thereunder  conveys  no  title.*  If  a  receiver 
departs  from  the  line  of  duty  marked  out  for  him  by  the  decree 
and  a  loss  occurs  by  reason  thereof,  he  must  bear  such  loss,  al- 
though his  action  was  under  advice  of  counsel ;°  and  where  he  is 
ordered  to  loan  a  trust  fund,  and  take  bonds  and  trust  deed  in 
his  own  name,  at  six  per  cent  interest,  the  principal  to  become 
due  on  default  of  two  payments  of  interest  he  must  be  held  liable 
for  the  loss  of  an  investment  in  which  he  took  notes  instead  of 
bonds  at  eight  per  cent,  f^nd  failed  to  enforce  the  trust  deed  after 
default  in    two    payments    of   interest.'"     Where  a  receiver   of 

^Broicn  Y.Warner,   78  Tex.  543,  11  tion  or  disposition  of  the  funds;   but 

L.  R.  A.  394.  he  holds  them  subject  to  the  order  of 

^Leldgli  Coal  &  Nav.  Co.  v.  Central  court,  and  to  be  paid  to  whom  the 

R.  Co.  41  N.  J.  Eq.  167.  court  shall   adjudge.     Cf.  Uooper  v. 

^Lehigh  Coal  &  Nav.  Co.  v.  Central  Winston,  24  111.  353:  Johnson  v.  Gun- 

R.  Co.  38  N.  J.  Eq.  175.  Ur,  6  Bush.  534;  Blunt  v.  Clitherow, 

*Holcomb  V.  Johnnon,  27  Minn.  353;  6  Ves.  Jr.  799. 

Cory  V.  Long,  12  Abb.  Pr.  N.  S.  427.  '^McCay  v.  Black,  14  Phila.  635.     It 

^Demain  v.  Cassidy,  55  Miss.  320.  is  not  mala  fides  in  the  receiver  but  he 

^Powers  V.  Loughridge,  38  N.  J.  Eq.  is  responsible  notwithstanding. 

396;  Louisville,  E.  &  St.  L.  B.  Co.  v.  '"Carrv.iform,  85  Va.  21.   This  too 

Wilson,  138  U.  S.  501,  34  L.  ed.  1023.  though  no  bad  faith  is  shown;  trus- 

''Barnes  v.  Newcomb,  89  N.  Y.  108.  tees  of  all  kinds  investing  money  in 

^Hospes  V.  Almstedt,    13   Mo.    App.  an  unauthorized  security  are  resjjon- 

270,  affirmed  on  other  grounds  in  83  Bible  for  any  future  loss  traceable  to 

Mo.  473.    In  general  no  discretion  is  their  error, 
allowed  the  receiver  as  to  the  applica- 


206  RECEIVERSHIPS. 

an  insolvent  estate  appointed  upon  the  removal  of  an  executor 
j)ays  out  mone}'  without  an  order  of  court  upon  judgments  ob- 
tained by  creditors  of  the  estate  who  have  no  priority  over 
other  creditors  he  is  responsible  therefor.'  As  a  general  rule  it 
may  be  stated  that  where  the  court  has  ordered  the  receiver  to  do 
a  thing  in  a  particular  way  he  has  no  discretion  and  if  by  reason 
of  unforseen  circumstances  it  becomes  difficult  or  impossible  he 
must  apply  to  the  court  for  further  directions, 

§  111.     Liability    for   use   of  property,  money,  etc.,  con- 
tempt. 

As  we  have  seen,  the  the  receiver  is  required  to  scrupulously 
care  for  the  property  placed  in  his  charge,  and  like  all  trustees  he 
is  not  permitted  to  use  the  funds  for  his  own  private  purposes. 
Thus  where  a  receiver  did  not  keep  the  receivership  funds  separ- 
ate, but  mingled  them  with  his  own  moneys  in  the  bank  where 
he  kept  his  account,  in  his  own  name,  and  drew  out  and  used 
large  sums  of  money  from  time  to  time  by  loaning  the  same  to 
his  friends,  and  otherwise,  he  was  required  to  pay  simple  interest 
on  the  funds  so  used  with  annual  rests.^  Being  an  officer  of  court 
the  receiver  is  liable  for  contempt  in  misappropriating  money  even 
under  the  belief  that  he  has  a  right  so  to  do  as  a  compensation 
for  his  services,  even  though  he  has  no  intention  of  wrong  doing  ; 
the  matter  of  contempt  not  depending  on  the  intention.*  Where 
two  receivers  were  appointed  to  close  up  the  affairs  of  a  corpora- 
tion and  one  of  them  illegally  appropriated  the  corporation  funds 
in  his  hands,  using  them  for  his  own  profit,  and  the  other  re- 
ceiver negligently  permitted  such  illegal  appropriation  they  will 
be  jointly  liable  for  the  balance  found  to  be  due  from  them  with 
interest.*     He  has  no  right  to  deposit  the  trust  funds  with  his 

'  Willis  V.  Sharp,   124    N.    Y.   406,  was  held  bound  to  make  them  profl- 

modifying  58  Hun,  608.  table,  and  if  they  were  used  about  his 

A  temporary  receiver  Is  not  liable  privatebusinesshe  was  liable  for  their 

as  such  on  a  contract  for  the  employ-  reasonable  hire.  Battaile  v.  Fisher,  36 

ment  of  a  truckman;  where  he  has  not  Miss.  321.      Cf.  Hinckley  v.  Oilman, 

been   authorized  to  make  such  con-  G.  &  S.  R.  Co.  100  U.  S.  153,  25  L. 

tract.     Meyer  v  Lexow,  1  App.  Div.  ed.  591. 

116.  ^Cartwright's  case,  114  Mass.  230. 

^TJtica  Ins.  Co.  v.  Lynch,  11  Paige,  *Com.  v.  Eagle  F.  Ins.  Co.  14  Allen, 

520.   A  receiver  in  possession  of  slaves  344. 


LIABILITY  OF  RECEIVER. 


207 


own  money  —  mix  them  with  his  own  —  and  if  he  does  so  and  the 
bank  fails,  he  must  account  therefor.'  Taking  the  receivership 
funds  and  depositing  them  to  his  private  credit  renders  the  re- 
ceiver liable  for  interest." 

Upon  the  question  of  the  power  of  the  court  to  commit  and 
punish  for  contempt  it  is  understood  to  be  inherent  in  courts  of 
chancery  and  is  an  essential  to  the  execution  of  their  powers  and 
to  the  maintenance  of  their  authority.^  There  is  no  class  of  cases 
in  which  the  exercise  of  this  power  is  more  familiar  than  in  the 
case  of  oliicers  of  courts,"  and  receivers  are  clearly  within  the 
purview  of  the  doctrine."  The  application  is  made  in  the  original 
cause  in  which  the  receiver  is  appointed,  but  after  the  application 
is  granted  and  the  attachment  is  issued,  the  proceedings  are  dis- 
tinct and  are  criminal  in  their  nature,"  and  are  wholly  independent 
of  the  fact  that  the  offense  might  be  punished  by  indictm^ent,' 
and  the  offense  depends  not  upon  the  intention  but  the  act.  It 
is  also  a  well  settled  principle  of  chancery  practice  that  a  per- 
son in  contempt  for  disobedience  to  the  authority  of  court  is  not 


•  Wren  v.  Eirfon,  11  Ves.  Jr.  377; 
Mansey  v.  Banner,  4  Madd.  416;  Sal- 
way  V.  Salway,  2  Russ.  &  M.  215; 
White  V.  Baugh,  2  Bligh  N.  S.  181. 

A  bank  in  which  a  receiver  kept  his 
accounts  was  authorized  to  make  sale 
of  receiver's  certificates,  and  did  so, 
but  after  the  order  had  been  revoked, 
deposited  the  proceeds  consisting  of 
checks,  drafts.etc.  to  the  credit  of  the 
receiver,  such  deposits  must  be  held 
to  have  come  into  the  receiver's  hands 
within  the  rule  which  makes  the  re- 
ceipt of  the  proceeds  by  the  receiver 
a  condition  precedent  to  the  validity 
of  the  certificates,  although  the  bank 
was  never  in  a  condition  to  pay  any 
considerable  portion  of  the  deposits  to 
the  receiver.  Alabama  Iron  &  C.  Co. 
V.  Anniston  Loan  db  B.  Co.  57  Fed. 
Rep.  25.  In  such  a  case  the  fact  that 
the  receiver  on  learning  of  the  insol- 
vency of  the  bank  took  from  it  and 
from  the  president  personally  certain 


collateral  securities  to  protect  his  de- 
posits was  not  a  repudiation  of  the 
sale  but  rather  a  fresh  ratification. 

^Hinckley  v.  Oilman,  C.  &  S.  B.  Co. 
100  U.  8.  153,  25  L.  ed.  591. 

3  CartwrigMs  Case,  114  Mass.  230; 
United  States  v.  Hudson,  11  U.  S.  7 
Cranch,  32,  3  L.  ed.  259. 

^United  States  v.  Mann,  2  Brock.  9; 
Be  Pitman,  1  Curt.  186;  Tales  v. 
Lansing,  9  Johns.  395. 

6  Davis  V.  Gray,  83  U.  S.  16  Wall. 
203,  21  L.  ed.  447;  Hills  v.  Barker,  111 
Mass.  508. 

«  Folger  v.  Hoagland,  5  Johns.  235; 
Ex  parte  Eearney,  20  U.  S.  7  Wheat. 
38,  5  L.  ed.  391;  Durant  v.  Washing- 
ton County  Supers.  1  Woolw.  377; 
Winsbw  v.  Nay  son,  113  Mass.  411; 
McDermott  v.  Clary,  107  Mass.  501. 

■•  Bay  V.  Ossulston,  2  Strange,  1107; 
Spalding  v.  People,  7  Hill,  301,  10 
Paige,  284;  State  v.  Woodfin,  5  Ired.  L. 
199;  State  v.  Williams,  2  ypecrs,  26. 


20S  RECEIVERSHIPS. 

entitled  to  be  heard  upon  any  motion  or  other  proceeding  in  the 
cause  until  he  purges  himself  of  the  contempt.' 

§  112.     As  common  carrier. 

While  a  court  of  chancery  appointing  a  receiver  will  throw 
around  him  its  shield  of  protection  in  all  necessary  cases,  yet  it 
cannot  be  recognized  as  a  defense  to  a  suit  at  law  for  a  breach  of 
.any  obligation  or  duty  which  was  fairly  and  voluntarily  assumed 
by  him  as  receiver,  that  he  is  an  officer  of  court  acting  under  a 
■decree  of  a  court  of  chancery.  The  obligations  and  duties  which 
the  receiver  assumes  are,  in  all  cases,  and  like  all  other  persons, 
to  be  measured  by  the  nature  and  character  of  the  business  which 
he  eno-ao-es  in.  Thus  it  cannot  be  contended  that  the  receiver 
who  is  the  mere  custodian  of  proj)erty,  answerable  only  for  its 
safe  keeping  and  due  return  when  called  upon  for  that  purpose, 
occupies  a  similar  position  with  like  responsibilities  to  the  receiver, 
who  by  virtue  of  his  official  position  is  placed  in  possession  of, 
and  is  charged  with  the  management  and  control  of  a  railway 
where  he  by  virtue  of  his  undertaking  assumes  the  functions  of 
a  common  carrier,  and  where  in  his  dealings  he  is  constantly 
brought  in  contact  with  the  public.  In  the  latter  case  his  respon- 
sibilities are  infinitely  increased.  The  very  nature  of  the  business 
carries  with  it  extraordinary  duties  and  corresponding  liabilities, 
and  hence  it  is  that  courts  are  becoming  more  disposed  to  charge 
this  class  of  receivers  with  a  greater  degree  of  responsibility,  and 
recognize  in  the  public,  and  those  dealing  with  them,  greater 
privileges  and  greater  facilities  for  relief,  not  only  in  matters 
purely  ex  contractu  but  more  especially  in  matters  ex  delicto^ 

%  113.    As  common  carrier  for  personal  injuries. 

Where  the  management  of  a  railroad,  or  other  concern  of  a 
quasi  public  nature,  has  passed  into  the  hands  of  a  receiver,  and 
he  is  in  charge  and  is  operating  the  same  in  his  official  caj^acity, 
and  a  passenger  or  an  employee  is  injured  through  the  fault  of 
the  employees  of  the  receiver,  the  liability  is  in  all  respects 
governed  by  the  principles  that  would  be  applicable  to  the  same 
action  were  the  proceeding  between  the  person  so  injured  and 

'  Wartman  v.  Wartman,  Taney,  362.  *  Blumenthal  v.    Brainard,  38  Vt. 

403;  Sprague  v.  Smith,  29  Vt.  421. 


LIABILITY  OF  RECEIVER. 


209 


the  railroad  company  had  no  receiver  been  appointed.  The  only 
difference  between  the  two  proceedings  being  that  in  the  former 
case  it  is  somewhat  in  the  nature  of  a  proceeding  in  rem,  and  the 
damages  recovered,  if  any,  are  chargeable  to  the  property  or  fund 
in  the  hands  of  the  receiver,  and  are  payable  from  the  funds  sub- 
ject to  distribution  on  the  final  order  of  the  court'     It  was  at 


'  Kain  v.  Smith,  80  N.  Y.  458. 
The  basis  of  this  decision  is  the  fact 
that  the  receiver  as  an  officer  of  court 
has  displaced  the  officers  of  the  com- 
pany who  by  the  charter  are  author- 
ized to  manage  its  affairs,  and  under 
the  direction  of  the  court  has  the  sole 
control  and  management  of  the  prop- 
erty and  effects  of  the  company,  and 
for  the  time  being  is  in  the  exercise 
of  the  franchises  of  the  company  as 
its  chief  executive,  and  is  responsible 
to  the  court  for  his  conduct  in  all 
these  things.  Cf.  Klein  v.  Jewett,  26 
N.  J.  Eq.  474;  Fuller  v.  Jewett,  80 
N.  Y.  46;  Morse  v.  Brainard,  41  Vt. 
551 ;  Coicdrey  v.  Galveston,  H.  &  H.  R. 
Co.  93  U.  S.  352,  25  L.  ed.  950;  Roches- 
ter V.  Bronson,  41  How.  Pr.  78; 
Meara  v.  Eolbrook,  20  Ohio  St.  137; 
Davenport  v.  Alabama  &  C.  R.  Co.  2 
Woods,  519 ;  Jordan  v.  Wells,  3  Woods, 
527;  Sloan  v.  Central  loica  R.  Co.  62 
Iowa,  728;  Little  v.  Dusenberry,  46 
N.  J.  L.  614;  Blumenthal  V .  Brainard, 
38  Vt.  402;  Paige  v.  Smith,  99  Mass. 
395;  Camp  v.  Barney,  4  Hun,  513; 
Missouri  P.  R.  Co.  v.  Texas  P.  R.  Co. 
30  Fed.  Rep.  167, 169;  Combs  v.  Smith, 
78  Mo.  32.  (This  was  a  suit  for  a  tort 
committed  by  the  company  before  the 
appointment  of  the  receiver.)  Eorns- 
by  v.  Eddy,  56  Fed.  Rep.  461;  Gibbes  v. 
Greenville  &  C.  R.  Co.  15  S.  C.  518; 
Texas  P.  R.  Co.  v.  Geizer,  79  Tex.  13; 
Texas  P.  R.Co.  v.  Johnson, ni:  ax.  421; 
Graham  v.  Chapman,  33  N.  Y.  S.  R. 
349;  (lack  of  funds  is  no  defense); 
Newell  V.  Smith,  49  Vt.  255;  Sprague  v. 
Smith,  29  Vt.  421 ;  Lyman  v.  Central 
Verm.ont  R.  Co.  59  Vt.  167;  Ballon  v. 
14 


Farnum,^  Allen,  47;  Ex  parte  Johnson, 
19  S.  C.  492;  Barter  v.  Wheeler,  49  N. 
H.  9;  Ex  parte  Brown,  15  S.  C.  518; 
Lamphear  v.  Buckingham,  33  Conn. 
237;  Kinney  v.  Crocker,  18  Wis.  74; 
Allen  V.  Central  R.  Co.  42  Iowa,  683. 
But  see  Henderson  v.  Walker,  55  Ga. 
481 ;  Thurman  v.  Cherokee  R.  Co.  51  Ga. 
376.  These  two  cases  have  been  sup- 
posed to  be  at  variance  with  the  gen- 
eral current  of  decisions,  but  a  care- 
ful analysis  will  show  that  they  are 
not.  The  case  of  Cardot  v.  Barney, 
63  N.  Y.  281,  is  apparently  in  conffict 
with  Graham  v.  Chapman,  33  N.  Y. 
S.  R.  349;  Durkin  v.  Sharp,  88  N.  Y. 
225,  and  Fuller  v.  Jewett,  80  N.  Y.  46 
of  the  same  state. 

In  Washington,  A.  &  G.  R.  Co.  v. 
Brown,  84  U.  S.  445,  21  L.  ed.  675,  it 
appeared  that  a  railroad  was  operated 
on  the  joint  account  of  a  receiver  of 
part  of  it  and  lessees  of  the  remaining 
part,  and  that  the  tickets  were  issued 
by  the  railroad  company,  and  an  in- 
jury occurred  to  a  passenger,  it  was 
held  that  the  operation  of  the  road  by 
the  lessees  did  not  change  the  relation 
of  the  original  company  to  the  public, 
and  the  company  was  responsible 
unless  it  appeared  that  the  possession 
of  the  receiver  was  exclusive,  and  the 
control  of  the  employees  exclusively 
in  him.  And  when  the  road  was  run 
on  the  joint  account  of  the  lessees  and 
receiver,  the  servants  being  enip]()3'ed 
by  them  jointly,  both  were  liable  for 
the  injury  complained  of  together 
with  the  original  company. 

In  Barton  v.  Barbour,  104  U.  S. 
126,  26  L.  ed.  672,  suit  was  brought 


210 


RECEIVERSHIPS. 


one  time  contended  that  by  reason  of  the  receiver's  official  position 
an  action  could  not  be  maintained  against  him  for  either  his  own 
neghgence  or  that  of  his  employees/  but  this  contention  is  no 
longer  tenable  either  in  this  country  or  in  England."     The  lia- 


against  a  receiver  for  personal  injuries 
received  by  the  plaintiff  while  a  pas- 
senger on  a  railroad  operated  by  the 
receiver.  It  was  held  on  the  author- 
ity of  Cowdrey  v.  Galveston,  H.  &  H. 
B.  Co.  93  U.  S.  352,  23  L.  ed.  950,  that 
the  receiver  was  liable  by  reason  of 
his  assuming  the  duties  of  a  common 
carrier,  and  that  the  receiver  stood  on 
precisely  the  same  footing  so  far  as 
damages  for  the  Injury  were  con- 
cerned as  for  any  of  the  expenses  in- 
curred in  the  execution  of  the  trust, 
and  they  must  be  adjusted  and  satis- 
fied in  the  same  way. 

'  This  principle  of  law  applicable 
to  agents  of.  the  public  in  the  dis- 
charge of  their  legitimate  functions, 
is  based  upon  the  following  authori- 
ties (with  others): 

Sussex  County  Chosen  Freeholders  v, 
Sirader,  18  N.  J.  L.  108;  Cooley  v. 
Essex  Chosen  Freelwlders,  27  N.  J.  L. 
415;  Livermore  v.  Camden  County 
Chosen  Freeholders,  29  N.  J.  L.  245; 
Pray  v,  Jersey  City,  32  N.  J.  L.  394; 
Marvin  Safe  Co.  v.  Ward,  46  N.  J. 
L.  19.  In  Hill  V.  Boston,  122  Mass, 
344,  the  whole  subject  is  most  ex- 
haustively reviewed  from  the  stand- 
point of  both  English  and  American 
cases  by  Chief  Justice  Shaw.  The 
same  principle  of  nonliability  for  in- 
juries growing  out  of  negligence  on 
the  part  of  his  agents,  was  sought  to 
be  extended  to  receivers  of  railroads 
on  the  ground  that  they  were  public 
agents  and  engaged  in  the  perform- 
ance of  public  duties  in  the  case  of 
Little  V.  Dusenberry,  46  N.  J.  L.  614, 
but  Mr.  Justice  Scudder,  in  a  thor- 
ough examination  of  the  cases  up  to 
that  time  (1884)  held  that  the  principle 


was  inapplicable  to  receivers  by  rea- 
son of  the  difference  existing  between 
the  functions  of  railroad  receivers 
and  public  officers  of  towns,  cities, 
etc.,  and  that  receivers  were  liable  in 
their  representative  capacity  in  all 
respects  to  others  for  injuries,  as  the 
company  would  be  if  transacting  its 
business  in  the  usual  way.  Of  course 
the  payment  of  the  judgment  in  all 
cases  must  remain  subject  to  order 
and  direction  of  the  court,  taking  into 
consideration  the  funds  subject  to 
distribution  and  the  respective  rights 
and  interests  of  all  persons  interested 
therein.  Cf.  Sprogue  v.  Smith,  29 
Vt.  421;  Fuller  v.  Jewett,  80  N.  Y.  46; 
Kain  v.  Smith,  80  N.  Y.  458.  But  see 
Cardot  v.  Barney,  63  N.  Y.  281. 

^  Ruck  V.  Williams,  3  Hurlst.  &  N. 
308.  In  this  case  Pollock,  C.  B., 
applied  the  rule  of  negligence  to  com- 
missioners charged  with  the  perform- 
ance of  duties  analogous  to  those  of 
receivers,  in  the  following  language: 
"  I  see  nothing  in  the  character  of  the 
commissioners  as  a  public  body,  or  in 
the  fact  that  they  are  discharging  a 
public  duty  without  any  remunera- 
tion to  exempt  them  from  liability  to 
compensate  a  person  who  has  suffered 
by  their  carelessness,  or  want  of  due 
regard  in  the  performance  of  their 
duty.  They  are  entitled  to  reimburse 
themselves  out  of  the  funds  over 
which  they  have  control,  and  it  would 
be  hard  indeed  to  throw  on  the  plain- 
tiff the  loss  which  has  been  sustained 
rather  than  let  it  be  paid  out  of  the 
common  fund  which  the  commis- 
sioners have  at  their  disposal." 

Cf.  Fenton  v.  Dublin  Steam  Poiket 
Co.  8  Ad.  &  El.   835;  Quarmann  v. 


LIABILITY  OF  RECEIVER. 


211 


bility  of  the  receiver  extends  to  injuries  received  on  a  connecting 
line  where  through  trains  are  used  by  the  same  employees,  and 
through  contracts  are  made  for  both  lines/  but  where  the  I'eceiver 
operates  one  road  as  receiver  and  another  as  lessor,  and  an  injury 
occurs  on  the  latter,  he  is  individually  liable,"  and  not  in  his 
official  capacity. 

§  114.    As  common  carrier  for  damages. 

The  receiver  of  a  railroad  corporation  in  charge  of  and  operat- 
ing its  road  is  liable  for  the  loss  of  freight  growing  out  of  the 
negligence  of  his  agents  f  and  for  negligence  in  the  construction 


Burne.tt,  6  Mees.  &  "W.  509;  Daly  ell  v. 
Tyrer,  1  El.  Bl.  &  El.  906.  The  law 
in  this  country,  as  applied  to  receiv- 
ers, is  similar  in  its  application.  See 
authorities  in  preceding  note.  In  Iowa, 
and  some  other  states,  the  receiver 
is  made  liable  by  statute  for  injur- 
ies received  by  an  employee,  the 
receiver  being  included  in  "persons 
owning  or  operating  railways  "  pur- 
suant to  S§  1278  and  1307  of  Iowa 
Code.  Sloan  v.  Central  Iowa  R.  Co. 
62  Iowa,  728.  In  Texas,  however, 
the  receiver  is  not  liable  as  "proprie- 
tor" for  injuries  resulting  in  the  death 
of  a  person  caused  by  the  negligence 
of  the  receiver  or  his  agents.  Dilling- 
liam  V.  Scaler  (Tex.  Civ.  App.)  24 
S.  W.  975;  TiLrner  v.  Cros^i,  83  Tex. 
218,  15  L.  R.  A.  262;  Yoakum  v.  Selph, 
83  Tex.  607.  In  Tennessee  the  re- 
ceiver of  a  delinquent  railroad  com- 
pany, appointed  by  the  governor 
under  the  provisions  of  a  statute,  was 
held  to  be  a  public  agent  and  as  such 
not  liable  for  the  wrongs  or  negligence 
of  his  employees,  but  only  liable  for 
his  own  wrongful  delinquencies. 
Ilojikim  V.  Connel,  2  Tenn.  Ch.  323; 
Ertcin  v.  Davenport,  9  Heisk.  44;  Cf. 
Cardot  v.  Barney,  63  N.  Y.  281; 
Davenport  v.  Alabama  &,  C.  II.  Co.  2 
Woods,  519;  Lane  v.  Cotton,  1  Ld. 
Raym.    646;     Whitfield    v.    Lord    Le 


Despencer,  Cowp.  754;  Duncan  v. 
Findlater,  6  Clark  &  F.  894;  Mersey 
Docks  &  Harbor  Trudees  v.  Gibbs, 
L.  R.  1  H.  L.lll ;  Henderson  v.  Walker, 
55  Ga.  481. 

'  Howe  v.  Gibson,  3  Tex.  Civ.  App. 
263. 

*  Rain  v.  Smith,  80  N.  Y.  458;  re- 
versing 11  Hun,  552.  Cf.  Rogers  v. 
Wheeler,  43  N.  Y.  598;  Sprague  v. 
Smith,  29  Vt.  421 ;  Baxter  v.  Wheeler, 
49  N.  H.  9;  Blumenthal  y.  Brainard, 
38  Vt.  409;  Paige  v.  Smith,  99  Mass. 
395;  Nichols  v.  Smith,  115  Mass.  332. 

Where  an  injury  results  from  the 
default  or  misconduct  of  a  receiver, 
appointed  by  a  court  of  equity,  while 
acting  under  the  color  of  the  authority 
of  the  court,  and  there  is  no  dispute 
as  to  the  power  of  the  court  to  make 
the  order  under  which  he  claims  to 
have  acted,  the  court  may,  in  its  dis- 
cretion, either  take  cognizance  of  the 
question  of  the  receiver's  liability 
and  determine  it,  or  permit  the 
aggrieved  party  to  sue  at  law.  But 
if  the  power  of  the  court  to  make  the 
order  is  disputed,  the  court  has  no 
choice;  it  must  assume  exclusive  jur- 
isdiction and  inhibit  the  aggrieved 
person  from  seeking  redress  against 
the  receiver  in  any  other  tribunal. 
Klein  v.  Jeicett,  26  N.  J.  Eq.  474. 

*  Melendy  v.  Barbour,  78  Va.  544. 


212 


RECEIVERSHIPS. 


of  a  railroad  crossing ;'  and  for  the  negligent  destruction  of  prop- 
erty by  tire ;"  and  for  his  omission  to  make  the  necessary  repairs 
to  engines  rented  and  used  by  him  f  and  for  injury  to  property 
delivered  to  him,  as  a  common  carrier,  for  shipment.*  And 
where  goods  are  committed  to  him  for  sale,  and  through  negli- 
gence or  bad  faith  he  fails  to  realize  the  full  value,  he  will  be  lia- 
ble for  the  real  value  but  not  the  speculative  value."  He  is 
responsible  for  the  value  of  property  which  by  diligence  would 
have  come  to  his  possession,  but  has  become  lost  by  his  omission 
to  act ;"  but  he  is  not  liable  to  pay  from  the  net  earnings  in  his 
hands,  as  against  the  prior  equity  of  bondholders,  for  the  loss  of 
freight  while  in  transit,  even  when  such  loss  occurred  within  six 
months  prior  to  the  appointment ;'  nor  for  personal  injuries,  un- 
less it  is  so  provided  in  the  order  of  appointment  f  nor  from  the 
earnings,  or  proceeds  of  sale,  in  preference  to  the  first  mortgage 
bondholders,"  though  probably  the  great  weight  of  authority  is 
to  the  effect  that  damages  for  personal  injuries  are  payable  from 
the  current  receipts.'" 


^Roxhury  v.  Central  Vermont  R.  Co. 
60  Vt.  121 

'*  Peoples  V.  Yoakum  (Tex.  Civ.  App.) 
25S.W.  1001. 

*  Turner  v.  Indianapolis,  B.  &  W. 
R.  Co.  8  Biss.  527. 

*  Toakum  \.  Dunn,  1  Tex.  Civ.  App. 
524  (see  act  of  1889,  amending  act  of 
1887,  and  its  application  to  receiver's 
liability). 

^Demain  v.  Cassidy ,  55  Miss.  320. 

*  Clapp  V.  Clapp,  49  Hun,  195. 

•»  Easton  v.  Houston  &  T.  C.  R.  Co. 
38  Fed.  Rep.  12;  Pennsylvania  Fi- 
nance Co.  V.  Charleston,  C.  &  C.  R. 
Co.  46  Fed.  Rep.  508;  Ex  parte  Brown, 
15  S.  C.  523. 

^Davenport  v.  Alabama  &  C.  R.  Co. 
2  Woods,  519. 

*  Davenport  v.  Alabama  &  C.  R.  Co. 
supra.  But  see  contra,  Cowdrey  v.  Gal- 
veston, II.  <&  II.  R.  Co.  93  U.  S.  352, 
23  L.  ed.  950. 

^'^Hale  V.  Frost,  99  U.  S.  389,  25  L. 
ed.  419;  Fosdick  v.  Schall,   99  U.   S. 


235,  25  L.  ed.  339;  Barton  v.  Barbour, 
104  U.  S.  136,  26  L.  ed.  677;  Kain  v. 
Smith,  80  N.Y.  458;  Ryan  v.  Hays,  62 
Tex.  42;  Klein  v.  Jewett,  26  N.  J.  Eq. 
474;  Morse  v.  Brainard,  41  Vt.  551; 
Cowdrey  v.  Galveston,  H.  &  H.  R.  Co. 
93  U.  S.  352,  23  L.  ed.  950.  The 
grounds  upon  which  these  decisions 
are  based  are  in  the  main  (1)  That 
this  class  of  claims  stand  precisely 
upon  the  same  footing  as  other  ex- 
penses of  the  receivership,  and  should 
be  paid  from  the  same  source.  (2) 
That  every  mortgagee  in  accepting 
his  security  impliedly  agrees  that  the 
current  debts  made  in  the  ordinary 
course  of  business  shall  be  paid  from 
the  current  receipts  before  he  has  any 
claim  upon  the  income.  Mr.  Chief 
Justice  Waite,  in  Fosdick  v.  Schall, 
supra,  said:  "The  mortgagee  has  his 
strict  rights,  vrhich  he  may  enforce 
in  the  ordinary  way.  If  he  asks  no 
favors  he  need  grant  none.  But  if 
he  calls  upon  a  court  of  chancery  to 


LIABILITY  OF  RECEIVER. 


213 


§  115.     Corporation  in  hands  of  receiver  not  liable. 

Where  the  property  and  effects  of  a  raih'oad  corporation  are  in 
the  hands  of  a  receiver,  and  he  in  his  official  capacity  is  operating 
the  road,  the  corporation  is  not  hable  for  the  torts  of  the  receiver 
or  of  his  agents  and  employees.  Having  no  control  of  the  prop- 
erty, it  is  apparent  no  liability  can  be  imputed  to  it  for  injuries 
received  while  the  road  is  operated  by  another.' 


put  forth  its  extraordinary  powers 
and  grant  him  purely  equitable  relief, 
he  may  with  propriety  be  required 
to  submit  to  the  operation  of  a  rule 
which  always  applies  in  such  cases, 
and  do  equity  in  order  to  get  equity. 
The  appointment  of  a  receiver  is  not 
a  matter  of  strict  right.  Such  an  ap- 
plication always  calls  for  the  exercise 
of  judicial  discretion;  and  the  chan- 
cellor should  so  mould  his  order  that 
while  favoring  one,  injustice  is  not 
done  to  another." 

A  receiver  of  a  railway  is  not  the 
"  proprietor,  owner,  charterer,  or 
hirer"  of  the  railway,  within  Tex. 
Rev.  Stat.  art.  2899,  and  was  not  lia- 
ble under  that  article  prior  to  the 
amendment  thereof  by  Tex.  Act,  April 
11,  1892,  to  one  run  over  ty  an  engine 
on  such  railway.  Camphell  v.  Davis 
(Tex.  Civ.  App.)  22  S.  W.  244;  Tur- 
ner  v.  Cross,  83  Tex.  218,  15  L.  R.  A. 
262. 

A  receiver  cannot  be  held  liable  in 
Texas  for  damages  resulting  in  death. 
Texas  &  P.  R.  Co.  v.  Thedens  (Tex. 
Civ.  App.)  21  S.  W.  132;  ToaJcumv. 
Selph,  fc3  Tex.  607;  Texas  &  P.  B.  Co. 
V.  Colli7is,  84  Tex.  121. 

A  receiver  of  a  railway  company  is 
liable  for  personal  injuries  resulting 
from  a  defect  in  the  road,  where  he 
is  not  sought  to  be  charged  with  any 
personal  liability,  whether  the  defect 
existed  when  the  railway  came  into 
his  hands,  or  whether  he  had  been  in 
charge  of  the  road  a  sufficient  time  to 
enable  him  to  repair  it.  Bonner  v. 
Mayfield,  82  Tex.  234. 


No  recovery  can  be  had  under  the 
statute,  either  against  the  receivers 
themselves  or  the  railway  company, 
for  personal  injuries  sustained  by  an 
employee  while  a  railway  company's 
property  is  in  the  hands  of  receivers, 
when  it  does  not  appear  that  the  re- 
ceiver was  personally  and  immedi- 
ately guilty  of  neglect.  Texas  &  P. 
E.  Co.  V.  Bledsoe,  2  Tex.  Civ.  App. 
88  (see  sub.  1  and  2,  art.  2899,  Tex. 
Rev.  Stat.). 

In  general  the  measure  of  the  re- 
ceiver's liability  is  the  liability  of  the 
person  or  corporation  whose  property 
he  is  administerng.  Whitehouse  v. 
Felloices,  10  C.  B.  N.  S.  765;  Dalton  v. 
Atlantic,  M.  <&  0.  R.  R.  Co.  4  Hughes, 
180;  Mersey  Doch  Trustees  v.  Gihbs,  11 
H.  L.  Cas.  686. 

When  a  corporation  is  in  the  hands 
of  a  receiver  who  has  full  possession 
of  its  property  and  entire  charge  of  its 
affairs,  it  is  not  liable  for  crimes  and 
misdemeanors  committed  by  the  agents 
of  the  receiver.  State  v.  Wabash  R. 
Co.  115  Ind.  466;  Ohio  &  M.  R.  Co.  v. 
Davis,  23  Ind.  553;  Bell  v.  Indianap- 
olis, C.  &  L.  R.  Co.  53  Ind.  57. 

^Meara  v.  Uolbrook,  20  Ohio  St.  137; 
Klein  v.  Jewett,  26  N.  J.  Eq.  474;  Jor- 
dan V.  Wells,  3  Woods,  527;  Davis  v. 
Duncan,  19  Fed.  Rep.  477;  Ohio  M. 
R.  Co.  V.  Davis,  23  Ind.  560;  Bell  v. 
Indianajwlis,  C.  cfc  L.  R.  Co.  53  Ind. 
57;  Metz  v.  Buffalo,  C.  &  P.  R.  Co.  58 
N.Y.  61;  Ror/ers  v.  Mobile,  etc.  R.  Co. 
17  Cent.  L.  J.  290  (Teun.  1883). 

Where  a  personal  injury  is  received 
while  the  road  is  in  the  hands  of  a  re- 


214 


RECEIVERSHIPS. 


A  railroad  company  in  the  hands  of  a  receiver  is  not  liable  for 
an  obstruction  in  the  highway  which  has  been  erected  and  is  main- 
tained by  a  receiyer,'  and  is  not  liable  for  the  death  of  an  em- 
ployee caused  by  the  negligence  of  the  receiyer.'  It  has  been 
held  that  a  person  at  whose  instance  a  receiyer  is  appointed 
should  see  that  he  performs  his  duties,  and  any  loss  which  he 
might  haye  prevented  by  proper  diligence  must,  as  between  him 
and  other  litigants,  be  borne  by  him/ 

§  116.    Lial)ility  for  use  of  receivership  fuiuls. 

"Where  the  receiver  realizes  on  money  invested  by  him  which 
is  not  authorized  by  the  court,  he  is  responsible  therefor/  and  in 
all  cases  he  must  account  for  the  profit  on  funds  held  by  him," 
and  when  he  deposits  the  money  belonging  to  his  trust  to  his 
private  account  and  uses  it  he  is  chargeable  with  interest.* 
All  classes  of  trustees  having  money  in  their  hands  belonging  to 
a  trust  estate  are  bound  to  keejp  the  trust  funds  separate  and  dis- 


ceiver,  and  subsequently  it  is  turned 
over  by  the  receiver  to  the  corpora- 
tion, and  a  suit  for  the  injury  is 
brought  against  the  corporation,  and 
it  appears  by  the  evidence  that  during 
the  time  of  the  receivership  the  earn- 
ings of  the  road  are  more  than  the 
amount  of  the  claim,  but  were  ap- 
plied toward  betterments  of  the  road, 
and  the  road  in  its  improved  condition 
turned  over  to  the  corporation,  and 
the  injury  complained  of  is  such  that  a 
recovery  could  have  been  had  against 
the  receiver,  had  he  still  remained 
such,  the  plaintiff  is  entitled  to  re- 
cover, even  if  the  court  prior  to  the 
receiver's  discharge  ordered  all  claim- 
ants to  intervene  within  a  fixed  time. 
Texas  &  P.  R.  Co.  v,  Boyd.  6  Tex. 
Civ.  App.  205;  Texas  T.  R.  Co.  v. 
Johnson,  86  Tex.  421.  And  if  the  lia- 
bilities of  the  receiver  for  unadjusted 
claims  exceed  the  amounts  expended 
for  betterments,  it  must  be  pleaded  in 
order  to  constitute  a  defense.  Texas 
&  P.  R.  Co.  V.  Bailey.  83  Tex.  19. 


^Sfate  V.  Minneapolis  &  St.  L.  R.  Co. 
88  Iowa,  589. 

•^Ttxas  &  P.  R.  Co.  V.  Collins.  84 
Tex.  121;  Memphis  &  L.  R.  R.  Co.  v. 
Stringfellow,  44  Ark.  323;  Turner  y. 
Hannibal  &  St.  J.R.  Co.  74  Mo.  603; 
Ohio  &  M.  R.  Co.  v.  Anderson,  10  111. 
App.  313. 

^Downs  V.  Allen,  10  Lea,  652;  Ter- 
rell V.  IngersoU,  10  Lea,  77. 

But  in  Iowa  where  no  fraud  is 
shown  against  the  plaintiff,  he  is  not 
liable  for  damages  sustained  by  prop- 
erty while  in  the  hands  of  a  receiver. 

Kaiser  v.  Kellar,  21  Iowa,  95. 

A  railroad  company  is  not  liable  for 
the  negligence  of  the  servant  of  a  re- 
ceiver. 

Ohio  &  M.  R.  Co.  V.  Davis,  23  Ind. 
553;  Metz  v.  Buffalo,  C.  &  P.  R.  Co. 
58  N.  Y.  61.  Cf.  Stanton  v.  Alabama 
&  C.  R.  Co.  31  Fed.  Rep.  585. 

*Baldicin  v.  Crawford,  2  Chamb.  Ch. 
(Onl.)  9. 

^ Adair  County  v.Ownby,  75  Mo.  282. 

«i?e  Co7)i.  F.  Ins.  Co.  32  Hun,  78. 


LIABILITY  OF  RECEIVER. 


215 


tinct  from  moneys  of  tlieir  own;  and  if  deposited  in  bank  for  safe 
keeping  tlie  money  should  be  deposited  to  the  credit  of  a  sepa- 
rate account  in  their  names  as  trustees  so  that  the  funds  can  be 
at  all  times  traced  and  identified;  but  if  this  be  not  done  and  the 
court  can  see  that  by  mingling  of  the  trust  funds  with  their  own 
the  trustees  have  derived  any  benefit  from  their  use,  they  are 
chargeable  with  interest,  simple  or  compound,  as  the  facts  may 
require.'  Where  the  receiver  is  ordered  to  invest  the  funds  in 
his  hands  in  a  certain  way  and  he  does  not  do  so,  he  is  liable  for 
interest.  It  may  be  stated  as  a  general  proposition  that  where  a 
receiver  holds  money  in  his  hands  improperly  he  will  be  charge- 
able with  interest,"  and  where  he  makes  interest  he  is  liable  for 
interest.' 


^Manning  v.  Manning,  1  Johns.  Ch. 
527;  Eatcliffe  v.  Graves,  1  Vern.  196; 
'Newton  v.  Bennet,  1  Bro.  C.  C.  359; 
Piety  V.  Stace,  4  Ves.  Jr.  620;  Scliieffe- 
Un  V.  Stewart,  1  Johns.  Ch.  618;  Min- 
use  V.  Cox,  5  Johns.  Ch.  447;  Mumford 
V.  Murray,  6  Johns.  Ch.  17;  Eellett  v. 
Rathbun,  4  Paige,  110;  Ogihie  v.  Ogil- 
me,  1  Bradf.  356;  Dvffy  v.  Duncan, 
32  Barb.  593,  affirmed  in  35  N.  Y.  ISl; 
Lansing  v.  Lansing,  45  Barb.  182;  Re 
Com.  F.  Ins.  Co.  32  Hun,  78. 

In  this  case  the  receiver  deposited 
the  receivership  moneys  with  his  own 
funds,  and  checked  them  out  from 
lime  to  time  for  his  own  purposes  he 
was  charged  with  interest;  but  he 
cannot  be  charged  with  interest  sim- 
ply because  he  deposits  them  with  his 
own  funds  in  the  bank  where  the  evi- 
dence fails  to  show  that  h'e  has  used 
any  part  of  the  funds. 

Radford  v.  Folsom,  55  Iowa,  276; 
Eic/cs  V.  Hicks,  3  Atk.  274. 

A  special  receiver  appointed  to  col- 
lect a  surplus  arising  from  a  sale  un- 
der a  deed  of  trust  and  return  it  to 
court  at  the  next  term,  who  received 
the  same  in  confederate  treasury  notes 
at  the  begining  of  the  war,  and  in 
good  faith  placed  them  in  a  respon.si- 


ble  bank  to  the  general  account  of  a 
firm  of  which  he  was  a  member,  in 
which  numerous  fiduciary  deposits 
were  kept,  is  not  liable  therefor  where 
no  subsequent  term  was  held,  and  the 
bank  failed  as  a  result  of  the  war,  and 
the  money  was  lost  with  it.  Barton  v, 
Ridgeway,  92  Va.  163. 

^Uarman  v.  Foster,  1  Hog.  318;  Fet- 
na-in  v.  Kirby,  4  Ir.  Eq.  320. 

A  receiver  is  not,  as  a  matter  of 
course,  chargeable  with  interest  in  the 
absence  of  special  circumstances. 
Crawford  v.  Fickey  (W.  Va.)  23  S.  E. 
662. 

^Potts  v.  Leighton,  15  Ves.  Jr.  273; 

Lonsdale  v.  Church,  3  Brace,  41 ; 

V.  Jolland,  8  Ves.  Jr.  72;  Fletcher  v. 
Dodd,  1  Ves.  Jr.  85;  Uarrison  v.  Boy- 
dell,  6  Sim.  211;  Shaw  v.  Rhodes,  2 
Russ.  539. 

But  he  is  not  liable  for  interest  if  he 
does  not  treat  the  trust  funds  as  his 
own.  Adair  County  v.  Ownby,  75  Mo. 
282. 

An  order  directing  receivers  to  pay 
interest  on  certain  bonds,  "after  meet- 
ing such  other  obligations  as  they 
have  been  directed  to  discliarge  by 
the  former  orders  of  this  court,"  does 
not  authorize  the  payment  of  such  iu- 


216 


RECEIVERSHIPS. 


§  117.     For  default  of  another. 

A  receiver  of  a  corporation  who  employs  another  to  look  after 
and  care  for  property,  in  the  absence  of  an  express  agreement  to 
the  contrary,  is  individually  liable  for  the  latter's  services,'  but 
where  he  employs  an  attorney  to  collect  money,  which  is  collected 
by  such  attorney  and  not  turned  over  to  the  receiver,  he  will  not 
be  liable  to  the  estate  for  such  loss  where  it  appears  that  the  em- 
ployment of  an  attorney  was  necessary,  and  the  attorney  em- 
ployed was  in  good  standing.'' 


tercst  until  the  debts  expressly  di- 
rected to  be  paid  by  the  former  orders 
have  been  paid. 

Central  Trust  Co.  v.  Wabash.  St.  L. 
&  P.  R.  Co.  38  Fed.  Rep.  63. 

^Rogers  v.  Wendell,  54  Hun,  540. 
This  was  an  action  brought  by  an 
employee  of  the  receiver  whose  duty 
It  was  under  his  contract  to  take 
charge  of  the  receivership  property 
and  make  certain  disbursements  on 
account  of  the  property.  In  the  course 
of  his  employment  he  made  weekly 
reports  to  the  receiver,  furnished  ma- 
terial, looked  after  the  property  gen- 
erally. The  receiver  died  without 
having  paid  the  plaintiff  his  salary  of 
$409,  and  $38  disbursed,  and  suit  was 
instituted  against  the  estate  for  these 
amounts.  On  the  trial  of  the  case  the 
court  refused  judgment  on  the  ground 
that  the  receiver  did  not  assume  a  per- 
sonal liability.  The  case  was  reversed 
in  the  upper  court  upon  the  authority 
of  Schmitter  v.  Simon,  101  N.  Y.  557; 
Willis  v.  Sha7-p,  113  N.  Y.  591,  4  L. 
R.  A.  493  (Executors  and  Administra- 
tors); Auatin  v.  Munro,  47  N.  Y.  360, 
which  were  cases  holding  executors 
and  administrators  personally  liable 
on  their  contract.  See  also  Davis  v. 
Stover,  16  Abb.  Pr.  N.  S.  225.  where 
it  was  held  that  an  agent  employed  by 
a  receiver  in  the  execution  of  a  trust 
must  look  to  the  person  employing 
him  individually,  for  his  pay,  and  the 


estate  was  not  bound,  but  that  if  there 
was  an  express  agreement  that  the 
compensation  was  to  be  made  out  of 
the  estate  the  claim  might  be  an  equi- 
table set-off  against  a  claim  of  the  es- 
tate. The  same  principle  was  an- 
nounced in  Noyes  v.  Blakeman,  6  N. 
Y.  580:  Mygali  v.  WUcox,  45  N.  Y.  309; 
Bowman  v.  Tallman,  2  Robt.  385; 
People  V.  Universal  L.  Ins.  Co.  30  Hun, 
142;  Kedian  v.  Eoyt,  33  Hun,  145 
(trustee);  By  an  v.  Rand,  20  Abb.  N. 
C.  314;  Patton  v.  Royal  Baking  Pow- 
der Co.  114  N.  Y.  4.  A  receiver  has 
no  power  to  contract  a  debt  chargeable 
against  the  fund,  and  while  a  court 
may  allow  expenses  by  a  receiver  for 
the  preservation  of  the  property,  it  is 
the  order  of  court  and  not  the  act  of 
the  receiver  which  creates  the  charge 
and  upon  which  its  validity  depends. 
Vilas  V.  Page.  106  N.  Y.  451. 

«In  Re  Union  Bank.  37  N.  J.  Eq.  420, 
the  receiver  was  not  permitted  to 
charge  the  fund  with  the  expense  of 
clerks  when  services  were  unneces 
sary,  nor  with  the  expense  of  a  daily 
newspaper,  nor  for  fees  of  counsel  to 
resist  applications  to  the  court  which 
the  receiver  ought  not  to  have  op- 
posed, but  he  was  allowed  for  moneys 
collected  and  misappropriated  by  an 
attorney  whom  he  employed  in  the 
business  of  the  trust  in  which  it  was 
necessary  for  him  to  act  by  an  attor- 
ney-at-law,    such    attorney   being    in 


LIABILITY  OF  RECEIVER. 


217 


§  118.     For  supplies,  labor,  etc. 

As  lias  been  seen  elsewhere  the  receiver  in  a  foreclosure  pro- 
ceeding is  authorized  to  purchase  on  credit  the  necessary  sup- 
plies, and  such  indebtedness  is  payable  out  of  the  net  earnings, 
and  if  ihey  are  insufficient  then  it  may  be  a  charge  upon  the 
funds  realized  on  a  sale  of  the  mortgage  premises.'  He  is  not 
personally  liable,  however,  for  services  rendered  by  emploj^ees  in 
charge  of  receivership  property.^  Where  an  employee  of  a  re- 
ceiver of  a  railroad  company  is  injured  in  the  line  of  his  duty  and 
without  his  apparent  fault  he  may  recover  his  wages  for  the  time 
during  which  he  is  disabled.'  Where  materials  are  furnislied  to 
a  receiver  the  proper  court  to  present  a  claim  therefor  is  tlie 
court  appointing  the  receiver  and  not  the  court  of  another  state 
where  the  receiversliip  has  been  extended  over  leased  lines  by 
ancillary  proceedings.*  The  employees  of  a  receiver  alleging  a 
grievance  against  him  may  be  heard  by  the  court  upon  making 
proper  application,  and  if  the  court  shall  be  of  opinion  that  fur- 
ther investigation  is  demanded  he  may  require  the  receiver  to 
answer  and  hear  evidence  upon  the  issue  made,  but  the  court  will 
not  reverse  a  decision  of  the  receiver  in  reducing  the  wages  of 
his  employees  where  it  involves  an  extensive  investigation.^ 


good  standing  and  no  negligence  ap- 
pearing on  the  part  of  the  receiver. 

See  §118,  note  2;  §  120. 

^Kneeland  v.  Bass  Foundry  &  Mach. 
Works,  140  U.  S.  592,  35  L.  ed.  543; 
Kneeland  v.  American  Loan  &  T.  Co. 
136  U.  S.  89,  34  L.  ed.  379;  Milten- 
berger  v.  Logansport,  G.  &  S.  W.  R. 
Co.  106  U.  S.  289,  27  L.  ed.  119;  Union 
Trust  Co.  V.  Souther,  107  U.  S.  591, 
27  L.  e(J.  488;  Wallace  v.  Loomis,  97 
U.  S.  146.  24  L.  ed.  895. 

"^Rogers  v.  Wendell,  54  Hun,  540. 

^-Missouri  P.  R.  Co.  v.  Texas  &  P. 
R.  Co.  41  Fed.  Rep.  319. 

*  Clyde  V.  Richmond  &  D.  R.  Co.  56 
Fed.  Rep.  539. 

^Continental  Trust  Co.  v.  Toledo,  St. 
L.  &  K.  C.  R.  Co.  59  Fed.  Rep.  514. 

See  also  Railroad  Receivers. 

As  to  the  payment  of  claims  from 
the  proceeds  of  sale  it  is  held  in  Knee- 


land  V.  American  Loan  &  T.  Co.  136 
U.  S.  89,  34  L.  ed.  379,  that  where  the 
receiver  is  appointed  at  the  instance 
of  a  general  creditor,  such  creditor 
is  not  entitled  as  against  the  lien  of 
the  mortgage  bondholders  to  a  prefer- 
ence in  payment  from  the  proceeds  of 
sale.  But  in  Kneeland  v.  Bass  Foun- 
dry &  Mach.  Woi-ks,  140  U.  S.  592,  35 
L.  ed.  543,  a  claim  was  allowed  for 
supplies  furnished  to  a  receiver,  ap- 
pointed on  the  application  of  a  judg- 
ment creditor,  and  ordered  to  be  paid 
from  the  proceeds  of  sale,  where  so 
far  as  the  record  showed  that  was  the 
only  fund  available  for  its  payment 
and  where  the  supplies  were  necessary 
for  the  continued  operation  of  the 
road,  and  had  gone  into  the  general 
property  covered  by  the  mortgage, 
which  was  sold  \  at  the  foreclosure 
sale,  upon  the  authority  of  Fosdick  v. 


218  RECEIVERSHIPS. 

§  110,     For  money  deposited  in  bank. 

A  receiver  haviii<^  money  in  his  hands  has  no  right  to  part  with 
the  actual  custody  of  such  money  by  depositing  it  in  a  bank  or 
otlierwise,  save  at  his  own  risk,  without  order  of  court  and  he 
must  make  good  the  loss.'  AYliile  a  receiver  may  keep  money  in 
a  bank  as  a  safe  place  of  deposit,  or  he  may  use  the  bank  as  a 
means  of  transmitting  money  to  distant  places,  and  if  in  doing  so 
lie  uses  reasonable  care  and  diligence  he  will  not  be  held  liable 
for  loss  in  case  of  a  failui'e  of  the  bank,'^  and  where  the  receiver- 
ship money  is  already  in  a  place  of  permanent  custody  and  which 
is  one  of  safety  the  receiver  is  not  authorized  in  removing  such 
deposit  to  a  bank,  or  otherwise  save  at  his  own  risk  without  an 
order  directing  him  to  do  so  from  the  court,'  but  if  a  receiver  in 
the  exercise  of  sound  business  judgment  deposits  money  in  a  bank 
of  good  credit  in  preference  to  taking  the  money  with  him  to 
London  to  pass  his  accounts,  and  in  the  meantime  the  bank  fails 
the  receiver  is  not  liable/  But  where  he  has  the  receivership 
money  on  deposit  in  a  bank  to  his  credit  as  receiver  and  with- 
draws such  deposit  and  places  it  to  his  private  account  in  another 
bank  and  declines  to  explain  the  transaction  he  is  chargeable  with 
interest,^  and  if  he  places  the  fund  with  private  bankers  without 
security  and  it  is  loaned  out  on  stock  collaterals  without  his 
knowing  to  whom,  or  on  what  stock,  or  the  interest  to  be  received, 
he  is  chargeable  with  the  interest  he  received/ 

ScMll,  99  U.  S.  235,  25  L.  ed.  339;  Cf.  Atlantic  &  N.  G.  R.  Co.  v.  Cowles, 

Miltenberger  v.  Logansport,  C.  &  S.  W.  (39  N.  C.  59. 

R.  Go.  106  U.  S.  286.  27  L.  ed.  117;  '•ninckley  v.  Oilman,  G.  <£  S.  R.  Go. 

Union  Trust  Go.  v.  Souther,  107  U.  S.  100  U.  S.  153,  25  L.  ed.  591. 

591,  27  L.  ed.  488;  Wallace  v.  Loomis,  ^Atty.  Gen.  v.  North  American  L. 

97  U.  S.  146,  24  L.  ed.  895;  Burnham  Ins.   Go.  89  N.  Y.  94.     In   this  case 

V.  Bowers,  111  U.  S.  776,  28  L.  ed.  the  receiver  acted  in  good  faith  and 

596.  no  money  was  lost. 

^Ricks\.  Broyles,  78  Ga.  610;  Slate,  A  firm  suspended  and  became  in- 

Collins,  V.  Gooch,  97  N.  C.  186.  solvent  and  at  the  time  of  such  sus- 

^State,  Gollins,  v.  Qooch,  supra.     He  pension   had   on   deposit  with  them 

will  not  be  authorized,  however,  in  from  another  firm  a  large  amount  of 

making  a  loan  to  the  bank  without  money  to  secure  advances  made  to  the 

security.  latter  from  time  to  time.     It  was  not 

^Ricks  V.  Broyles,  78  Ga.  610;  Knight  understood  that  they  were  to  keep  on 

V.  Plymouth,  3  Atk.  480.  hand  the  same  money  deposited  or 

*Routh  V.  Howell,  3  Ves.   Jr.   565.  any  particular  money  or  property,  the 


LIABILITY  OF  RECEIVER.  219 

§  120.     For  costs  and  expenses. 

"Where  proceedings  were  instituted  by  a  bank,  and  after  its  in- 
solvency and  the  appointment  of  a  receiver  the  latter  carried  on 
the  proceedings,  the  defendant  is  entitled  to  his  costs  on  the  ren- 
dition of  a  judgment  in  his  favor,  to  be  paid  from  the  fund  in  the 
receiver's  hands,'  but  the  court  will  not  order  paid  expenses  in- 
curred in  legal  proceedings  where  such  proceedings  w^ere  not  au- 
thorized by  the  court,"  nor  where  the  receiver  contests  a  claim  in 
bad  faith,  and  where  he  voluntarily  embarks  in  litigation  without 
funds  from  which  to  pay  the  costs  thereof  he  is  guilty  of  bad 
faith  and  must  pay  such  costs  personally.^  Costs  incurred  for  the 
benefit  of  a  fund  in  the  hands  of  a  receiver  will  be  paid  from 
such  fund,*  though  an  order  of  court  authorizing  the  action  has 
been  held  necessary/  Where  a  judgment  for  costs  has  l)een  ren- 
dered against  a  receiver  he  will  not  be  ordered  on  motion  to  pay 
such  costs  from  the  funds  in  his  hands,  even  upon  a  showing  that 
he  has  paid  other  larger  amounts,  or  recently  had  sufficient  funds 
to  pay  the  judgment.  He  is  not  bound  to  render  the  account  to 
each  individual  creditor.  Other  creditors  with  suits  pending  or 
to  be  commenced  have  an  equal  claim  upon  the  funds  in  the  re- 
ceiver's hands.  Such  a  motion  cannot  be  converted  into  a  cred- 
itor's bill."     Expenses  for  repairs  are  a  charge  on  the  funds  in  his 

account  being  a  debit  and  credit  ac-  man  v.  White,  6  N.  Y.  412;   Cook  v. 

count,  interest  being  allowed  on  one  Tullis,  85  U.  S.  18  Wall.  333,  21  L. 

side  and  credited  on  the  other.    After  ed.  933;  Clark  v.  Iselin,  88  U.  S.  21 

the  suspension  and  appointment  of  a  Wall.  360,  22  L.  ed.  568;  Van  Alen  v. 

receiver,  the   depository  firm  sought  American  Nat.  Bank,  53  N.  Y.  6. 

to  compel  the  receiver  to  pay  over  the  ^Camp  v.  Niagara  Bank,  2  Paige, 

balance  in  his  hands  of  said  deposit  283. 

on   the  ground  that  it  was  a  special  ^Dudgeon  v.  Boioen,  Hayes  &,  J.  717. 

deposit.     Held,  that  the  receiver  was  ^Bourdon  v.  Mantin,  74  Hun,  246. 

not  liable  for  the  deposit  as  a  special  A    receiver    of    an    estate    cannot 

deposit;  if  a  special  deposit  had  been  charge  the  heirs  and  legatees  with  the 

made  and  the  same  money  had  been  cost  of  an  unsuccessful  litigation  over 

found   or  property  in   which  it  had  his  accounts.      Henry  v.  Henry,  103 

been   wrongfully  invested,  or  which  Ala.  582. 

had  been  wrongfully  substituted  for  '^Locke  v.  Covert,  43  Ilun,  484. 

it  then  such  money  or  property  could  ^Sioaby  v.  Dickon,  5  Sim.  629;  Con- 

have  been  followed  into  the  hands  of  yers  v.   CroMe,  6  Ir.  Eq.  657;   Bris- 

the  receivers  and  recovered.     Batter  tome  v.  Needham,  12  Phill.  Ch.  190. 

V,    Spi-ague,  66   N.  Y.    393.     Cf.  Re  '^Devendorf  v.  Bickinvon,  21  How. 

Franklin  Bank,  1  Paige,  249;  Chaj)-  Pr.  275. 


220  RECEIVERSHIPS. 

hands,  and   so   are   salaries,   including   receiver's  certificates,   a 
charo-e  upon  mortgage  property  taking  precedence  to  the  mort- 
gage.' 
§  121.     For  rents. 

Where  a  receiver  as  such  takes  possession  of  premises  whicli 
were  held  as  lessee  by  those  wliose  estate  he  is  administering  and 
has  paid  rent  therefor,  according  to  the,  terms  of  the  lease,  from 
the  time  of  his  appointment  for  a  considerable  period  thereafter, 
he  becomes  liable  for  the  rent  accruing  thereafter,  and  it  is  not  a 
defense  that  there  is  no  privity  of  contract  between  himself  and 
lessor.  The  title  to  the  demised  term  passes  to  and  becomes 
vested  in  the  receiver  and  he  is  liable  for  the  subsequently  accru- 
ing rent."  This  principle  is  based  upon  the  fundamental  doctrine 
applied  to  parties  generally,  that  possession  and  use  of  property 
carries  with  it  a  corresponding  liability  to  pay  therefor  according 
to  the  terms  of  the  lease  under  which  the  property  was  held  by 
the  receiver's  predecessor,  during  the  time  he  occupies  the  demised 
property.'  But  it  by  no  means  follows  from  this  that  he  becomes 
liable  for  the  entire  unexpired  portion  of  the  term,  for  he  is  liable 
for  such  covenants  only  as  are  broken  while  privity  of  estate  is 
continued,  and  it  is  at  all  times  within  his  power  to  escape  fur- 
ther liability  by  abandoning  possession  even  if  done  for  the  ex- 
press purpose  of  avoiding  further  payment  for  rent,  and  thereby 
destroy  the  privity  of  estate.* 

A  receiver  will  be  liable  for  the  rents  collected  by  him  although 
his  bond  was  not  approved  until  sometime  afterwards,^  but  he  is 
not  liable  where  he  refuses  to  take  possession  of  the  leasehold 

^Sterling  V.  Wynne,  Hayes  &  J.  817;  becomes  liable  to  pay  rent  which  is  a 

Ellis  V.  Ve7'non,  4  Tex.  Civ.  App.  66.  covenant  running  with  the  land. 

See  §  117.  A  service  of  notice  upon  the  lessee 

^  Wells  v.  Higgins,  132  N.  Y.  459;  in  a  forcible  entry  and  detainer  pro- 
Woodrvff  v.  Erie  R.  Co.  93  N.  Y.  609;  ceeding  will  be  binding  on  a  receiver 
Frank  v.  New  York,  L.  E.  &  W.  R.  of  his  property  subsequently  appoint- 
ed. 122  N.  Y.  197.  ed  in  another  suit.        Woodward  v. 

^Frank  v.  Neic   York,  L.  E.   &  W.  Tr2«e7i?-«  (Wash.)  44  Pac.  860. 

R.  Co.  supra.     In  such   case  the  re-  *  Frank  v.  Neio  York,  L.  E.  &  W.  R. 

ceiver    occupies    the    premises    and  Co.   supra;  Childs  v.    Clark,  3  Barb, 

makes  himself  liable  by  reason  of  his  Ch.  52;  Tate  v.  McCormick,  23  Hun, 

privity  of  estate  and  not  by  any  priv-  218;  Durand  v.  Curtis,  57  N.  Y.  7. 

ity  of  contract,  and  by  reason  thereof  °  Western  Canada  &  I.  Co.  8  Prec. 

Rep.  (Ont.)  262. 


LIABILITY  OF  RECEIVER.  221 

premises;'  l)ut  if  it  is  his  duty  to  take  possession  of  real  estate  and 
he  neglects  to  do  so  during  the  period  of  his  appointment  he  is 
chargeable  with  rent  for  such  premises.*  Before  a  landlord  is 
entitled  to  a  lien  under  the  statute  of  8  Anne,  chap,  l-l,  §  1,  his 
rent  must  be  due,  and  when  his  rent  is  not  due  until  after  the 
goods  are  sold  he  cannot  be  a  preferred  creditor.^  A  person 
having  a  claim  for  rent  upon  pro])ertj  in  the  possession  of  a  re- 
ceiver appointed  by  the  court  should  apply  to  the  court  upon  no- 
tice to  the  receiver,  for  an  order  upon  the  receiver  to  pay  tlie  rent 
or  for  leave  to  proceed  by  distress  or  otherwise.''  The  rental  value 
of  rolling  stock  while  it  is  in  the  hands  of  the  receiver  appointed  at 
the  instance  of  a  mortgagee  in  a  proceeding  instituted  to  foreclose 
a  mortgage,  if  used  by  the  receiver  in  operating  a  railroad  is 
properly  allowed  as  a  prior  lien  to  the  mortgage  indebtedness.^ 

§  122.    On  unexpired  leases. 

An  ordinary  chancery  receiver  appointed  in  a  foreclosure  pro- 
ceeding does  not,  simply  by  virtue  of  his  appointment,  become 
liable  upon  the  covenants  and  agreements  of  the  person  or  corpo- 
ration over  whose  property  he  is  appointed  ;  and  in  case  of  a 
receivership  of  a  raih-oad  he  is  entitled  to  a  reasonable  time  in 
which  to  elect  whether  he  will  adopt  a  lease  in  which  tlie  railroad 
company  is  the  lessee  or  return  the  leased  propert}^  to  the  lessor 
or  owner."  He  does  not  by  reason  of  his  appointment  become  an 
assignee  of  the  term,'  and  in  such  case  it  is  a  proper  matter  of 

^Fidelity  Safe  Deposit  &  T    Co.  v.  therefor,  on  the  payment  of  the  stipu. 

Armstrong,  35  Fed.  Rep.  567.  lated    rental.     Sunflower    Oil    Co.    v. 

^Dotcns  V.  Allen,  10  Lea,  652.  Wilson,  143  U.  S.  313,  35  L.  ed.  1025; 

^Gaither  v.  Strockbridge,  67  Md.  222.  Com.  v.  Franklin  Ins.  Co.  115  Mass. 

*Noe  V.  Gibson,  7  Paige,  513.  278;  Sparliawk  v.  Terkes,  143  U.  S.  1, 

^Eneelandv.  American  Loan  &  T.  35  L.  ed.  915;  Southern  Exp.    Co.  v. 

Co.  136  U.  S.  89,  34  L.  ed.  379.    Such  Western  N.  C.  R.  Co.  99  U.  S.  191,  25 

rental  should  be  fixed  not  at  the  actual  L.  ed.  319;  Coe  v.  New  Jersey  M.  R. 

mileage  but  at  its  reasonable  value.  Co.  27  K  J.  Eq.  37;     United  States 

^Quincy,  M.  &  P.  R.  Co.  v.  Humph-  Trust  Co.  v.  Wabash  &  W.  R.  Co.  150 

reys,  145  U.  S.  83,  36  L.  ed.  632;  St.  U.  S.  287,  37  L.  ed.  1085;  Woodruff  v. 

Joseph  &  St.  L.  R.  Co.  v.  Humphreys,  Erie  R.  Co.  93  N.  Y.  609;  Re  Otis,  101 

145  U.  S.  105,  36  L.  ed.  640.     And  the  N.  Y.  580;  Farmers'  Loan  &  T.  Co.  v. 

same  rules  apply  to  leases  of  rolling  Chicago  &  A.  R.  Co.  42  Fed.  Rep.  6. 
stock,  which  are  coupled  with  an  op-  ''Olenny  v.  Langdon,  98  U.  S.  20,  25 

tion  to  buy  and  the  privilege  of  re-  L.  ed.  43;  American  File  Co.  v.    Gar- 

turning  in  case  of  an  inability  to  pay  rett,  110  U.  S.  288,  28  L.  ed.  149;  Re 


222 


RECEIVERSHIPS. 


consideration  by  the  court  whether  the  adoption  of  the  lease  and 
the  operation  of  the  leased  road  would  be  a  burden  upon  the  re- 
ceiver, and  the  pi'operty  in  his  hands,'  and  one  of  the  elements 
entering-  into  sucli  a  question  is  whether  the  cost  of  maintaining 
such  leased  Htic  prior  to  the  surrender  to  tlie  receiver  exceeded 
the  earnings  tliereof.^  If.  however,  under  the  circumstances  of 
the  ease  the  receiver  become  assignee  of  the  term  and  is  vested 
with  the  estate  he  is  liable  for  the  rent  during  the  term  of  the 
receivership.' 

§  123.    Adoptiou  of  lease  by  receiyer. 

As  we  have  seen,  neither  the  appointment  of  a  receiver  nor  his 
taking  possession  of  a  leased  line  of  road,  or  other  leased  property, 
makes  him  liable  for  the  rental  longer  than  he  sees  proper  to  re- 
tain possession  thereof.*  Such  leases,  however,  may  be  adopted 
bv  the  receiver  and  thenceforth  they  become  in  all  their  covenants 
and  conditions  obligatory  on  the  receiver  and  the  property  in  his 
charge/     The  adoption    by  the  receiver   may  be  effected  by  a 


Oak  Pits  Colliery  Co.  L.  R.  21  Ch.  Div. 
322,  330;  Broicn  v.  Toledo,  P.  &  W.  R. 
Co.  35  Fed.  Rep.  .444;  People  v.  Uni- 
versiil  L.  Ins.  Co.  30  Hun,  142;  Easton 
V.  Uouston  (&  T.  C.  R.  Co.  38  Fed. 
Rep.  784;  Fidelity  Safe  Depofiit  Co.  v. 
Armstrong,  35  Fed.  Rep.  567. 

^St.  Joseph  <&  St.  L.  R.  Co.  v.  Humph- 
reys, 145  U.  S.  105.  36  L.  ed.  640. 

-Quincy,  M.  &  P.  R.  Co.  v.  Humph- 
reys, 145  U.  S.  82.  36  L.  ed.  632. 

^Broion  v.  Toledo,  P.  <&  W.  R.  Co.  35 
Fed.  Rep.  444. 

4See§  121. 

Cf.  Gaither  v.  Stockhridge,  67  Md. 
222.  If  the  key  is  surrendered  and  the 
leasehold  property  returned  to  the 
landlord  before  rent  matures  the  land- 
lord has  no  claim  upon  the  receiver; 
if,  however,  he  is  still  in  possession 
when  the  rent  matures  the  receiver 
may  properly  pay  the  accrued  rent. 

The  refusal  of  a  receiver  of  a  na- 
tional bank  which  went  into  insolv- 
ency and  was  dissolved  shortly  after 
making  a  lease  for  a  long  term,  to 


take  possession  of  the  leased  premises, 
does  not  entitle  the  lessor  to  damages 
out  of  the  assets,  where  the  rent  was 
paid  while  the  bank  was  in  possession. 
Fidelity  Safe  Deposit  &  T.  Co.  v.  Arm- 
strong, 35  Fed.  Rep.  567. 

^Quincy,  M.  &  P.  R.  Co.  v.  Humph- 
reys, 145  U.  S.  82,  36  L.  ed.  632. 

Where  receivers  of  an  insolvent  rail- 
road company  agreed  to  accept  cer- 
tain rails  contracted  for  before  their 
appointment  believing  their  accept- 
ance would  be  for  the  benefit  of  the 
estate  it  was  held  to  be  an  adoption 
and  binding  on  the  receivers  though 
it  was  subsequently  developed  that 
the  contract  was  a  losing  one.  Wa- 
bash, St.  L.  &  P.  R.  Co.  v.  Central 
Trust  Co.  22  Fed.  Rep.  269.  And  see 
Central  Trust  Co.  v.  Wabash,  St.  L.  <& 
P.  R.  Co.  52  Fed.  Rep.  908.  It  has 
been  held,  however,  that  an  improvi- 
dent contract  of  the  receiver,  detri- 
mental to  the  trust  should  not  .be  en- 
forced, unless  the  contractor  is  ig- 
norant of  such  improvidence  and  has 


LIABILITY  OF  RECEIVER. 


223 


direct  affirmation  of  his  intention  so  to  do  with  the  landlord  or 
lessor  ;  or  it  may  be  done  by  acts  on  the  part  of  the  receiver  which 
by  implication  will  amount  to  an  adoption.  The  rule  upon  this 
subject,  as  stated  by  Mr.  Piatt  in  his  work  on  Leases,'  and  adopted 
by  the  United  States  Supreme  Court^  is  as  follows  :  "  A  reason- 
able time  was  allowed  the  assignees  to  ascertain  the  value  of  the 
lease  before  they  made  their  election;  for  which  purpose  they  might 
have  it  valued,  or  put  up  for  sale  without  danger  of  such  act 
being  deemed  an  acceptance.  If,  however,  they  accepted  a  bid- 
dino;,  or  dealt  with  the  estate  as  their  own  or  used  it  in  a  manner 
injurious  to  the  persons  otherwise  entitled  they  were  not  within 
this  protection."     Where  the  receiver  becomes  liable  for  rent  by 


in  good  faith  performed  bis  part. 
Vanderbilt  v.  Central  B.  Co.  43  N.  J. 
Eq.  669. 

'  Vol.  2,  p.  435. 

^Quincy,  M.  &  P.  R.  Co.  v.  Humph- 
reys, 145  U.  S.  83,  36  L.  ed.  632.  And 
see  Olenny  v.  Langdon,  98  U.  S.  20, 
25  L.  ed.  43;  American  File  Co.  v. 
Garrett,  110  U.  S.  288,  28  L.  ed.  149; 
Sparhawk  v.  Yerkes,  142  U.  S.  1,  35 
L.  ed.  915.  This  doctrine  was  ap- 
proved by  the  Court  of  Appeals  of 
England  in  Re  Oak  Pits  Colliery  Co. 
L.  R.  21  Ch.  Div.  322,  upon  the  au- 
thority of  Re  Lundy  Granite  Co.  L. 
R.  6  Ch.  462;  Re  Brown,  Bayley,  & 
Dixon,  L.  R.  18  Cb.  Div.  649;  and  by 
Chief  Justice  Parker  in  Berry  v. 
GiUis,Vl^.'il.  9,  upon  the  authority  of 
Smith  V.  Gordon,  6  Law  Rep.  ol3; 
Copeland  v.  Stephens,  1  Barn.  &  Aid. 
602,  and  other  cases  cited;  and  by  Mr. 
Justice  Endicott  in  Com.  v.  Franklin 
Ins.  Co.  115  Mass.  278,  iipon  the  author- 
ity of  Copeland  v.  Stephens,  supra; 
Thomas  v.  Pemberton,  7  Taunt.  206; 
Uill  V.  Dobie,  8  Taunt.  325;  Ansell  v. 
Eobson,  2  Cromp.  &  J.  610;  Uanson  v. 
Stevenson,  1  Barn.  &  Aid.  303;  Exparte 
Faxon,  1  Low,  Dec.  404;  Martin  v. 
Black,  9  Paige,  641;  and  by  Chancel- 
lor Walworth  in  Martin  v.  Black,  9 
Paige,    041,    upon    the   authority  of 


Bonrdillon  v.  Dalton,  1  Peakes,  N.  P. 
238;  Wheeler  v.  Braham,  3  Campb. 
340;  Clarke  v.  Hume,  1  Ryan  &  M. 
206,  and  others.  The  Chancellor  says: 
"If  the  assignee  elects  to  waive  the 
term  and  neither  enters  upon  the  de- 
mised premises  nor  does  any  other  act 
signifying  his  acceptance  of  the  terms 
as  assignee  he  is  not  liable  for  the 
rent,  *  *  *  but  if  the  assignee 
enters  upon  the  demised  premises,  or 
does  any  other  act  which  is  equiva- 
lent to  signify  his  assent  to  accept  the 
terms  as  the  assignee  of  the  lease  he 
will  become  the  tenant  of  the  prem- 
ises and  render  himself  liable  for  the 
rent."  Justice  Endicott  says:  "There 
must  be  some  occupation  and  use  of 
or  some  dealing  and  intermeddling 
with  the  estate,  or  some  act,  admission 
or  agreement  which  in  terms  or  by 
necessary  implication  indicates  an 
election." 

In  proceedings  to  compel  a  receiver 
in  a  foreclosure  action  to  pay  rent  for 
use  of  tracks  and  terminal  facilities, 
where  the  amount  of  rent  was  left 
uncertain,  a  contract  between  other 
parties,  oppressive  in  its  terms,  is  not 
a  test  of  the  amount  of  rent  which  the 
receiver  should  pay;  and  it  not  being 
shown  tliat  the  sura  paid  by  the  re- 
ceiver was  insufhcicnt,  the  dismissal 


224  RECEIVERSHIPS. 

reason  of  liis  occupancy  of  the  demised  premises  the  liability  will 
be  for  a  reasonable  rental,'  durino;  the  period  of  his  occupancy." 

Such  leases  do  not  become  bindinir  upon  the  receiver  by  reason 
of  the  bill  beini^  filed  for  the  purpose  of  preventinn;  a  disintegra- 
tion of  the  system,  nor  by  reason  of  the  fact  that  the  receiver  has 
remained  in  possession  of  the  leasehold  property  for  ^ome  time, 
the  lessor  not  having  taken  possession,  or  demanded  possession  by 
reason  of  a  breach  of  the  conditions  of  the  lease.' 

§  124.     Liability  on  leases  made  without  order  of  court. 

Where  a  receiver  of  a  railroad  company  is  authorized  "to  make 
all  contracts  necessary  in  carrying  on  the  business,  subject  to  the 
Bupervision  of  the  court,"  he  has  no  authority  to  make  a  lease  for 
a  term  of  general  offices  without  the  sanction  of  the  court,  and  to 
bind  his  successors,  and  the  property,  therefor  for  the  term,  and 
the  fact  that  his  accounts  showed  monthly  the  payment  of  rent 
under  such  lease,  and  that  the  rent  was  reasonable  and  that  the 
iiccounts  as  rendered  were  passed  upon  by  the  master  and  re- 
ported to,  and  approved  by  the  court,  do  not  amount  to  a  sanction 
by  the  court  of  the  lease  for  the  term." 

§  125.     On  contracts  other  than  leases. 

Similar  rules  to  those  applicable  to  leases  are  applicable  to  the 
general  contracts  of  the  person  or  corporation  over  whose  prop- 
■erty  the  receiver  is  appointed,  which  are  in  force  at  the  time  of 
the  receiver's  appointment.     Thus  a  receiver  of  a  railroad  com- 

•  of  the  proceedings  was  proper.     Peo-  Humphreys,  145  U.  S.  82,  36  L.  ed. 

ria  &  P.  U.  B.   Co.  v.  Chicago,  P.  &  632;  Coe  v.  New  Jersey  M.  R.  Co.  27 

.8.  W.  R.  Co.  127  U.  S.  200,  32  L.  ed.  N.  J.  Eq.  37;  Re  Silkstotie  &  D.  Coal 

110.  &  I.  Co.  L.  R.  17  Ch.  Div.  158. 

"^Bell  V.  American  Protective  League,  As  to  the  liability  of  an  assignee  in 
163  Mass.  558,  28  L.  R.  A.  452.  bankruptcy  or  insolvency,  see  Iloyt  v. 
''United  States  Trust  Co.  y.  Wabash  Stoddard,  2  Allen,  442;  Patten  v. 
W.  R.Co.  150 U.  S.  287,  37 L.  ed.  1085;  Beshon,  1  Gray,  325;  Sanders  v.  Par- 
Woodruff  V.  Erie  R.  Co.  93  N.  Y.  609;  tridge,  108  Mass.  556;  Abbott  v.  Stearns, 
Frank  v.  New  York,  L.  E.  &  W.  R.  139  Mass.  168;  Frank  v.  New  York,  L. 
Co.  122  N.  Y.  197;    Re  Oak  Pits  Col-  E.  &  W.  R.  Co.  122  N.  Y.  197. 

■liery  Co.  L.  R.  21  Ch.   Div.  328;  Re  ^New  York,  P.  &  0.  R.  Co.   v.  New 

Blackburn    d:   Dist.   Ben.    Bldg.   Soc.  York,  L.  E.  &  W.  R.  Co.  ^SYqCl.  Ile^. 

L.    R.   42  Ch.   Div.  343:    Oaither  v.  268. 

.Stockbridge,  67  Md.  222;  Re  Otis,  101  ^Chicago  Deposit  Vault    Co.    v.  Mc- 

JN.  Y.  580;  Quincy,  M.  <&  P.  R.  Co.  v.  Nulta,  153  U.  S.  554,  38  L.  ed.  819. 


LIABILITY  OF  RECEIVER.  225 

panj  is  not  liable  for  removing  a  switch  which  the  company  was 
under  contract  to  maintain  at  a  certain  place.'  In  another  case, 
however,  in  the  same  state  where  in  consideration  of  the  grant  of 
the  right  of  way  across  land  the  railroad  company  agreed  to  erect 
a  water  tank  on  the  land  and  maintain  the  same,  which  was  to  he 
supplied  with  water  from  a  spring  for  which  compensation  was 
to  be  made,  it  was  held  that  there  was  a  lien  upon  the  earnings 
of  the  road  in  the  hands  of  a  receiver  to  secure  such  payment 
and  a  right  of  action  against  the  receiver  for  breach  of  contract." 
A  receiver  cannot  under  a  contract  between  his  principal  and  an- 
other person  enter  upon  and  use  the  property  of  the  latter  and 
without  his  consent  repudiate  or  change  the  terms  thereof,  and  if 
the  receiver  uses  a  railroad  track  under  the  terms  of  a  lease  he  is 
bound  to  pay  the  rent  according  to  the  terms  thereof.'  The  gen- 
eral rule  upon  the  subject  of  the  liability  of  the  receiver  upon 
the  contracts  of  the  debtor,  in  the  absence  of  a  lien,  is  that  he  is 
not  liable."  This  rule  is  based  upon  the  fact  that  the  receiver  is 
not  the  representative  of  the  debtor  for  the  fulfillment  of  his  con- 
tracts except  in  such  cases  as  he  may  adopt  the  contract  as  his 
own. 

§  126.    Oil  contracts  of  predecessor. 

A  receiver  is  not,  as  such,  liable  on  the  contracts  of  his  prede- 
cessor and  cannot  be  sued  thereon;  he  is  not  a  party  thereto  by 
execution  or  adoption,  and  in  the  absence  df  instruction  by  the 
court  is  not  obliged  to  perform  them,  nor  is  he  the  representative 

^ Brown  \.  Warner,  78  Tex.  543,  11  Co.  107   Mass.  1;    Elmira  Iron  &  S. 

L.  R.  A.  394.  Rolling  Mill  Co.  v.  Erie  R.  Co.  26  N. 

""Ho^ce  V.  Harding,  76  Tex.  17.  J.  Eq.  284. 

^ St.  Louis  &  C.  R.  Co.   V.  East  St.  A  note  executed  by  a  corporation  to 

Louis  &  C.  R.  Co.  39  111.  App.  354,  af-  one  who  has  previously  given  a  check 

firmed  in  189  111.  401, on  other  grounds.  drawn  to  the  individual  order  of  its 

*  Central  Trust  Co.  v.  Marietta  &  N.  vicepresident,  which  has  been  used 

G.  R.  Co.  51  Fed.  Rep.  15,  16  L.  R.  A.  by  the  corporation  for  its  own  pur- 

SO;  Southern  Exp.  Co.  y  .Western  N.  C.  poses,  is  a  valid  claim  against  the  cor- 

R.  Co.  99  U.  S.   194,  25  L.  ed.  320;  poration  or  a  receiver  appointed   in 

Brown  V.Warner,  78  Tex.  543,  11  L.  proceedings  for  its  di.s.sohition.     Peo- 

R.  A.  394.    Cf.  Central  Trust  Co.  v.  pie  v.  American  Steam  Boiler  Ins*  Co. 

Wabash,  St.  L.  &  P.  R  Co.   32  Fed.  8  App.  Div.  504,  All'g.  14  Misc.  163. 
Rep.  566;  Ellis  v.  Boston,  H.  dc  E.  R. 
15 


226  RECEIVERSHIPS. 

of  his  predecessor  in  the  le^^al  sense  of  the  term,'  nor  can  dam- 
ages be  imposed  upon  liim  for  a  faihire  to  perform  them,''  but 
under  some  circumstances  such  contracts  may  be  a  charge  against 
the  trust  property.  It  would  seem  that  if  the  contract  of  a  re- 
ceiver is  made  by  order  of  court  it  is  binding  on  the  estate,  and 
upon  a  subsequent  receiver.* 

§  127.     Order  of  payment;  preferred  payments. 

In  foreclosure  proceedings  it  frequently  becomes  important  to 
determine  the  order  of  payment.  It  may  be  stated  as  a  rule, 
however,  that  a  claimant  is  not  entitled  to  an  allowance  from  the 
property  in  the  receiver's  hands  or  from  the  earnings  of  such 
property,  in  preference  to  the  mortgage  bondholders  where  the 
claim  grows  out  of  an  alleged  breach  of  contract,*  nor  are  rentals 
for  rolling  stock  entitled  to  preference  from  the  proceeds  of  sale, 
over  lienholders  under  a  mortgage,  where  there  is  nothing  sold 
except  the  mortgage  property,  and  when  the  receiver  is  appointed 
on  a  bill  filed  by  a  general  creditor,  and  where  the  property  did 
not  sell  for  a  sufficient  amount  to  pay  the  mortgage  indebtedness.* 
Nor  has  the  court  a  right  to  make  the  appointment  of  a  receiver 
conditioned  upon  the  payment  of  the  unsecured,  indebtedness.* 

^LeMgTi  Coal  &  Nav.  Co.  v.  Central  speaking   for  the  court,  says:     "Be- 

R.  Co.  38  N.  J.  Eq.  175.  cause  in  a  few  specified  and  limited 

^Lehigh  Coal  &  Nav.  Co.  v.  Central  cases  this  court  has  declared  that  un- 
R.  Co.  41  N.J.  Eq.  167.  And  where  secured  claims  were  entitled  to  pri- 
he  has  doubts  about  the  fairness  of  the  ority  over  mortgage  debts  an  idea 
contracts  of  its  predecessor  it  is  his  seems  to  have  obtained  that  a  court 
duty  to  refuse  to  perform  them.  It  appointing  a  receiver  acquires  power 
was  held,  however,  by  the  same  court  to  give  such  preference  to  any  general 
in  Kerr  v.  Little,  42  N.  J.  Eq.  528,  that  and  unsecured  claims.  It  has  been 
a  suit  for  damages  could  be  main-  assumed  that  a  court  appointing  a  re- 
tained against  a  receiver  for  the  non-  ceiver  could  rightfully  burden  the 
performance  of  the  contract  of  a  for-  mortgaged  property  for  the  payment 
mer  receiver.  of  any  unsecured  indebtedness.     In- 

^Farmers'  Loan  &  T.  Co.  v.  Burling-  deed,  we  are  advised  that  some  courts 

ton  &  8.  W.  R.  Co.  32  Fed.  Rep.  805.  have  made  the  appointment  of  a  re- 

^Central  Trust  Co.  v.  Wabanh,  St.  L.  ceiver  conditional  upon  the  payment 

&  P.  R.  Co.  32  Fed.  Rep.  566.  of  all  unsecured  indebtedness  in  pref- 

^Kneeland  v.  American  Loan  &  T.  erence  to  the  mortgage  liens  sought  to 

Co.  136  U.  S.  89,  34  L.  ed.  379.  be  enforced.     Can  anything  be  con- 

^Kneeland  v.  American  Loan  &  T.  ceived  which  more  thoroughly  de- 
Co.  136  U.  S.  89,  34  L.  ed.  379.  Upon  stroys  the  sacredness  of  contract  obli- 
this  question,    Mr.   Justice    Brewer,  gations?     One   holding    a    mortgage 


LIABILITY  OF  RECEIVER. 


227 


It  may  be  stated,  however,  tliat  if,  at  the  instance  of  any  party 
rii^htfiilly  entitled  thereto,  the  court  should  appoint  a  receiver  of 
property,  the  same  being;  railroad  property  and  therefore  under 
an  obligation  to  the  public,  of  continued  operation  he,  in  the  ad- 
ministration of  such  receivership,  might  rightfully  contract  debts 
necessary  for  the  operation  of  the  road,  either  for  labor,  supplies 
or  rentals,  and  make  such  expenses  a  prior  lien  on  the  property 
itself.'     As  between  the  conflicting  interests  of  general  creditors, 


debt  upon  a  railroad  has  the  same 
right  to  demand  and  expect  of  the 
court  respect  for  his  vested  and  con- 
tracted priority  as  the  holder  of  a 
mortgage  on  a  farm  or  lot.  So,  where 
a  court  appoints  a  receiver  of  railroad 
property,  it  has  no  right  to  make  that 
receivership  conditional  on  the  pay- 
ment of  other  than  those  few  unse- 
cured claims  which,  by  the  rulings  of 
this  court,  have  been  declared  to  have 
an  equitable  priority.  No  one  is 
bound  to  sell  to  a  railroad  com- 
pany or  to  work  for  it,  and  whoever 
has  dealings  with  a  company  whose 
property  is  mortgaged,  must  be  as- 
sumed to  have  dealt  with  it  on  the 
faith  of  its  personal  responsibility  and 
not  in  expectation  of  subsequently 
displacing  the  priority  of  the  mort- 
gage liens." 

'See  last  preceding  note. 

A  receiver  of  a  railroad  is  not  lia- 
ble, individually,  upon  contracts  made 
as  receiver  where  he  has  not  pledged 
his  own  credit. 

Neioman  v.  Davenport,  9  Baxt.  538. 

A  rule  has  been  adopted  in  the  sev- 
enth circuit  though  not  fully  or  ex- 
pressly formulated  in  any  decision, 
to  allow  preferential  payments  for  la- 
bor supplies  and  equipment  from  the 
income  during  the  receivership,  or 
from  the  sale  of  property  mortgaged, 
for  a  period  of  six  months  preceding 
theappointrnentof  a  receiver.  Thomas 
V.  reoria  &  11.  R.  Co.    36   Fed.  Kep. 


808.  The  remainder  due  on  a  locomo- 
tive sold  to  a  railroad  company  more 
than  six  months  prior  to  the  time  the 
road  went  into  the  hands  of  a  receiver 
cannot  be  allowed  out  of  the  earnings 
of  the  receivership  in  preference  to 
the  claims  of  bondholders  under  a 
prior  mortgage,  but  is  to  be  classed 
with  the  general  corporate  indebted- 
ness. Manchester  Locomotive  Works  v. 
Truesdale,  44  Minn.  115,  9  L.  R.  A. 
140.  It  has  been  held  that  a  receiver 
is  liable  for  the  good  will  of  the  con- 
cern over  which  he  has  been  ap- 
pointed receiver.  Merchants  Nat. 
Bank  v.  Landaner,  68  Wis.  44. 

A  trustee  of  the  bondholders  of  a 
railroad  company  who  resists  the  re- 
turn of  cars  delivered  to  such  com- 
pany from  a  lessee  of  the  cars  under 
a  contract  providing  for  their  final  sale 
with  a  reservation  of  title  in  the  lessor 
until  they  should  be  fully  paid  for, 
and  who  participates  in  procuring  an 
order  to  restore  them  to  such  lessor, 
is  estopped  to  deny  that  the  rental  of 
the  cars  is  an  expense  of  the  receiver- 
ship of  such  railroad  company  prior 
in  dignity  to  the  lien  of  the  mortgage 
securing  the  bonds.  Lane  v.  Macon 
&  A.  R.  Co.  96  Ga.  630. 

A  pledge  of  the  revenues  to  be 
earned  by  an  electriclight  company 
under  its  contract  with  a  city  will  not 
entitle  the  pledgee  to  the  payments  to 
be  made  by  the  city  as  against  the  re- 
ceivers, where  nothing   will  become 


228  RECEIVERSHIPS. 

and  the  bondholders  secnred  by  a  first  mortgage,  where  not 
only  the  real  estate  but  the  personalty  is  taken  possession  of  by  a 
receiver  and  a  sale  made  of  both,  questions  of  difficulty  have  pre- 
sented themselves,  and  no  general  rule  can  possibly  be  stated  ap- 
plicable to  all  cases.  The  following  propositions  have  been  re- 
cently established,  or  reiterated,  by  the  Supreme  Court  of  the 
United  States  relative  to  the  rights  of  mortgagees  and  general 
creditors  and  their  priority  with  respect  to  each  other. 

(a)  "Where  a  judgment  creditor  files  a  bill  and  on  his  applica- 
tion a  receiver  is  appointed  for  an  insolvent  railroad  company  and 
possession  is  taken  of  the  property  of  the  company,  real  and  per- 
sonal, the  mortgage  covering  the  realty  only,  the  lien  of  the  judg- 
ment creditor  has  priority  as  to  the  personalty  and  the  lien  of  the 
bondholder  under  the  mortgage  has  priority  as  to  the  realty,  and 
neither  is  charged  with  a  deficiency  from  the  other. 

(b)  "Where  a  bondholder  files  a  bill  to  foreclose  his  mortgage 
and  on  his  application  a  receiver  is  appointed  for  a  railroad  com- 
pany, and  the  receiver  takes  possession  of  the  property  of  the 
company,  real  and  personal,  the  personal  for  the  benefit  of  the 
real,  there  is  an  implied  consent  on  the  part  of  the  bondJioIder 
that  the  rental  value  of  the  personalty  shall  be  paid  in  prefer- 
ence to  his  claim,  as  one  of  the  expenses  of  the  receivership,  and 
thus,  in  this  case,  the  realty  is  burdened  with  the  rental  of  the 
personalty  as  an  operating  expense. 

The  liability  of  a  receiver  for  the  use  of  cars  under  a  contract 
which  is  invalid,  is  the  amount  which  similar  cars  could  be  rented 
for  in  the  open  market.' 

§  128.    When  personally  liable. 

As  a  rule  the  receiver  is  only  liable  in  his  official  capacity  and 
from  the  receivership  fund  in  his  hands ;"  but  he  may  make  him- 

due  from  the  city  until  the  services  vices  are  rendered,  and  the  receivers 
required  by  the  contract  for  each  have  the  right  to  elect  either  to  carry 
month  have  been  performed,  and  such  out  or  renounce  such  executory  con- 
services  connot  be  performed  except  tracts.  United  Electric  tecurities  Co. 
at  a  neavy  expense,  which  must  be  v.  Louidana  Electric  Light  Co.  71  Fed. 
paid  by  the  receivers,  as  the  contract  Rep.  615. 

of  assignment  of  revenues  to  be  earned  '  Thomas  v.  Peoria  &  R.  I.  R.  Co.  36 

is  executory,    and  vests  no  right  in  Fed.  Rep.  808. 

favor  of  the  assignees  until  the  ser-  '^  Kaiii  v.  Smith,  80  x^.Y.  458. 


LIABILITY  OF  RECEIVER. 


22\) 


self  personally  liable,  as  where  he  is  operating  property  by  con- 
tract or  lease  in  connection  with  receivership  property,  in  which 
case  he  is  individually  liable  for  an  injury  occurring  to  a  person 
growing  out  of  the  use  of  the  property  operated  by  him  under 
contract  or  lease,  and  generally  it  may  be  stated  that  he  is  per- 
sonally liable  where  his  contract  is  personal.'  If  the  law  were 
such  that  a  receiver  would  be  personally  liable  upon  contracts 
made  in  his  official  capacity,  or  for  torts  committed  by  his  sub- 
ordinates, no  capable  person  would  be  willing  to  act  as  receiver 
and  assume  such  responsibilities,  and  particularly  so  in  the  mat- 
ter of  receivership  of  railways  and  large  corporations,  where  a 
large  number  of  subordinates  are  necessarily  employed.*  And  a 
judgment  against  a  receiver  must  be  against  him  officially  and 
payable  from  the  receivership  funds.'  But  if  the  receiver  incurs 
expenses  and  charges  without  sufficient  funds  in  his  hands  to 


» Elebisch  v.  Seidler,  57  N.  Y.  S.  R. 
003;  Kno'wles  v.  Scott,  64  L.  T.  135; 
Davenport  v.  Alabama  &  C.  B.  Co.  2 
Woods,  519;  Vilas  v.  Paige,  106  N.Y. 
439;  Cojn.  v.  Bu7ik,  26  Pa.  235;  IIop- 
kins  V.  Connel,  2  Tenn.  Ch.  323;  Little 
V.  Dusenberry,  46  N.  J.  L.  614. 

Although  a  note  may  have  been 
handed  to  a  receiver  that  he  might 
allow  it  as  a  mortgage  debt,  he  prom- 
ising to  attend  to  it,  and  negligently 
failing  to  do  so,  he  cannot  be  held 
answerable  as  receiver  in  a  court  of 
chancery  for  such  neglect.  The  lia- 
bility is  a  personal  one  solely,  to  be 
enforced  at  law.  Eeene  v.  GaeUe,  56 
Md.  343. 

It  was  held  in  Ericin  v.  Davenport, 
9  Heisk.  44,  that  a  receiver  is  person- 
ally liable  for  an  injury  resulting  from 
defective  machinery,  if  he  has  knowl- 
edge of  such  defect;  but  in  such  case 
there  must  be  personal  negligence  on 
the  part  of  the  receiver,  negligence  of 
his  employees  alone  not  being  suffi- 
cient. Camp  V.  Barney,  4  Hun,  373; 
Cardot  v.  Barney,  63  N.Y.  281;  Kain 


V.  Sinitn,  80  N.Y.  458;  Lymanv.  Cen- 
tral Vermont  B.  Co.  59  Vt.  167. 

Under  Tex.  Rev.  Stat.  §  2899,  it 
was  held  that  a  receiver  was  not  "pro- 
prietor, owner,  charterer  or  hirer"  of 
a  railroad  within  the  purview  of  the 
statute,  and  therefore  not  liable  for 
the  death  of  a  person  caused  by  the 
negligence  of  the  receiver  or  his  em- 
ployees. The  statutes  in  Ohio  {Meara 
v.  Eolbrook,  20  Ohio  St.  137)  and  New 
Jersey  {Little  v.  Dusenberry,  46  N.  J. 
L.  G14)  were  materially  different  from 
the  Texas  statute.  And  see  Lamphear 
v.  Buckingham,  33  Conn.  238. 

*  Farmers  Loan  &  T.  Co.  v.  Central 
B.  Co.  2  McCrary,  181;  Davis  v.  Dun- 
can, 19  Fed.  Rep.  477. 

3  Woodruff  v.  Jewett,  37  Hun.  205, 
115  N.  Y.  267;  Davis  v.  Duncan,  19 
Fed.  Rep.  477.  The  proceeding  is  in 
the  nature  of  a  proceeding  in  rem.  It 
seems  however  that  he  may  waive  the 
right  to  be  sued  officially  only.  Camp 
V.  Barney,  4  Hun,  373;  Newell  v.  Smith, 
49  Vt.  255 


230 


RECEIVERSHIPS. 


meet  them,  he  may  become  personally  liable  ;*  so  also  if  he  com- 
mits a  tort  while  acting  beyond  the  scope  of  his  authority.' 

§  129.     Liiibility  for  attorney's  fees. 

An  action  cannot  be  maintained  against  a  receiver  for  services 
rendered  by  an  attorney  to  an  insolvent  corporation  after  a 
receiver  has  been  appointed.'  An  allowance  of  counsel  fees  is 
made  to  the  receiver  and  not  to  the  counsel,"  the  amount  being 
usually  determined  by  the  circumstances  of  each  particular  case, 
and  corresponding  with  the  degree  of  responsibility,  the  business 
abihtv  required  in  the  management  of  the  affairs  entrusted  to 
him,  the  perplexity  and  difficulty  involved,  and  consequently  the 
court  in  its  discretion  is  allowed  a  large  latitude."  A  receiver  has 
a  riii:ht  to  place  the  collection  of  insurance  policies  in  the  hands 
of  competent  attorneys,  and  will  be  liable  for  and  allowed  attor- 
nev's  fees  therefor,  though  the  insurance  may  have  been  paid 
without  litigation."  A  liquidator  in  a  voluntary  winding  up  is 
not  personally  responsible  to  the  solicitor  employed  by  him  in  the 
affairs  of  liquidation/ 


^Rogers  v.  Wendell,  54  Hun,  540. 

Compare  Peacock  v.  Pittsburg  Loco- 
motive  &  Car  Works,  52  Ga.  417.  In 
this  case  an  order  appointing  a  re- 
ceiver was  rescinded  and  he  turned 
back  to  the  company  property  for 
■which  a  possessory  warrant  had  been 
issued. 

»  Curran  v.  Craig,  22  Fed.  Rep.  101; 
Bank  of  Montreal  v.  Thayer,  7  Fed. 
Rep.  622;  HartellY.  Tilghman,  99  U. 
S.  547,  25  L.  ed.  357;  Barton  v.  Bar- 
bour, 104  U.  S.  126,  26  L.  ed.  572. 

^Barnes  v.  Neiccomb,  89  N.Y.  108. 

*  International  Improv.  Fund  Trus- 
tees V.  Greenough,  105  U.  S.  527,  26  L. 
ed.  1157 ;  Stuart  v.  Boulware,  133  U. 
S.  78,  33  L.  ed.  568. 

'  Note  preceding. 

A  receiver  of  an  estate  who  employs 
attorneys  to  advise  and  assist  him  in 
performing  duties  which  his  accept- 
ance of  the  trust  presupposes  him  to 
be    capable    of    performing    himself 


must  pay  them  out  of  his  own  means. 
Eenry  v.  Henry,  103  Ala.  582. 

^  Abbott  V.  Downer,  54  Iowa,  687. 

'  Trueman,  Hooke,  v.  Piper,  L.  R.  14 
Eq.  278.  This,  however,  must  be  un- 
derstood to  be  in  the  absence  of  an 
express  contract.  Be  Anglo  Moravian 
Hungarian  Junction  B.  Co.  L.  R.  1 
Ch.  Div.  130,  45  L.  J.  Ch.  115. 

One  who  rendered  legal  services  to 
a  corporation  upon  an  emploj^ment 
by  its  officers  during  the  pendency  of 
an  action  for  the  appointment  of  a  re- 
ceiver for  its  property,  and  before  the 
same  passed  under  the  receiver's  con- 
trol,— Held,  to  be  entitled  to  set  off 
the  value  of  such  services  against  an 
account  due  by  him  to  the  corpora- 
tion, and  which  also  accrued  prior  to 
the  receivership,  but  not  against  a  fur- 
ther account  which  accrued  during 
the  administration  of  the  receiver. 
Cook  V,  Cole,  55  Iowa,  70. 


LIABILITY  OF  RECEIVER.  231 

Money  collected  by  a  receiver  under  a  void  appointment  may 
be  recovered  from  him  in  an  action  for  money  had  and  received.' 

§  130.     For  disobeying  orders  of  court. 

A  receiver  will  be  liable  where  he  invests  the  receivership 
funds  contrary  to  the  order  of  court,''  and  where  he  fails  to  pay 
a  certain  sum,  pursuant  to  an  order  of  court,  the  surety  on  his 
bond  is  liable  for  the  amount,  though  the  surety  is  not  a  party  to 
the  proceeding  resulting  in  the  order ;  such  an  order  is  conclu- 
sive on  the  surety,  and  he  cannot  insist  that  the  receiver  had  dis- 
bursed all  the  funds.'  The  court  will  at  all  times  be  vigilant  to 
see  that  parties  interested  in  the  trust  fund  are  not  injured  by 
the  improvident  acts  of  the  receiver.''  The  receiver  will  l)e  liable 
for  trespass  where  he  has  unlawfully  taken  possession  of  property 
not  included  in  the  trust,  and  this  though  he  takes  possession 
under  an  order  of  court  ;^  but  where  he  sells  property  pursuant 
to  the  order  of  sale  he  is  not  a  trespasser,  nor  are  those  aiding 
and  assisting  him."  The  order  appointing  a  receiver  in  foreclos- 
ure proceedings  embracing  property  not  included  in  the  m.ort- 
gage,  is  to  that  extent  in  excess  of  the  jurisdiction  of  the  court 
and  void ;  and  the  receiver  may  be  held  liable  to  the  general 
creditoi's  of  the  mortgagee  for  any  profits  arising  from  such  pro]?- 

^  Johnson  V.  Powers,  21l!ieh.  292.  Where  all  mining    property  of  a 

*  Carr  v.  Morris,  85  Va.  21.  company  was  a  part  of  the  same  sys- 
'  Thomson  v.  McGregor,  13  Jones  &       tem  of  operation,  and  the  proceeds  of 

S.  197.  ore  extracted  from  a  portion  of  the 
A  decree  directing  a  general  re-  mines  were  used  indiscriminately  for 
ceiver  of  the  court  to  pay  out  of  a  the  common  benefit  of  the  whole  prop- 
fund  in  his  hands  a  certain  sum  to  a  erty,  a  receiver  appointed  on  a  fore- 
certain  person  is  binding  upon  him,  closure  of  a  mortgage  covering  only  a 
although  he  was  not  made  a  party  to  part  of  the  property,  who  was  given 
•  the  suit  in  which  it  was  rendered,  and  power  to  take  possession  of  the  prem- 
no  notice  thereof  was  given  to  him.  ises  and  carry  on  the  mines,  is  a  tres- 
Crawford  v.  Fickey(W.  Va.)23  S.  E.  passer,  and  is  personally  liable  to  a 
662.  general    creditor    for    sums   realized 

*  Turner  v.  Peoria  &  S.  R.  Co.  95  from  a  mine  not  covered  by  the  mort- 
111.  134.  gage.     5tepfes  v.  May,  87  Cai.   178, 

*  Chirran  v.  Craig,  22  Fed.  Rep.  101 ;  overruling  same  case  in  Department 
Eai  ieU  V.  Tilghman,  99  U.  S.  547,  25  One,  reported  in  23  Pac.  710. 

L.  ed.  357;  Barton  v.  Barbour,  104  U.  *WaUing  v.  MiUer,  108  N.Y.  173. 

S.  126.  26  L.  ed.  672;  Hills  v.  Parker, 
111  Mass.  508.  But  see  Ward  v.  31of 
fett,  38  Mo.  App.  395. 


232  RECEIVERSHIPS. 

erty ;'  and  where  he  wrongfully  takes  property  it  may  be  replev- 
ied." If  he  extracts  ores  from  land  not  involved  in  the  foreclos- 
ure proceedings,  he  is  liable  to  the  mortgagor  therefor.' 

§  131.     To  account. 

The  receiver  is  not  liable  to  account  pending  the  suit  and  the 
funds  must  remain  in  his  hands  until  tlie  rights  of  all  parties  are 
finally  passed  upon.'  He  must  account  for  all  money  coming 
into  his  liands  in  his  official  capacity,  whether  he  receives  the 
money  before  he  gives  bond  or  afterwards.^  The  usual  practice 
is  for  the  receiver's  account  to  be  referred  to  a  master  for  exam- 
ination and  passing. 

§  132.    Order  on  receiver  to  pay,  effect  of. 

Where  a  receiver  has  been  ordered  to  pay  money  in  hi.s  hands 
it  is  his  duty  to  comply  with  such  order,  and  a  refusal  on  his  part 
may  be  treated  as  a  contempt,  and  he  may  be  punished  accord- 
ingly;' but  it  must  be  understood  in  such  case  that  before  an 
order  of  contempt  is  issued  the  receiver  must  be  given  an  oppor- 
tunity to  be  heard,  and  the  correctness  of  the  order  to  pay  will 
not  be  considered  on  an  appeal  from  an  order  to  show  cause.'  If 
in  a  proceeding  to  which  the  receiver  has  not  been  made  a  party 
he  is  ordered  to  pay  money  or  deliver  property  in  his  hands,  he 
is  not  bound  by  the  order  and  is  entitled  to  an  opportunity  to 
show  that  he  has  turned  over  a  large  part  of  the  property.*  In 
West  Virginia  an  order  to  pay  to  a  party  in  the  cause  by  a  cer- 
tain day  has  the  effect  of  a  judgment  and  is  a  lien  on  the  receiv- 
er's land  to  be  enforced  as  other  judgment  liens."  He  is  not 
liable,  in  a  foreclosure  proceeding,  to  pay  to  a  railroad  company 
money  to  be  used  in  contesting  the  validity  of  the  bonds,  or  to 
pay  salaries  of  the  officers  of  the  company,  or  office  expenses.'" 

^Staples  V.  May,  87  Cal.  178.  ''Clark  v.  Binninger,  supra;  Erie  R. 

•^QeUchv.  Mcllhargey,  69  Mich.  377.  Co.  v.  Ramsey,  45  N.  Y.  637;  People, 

^StajylesY.  May,  87  Cal  118.  Davis,  v.    Sturtemnt,   9  N.    Y.    266; 

*Musgrov6  v.  Nash,  3  Edw.  Ch.  173.  Adair  County  v.  Ownhy,  75  Mo.  282. 

^ Smart  v.  Flood,  49  L.  T.  467;  Re  '^How  v.  Jones,  60  Iowa,  70. 

Western    Canada,  etc.,  Ince.  8  Free.  ^Richard  v.  Schley,  27  W.  Va.  617. 

Rep.  (Ont.)  262.  ^^  Union  Loan  &  T.  Co.  v.  Southern 

^Clark  V.  Binninger,  75  N.  Y.  344.  California   Motor  Road   Co.   51  Fed. 

The  contempt  in  this  case  was  statu-  Rep.  106. 
tory. 


LIABILITY  OF  RECEIVER. 


233 


§  133.     Effect  of  discharge. 

The  moment  a  receiver  is  discharged  and  relieved  from  the  ob- 
ligations of  his  office,  all  right  upon  the  part  of  the  court  to  pro- 
ceed against  him  summarily  ceases,  and  he  is  no  longer  subject  to 
its  jurisdiction,  except  such  jurisdiction  is  acquired  in  the  ordi- 
nary methods  available  to  all  suitors.' 

§  134.    Liability  for  unjust  freights  exacted. 

A  receiver  of  a  railroad  company,  operating  a  railroad  under 
the  supervision  of  a  federal  court  may  be  compelled  to  refund 
money  exacted  from  a  shipper  where  such  exaction  is  an  unjusti- 
fiable discrimination  under  a  state  law,^  but  he  is  not  liable  for  a 
statutory  penalty.^ 

§  135.    Power  of  court  over  executors  of  receivers. 

The  court  has  no  power  to  order  the  receiver's  executor  or  ad- 


'  In  Neio  York  &  W.  U.  Teleg.  Co.  v. 
Jeicett,  43  Hun,  565,  affirmed  in  115 
N.  Y.166.  The  court  say:  "Obvi- 
ously after  the  receiver  has  been  dis- 
charged, and  the  property,  by  the 
action  of  the  court,  has  all  been  taken 
out  of  his  hands  there  can  be  no  pro- 
priety whatever  in  any  further  pro- 
ceedings against  him,  because  there- 
after he  ceases  to  represent  anyone; 
he  can  no  longer  act  for  or  represent 
the  company  or  its  creditors  or  any 
other  person  interested  in  the  prop- 
erty; and  manifestly  the  court  could 
not  thereafter  make  an  order  that  he 
should  pay  a  creditor,  he  no  longer 
having  any  fund  out  of  which  pay- 
ment could  be  made."  Farmers'  Loan 
<&  T.  Co.  V.  Central  R.  Co.  2  McCrary, 
181.  Cf.  Corser  v.  Rmsell,  20  Abb. 
N.  C.  316. 

Byan  v.  Bays.  62  Tex.  43.  But  if 
before  the  order  of  discharge  a  judg- 
ment is  rendered  and  the  receiver  is 
ordered  to  pay  it  the  discharge  of  the 
receiver  in  another  court  without  no- 
tice to  the  judgment  creditor,  qumre. 
Woodrvffy.  J^ett,  115  N.  Y.  267. 

*  Cutting  v.  Florida  R.  &  Nav.  Co, 


43  Fed.  Rep.  747,  and  see  also  Mis- 
souri  P.  R.  Co.  v.  Texas  P.  R.  Co.  31 
Fed.  Rep.  862. 

^Campbell  v.  Weiss  (Tex.)  25  S.  W. 
1076;  Bonner  y.  Franklin  Co-Operative 
Asso.  4  Tex.  Civ.  App.  166;  Missouri, 
K.  &  T.  R.  Co.  V.  Stoner,  5  Tex.  Civ. 
App.  50. 

Turner  v.  Cross,  83  Tex.  218,  15  L. 
R.  A.  262,  but  there  maybe  a  cause  of 
action  independent  of  the  statutory 
penalty.  Bonner  v.  Franklin  Co- 
operative Asso.  su])ra;  Clark  v.  Dyer, 
81  Tex.  339. 

The  act  of  Congress  of  March  3, 
1887,  provides  that  receivers  ap- 
pointed in  the  United  States  courts 
who  are  in  possession  of  property  are 
required  to  administer  it  according  to 
the  laws  of  the  state  where  situated, 
and  where  the  state  law  imposes  a 
duty  upon  a  receiver  which  he  neg- 
lects, he  is  liable.  Thus  if  the  statute 
imposes  a  duty  of  providing  embank- 
ments with  culverts  and  sluices  suffi- 
cient to  drain  the  surface  water  and 
the  receiver  neglects  this  duty,  he  is 
liable.  (See  Art.  4171,  Sayles  Ciy. 
Stat.)     Clark  v.  Dyer,  supra. 


234  RECEIVERSHIPS. 

administrator  to  In-iiig  in  and  pass  his  testator's  or  intestate's 
accounts  and  pay  any  balance  due  from  the  deceased  receiver.' 
A  bill  must  be  filed  for  that  purpose,"  unless  the  representatives 
submit  to  such  an  accounting."  Besides  as  a  rule  the  liability 
of  the  receiver  to  account  is  covered  by  the  bond  given  by  him 
and  resort  to  that  is  usually  the  proper  course  to  be  taken.  It 
has  been  held,  however,  that  if,  at  the  time  of  a  receiver's  death 
a  suit  is  pending  against  him  for  the  purpose  of  compelling  an 
accounting,  the  court  may  properly  order  his  legal  representatives 
to  be  made  parties  and  continue  the  proceeding  against  them.* 

§  13G.     Liability  for  contempt  of  court. 

A  receiver  who  wilfully  refuses  to  pay  over  money  as  ordered 
by  the  court  may  be  proceeded  against  personally  and  committed 
for  contempt,^  and  he  is  liable  in  damages  for  his  misconduct.' 
Being  an  officer  of,  and  at  all  times  subject  to  the  direction  and 
control  of  the  court,  he  must  implicitly  obey  its  commands  and  a 
refusal  on  his  part  subjects  him  to  the  penalty  which  the  court 
under  the  circumstances  may  deem  proper  to  inflict. 

Jenkins  v.  Briant,  7  Sim.  171.  126,  344.     See  Perkins  v.  Taylor,  19 

^Ltidgater  v.  Channell,  15  Sim.  479.  Abb.  Pr.  146;  Mcintosh  v.  Elliott,  2 

"Mar/an  v.  Fallon,  5   Ir.  Eq.  490;  Grant,  Ch.  (Ont.)  396.     As  to  an  ap- 

Gurden    v.    Badcock,   6    Beav.    157;  peal   from  such  order,  see  People  v. 

Eovey  v.  Blakeman,  4  Ves.  Jr.  606.  Jones,  33  Mich.  303. 

*Be  Columbian  Ins.  Co.  30  Hiin,  342;  *  Stanton  v.  Alabama  &  0.  B.  Co.  2 

Be  Foster,  7  Hun,  129;  Livermore  v.  Woods,  506. 

Bainbridge,  49  N.  Y.  130.     See  also  Pending  the  litigation,  the  receiver 

Code  Civ.  Proc.  §§  414.  452.  should    not    repay    plaintiff's    costs. 

^Dames  v.  Cracroft,  14  Ves.  Jr.  143 ;  Olyphant  v.  St.  Louis  Ore  <£  8.  Co.  23 

Be  Bell,  Foster,  v.  Bell,  L.  R.  9  Eq.  Fed.  Rep.  179. 

172;  Clark  v.  Bininyer,  11  Jones  &  S.  See  §  111. 


CHAPTER  IX. 


CREDITOR'S  BILLS,   SUPPLEMENTARY  PROCEEDINGS,   AND 
PROCEEDINGS  IN  AID   OF  EXECUTION. 


§  146.    General  nature  of  remedy. 

(a)  Chancery  jurisdiction. 

(b)  Based  on  inadequacy  of  com- 

mon law  remedies. 
(1)  Common  law  remedies  must 

be  exhausted. 
(^)  Claim   must  be  reduced    to 

judgment. 

(3)  Execution  returned  nuUahona. 

(4)  Exception  to  rule  as  to  ex- 

haustion of  legal  remedies. 
§  147.    Classes  of  creditor's  proceed- 
ings. 

(a)  In  equity  to  annul  fraudulent 

transfers. 

(b)  Creditor's  bills  proper. 

(c)  Supplementary       proceedings, 

statutory. 
§  148.  Fraudulent  conveyances. 

(a)  Effect  generally. 

(b)  Rule  as  to  execution. 

{1)  Exception  in  case  of  lien  by 
attachment. 

(5)  of  debtor's  insolvency. 
{3)          of     fraudulent    convey- 
ances. 

(4)  of  levy  on  property  con- 

veyed. 

(5)  of  an  absconding  debtor. 
(C)          of  insolvent's  estate. 

(7)  of  waiver  by  debtor. 

§  149.  Jurisdiction  in  matters  of  as- 
signment, 
(a)  Where  assignment  is  fraudulent, 
(i)  Where  the  debtor  is  to  con- 
tinue business. 


{2)  Where  benefit  to  debtor  re- 
served. 

(<?)  possession  to  remain 

with  debtor. 

{4)  debtor  to  derive  per- 

sonal benefit  from 
partnership  assets. 

(5)  intentional    omission 

of  assets. 

{G)  fictitious     liabilities. 

(b)  Where  assignment  is  valid,  but 
assignee  fails  or  re- 
fuses to  act. 

(i)  Where  the  assignee  fails  or 
refuses  to  carry 
out  the  trust. 

{2)  Where  the  assignee  is  guilty 
of  mismanage- 
ment. 

150.  Supplementary  proceedings. 

151.  Necessity  of  oflicers  retaining 

execution,  statutory  period. 

(a)  When  required. 

(b)  When  not  required. 

152.  Practice  in  code  states. 

153.  Appointment  of  receiver, order, 

duties,  etc. 

154.  Receivers    powers   in   supple- 

mentary proceedings. 

155.  Functions. 

156.  Right  to  sue  and  be  sued. 

157.  Order  of  appointment. 

158.  Power  in  foreign  jurisdiction. 

159.  Priorities  under  creditor's  bills. 
100.  Courts     reluctant    to    appoint 

where  legal  title  involved. 


§  146.    General  nature  of  reniedy. 

(a)  Chancery  jurisdiction. 
Almost  from  the  earliest  history  of  chancery  jurisdiction  courts 
of  equity  have  lent  their  assistance  to  the  common  law  courts  in 

235 


236  RECEIVERSHIPS. 

enablir,^  the  latter  to  enforce  their  judgments  by  removing  ob- 
structions in  the  way  of  levy  and  sale  of  the  property  of  the 
judgment  debtor.  For  the  purpose  of  preventing  the  levy  and 
sale  of  his  property  the  judgment  debtor  has  frequently,  by  color- 
able or  pretended  sales,  placed  the  legal  title  to  his  property 
beyond  the  reacli  of  the  judgment  creditor  su  that,  with  the  ordi- 
nar}'-  common  law  execution,  no  available  results  could  be  obtained. 
Sometimes  his  tangible  and  movable  property,  or  his  choses  in 
action,  have  been  covered  up,  or  otherwise  concealed,  and  thus 
placed  beyond  the  reach  of  the  officer  with  his  writ  of  execution. 
To  meet  this  emergenc}'-,  and  to  supply  the  defects  of  the  common 
law  courts,  the  early  English  chancery  courts  established  this 
branch  of  its  remedial  jurisdiction,  and  in  some  form  or  other  it 
has  continued  down  to  the  present  time,  sometimes  designated  as 
"Creditor's  Bills,"  and  sometimes  "Supplementarj^  Proceedings," 
"Proceedings  Supplementary  to  Execution,"  "Proceedings  in 
x\.id  of  Execution,"  and  the  like.  Usually  in  this  country  the 
proceeding  is  regulated,  in  some  of  its  details,  by  statute  and 
especially  in  states  adopting  codes  of  civil  procedure,  but  in  the 
main  the  general  features  are  similar  in  all  the  states.  The 
appointment  of  a  receiver  in  this  class  of  proceedings  is  incidental 
to  the  general  jurisdiction  of  the  court,  and  usually  is  an  element 
therein,  his  services  being  peculiarly  appropriate  in  reducing 
property  to  possession,  and  preserving  the  same  until  final  term- 
ination of  the  litigation.' 

'  In  Fusze  v.  Stern,  Yl  111.  App.  429,  creditor,  having  recovered  judgment 
Mr.  Justice  Pleasants  says:  "There  against  his  debtor  seeks  to  remove  a 
are  several  kinds  of  original  bills  fraudulent  conveyance  or  incum- 
known  to  our  laws,  wherein  courts  of  brance  out  of  the  way  of  an  execution 
equity  entertain  jurisdiction  to  aid  a  issued  or  to  be  issued  upon  such  judg- 
creditor  in  obtaining  a  satisfaction  of  ment.  .  .  In  another  class  of  cases 
his  claim  from  his  debtor,  and  which  where  the  creditor  seeks  to  satisfy  his 
are  generally  denominated  '  creditor's  claim  out  of  a  fund  charged  with  its 
bills,'  not  only  by  the  members  of  the  payment  and  which  can  only  be 
legal  profession,  but  by  the  courts  as  reached  by  proceedings  in  chancery, 
well,  as  where  a  creditor  seeks  to  sat-  he  may  file  his  bill  and  establish  his 
isfy  his  debt  out  of  some  equitable  es-  claim  in  that  suit  without  having  re- 
late of  the  defendant  which  is  not  sub-  duced  it  to  a  judgment  at  law. " 
ject  to  levy  and  sale  under  an  execu-  Chancellor  Walworth  in  Beck  v. 
tion  at  law.  .  .  Another  kind  of  Burdett,  1  Paige,  305,  says:  "There 
bill  analogous  to  this  is  where  the  are  two  classes  of  cases  where  a  plain- 


CREDITOR'S  BILLS,  ETC. 


237 


(b)  Based  on  inadequacy  of  co>nroN  law  remedies. 
The   foundation   of    this   remedy   is    based   upon   the   inade- 
quacy of  the  ordinary  common  law  remedies  and  the  necessity 


tiff  is  permitted  to  come  into  court  for 
relief  after  he  has  proceeded  to  judg- 
ment and  execution  at  law  without 
obtaining  satisfaction  of  his  debt.  In 
one  case  the  issuing  of  the  execution 
gives  the  plaintiff  a  lien  upon  the 
property  but  he  is  compelled  to  come 
here  for  the  purpose  of  removing  some 
obstruction  fraudulently  or  inequita- 
bly interposed  to  prevent  a  sale  on  exe- 
cution. In  the  other,  the  plaintiff 
comes  here  to  obtain  satisfaction  of 
his  debt  out  of  property  of  the  defen- 
dant which  cannot  be  reached  by  exe- 
cution at  law.  In  the  latter  case  his 
right  to  relief  here  depends  upon  the 
fact  of  his  having  exhausted  his  legal 
remedies  without  being  able  to  obtain 
satisfaction  of  his  judgment.  In  the 
first  case  the  plaintiff  may  come  into 
this  court  for  relief  immediately  after 
he  has  obtained  a  lien  upon  the  prop- 
erty by  the  issuing  of  an  execution  to 
the  sheriff'  of  the  county  where  the 
same  is  situated;  and  the  obstruction 
being  removed  he  may  proceed  to  en- 
force the  execution  by  a  sale  of  the 
property  although  an  actual  levy  is 
probably  necessary  to  enable  him  to 
hold  the  property  against  other  execu- 
tion creditors  or  bona  fide  purchasers," 
citing  Angell  v.  Draper,  1  Vern.  399; 
Shirley  v.  Watts,  3  Atk.  200;  McDer- 
mutt  V.  Strong,  4  John.  Ch.  687.  Cf. 
Bloodgood  v.  Clark,  4  Paige,  574. 

The  proceedings  under  the  code 
practice  supplementary  to  execution, 
are  very  fully  and  clearly  stated  by 
Merrimon,  J.,  in  Cootes  Bros.  v. 
Wilkes,  92  N.  C.  376.  Cf.  Sjjencer  v. 
Cuyler,  9  Abb.  Pr.  382;  Peo2^le,  Fitch 
V.  Mead,  29  How.  Pr.  360. 

Proceedings  of  a  similar  nature  have 
been  entertained  by  a  court  of  chan- 
cery on  a  bill  filed  by  creditors  of  an 


insolvent  banking  corporation  when 
the  object  sought  was  an  equality  of 
benefit  and  burden  among  a  numerous 
class  of  persons  similarly  situated  in 
respect  to  a  particular  fund.  Tun- 
nesma  v.  Schuttler,  114  III.  156.  Cf. 
Ci'andall  v.  Lincoln,  52  Conn.  73; 
Wood  V.  Bummer,  3  Mason,  308. 

In  the  absence  of  statutory  power  a 
court  of  chancery  is  without  jurisdic- 
tion to  decree  a  dissolution  of  a  cor- 
poration, and  where  a  statute  as  one 
of  the  causes  for  the  dissolution  of  a 
corporation  provides  that  if  it  has 
"ceased  doing  business,"  etc.  the  fact 
that  the  corporation  ceased  doing  busi- 
ness by  reason  of  the  levy  of  attach- 
ments on  the  companj'  property  is  not 
such  a  cause  as  is  contemplated  by 
the  statute.  It  must  be  an  actual 
ceasing  and  not  such  as  is  brought 
about  by  the  enforcement  of  legal  pro 
cess.      People  v.  Weigley,  loo  111.  491. 

When  a  creditor  obtains  judgment, 
issues  execution,  levies  same  upon 
lands  alleged  to  have  been  fraudu- 
lently transferred,  a  receiver  may  be 
appointed  for  mone}'  in  the  hands  of 
the  clerk  of  court  paid  in  as  condem- 
nation by  a  railroad  company,  after 
the  fraudulent  transfer.  Alilhauser 
V.  Bond,  74  "Wis.  400;  Bjose  v.  Bevan, 
10  Md.  406;  Beam  v.  Bennett,  51  Mich. 
148. 

Proceedings  supplementary  to  exe- 
cution in  New  York  are  statutory  and 
do  not  belong  to  chancery  jurisdiction 
but  are  auxiliary  remedies  in  common 
law  actions.  Ex  parte  Boyd,  105  U. 
S.  647,  26  L.  ed.  1200. 

A  creditor's  bill  may  be  brought 
under  the  chancery  practice  act  of  Illi- 
nois in  all  cases  where  the  creditor  or 
his  representative  is  obliged  by  the 
nature  of  the  interest  sought  to  be 


23S 


RECEIVERSHIPS. 


of  the  courts  of  equity  lending  tlicir  aid  to  the  common  law 
courts  in  the  enforcement  of  the  rii^^lits  of  creditors  against  the 
property  of  debtors,  where  the  ordinary  process  is  found  to  be 
inadequate.  It  is  therefore  to  be  understood  as  a  prerequisite 
to  this  jurisdiction  and  the  appointment  of  a  receiver  that  the 
plaintilf — 

(1)  Shall  have  exhausted  fully  and  completely  his  common 
law  remedies  for  the  collection  of  his  judgment/  and  in  doing  so 
shall  have  used  due  diligence.''  The  inadequacy  of  the  common 
law  remedy  does  not  consist  in  its  failure  merely  to  produce  the 
money — a  misfortune  often  attendant  upon  all  remedies — but 
that  in  its  nature  or  character  it  is  not  fitted  or  adaj)ted  to  the 
end  in  view.' 

(2)  The  plaintiffs  claim,  as  a  rule,  must  also  have  been  reduced 
to  a  judgment,  jurisdiction  not  being  exercised  in  behalf  of  a  gen- 
eral creditor.* 


reached  to  resort  to  a  court  of  equity 
for  relief  as  where  the  property  is  la 
the  hands  of  trustees  and  the  creditor 
has  no  lien  thereon  and  can  acquire 
none.  Spindle  v.  Shreve,  111  U.  S. 
542,  28  L.  ed.  512. 

•  Parker  v.  Moore,  3  Edw.  Ch,  234; 
Congdon  v.  Lee,  3  Edw.  Ch.  304;  Hart 
V.  Tims,  8  Edw.  Ch.  226;  Cassidy  v. 
Meacham,  3  Paige,  311;  Smith  v. 
Thompson,  Walk.  Ch.  1;  Thayer  v. 
Swift,  Harr.  Ch.  (Mich.)  430;  Steward 
V.  Stevens,  Harr.  Ch.  (Mich.)  169; 
Starr  Y.  Rathbone,  1  Barb.  70;  Second 
Ward  Bank  v.  Upmann,  12  Wis.  499; 
Smith  V.  Week-H,  6U  Wis.  94;  Williams 
V.  Sexton,  19  Wis.  43;  Buckeye  Engine 
Co.  V.  Donau  Brew.  Co.  47  Fed.  Rep. 
6;  McElwain  v.  Willis,  9  Wend.  561; 
Clark  V.  Bergenthal,  52  Wis.  103;  Be 
Remington,  7  Wis.  651.  See  also  g  121. 
Smyth  V.  New  Orleans  Canal  &  Bkg. 
Co.  141  U.  S.  661.  35  L.  ed.  803; 
Scripps  V.  King,  103  111.  469;  McDow- 
ell V.  Cochran,  11  111.  31;  Artnstrong 
V.  Coopes,  11  111.  560;  Van  Syckle  v. 
Richardson,  13  111.  174;  Bay  v.  Cook, 
31  111.  336;  Manchester  &  L.  Dist.  Bkg. 


Co.  V.  Parkinson,  L.  R.  22  Q.  B.  Div. 
173;  Harris  v.  Beauchamp  Bros.  [1894] 
1  Q.  B.  801. 

2  Fogarty  v.  Burke,  2  Drury  &  W. 
580;  National  Mecha?iics  Bkg.  Asso.  v. 
Mariposa  Co.  60  Barb.  423;  Gould  v. 
Tryon,  Walk.  Ch.  353. 

2  Thompson  v.  Allen  County,  115  U. 
S.  550.  29  L.  ed.  472;  Jones  v.  Green, 
68  U.  S.  1  Wall.  330,  17  L.  ed.  553. 

*  Scott  V.  Neely,  140  U.  S.  106,  35  L. 
ed.  358;  Swan  Land  &  C.  Co.  v.  Frank, 
148  U.  S.  612,  37  L.  ed.  581;  Morrow 
Shoe  Mfg.  Co.  v.  New  England  Shoe 
Co.  57  Fed.  Rep.  698,  24  L.  R.  A. 
417,  60  Fed.  Rep.  341;  United  Slates 
Y.  Lngate,  48  Fed.  Rep.  253;  Cates 
V.  Allen,  149  U.  S.  456,  37  L.  ed.  807; 
Zell  Guano  Co.  v.  Heatherly,  38  W. 
Va.  416;  National  Tube  Works  Co. 
V.  Ballou,  146  U.  S.  577,  36  L.  ed. 
1070;  Hollins  v.  Brierfkld  Coal  dc  I. 
Co.  150  U.  S.  371,  37  L.  ed.  1113;  Ad- 
kr  V.  Feiiton,  55  U.  S.  24  How.  407,  16 
L.  ed.  696;  Smithy.  Ft.  Scott,  H.  &  W. 
R.  Co.  99  U.  S.  398,  25  L.  ed.  437; 
Day  V.  Washburn,  65  U.  S.  24  How. 
352.  16  L.  ed.  712;   Scripps  v.  King, 


CREDITOR'S  BILLS,  ETC. 


239 


(3)  And  as  a  general  rule  execution  must  have  been  issued  on 
such  judgment  and  a  return  made  by  the  proper  officer,  nulla 
hona."^ 

(4)  The  rule  that  a  judgment  at  law  is  a  prerequisite  to  a  pro- 
ceeding in  chancery  has  its  exceptions,  however,  which  have  been 
recognized  by  the  courts,  particularly  in  some  cases  involving 
fraud,  and  the  rule  has  been  less  strictly  enforced  in  states  where 
chancery  and  common  law  procedures  have  become  blended.* 


103  111.  469;  Newman  v.  Willetts,  52 
111.  98;  Bigelow  v.  Andress.^l  111.  322; 
Oetzler  v.  Saroni,  18  111.  511,  Green- 
toay  V.  Thomas,  14  111.  271;  hhmael  v. 
Parker,  13  111.  324;  Smith  v.  Los  An- 
geles County  Super.  Ct.  97  Cal.  348; 
Dodge  v.  Pyrolusite  Manganese  Co.  69 
Ga.  665;  Johnson  v.  Farnum,  56  Ga. 
144;  Clark  v.  Raymond,  84  Iowa,  251; 
May  V.  Qrenhill,  80  Ind.  124;  McG old- 
rick  V.  Slevin,  43  Ind.  522;  Rich  v. 
Levy,  16  Md.  74;  Hubbard  v.  Hub- 
bard, 14  Md.  356;  Nusbaiim  v.  Stein, 
12  Md.  315;  Blondheim  v.  Moore,  11 
Md.  365;  Uhl  v.  Dillon,  10  Md.  500; 
Holdrege  v.  Gwynne,  18  N.  J.  Eq.  26; 

To  entitle  a  creditor  to  a  receiver 
he  must  have  a  judgment  or  a  lien  on 
the  property.  San  Antonio  &  G.  S. 
R.  Co.  v.  Davis,  (Tex.)  2  Am.  &  Eng. 
Corp.  Cas.  N.  S.  374. 
Toung  v.  Frier,  9  N.  J.  Eq.  465. 

^  Adee  Y.  Bigler,  81  N.Y.  349;  Bay- 
aud  V.  Fellows,  28  Barb.  451 ;  Wiggins 
V.  Armstrong,  2  John.  Ch.  144;  Hen- 
dricks V.  Robinson,  2  Johns.  Ch.  296; 
Carter  v.  Hightower,  79  Tex.  135;  Zell 
Guano  Co.  v.  Heatherly,  35  W.  Va. 
416;  Rhodes  v.  Cousin,  6  Rand.  (Va.) 
188;  Hulse  v.  Wrigfit,  Wright  (Ohio)  61 ; 
Misell  V.  Herbert,  12  Smedes  &  M. 
550;  Skeele  v.  Stanwood,  33  Me.  309. 
Gorton  v.  Massey,  12  Minn.  147. 

A  judgment  cannot  be  questioned 
on  a  creditor's  bill  brought  to  secure 
its  payment.  Matiingly  v.  Nye,  75  U. 
S.  8  Wall.  370,  19  L.  ed.  380. 

Execution  must  be  sent  to  the  county 


where  the  defendant  has  property  if 
known  to  the  plaintiff.  Minkler  v. 
United  States  Sheep  Co.  4  N.  D.  507,  2 
Am.  &  Eng.  Corp.  Cas.  N,  S.  368, 
overruling  Paulson  v.  Ward,  4  N.  D. 
100 ;  and  see  Durand  v.  Gray,  124  111.  9. 

^It  has  been  held,  however,  that  a 
judgment  is  not  necessary  in  the  fol- 
lowing cases  usually  involving  fraud, 
or  where  the  delay  of  getting  judg- 
ment would  not  benefit  any  one,  or 
where  the  debt  is  undisputed,  or 
where  the  creditors  have  a  special 
lien. 

Morrison  v.  Shuster,  1  Mackey,  190; 
Martin  v.  Bu7-gwyn,  88  Ga.  78;  Wolfe 
V.  Claflin,  81  Ga.  64;  Orton  v.  Mad- 
den, 75  Ga.  83;  Oliver  v.  Victor,  74 
Ga.  543;  Cohen  v.  Morris,  70  Ga.  313; 
Crittenden  v.  Coleman,  70  Ga.  293; 
Wachtel  v.  Wilde,  58  Ga.  50;  Kehler  v. 
Jack  Mfg.  Co.  55  Ga.  639;  Cohen  v. 
Meyers,  42  Ga.  46;  Rosenberg  v.  Moore, 
11  Md.  376;  Thompsen  v.  Diffenderfer, 
1  Md.  Ch.  489;  Chamberlain  v.  O'Brien, 
46  Minn.  80;  Sorley  v.  Brewer,  18 
How.  Pr.  276;  Levy  v.  Ely,  15  How. 
Pr.  395;  La  Chaise  v.  Lord,  10  How. 
Pr.  461;  Mottv.  Dunn.  10  How.  Pr. 
225  (see  code);  Jackson  v.  Sheldon,  9 
Abb.  Pr.  127;  Haggarty  v.  Pittman,  1 
Paige,  298;  Regenstein  v.  Pearlstein, 
30  S.  C.  192;  Meinhard  v.  Strickland, 
29  S.  C.  491;  Todd  v.  Lee,  15  Wis. 
365;  Taylor  v.  Bowker,  111  U.  S.  110, 
28  L.  ed.  368. 

Cf.  Johnson  v.  Poicers,  13  Fed.  Rep. 
315,  allirmed  in  136  U.  S.  106,  35  L. 


240 


RECEIVERSHIPS. 


§  147.     Classes  of  creditor's  proceedings. 

There  are  three  classes  of  proceedings  generally  denominated 
■"  Creditor's  proceedings,"  the  first  of  which  is  the  ordinary  suit 
in  equity,  the  purpose  of  -which  is  to  annul  some  particular  trans- 
action or  transfer,  or  remove  some  particular  cloud  upon  the  title.' 
The  second  is  the  creditor's  bill  proper,  which  is  broader  in  its 
scope  and  therefore  not  inaptly  called  an  "  Omnibus  bill,"  the  pur- 
pose being  not  only  to  reach  property  therein  described,  but  any 
other  property  of  the  debtor,  assets  or  even  debts  due  him,  which 
were  unkno\tn  to  the  creditor,  and  is  in  the  nature  of  a  bill  of 
discovery."  The  third  is  the  statutory  proceeding  usually  desig- 
nated "Supplementary  proceedings,"  which  in  a  general  sense 
will  reach  whatever  could  have  been  reached  under  the  ordinary 


ed.  113;  Pullman  v.  Stehbins,  51  Fed. 
Rep.  10;  Beverly  v.  Rhodes,  86  Va. 
415;  Rice  v.  Hartman,  84  Va.  251; 
Duerson  v.  Alsop,  27  Gratt.  229;  Car- 
ter V.  Hampton,  77  Va.  631 ;  Hu7-n  v. 
Keller,  79  Va.  415;  Case  v.  Mw  Or- 
leans &  C.  B.  Co.  (  "Case  v.  Beaure- 
gard") 101  U.  S.  688,  25  L.  ed.  1004. 

It  is  well  settled  that  a  creditor  with 
an  established  claim  against  an  estate 
may  come  into  a  court  of  chancery 
against  an  executor  for  the  discovery 
and  distribution  of  assets;  and  that  he 
may  have  a  bill  against  heirs  and  de- 
visees to  subject  real  estate  descended, 
there  being  a  deficiency  of  personal 
assets  to  the  payment  of  decedent's 
debts.  Houston  v.  Levy,  44  .N.  J.  Eq. 
6;  Thompson  v.  Brown,  4  John.  Ch. 
619;  Kennedy  v.  Creswell,  101  U.  S. 
641,  25  L.  ed.  1075;  Mallory  v.  Craige, 
15  N.  J.  Eq.  73;  Coddington  v.  Bis- 
pham,  36  N.  J.  Eq.  574. 

Where  a  creditor  has  a  trust  in  his 
favor  he  may  go  into  equity  without 
exhausting  legal  processes  or  reme- 
dies. If  he  avers  insolvency  so  that 
a  suit  at  law  and  the  recovery  of  a 
judgment  would  not  afford  any  relief, 
that  is  enough  to  show  there  is  a  rem- 
edy in  equity.  Case  v.  New  Orleans 
<£  C.  B.  Co.  ("  Case  v.  Beauregard") 
101  U.  S.  688,  25  L.  ed.  1004. 


Where  a  claim  can  only  be  satisfied 
out  of  a  fund  which  is  accessible  to  a 
court  of  chancery  only,  the  claim  need 
not  be  established  in  a  court  of  law. 
Russell  V.  Clark,  11  U.  S.  7  Cranch, 
69,  3  L.  ed.  271. 

The  same  rule  applies  when  the 
claim  is  against  a  deceased  person  and 
a  bill  is  filed  against  his  executor  for 
the  discovery  of  assets.  Kennedy  v. 
Creswell,  101  U.  S.  641.  25  L.  ed.  1075; 
Thompson  v.  Broicn,  4  John.  Ch.  619. 
And  a  creditor's  bill  will  lie  against 
an  administrator  of  a  deceased  judg- 
ment debtor  and  a  third  person  to 
whom  it  is  alleged  the  debtor  fraud- 
ulently conveyed  assets.  Hagan  v. 
Walker,  55  U.  S.  14  How.  29,  17  L. 
ed.  312.  The  equity  jurisdiction  in 
such  case  is  not  auxiliary  to  the  legal 
process. 

^Lynch  v.  Johnson,  48  N.  Y.  33; 
Brown  v.  NicJiols,  42  N.  Y.  26;  Rob- 
erts V.  Albany  &W.  8.  R.  Co.  25  Barb. 
662;  George  v.  Williamson,  26  Mo.  190; 
Newman  v.  Willets,  52  111.  98;  Weight- 
man  V.  Hatch,  17  111.  281;  Miller  v. 
Davidson,  8  111.  518. 

'^Newman  v.  Willets,  52  111.  98; 
Conro  V.  Port  Henry  Iron  Co.  12  Barb. 
58. 


CREDITOR'S  BILLS,  ETC. 


241 


creditor's  bil],  but  the  proceedings  are  more  simplified.*  This 
procedure  is  nsiiallj  by  order  made  upon  proof  of  the  return  of 
an  execution  unsatisfied,  requiring  the  debtor  to  appear  in  person 
before  the  court  and  be  examined  concerning  his  propeity,'  and 
on  the  discovery  of  property  the  receiver  is  appointed,  who 
after  qualifying  becomes  vested  with  the  debtor's  property  and 
equital)le  assets.' 

§  14S.    Fraudulent  conTeyances. 

(a)  Effect  generally. 
One  of  the  main  features  of  this  branch  of  equity  jurispru- 
dence, is  to  enable  a  judgment  creditor  to  reach,  for  the  purpose  of 
satisfying  his  judgment,  the  property  of  the  judgment  debtor  that 
has  been  transferred  prior  to  the  judgment  for  the  purpose  of  hin- 
dering, delaying,  and  defrauding  his  creditors,  in  which  case,  upon 
proper  showing,  it  follows  almost  as  a  matter  of  course  that  a  re- 
ceiver will  be  appointed  pending  the  litigation.*     A  receiver  may 


^Spencer  v.  Cuyler,  9  Abb.  Pr.  382; 
Becker  v.  Torrance,  31  N.  Y.  631 ; 
Lynch  v.  Johnson,  48  N.  Y.  33;  Bar- 
ker V.  Dayton,  28  Wis.  367;  Smilh  v. 
Weeks,  60  Wis.  100;  Barnes  v.  Mor- 
(jan,  3  Hun,  703;  Williams  v.  Thome, 
70  N.  Y.  270. 

^'Bartlett  v.  McNiel,  49  How.  Pr. 
55.     Affirmed  in  60  N.  Y.  53. 

^Bosticick  V.  3Ienck,  40  N.  Y.  383; 
Cooney  v.  Cooney,  65  Barb.  524;  Po7'- 
ter  V.  WUliams,  9  N.  Y.  142. 

Il  has  been  held  that  where  the 
•equity  of  the  bill  is  not  denied  on  the 
hearing  the  appointment  follows  as  a 
matter  of  course.  Gage  v.  /Snath,  79 
111.  219;  Bloodgood  v.  Clark,  4  Paige, 
574;  Corning  v.  White,  2  Paige,  567; 
Congdon  v.  Lee,  3  Edw.  Ch.  304; 
Bank  of  Monroe  v.  JSchermei-Jcorn, 
Clark  Ch.  214;  Austin  v.  Figueira,  7 
Paige,  56. 

*The  receiver  has  two  methods  of 
enforcing  the  judgments  under  which 
he  is  appointed  against  the  real  estate 
alleged  to  have  been  fraudulently  con- 
veyed by  the  judgment  debtor:  (1)  he 
16 


may  sell  the  real  estate  under  an  exe- 
cution, perfect  his  title  and  test  the 
question  of  fraud  in  an  action  of  eject- 
ment; (2)  he  may  bring  an  equitable 
action  to  set  aside  the  conveyance  al- 
leged to  be  fraudulent.  Maders  v. 
Whallon,  74  Hun,  372.  In  Smith  v. 
Beid,  134  N.  Y.  578,  the  court  says: 
"A  judgment  creditor  cannot  be  de- 
prived of  his  legal  right  to  enforce 
collection  of  his  judgment  against  the 
lands  of  his  debtor  by  a  fraudulent 
conveyance  thereof  prior  to  the  entry 
of  the  judgment,  nor  can  he  by  such  a 
conveyance  be  forced  to  pursue  an 
equitable  remedy,  for  the  collection  of 
his  debt  instead  of  a  legal  one  and  the 
whole  current  of  authorities  in  this 
state  is  to  the  effect  that,  notwith- 
standing the  fraudulent  conveyance, 
the  judgment  creditor  may  sell  the 
land  under  execution  upon  his  judg- 
ment and  the  purchaser  may  impeach 
the  conveyance  of  the  land  in  a  suit  at 
law  to  recover  possession,  or  if  he  can 
gain  possession  defend  the  title  thus 
acquired     against     the     fraudulent 


242 


RECEIVERSUIPS. 


maintain  an  action  in  tlie  nature  of  a  creditor's  bill  to  avoid,  in 
behalf  of  creditors,  a  fraudulent  transfer  as  to  them,  so  as  to  make 
the  property  available  for  the  satisfaction  of  their  debts.'     In  this 


grantee  or  those  claiming  under  him." 
.  .  "  While  the  title  remains  in  the 
fraudulent  grantee,  the  lien  of  the 
judgment  exists  and  may  be  enforced 
against  the  land,  with  the  same  effect 
as  if  the  conveyance  had  not  been 
made.  As  against  the  creditor,  the 
conveyance,  while  the  fraudulent 
grantee  holds  the  title,  is  a  nullity." 

In  either  of  the  two  proceedings 
above  indicated,  the  burden  of  estab- 
lishing fraud  rests  with  the  plaintiff. 
He  must  show  satisfactorily  that  the 
conveyance  was  made  and  accepted 
with  the  purpose  and  intent  of  hinder- 
ing, delaying,  and  defrauding  the 
creditors  of  the  grantor;  that  the  deed 
was  executed  in  bad  faith  and  left  the 
grantor  insolvent  and  without  ample 
to  pay  his  existing  debts  and  liabili- 
ties. Maders  v.  Whallon,  supra;  Rain 
V.  Larkin,  131  N.  Y.  300. 

As  to  what  are  insufficient  allega- 
tions of  fraud  on  the  part  of  directors 
of  a  corporation  in  bill  by  creditors 
asking  for  the  appointment  of  a  re- 
ceiver, see  Fort  Payne  Furnace  Co.  v. 
Fort  Payne  Coal  &  1.  Co.,  96  Ala.  472; 
Briarfield  Iron  Works  Co.  v.  Foster^  54 
Ala.  623. 

A  judgment  creditor  with  an  execu- 
tion returned  "no  property  found," 
and  seeking  by  bill  to  subject  the 
debtor's  alleged  interest  in  certain 
crops  raised  on  a  plantation  carried 
on  by  another,  has  such  a  lien  on  such 
crops  as  entitles  him  to  ask  for  a  re- 
ceiver to  prevent  their  loss.  Micou  v. 
Moses,  72  Ala.  439. 

A  receiver  appointed  in  a  judgment 
creditor's  suit,  can  hold  the  debtor's 
choses  in  action  in  preference  to  one 
who  purchased  the  same  of  the  debtor 
and  paid  for  them,  after  notice  of  the 


filing  of  the  bill,  and  after  attempts 
had  been  made,  but  without  much 
diligence,  to  servp  the  subpoena. 
Weed  V.  Smull,  3  Sandf.  Ch.  273. 

A  receiver  appointed  in  supplemen- 
tary proceedings,  and  suing  to  reach 
the  property  of  the  judgment  debtor, 
which  he  alleges  to  have  been  assigned 
to  delay,  hinder,  and  defraud  cred- 
itors, is  not  entitled  to  an  injunction, 
unless  he  furnishes  to  the  court  some 
evidence  that  he  was  entitled  to  the 
relief  demanded  in  his  complaint,  or 
has  an  apparent  right  to  the  property. 
The  ordinary  affidavit  of  verification 
of  a  complaint  is  not  suflicient  to  es- 
tablish any  fact  alleged  therein  on  in- 
formation and  belief.  Bostwick  v, 
Elton,  25  How.  Pr.  363.  Cf.  Connah 
V.  Sedgwick,  1  Barb.  210;  Shainwald 
v.  Lewis,  7  Sawy.  148;  Goodyear  v. 
Belts,  7  How.  Pr.  187. 

^Dunham  v.  Byrnes,  36  Minn.  106; 
Bostwick  V.  Menck,  40  N.  Y.  383; 
Wright  v.  Nostrand,  94  N.  Y.  31; 
Hamlin  v.  Wright,  23  Wis.  491 ;  Bar- 
ker V.  Dayton,  28  Wis.  367;  Miller  v. 
McKemie,  29  N.  J.  Eq.  291;  and  this 
as  soon  as  judgment  is  obtained. 
Newman  v.  Willets.  52  111.  98;  Green- 
way  V.  Thomas,  14  111.  271;  'Weight- 
man  V.  Hatch,  17  111.  281;  Dewey  v. 
Eckert,  62  111.  218;  Miller  v.  David- 
son, 8  111.  518;  Lewis  v.  Lanphere,  79 
111.  187. 

The  unconditional  appointment  of 
a  receiver  to  take  charge  of  the  prop- 
erty in  an  action  based  on  an  alleged 
fraudulent  conveyance  and  bill  of  sale 
is  not  authorized,  where  the  defend- 
ant is  solvent  and  able  to  respond  to 
any  judgment  which  may  be  obtained 
against  him  by  plaintiffs.  Turnipseed 
y. Kentucky  Wagon  Co.{G&.)  23  S.E.  84, 


CREDITOR'S  BILLS,  ETC. 


243 


class  of  cases  the  receiver's  right  does  not  depend  upon  his  succes- 
sion to  the  title  of  the  debtor,  but  upon  the  equitable  right  of  the 
creditor  to  have  set  aside  a  conveyance,  which,  as  to  him,  is  invalid 
but  which  is  effectual  as  a  cloud  to  prevent  the  application  of  the 
property  to  the  satisfaction. of  the  debt.' 

By  the  statute  of  13  Eliz.  Ch.  5,  made  jDerpetual  by  29  Eliz.  Ch. 
5,  all  conveyances  or  other  disposition  of  property,  real  or  per- 
sonal, made  with  the  intention  of  defrauding  creditors  are  de- 
clared to  be  null  and  void.  This  statute  has  been  adopted  in 
Maine,  New  Hampshire,  Massachusetts,  Marjdand,  Pennsylvania, 
Delaware,  and  Iowa,  and  re-enacted,  in  substance,  in  the  other 
states.  Under  these  statutes  the  rule  is  well-nigh  universal  that  a 
transfer  by  a  debtor  to  a  creditor  in  payment  of  his  claim,  with 
the  intention  on  the  part  of  the  former  to  hinder  and  delay  his 
other  creditors,  the  latter  participating,  is  invalid  as  to  such  other 
creditors.^ 


A  receiver  in  supplementary  pro- 
ceedings may  attack  as  fraudulent  a 
mortgage  executed  by  a  judgment 
debtor.  Ward  v.  Petrie,  36  N.  Y. 
Supp.  940. 

The  appointment  of  a  receiver  with- 
out notice  in  a  creditors'  action  to  reach 
property  fraudulently  transferred 
is  authorized  where  the  bill  avers  that 
the  debtors  are  insolvent;  that  they 
have  sold  a  large  part  of  their  goods 
to  their  mother  in  payment  of  a  stipu- 
lated debt;  that  she  has  disposed  of 
them;  that  the  debtors  have  made  an 
assignment  of  the  remainder  of  their 
stock  for  creditors;  that  the  assignee 
is  insolvent  and  acting  without  bond 
and  has  preferred  a  stipulated  claim 
for  a  large  amount;  and  that  the  sale 
and  transactions  were,  to  the  knowl- 
edge of  the  transferee  and  assignee, 
parts  of  a  scheme  to  injure,  delay,  and 
defraud  creditors.  Maxwell  v.  Peters 
Co.  (Ala.)  10  So.  419. 

^Dunham,  v.  Byrnes,  36  Minn.  106; 
in  such  case  there  is  no  need  that  the 
receiver  take  possession  of  the  prop- 
erty for  this  purpose,  nor  that  he  be 
in   any   way   invested  with  the  title. 


Boshcick  V.  Menck,  40  N.  Y.  383 ; 
Wright  V.  Nostrand,  94  N.  Y.  3L  The 
receiver  may  avoid  a  chattel  mortgage 
given  by  the  debtor  on  the  ground  that 
it  is  not  given  in  accordance  with  the 
statute.  Farmers'  Loan  &  T.  Co.  v. 
Minneapolis  Engiiie  &  Mach.  Works. 
35  Minn.  543. 

It  should  be  observed  in  this  con- 
nection that  the  courts  are  slow  to  ap- 
point a  receiver  upon  an  allegation  of 
a  fraudulent  transfer,  if  the  fraud  is 
denied  in  the  answer,  and  it  is  not 
shown  that  the  assignee  is  insolvent, 
or  that  there  is  danger  of  loss  or  in- 
jury to  the  property.  Goodyear  v. 
Betts,  7  How.  Pr.  187;  Pelzer  v. 
Hughes,  27  S.  C.  408. 

The  rights  of  an  assignee  cannot  be 
determined  in  the  application  for  a  re- 
ceiver, particularly  if  the  assignee  is 
not  a  party.  Journeay  v.  Brown,  26 
N.  J.  L.  111.  "The  property  can 
only  be  recovered  of  him  by  a  suit 
brought  by  the  receiver,  and  in  that 
suit  he  may  be  heard  fully  in  his  own 
defense." 

'For  an  exhaustive  discussion  of 
this  subject  and  particularly  relative 


2ii 


RECEIVERSHIPS. 


Creditors  having  judgment  liens  may  also  attack  as  invalid,  a 
morto-age  given -by  a  delator  in  fraud  of  their  rights,  even  though 
a  receiver  has  been  appointed.' 

(b)  Rule  as  to  execution. 

Tins  proceeding  having  for  its  primary  purpose  the  reaching 
of  property  not  otherwise  accessible  to  ordinary  common  law- 
writs,  it  follows  as  one  of  the  fundamental  principles  of  this 
branch  of  equity  jurisdiction  that  if  the  plaintiff  has  an  adequate 
remedy  at  law  he  cannot  invoke  the  aid  of  a  court  of  chancery." 


to  the  participation  in  the  fraud  by 
the  vendee,  see  note  to  Bice  v.  Wood 
(Ark.)  31  L.  R.  A.  609. 

'Gere  v.  Dibble,  17  How.  Pr.  31. 

A  court  of  equity  has  power  to  sub- 
ject property  which  in  fact  is  the 
property  of  the  debtor,  but  is  fraudu- 
lently standing  in  the  name  of  another, 
to  the  payment  of  a  judgment  and  to 
remove  a  fraudulent  judgment  which 
might  stand  as  a  cloud  upon  the  title 
of  a  debtor.  Mimssippi  Mills  v.  Colin, 
150  U.  S.  202,  37  L.  ed.  1052;  Dockray 
V.  Mason,  48  Me.  178;  Hendricks  v. 
Robinson,  2  John.  Ch.  283;  Edmeston 
V.  Lyde,  1  Paige,  637;  Beck  v.  Bur- 
dett,  1  Paige,  305;  Guyler  v.  Moreland, 
6  Paige,  273;  Feldenheimer  v.  Tressel, 
6  Dak.  265. 

In  reference  to  the  matter  of  juris- 
diction of  the  United  Stales  courts  in 
creditor's  proceedings,  the  equitable 
jurisdiction  is  not  taken  from  such 
courts  by  reason  of  state  legislation 
giving  to  creditors  a  remedy  at  law. 
Mississippi  Mills  v.  Cohn,  150  U.  S, 
202,  37  L.  ed.  1052. 

"■Durand  v.  Gray,  129  111.  9:  Pres- 
ton V.  Colby,  117  111.  477;  Dormueil  v. 
Ward,  108  111.  216;  Moshier  v.  Meek, 
80  111.  79;  First  Nat.  Bank  v.  Gage, 
79  111.  207;  Horner  v.  Zimmerman,  45 
111.  14;  McConnel  v.  Dickson,  43  III. 
109;  Heacock  v.  Durand,  42  111.  230; 
Newman  v.  Willetts,  52  111.  98;  McNab 
V.  Eeald,  41  111.  326;  Bigelow  v.  An- 


dress,  31  111.  322;  Bowen  v.  ParkJmrst, 
24  111.  257;  Ishmael  v.  Parker,  13  111. 
324;  McDowell  v.  Cochran,  11  111.  31; 
Manchester  V.  McKee,  9111.  511;  Miller 
V.  Davidson,  8  111.  522;  Ballentine  v. 
Beall,  4  111.  203;  Stone  v.  Manning,  3 
111.  530;  Allright  v.  Herzog,  12  111.  App. 
557;  Baxter  v.  Moses,  77  Me.  465;  Howe 
V.  Whitney,  66  Me.  17;  Hamlin  v.  Mc- 
Gillicuddy,  62  Me.  268;  Griffin  v. 
Nitcher,  57  Me.  270;  Corey  v.  Greene, 
51  Me.  114;  Webster  v.  Clark,  25  Me. 
813;  Taylor  v.  Bowker,  111  U.  S.  110, 
28  L.  ed.  368;  Bassett  v.  Orr,  7  Biss. 
296 ;  Board  of  Public  Works  v.  Colum- 
bia College,  84  U.  S.  17  Wall.  521,  530, 
21  L.  ed.  687,  692;  Jones  v.  Green,  68 
U.  S.  1  Wall.  332,  17  L.  ed.  555;  Day 
V.  Washburn,  65  U.  S.  24  How.  352, 
16  L.  ed.  712;  Stewart  v.  Fagan,  2 
Woods,  215;  Beardsley  Scythe  Co.  v. 
Foster,  36  N.  Y.  561;  Dunlevy  v.  Tall- 
madge,  32  N.  Y.  457;  Miller  v.  Miller, 
7  Hun,  208;  Ballou  v.  Jones,  13  Hun, 
629;  Crippen  v.  Hudson,  13  N.Y.  161; 
Brinkerhoff  v.  Brown,  4  John.  Ch. 
671;  McDermutt  v.  Strong,  4  John. 
Ch.  687;  Williams  v.  Brown,  4  John. 
Ch.  682;  Wiggins  v.  Armstrong,  2 
John.  Ch.  144;  Hendricks  v.  Robin- 
son, 2  John.  Ch.  290 ;  Beck  v.  Burdett, 
1  Paige,  305;  Payne  v.  Sheldon,  63 
Barb.  169;  Voorhees  v.  Howard,  4  Abb. 
App.  Dec.  503;  Parshall  v.  Tillou,  13 
How.  Pr.  7;  Brooks  v.  Stone,  19  How. 
Pr.  395;  Bailey  v.  Staley,  5  Gill  &  J. 


CREDITOR'S  BILLS,  ETC. 


245 


But  the  evidence  nsuallj  required  upon  this  subject  has  given 
rise  to  a  great  variety  of  decisions.     The  general  doctrine  may 


432;  Brown  v.  Long,  1  Ired.  Eq.  190; 
McNairy  v.  Eastland,  10  Yerg.  310; 
Presion  v.  Wilcox,  38  Mich.  578;  Tyler 
V.  Featt,  30  Mich.  63;  Angell  v.  Dra- 
per, 1  Vern.  399;  Shirley  v.  Watts,  3 
Atk.  200;  Pease  v.  Scranton,  11  Ga. 
33;  Cubbedge  v.  Adams,  42  Ga.  124 
Peyton  v.  Lamar,  42  Ga.  131 ;  Reese  v 
Bradford,  13  Ala.  837;  Henderson  v, 
McVay,  33  Ala.  471 ;  Bassett  v.  St.  Al 
bans  Hotel  Co.  47  Vt.  313;  Tappan  v 
Evans,  11  N.  H.  312;  Ranbaut  v.  May 
field,  1  Hawks,  85;  Allen  v.  Montgom 
ery,  48  Miss.  106;  Brown  v.  SanA;  o/ 
Mississippi,  31  Miss.  454;  Ragsdale  v. 
Holmes,  1  S.  C.  91;  Turner  v.  ^(?ams, 
46  Mo.  95;  Suydam  v.  NortJiicestern 
Ins.  Co.  51  Pa.  394;  il/a^  v.  Greenldll, 
80  Ind.  124. 

In  Bieder  v.  Douglas,  35  111.  App. 
124,  it  is  held  that  proof  of  the  exist- 
ence of  a  judgment  and  return  of  exe- 
cution unsatisfied  are  jurisdictional 
facts,  and  in  the  absence  of  proof  on 
this  subject  no  relief  can  be  granted 
on  a  creditor's  bill.  Cf .  Vicksburg  &  M. 
R.  Co.  V.  Phillips,  64  Miss.  108. 

In  the  case  of  Slate  v.  Foot,  27  S.  C. 
340,  where  suit  was  instituted  to  set 
aside  and  vacate  a  mortgage  and  an 
assignment  it  was  held,  on  the  author- 
ity of  Burch  V.  Bramley,  20  S.  C.  503, 
that  an  allegation  of  the  return  of  an 
execution  nulla  bona  is  not  required. 
In  a  similar  proceeding  it  was  held  in 
Hancock  v.  Wooten,  107  N.  C.  9,  11  L. 
R.  A.  466,  that  under  the  present  prac- 
tice in  North  Carolina,  neither  a  judg- 
ment nor  execution  is  necessary  to 
sustain  the  proceeding.  Cf.  Dawson 
Bank  v.  Harris,  84  N.  C.  206. 

In  the  case  of  Newman  v.  Willetts, 
52  111.  98,  it  was  held  that  in  the  ordi- 
nary creditor's  bill,  the  issuing  and  re- 
turn of  an  execution  no  property  found 


are  prerequisites.  Yet  where  the  pro- 
ceeding is  merely  to  set  aside  a  fraud- 
ulent conveyance,  constituting  an  ob- 
struction to  a  judgment,  the  issuing 
and  return  of  an  execution  on  such 
judgment  are  not  prerequisites,  but 
that  it  must  appear  that  the  judgment 
is  an  existing  lien. 

The  power  of  a  court  of  equity  to 
lend  its  aid  where  the  common  law 
remedies  have  proved  ineffectual  is 
not  without  limitations,  however,  as 
will  be  seen  in  Thompson  v.  Allen 
County,  115  U.  S.  550,  29  L.  ed.  472. 
In  this  case  judgment  was  obtained 
against  a  county,  executions  issued 
and  returned  mdla  bona;  under  man- 
damus proceedings  a  tax  was  levied 
to  pay  the  judgment,  but  the  tax  col- 
lector whose  duty  it  was  to  collect  the 
taxes  refused  to  qualify,  whereupon  a 
receiver  was  prayed  for  to  collect  the 
taxes  in  lieu  of  the  collector.  The 
court  say:  "By  inadequacy  of  the 
remedy  at  law  is  here  meant  not  that 
it  fails  to  produce  the  money — that  is 
a  very  usual  result  in  the  use  of  all 
remedies — but  that  in  its  nature  or 
character  it  is  not  fitted  or  adapted  to 
the  end  in  view." 

And  in  a  similar  proceeding  in  Rees 
v.  Watertown,  86  U.  S.  19  Wall,  107,  22 
L.  ed.  72,  the  court  say:  "  The  rem- 
edy (mandamus)  is  in  law  and  theory 
adequate  and  perfect.  The  difllculty 
is  in  its  execution  only.  The  want  of 
a  remedy  and  the  inability  to  obtain 
the  fruits  of  a  remedy  are  quite  dis- 
tinct, and  yet  they  are  confounded  in 
the  present  proceeding.  ...  A 
court  of  equity  cannot,  by  avowing 
there  is  a  right  but  no  remedy  known 
to  the  law,  create  a  remedy  in  viola- 
tion of  law,  or  even  without  the  au- 
thority of  law.     It  acts  upon  eslab- 


24G 


RECEIVERSHIPS. 


be  stated  as  follows :  That  the  issuance  of  an  execution  and  a 
return  thereof  nulla  hona  are  essential  to  the  commencement  of 
a  proceeding  in  the  nature  of  a  creditor's  bill  or  supplementary 
proceeding.'  To  this  general  rule  there  are  many  exceptions. 
Thus  it  has  been  held — 

(1)  That  where  the  plaintiff  obtains  a  lien  upon  the  debtor's 
real  estate  by  attachment,  he  may  maintain  a  creditor's  bill  by 
virtue  of  such  lien,  for  the  purpose  of  removing  or  setting  aside 
fraudulent  conveyances  thereof,  without  alleging  and  showing 
the  issuance  of  an  execution,  and  the  return  thereof,  no  property 
found.' 

(2)  Where  it  is  alleged  and  shown  that  the  judgment  debtor  is 
insolvent,  and  that  the  issuance  of  an  execution  and  return  thereon 
nulla  hona  would  necessarily  be  of  no  practical  utility,  it  may  be 
dispensed  witb.^ 


lished  principles  not  only,  but  through 
established  channels."  The  refusal 
of  the  court  of  equity  through  its  re- 
ceiver to  collect  taxes,  in  the  forego- 
ing and  other  cases,  is  based  upon  the 
ground  that  the  remedy  of  the  com- 
mon law  courts  to  enforce  the  collec- 
tion of  taxes  is  adequate  and  com- 
plete. The  difficulty  is  that  neither  a 
common  law  nor  chancery  court  has 
power  to  fill  a  vacancy  in  office  of  tax 
collector.  Cf.  Heine  v.  Madison  & 
Carrol  Board  of  Levee  Gomrs.  86  U.  S. 
19  Wall.  655,  22  L.  ed.  223;  Taylor  v. 
Sean-  ("  State  B.  Tax  Cases  ")  92  U.  S. 
575,  23  L.  ed.  663;  Barkley  v.  Madi- 
son &  Carrol  Board  of  Levee  Comrs.  93 
U.  S.  258,  23  L.  ed.  893;  Meriwether 
V.  Garrett,  102  U.  S.  472,  26  L.  ed. 
197;  McLean  County  Precinct  v.  De- 
posit Bank,  81  Ky.  254. 

1  See  cases  under  preceding  note. 
Tomlinson  &  W.  Mfg.  Co.  v.  Bhutto,  34 
Fed.  Rep.  380.  The  positive  affidavit 
that  no  execution  has  been  returned 
is  a  sufficient  answer  to  the  motion. 
Wright  v.  Strong,  3  How.  Pr.  112; 
Ahlhauser  v.  Doud,  74  Wis.  400. 

^Francis  v.  L,awrence,  48  N.  J.  Eq. 
508;  Hunt  v.  Field,  9  N.  J.  Eq.  36; 


Williams  v.  MicTiener,  11  N.  J.  Eq. 
520;  Robert  v.  Hodges,  16  N.  J.  Eq. 
299;  Cocks  v.  Varney,  45  N.  J.  Eq.  72; 
Dawson  v.  Sims,  14  Or.  561;  Conroy 
V.  Woods,  13  Cal.  626.  There  will  be 
noticed  a  direct  conflict  of  authority 
upon  this  point  in  the  cases  of  Thur- 
her  v.  Blanck,  50  N.  Y.  80,  and  Me- 
chanics Bank  v.  Dakin,  51  N.  Y.  519. 
Cf.  Gross  V.  Daly,  5  Daly,  542;  Castle 
v.   Leiois,  78  K  Y.   137;  Anthony  y. 

Wood,  96  N.  Y.  185;  Smith  v.  Long- 
mire,  1  American  Insolv.  Rep.  426. 

^Turner  v.  Adams,  46  Mo.  95;  citing 
Merry  v.  Freemon,  44  Mo.  518;  Mc 
Dowellv.  Cockran,  11  111.  31;  Bay  v. 
Cook,  31  111.  336;  Postlewait  v.  Howes, 

3  Iowa,  366. 

A  creditor  may  proceed  in  equity 
to  reach  an  equitable  estate  before 
judgment.  Doolittle  v.  Bridyman,  1 
G.  Greene,  265;  Thompson  v.  Brotcn, 

4  John.  Ch.  630;  Sweny  v.  Ferguson, 
2  Blackf.  129;  Ripper  v.  Glancey,  2 
Blackf.  356;  Steere  v.  Hoagland,  39 
111.  264;  White  v.  Russell,  79  111.  155; 
Eads  V.  Mason,  16  111.  App.  545;  Rus- 
sell V.  CluiJc,  11  U.  S.  7  Cranch,  89,  3 
L.  ed.  279. 


CREDITOR'S  BILLS,  ETC.  247 

(3)  Where  the  judgment  debtor  has  nothing  except  real  estate 
which  has  been  fraudulently  conveyed,  proof  of  the  issuance  of 
an  execution  is  not  necessary.' 

(4)  Where  the  object  of  tlie  bill  is  the  removal  of  a  fraudulent 
conveyance  of  property  upon  which  a  levy  has  been  made,  an 
execution  returned  is  not  required.^ 

(5)  Where  it  is  shown  that  the  judgment  debtor  has  absconded 
so  that  a  judgment  cannot  be  had  against  him,  creditors  may  pro- 
ceed at  once  by  a  proceeding  in  equity.' 

(6)  Where  the  proceedings  are  against  an  insolvent's  estate  no 
execution  can  issue  and  a  bill  may  be  filed  in  the  lirst  instance." 

(7)  Where  it  appears  that  the  judgment  debtor  made  no  ob- 
jection on  account  of  the  failure  to  issue  execution,  and  where  it 
further  appears  that  if  execution  had  been  issued  and  returned 
nulla  bona  it  would  have  been  an  idle  ceremony.' 

And  it  may  be  remarked  in  this  connection  that  the  person 
who  is  entitled  to  object  because  of  no  execution  having  been 
issued  and  returned  unsatisfied  is  the  debtor  and  if  he  acquiesces 
in  the  proceeding  for  a  considerable  sj)ace  of  time  it  will  be  con- 
strued as  a  waiver  of  the  objection,"  It  is  no  defense  to  the  ap- 
pointment of  a  receiver  in  a  creditor's  suit  that  the  judgment  was 
confessed  to  secure  a  contingent  liability  which  is  not  matured ; 
the  court  will  not  go  behind  the  judgment  and  execution.^  JSTor 
is  it  a  defense  to  the  appointment  of  a  receiver,  that  a  motion  is 
pending  for  leave  to  amend  the  bill,  providing  the  defect  is  not 
fatal,  nor  is  the  pendency  of  a  motion  to  dissolve  the  injunction.' 

^Payne  v.  Sheldon,   63  Barb.    169;  R.  I.  592;  Scott  v.  McMillen,  1  Litt. 

Shaw  V.  Dwight,  27  N.Y.  244;  Brinker-  302;  Peay  v.  Morrison,  10  Gmtt.  144 

h/>ffv.  Brown,  i:  Sdhn.  Cb.  671;  Cor-  Kipper  v.    Olancey,    2    Blackf.    350 

nell  V.  Badway,  22  Wis.  260;  Cook  v.  O'Brien  v.    Coulter,   2    Blackf.    431 

Johnson,  12  N.   J.   Eq.  51;   Croonev.  Farrary.  Haselden,  9  Rich.  Eq.  331 

Bivins,    2   Head.    339;    Thurmond  v.  Pendleton    v.    Perkins,    49   Mo.    565 

Beese,  3  Ga.  449;  Sanderson  v.  Stoc/c-  Pope  v.  Solomon,  36  Ga.  541. 

dale,  11  Md.  563.  *Bay  v.  Cook,  31  111.  336;  McDowell 

^Bottford  V.  Beers,   11   Conn.    369;  v.  Cochrane,  11  111.  30. 

Logan  v.  Logan,  22  Fla.  561;  Binnie  '•Sage  v.  Memphis  &  L.  R.  R.  Co. 

V.  Walker,  25  111.  App.  82:  Weightman  125  U.  S.  361,  31  L.  ed.  604. 

V.  Hatch,  17  111.  281;  Beach  v.  Benton,  ^Brown  v.  Lake  Superior  Iron  Co. 

45  111.  341;  Newman  v.  Willetts,  52  111.  134  U.  S.  530,  33  L.  ed.  1021. 

101;  Fusze  v.  Stern,  17  111.  App.  429.  ''Lent  v.  McQueen,  15  How.  Pr.  313. 

'^Merchants'  Nat.  Bank  v.  Paine,  13  ^Barnard  v.  Darling,  1  Barb.  C)i.76. 


248 


RECEIVERSHIPS. 


Neither  is  the  appointment  barred  by  an  assignment  for  the  ben- 
efit of  creditors  where  such  assignment  is  made  after  the  com- 
mencement of  the  supplementary  proceeding ;'  nor  is  it  a  defense 
that  the  real  estate  of  the  debtor  is  heavily  incumbered,  and  that 
an  execution  cannot  be  satisfied  in  whole  or  in  part.  A  defect 
in  the  return  of  an  execution  is  cured  by  the  appearance  of  the 
defendant,  who  without  objection  submits  to  an  examination,  but 
more  especially  so  if  it  appears  that  the  debtor  has  not  been  in- 
jured by  the  defective  return." 

Notwithstanding  the  exceptions  above  noted  the  rule  is  that  it 
is  necessary  as  we  have  seen,  that  the  plaintiff  shall  have  recov- 
ered a  judgment  against  his  debtor  in  a  court  of  competent  juris- 
diction, and  that  such  judgment  is  in  full  force  and  unsatisfied. 
A  iudo-ment  in  favor  of  the  creditor  and  against  the  debtor  is  a 
necessary  prerequisite  to  the  commencement  of  a  proceeding  of 
this  nature  except  in  a  few  cases  noted,  and  except  where  the 
statute  has  otherwise  provided ;  in  other  words  a  chancery  court 
will  not  take  jurisdiction  except  upon  the  application  of  a  judg- 
ment creditor.* 


^Tomlinson  &  W.  Mfg.  Co.  v.  Shatto, 
34  Fed.  Rep.  380. 

■^Baker  v.  Herkimer,  43  Hun,  86. 

^Adee  v.  Bigler,  81  N.  Y.  349;  Estes 
V.Wilcox,  67  N.  Y.  264;  Ocean  Nat. 
Bank  V.  Olcott,  46  N.  Y.  12;  Bearddey 
Scythe  Co.  v.  Foster,  36  N.  Y.  565; 
Dunltvy  v.  Tallmadge,  32  N.  Y.  457; 
McElwain  v.  Willis,  9  Wend.  548; 
Wiggins  v.  Armstrong,  2  John.  Ch. 
144  (injunction);  Bayard  v.  Fellows. 
28  Barb.  451;  Dodge  v.  Pyrolusite 
Manganese  Co.  69  Ga.  665;  Johnson  v. 
Farnum,  56  Ga.  144;  Clark  v.  Ray- 
mond, 84  Iowa,  251 ;  Durand  v.  Gray, 
129  111.  9;  Preston  v.  Colby,- m  111. 
477;  Dormeuil  v.  Ward,  108  111.  216; 
McConnel  v.  Dickson,  43  111.  109;  Rich 
V.  Levy,  16  Md.  74;  Hubbard  v.  Hub- 
bard, 14  Md.  356;  Nusbaum  v.  Stein, 
12M(1.315;  TJhlv.  Dillon,  10 Md.  500; 
Bliodes  V.  Cousins.  6  Rand.  (Va.)  188 


(injunction);   May    v.    Greenhill,    80 
Ind.  124. 

It  has  been  supposed  that  the  cases 
of  Rosenberg  v.  Moore,  11  Md.  376; 
Morrison  v.  Shuster,  1  Mackey,  190, 
and  Watchtel  v.  Wilde,  58  Ga.  50,  are 
contrary  to  the  doctrine  of  the  text, 
but  it  will  be  seen  by  an  examination 
of  the  cases  that  two  of  them  were  to 
set  aside  fraudulent  transfers,  and  the 
question  of  the  necessity  of  a  judg- 
ment was  not  raised  or  discussed  by 
the  court,  and  in  the  other  case  judg- 
ment was  reserved  until  a  hearing 
upon  the  merits  could  be  had.  The 
same  principle  is  involved  in  cases 
where  before  the  rendition  of  a  judg- 
ment an  injunction  is  sought  against  a 
debtor  to  prevent  a  disposition  of  hia 
property  pending  the  common  law 
suit  and  in  such  cases  it  is  held  that  a 
judgment  in  case  of  real  estate  and  a 
judgment  and  execution  in   case  of 


CREDITOR'S  BILLS,  ETC. 


24^- 


§  149.     Jurisdiction  in  matters  of  assignment. 

(a)  Closely  related  to  the  matter  of  fraudulent  conveyances,  is  tlie 
matter  of  fraudulent  assignments  intended  by  the  debtor  to 
hinder  and  delay  his  creditors  in  the  collection  of  their  debts  and 
therefore  voidable  as- to  them  in  a  proper  proceeding  instituted 
for  such  jDurpose.'     But  in  attacking  an  assignment  on  the  ground 


personal  property  are  necessary  to  give 
a  court  of  equity  jurisdiction  to  grant 
an  injunction.  These  cases  are  based 
upon  the  doctrine  that  until  the  cred- 
itor has  established  his  title  he  has  no 
right  to  interfere  with  the  debtor's 
disposition  of  his  property;  that  un- 
less he  has  some  claim  upon  the  prop- 
erty of  the  debtor  he  has  no  concern 
■with  his  frauds.     Rhodes  v.  Cousins, 

6  Rand.  (Va.)  188;  citing  Angell  v. 
Draper,  1  Vern.  399;  Shirley  v.  Waits, 
3  Atk.  200;  Bennetv.  Mnsgrove,  2Ves. 
Sr.  51;  Balch  v.  Wastall.  1  P.  Wms. 
451;  Wiggins  v.  Armstrong,  2  John. 
Ch.  144;  Chamberlayne  v.  Temple,  2 
Rand.  (Va.)  384,  Cf.  Blondheim  v. 
Moore,  11  Md.  365;  8.  C.  11  Md.  376, 
under  title  of  Rosenberg  v.  Moore, 
Phelps  V.  Foster,  18  111.  309;  Young  y. 
Frier,  9  N.  J.  Eq.  465  In  this  case  a 
creditor  at  large  sought  the  aid  of  a 
chancery  court  to  restrain  a  judgment 
creditor  of  a  firm  from  proceeding 
under  his  judgment  against  the  prop- 
erty of  an  individual  member  of  such 
firm  and  it  was  held  that  without 
judgment  it  could  not  be  done.  Over- 
ruling the  case  of  Blackwell  v.  Rankin, 

7  N.  J.  Eq.  153,  which  was  said  to  be 
based  on  1  Story,  Eq.  678;  2  Story, 
Eq.  1253,  and  KetcJmm  v.  Durkee,  1 
Barb.  Ch.  480,  and  Waters  v.  Taylor, 
2  Ves.  &  B.  299.  So  long  as  the  final 
judgment  remains  unsatisfied  the  ac- 
tion is  a  "cause  or  matter  pending" 
within  the  meaning  of  the  Judicature 
Act  of  1873,  and  the  court  may  ap- 
point a  receiver,  and  a  new  action  is 
not  required.     Salt  v.  Cooper,  L.  R.  10 


Ch.  Div.  544;  Re  Peace  and  Waller, 
L.  R.  24  Ch.  Div.  405;  Smithv.  Cowell, 
L.  R.  6  Q.  B.  Div.  75. 

'In  Connah  v.  Sedgwick,  1  Barb. 
210,  a  creditor's  bill  was  filed  to  set 
aside  an  alleged  fraudulent  assign- 
ment. After  the  failure  an  assign- 
ment was  made  of  all  his  property 
by  the  judgment  debtor  to  his  father 
who  was  made  a  preferred  creditor, 
and  was  also  insolvent,  no  change  of 
possession  being  made.  The  court 
held  that  under  the  statute  unless 
there  was  a  change  of  possession  con- 
tinuous the  assignment  was  presumed 
to  be  fraudulent  and  void  as  to  cred- 
itors, and  said:  "If  there  is  any  aspect 
I  am  bound  to  look  upon  it  as  void 
nothing  can  be  more  right  or  con- 
sonant to  the  well  established  practice 
of  this  court  than  on  such  a  bill  as 
this  is  to  direct  the  appointment  of  a 
receiver  to  take  charge  of  the  prop- 
erty to  abide  the  result  of  the  inquiry 
whether  it  was  actually  fraudulent." 
And  see  further  discussion  as  to  what 
constitutes  a  change  of  possession, 
Shaimcald  v.  Lewis,  7  Sawy.  148. 
And  see  this  case  for  general  discus- 
sion of  the  scope  and  purpose  of  cred- 
itor's bills. 

The  appointment  of  a  receiver,  by 
a  decree  in  favor  of  judgment  credit- 
ors declaring  an  assignment  for  credit- 
ors void,  to  sell  the  property  and  ap- 
ply the  proceeds  to  the  payment  of  the 
judgments  and  distribute  the  balance 
among  the  other  creditors,  is  not 
necessary  or  proper.  Middlcton  v. 
Taher  (S.  C.)  24  S.  E.  282. 


250  RECEIVERSHIPS. 

of  fraud  the  court  will  not  appoint  a  receiver  where  the  fraud  is 
denied  by  the  answer,  and  it  is  not  shown  that  the  assignee  is  in- 
solvent or  there  is  otherwise  danger  of  loss.'  As  to  what  are 
fraudulent  assignments  it  may  in  general  terms  be  stated  as  fol- 
lows: (1)  where  the  instrument  provides  for  the  debtor  continu- 
ing business ;  (2)  where  the  debtor  reserves  to  himself  a  benefit, 
as  in  the  disposition  of  the  property ;  (3)  provisions  for  the  pos- 
session to  remain  in  the  debtor ;  (4)  provisions  for  the  payment 
of  individual  debts  out  of  partnership  assets;  (5)  omission  of 
assets  if  int&ntional ;  (6)  including  fictitious  liabilities.'' 

(b)  And  a  receiver  may  be  appointed  where  the  assignment  is  free 
from  fraud  in  cases  (1)  where  the  assignee  fails  to  take  possession 
of  the  property,  or  fails  or  refuses  to  do  anything  towards  carry- 
ing out  the  object  of  the  trust,'  or  (2)  is  guilty  of  gross  mis- 
management of  the  trust  property  or  funds/  Where  an  assign- 
ment is  set  aside  as  fraudulent  and  void  as  to  creditors,  and  the 
debtor  and  assignee  transfer  the  property  to  the  receiver  ap- 
pointed in  a  creditor's  proceeding  upon  the  order  of  court  the 
title  to  the  real  estate  thereby  becomes  vested  in  the  receiver  and 
is  not  subject  to  levy  and  sale  under  a  subsequent  judgment.* 

^Pelzerv.  migUi,  27  8.  C.  408.  Shuliz  v.  Hoagland,   85  K  Y.    464; 

''See  Wait  on  Fraudulent  Convey-  Waverley    Nat.  Bank    v.    Hcdsey,  57 

ances  and  Creditor's  Bills,  §  345,  2d  Barb.  249;  Graft  v.  Bloom,  59  Miss. 

ed.;  also  the    following    cases  cited:  69;  (6)  Talcott  v.  Hess,  31  Hun,  282, 

(1)  Holmes  V.  Marshall,  78  N.  C.  262;  Cf.    Pierce  v.   Brewster,  32   111.    268; 

(2)  Cheatham  v.  Hawki7is,  76  N.  C.  Whipple  v.  Pope,  33  111.  834;  Gardner 
335;  Bifjelow  v.  Stringer,  40  Mo.  195;  v.  Commercial  Nat.  Bank,  95  111.  298. 
Barney  V.  Griffin,  2  1^.  Y.Z65;  Leiich  ^Suydam  v.  Dequindre,  Harr.  Ch. 
V.   Hollister,   4  N.  Y.  211;  Mackie  v.  347. 

Cairnes,  5  Cow.  547;  Harris  v.  Sum-  *  Jones  v.  Dougherty,  10  Ga.  273. 

mer,  2  Pick.  129;  Frank  v.  Robinson,  Where  a  bankrupt  concealed  from 

96  N.  C.  32;  (3)  Billingsley  v.  Bu7ice,  his  assignee  a  valuable  claim  and  bid 

28  Mo.  547;  Beed  v.  Pelletier,  28  Mo.  off  all  his  rights  and  property  at  a  sale 

173;  Brooks  v.  Wisner,  20   Mo.  503;  thereof  for  a  nominal  sum,  a  creditor's 

Stanley  v.  Bunce,  27  Mo.  269;  Cheat-  bill  was  held  properly  brought  by  a 

ham  v.  Hawkins,  76  N.  C.  335;  Har-  creditor,  after  the  assignee's  death,  in 

man  v.  Hoskins,  56  Miss.  142 ;  Joseph  behalf  of  all  the  creditors,  to  reach  the 

v.  Levi,  58  Miss.    843;  (4)  Wilson  v.  fund    awarded    in    payment  of    the 

Robertson,   21   N.   Y.  587;    Schiele  v.  claims.     Clark  v.  Clark,  58  U.  S.  17 

Hciily,  61  How.  Pr.  73;  Piatt  v.  Hun-  How.  315,  15  L.  ed.  77. 

ter,  11  N.  Y.  Week.  Dig,  300;  but  see  ^Chautauque  County  Bank  v.  White, 

Crook  V.  Rindskopf,  105   N.  Y.  476;  6  N.  Y.  236. 
^5;    Probst  V.    Welden,   46   Ark.    409; 


CREDITOR'S  BILLS,  ETC. 


251 


§  150.     Supplementary  proceeding. 

Closely  analogous  to  a  creditors  bill,  and  as  a  substitute  there- 
for, so  far  as  the  discovery  of  property  and  the  ajjplication  of  the 
same  is  concerned  is  the  statutory  proceeding,  in  most  of  the 
states  denominated  supplementary  proceedings  or  proceedings  in 
aid,  etc.,  and  as  a  rule  the  old  chancery  practice  governs  this 
statutory  proceeding,  unless  otherwise  provided  by  the  statute. 
In  many  of  the  states  the  proceedings  are  less  formal  and  less 
complicated  than  under  the  original  chancery  practice  under  a 
creditor's  bill.'  In  this  class  of  cases  the  receiver  represents  the 
creditors  and  may  impeach  the  debtor's  fraudulent  transfers,'  to 


^Pacific  Bank  v.  Robinson,  57  Cal, 
520;  McCullough  v.  Clark,  41  Cal.  298; 
Mason  v.  Weston,  29  lud.  561;  Becker 
V.  Torrance,  31  N.  Y.  631;  Pope  v. 
Cole,  64  Barb.  406,  affirmed  in  55  N, 
Y.  124;  Tudes  v.  Hood,  29  Kan.  49; 
Atcldson  Board  of  Education  v.  Sco- 
field,  13  Kan.  17;  Fli7it  v.  Webb,  25 
Minn.  263;  Kennesaw  Mills  Go.  v. 
Walker,  19  S.  C.  104;  Graham  v.  La 
Grosse  &  M.  R.  Co.  10  Wis.  459; 
Smith  V.  Weeks,  60  Wis.  94;  Clark  v. 
Bergenthal,  52  Wis.  103;  Kellogg  v. 
Coller,  47  Wis.  649;  Barker  v.  Dayton, 
26  Wis.  367;  Allen  v.  Tritch,  5  Colo. 
222;  Coates  Bros.  v.  Wilkes,  92  N.  C. 
376.  And  see  People,  Fitch,  v.  Mead, 
29  How.  Pr.  360;  Spencer  v.  Cuyler, 
9  Abb.  Pr.  382;  Barnes  v.  Morgan,  3 
Hun,  703;  Billings  v.  Stewart,  4  Dam. 
269. 

It  is  held  in  New  York  that  the 
commencement  of  the  creditor's  pro- 
ceeding gives  the  creditor  at  once  a 
lien  upon  the  equitable  assets  of  the 
debtor.  Lynch  v.  Johnson,  48  N.  Y. 
27;  Storm  v.  Waddell,  2  Sandf.  Ch. 
494;  Brown  v.  Nichols,  42  N.  Y.  26; 
Davenport  v.  Kelly,   42  N.    Y.    193. 

The  filing  of  a  bill  and  the  service 
of  process  creates  a  lien.  Miller  v. 
Sherry,  69  U.  S.  2  Wall.  237,  17  L. 
ed.  827;  Freedman's  Sav.  &  T.  Co.  v. 
Ea/rle,  110  U.  8.  710,  28  L.  ed.  301. 


^Bostwick  V.  Menck,  40  N.  Y.  383; 
Porter  v.  Williams,  9  N.  Y.  142;  Dal- 
lard  V.  Taylor,  1  Jones  &  S.  496;  Os- 
good V.  Laytin,  48  Barb.  463;  S.  C. 
affirmed  5  Abb.  Pr.  N  S.  9;  Hamlin 
V.  Wright,  23  Wis.  492;  Barton  v. 
Hosner,  24  Hun,  469;  Underwood  v. 
Sutcliffe,  11  N.  Y.  62;  Dunham  v. 
Byrnes,  36  Minn.  106;  Miller  v.  Maa- 
kemie,  29  N.  J.  Eq.  291.  But  see 
Higgins  v.  Gillesheiner,  26  N.  J.  Eq. 
308. 

A  receiver  will  not  be  appointed  for 
the  purpose  of  collecting  costs  in  sup- 
plementary proceedings  which  have 
not  been  awarded  or  allowed,  where 
the  judgment  creditor  has  without  the 
knowledge  of  his  attorney  settled  the 
matter  in  full.  Paterson  Bros.  v. 
Goorley,  14  Misc.  56. 

A  receiver  in  supplementary  pro- 
ceedings is  not  entitled  to  the  proceeds 
of  insurance  upon  exempt  property 
because  the  debtor  once  expressed  his 
willingness  to  apply  the  money  on 
the  judgment,  where  he  subsequently 
claims  his  legal  rights.  Bliss  v.  Ray- 
nor,  91  Hun,  250. 

A  receiver  in  supplementarj'^  pro- 
ceedings cannot  be  required  at  the 
instance  of  his  attorney  to  bring  an 
action  against  the  county  clerk  for 
official  misconduct  in  failing  to  fur- 
nish copies  of  papers  on  file  in  his 


252  RECEIVERSHIPS. 

such  extent  as  to  satisfy  the  debts  of  the  creditors  he  represents' 
But  it  must  not  be  understood  that  the  receiver  by  his  appoint- 
ment becomes  vested  with  the  title  to  property  fraudulently  con- 
veyed so  that  the  court  in  a  summary  manner  may  put  him  in 
possession.  A  suit  is  necessary  for  that  purpose,"  and  where  an 
assio-nee  in  bankruptcy  has  been  appointed  the  assignee  and  not 
the  receiver  is  the  proper  person  to  institute  such  proceedings/ 

§  151.    Necessity  of  oilicers  retaining  execution,  statutory 

period. 

(a)  When  eequired. 
As  to  the  necessity  of  the  sheriff  holding  the  execution  for  the 
full  lifetime  given  by  the  statute  the  decisions  are  by  no  means 
uniform.  Some  of  them  hold  that  the  sheriff  must  hold  the  ex- 
ecution the  full  sixty  days,  or  other  time  allowed  for  a  return, 
before  a  return  thereon  can  be  made  a  basis  for  a  creditor's  bill 
or  supplementary  proceeding,  and  are  based  upon  the  doctrine 
that  plaintiff"  must  have  exhausted  his  legal  remedies  before  in- 
voking the  aid  of  a  court  of  chancery,  or  other  court  exercising 
chancery  jurisdiction.* 

office,  to  enable  such  attorney  to  ob-  Be^k  v.  Burdctt,  1  Paige,  305;  Pudney 

tain  pay  for   his  services,  where   no  y.   Oriffiths,  6  Abb.  Pr.  211;  Spencer 

action  has  been  commenced  so  as  to  y.    Cuyler,  17   How.  Pr.   157,  9  Abb. 

give  the  attorney  a  lien  on  such  papers  Pr_  382;  Ritterband  v.  Maryatt,  12  N. 

under  N.  Y.  Code  Civ.  Proc.  §  66.  y.  Leg.  Ob.  158;  Nagle  v.  James,  7 

Millis  V.  Pentelow,  92  Hun,  284.  Abb.  Pr.  234;  Cassidy  v.  Meacham,  3 

^Bosticick  v.  Menck,  40  N.  Y.  883;  Paige,  311;  Williams  v.  Hogehoom,  8 

Manley  v.  Rassiga,  13  Hun,  290.  Paige,  469;  Piatt  v.  Cadwell,  9  Paige, 

^Bostwick  V.  Menck,  40  N.  Y.  384.  886;  Smith  v.  Thornpson,  Walk.  Ch.  1 

Wlneyv.  Tanner,18Fed.  Rep.  636;  Williams  v.  Hubbard,  Walk.  Ch.  28 

Olenny  v.  Langdon,  98  U.   S.  20.  25  Beach    v.     White,    Walk.    Ch.    495 

L.  ed.  43;  Trimble  v.    Woodhead,  102  Thayer  v.  Stcift,  Harr.  Ch.  430;  Stew- 

U.    S.    647,  26   L.  ed.  290;  Moyer  v.  ard  v.  Stevens,  Harr.  Ch.  169;  Adam» 

Dewey,   103    U.    S.    301,   26    L.    ed.  v.  Bowe,  12  Abb.  N.  C.  322;  Wright  v. 

394.  Nostrand,   94  N.    Y.    31.      And   see 

But  the  right  of  possession  of  a  re-  Palmer  v.  Colville,  63  Hun,  536. 
ceiver  is  superior  to  that  of  an   as-  Under  New  York  Code.     Engle  v. 

signee    in    bankruptcy  subsequently  Bonneau,    2    Sandf.    679;  Livingston 

appointed.     Skip  v.  Haricood,  3  Atk.  v.  Gleaveland,  5  How.  Pr.  396;  Tyler  v. 

564;  Judd  v.  Bankers'  &  M.  Teleg.  Co.  Whitney,  12  Abb.  Pr.  465;  Fenton  v. 

31  Fed.  Rep.  182.  Flagg,  24  How.   Pr.  499;  Farquahar- 

*McElwain  v.   Willis,  9  Wend,  548;  son    v.   Kimball,   9    Abb.    Pr.    385»/ 


CREDITOR'S  BILLS,  ETC. 


253 


(b)  When  not  required. 

On  the  otlier  hand  it  has  been  held  that  the  officer  havmo'  tlie 
execution  in  his  hands  need  not  retain  the  same  tlie  full  statutory 
period  before  makino;  his  return  thereon  in  order  to  constitute  the 
foundation  of  a  creditors'  bill  or  sui)plenientarj  proceedino-g,  and 
this  doctrine  is  maintained  upon  the  presumption  that  the  sheriff 
or  other  officer  has  done  his  entire  official  duty  in  searching  for 
property  of  the  judgment  debtor.' 

It  will  be  apparent  that  the  return  of  the  execution  by  the  offi- 
cer within  the  statutory  period,  and  making  such  return  the  basis 
of  a  creditor's  Inll  or  supplementary  proceeding,  on  the  presump- 
tion that  the  officer  has  used  due  diligence  in  searching  for  prop- 
erty may  be,  and  often  is,  the  merest  fiction,  and  is  using  the 
■court  and  its  process  for  the  purpose  of  wresting  from  an  unfor- 
tunate debtor  the  possession  and  income  of  his  property  by  means 


Sperling  v.  Levy,  10  Abb.  Pr, 
426. 

If  there  is  no  fraud  or  collusion,  it 
may  be  presumed  the  officer  did  his 
duty.  The  return  of  the  sheriiT  can 
only  be  impeached  in  a  direct  pro- 
ceeding, and  not  collaterally.  Metho- 
dist Book  Concern  &  Co.  v.  Hudson,  1 
How.  Pr.  N.  S.  517  (see  rules  of 
court). 

One  judgment  debtor  on  whose 
property  an  execution  has  been  levied 
which  property  it  is  alleged  had  been 
fraudulently  conveyed,  will  not  be 
permitted  to  contend  that  the  execu- 
tion is  void  because  issued  against 
only  one  of  several  judgment  debtors. 
Flanders  v.  Batten,  50  Hun,  542. 

^Spencer  v.  Cuyler,  17  How.  Pr.  157; 
Hutchinson  v.  Brand,  9  N.  Y.  208; 
Farquahart-on  v.  Kimball,  18  How. 
Pr.  33;  Livingston  v.  Cleaveland,  5 
How.  Pr.  396;  Tyler  v.  Whitney,  12 
Abb.  Pr.  465;  Fenton  v.  Flagg,  24 
•  How.  Pr.  499;  Field  v.  Chapman,  15 
Abb.  Pr.  434;  First  Nat.  Bank  v.  Ber- 
ing, 8  N.  Y.  Week.  Dig.  261;  Tojnlin- 
son  &  W.  Mfg.  Co.  v.  iShatts,  34  Fed. 


Rep.  380;  Sperling  v.  Levy,  10  Abb. 
Pr.  426;  Tykr  v.  Willis,  33  Barb.  327; 
Benand  v.  O'Brien,  35  N.  Y.  99.  But 
see  Williams  v.  Hogeboom,  8  Paige, 
469;  Whitehead  v.  Hellen,  74  N.  C.  679; 
Bowen  v.  Parkhurst,  24  111.  257;  Wil- 
liams V.  Ives,  49  111.  513;  First  Nat. 
Bank  v.  Gage,  79  111.  207;  Iiu.><sell  v. 
Cliicago  Trust  &  Sav.  Bank,  139  111. 
538,  17  L.  R.  A.  345. 

Where  the  execution  is  returned  on 
the  same  day  of  its  issuance  by  order 
of  the  plaintiff's  attorneys,  it  cannot 
form  the  basis  of  a  creditor's  bill  and 
the  receiver  will  be  discharged.  Stir- 
len  V.  Jeioett,  63  111.  App.  55;  Scheubert 
V.  Honel,  50  111.  App.  597. 

And  while  the  execution  may  be  re- 
turned before  the  90  days  and  become 
the  foundation  of  a  creditor's  bill  it 
must  be  done  upon  the  responsibility 
of  the  sheriff,  and  not  by  direction  of 
the  plaintiff.  It  must  be  returned  by 
reason  of  the  sherifl"s  inability  to  find 
property  whereon  to  levy.  Bitrand 
V.  Gray.  129  111.  9;  Scheubert  v.  Honel, 
152  111.  313. 


254 


RECEIVERSHIPS. 


of  a  receivership.  Hence  it  is  that  courts  have  exercised  a  judi- 
cious care  and  circumspection  over  proceedings  of  this  nature,  and 
if  it  appeared  that  the  execution  was  returned  before  its  lifetime 
had  expired, throuo-h  the  solicitation  and  at  the  request  of  plain- 
titf  or  his  attorney,  and  that  no  attempt  had  been  made  to  dis- 
cover property,  or  effect  a  levy,  or  demand  property  for  the  pur- 
pose of  satisfyinc^  the  execution,  then  in  such  case  the  court  has 
treated  the  return  of  the  sheriff  as  not  in  fact  his  return  and  has, 
upon  motion,  set  aside  the  supplementary  proceedings.'  Where 
the  sheriff's  return  is  dictated  by  the  plaintiff's  attorney  and  is  so 
shown  thereby  it  is  not  a  sufiicient  foundation  for  supplementary- 
proceedings.' 

§  152.    Practice  in  code  states. 

Under  many  of  the  codes  of  procedure  the  causes  for  which 
the  court  may  appoint  a  receiver  are  specifically  stated,  to  which 
it  is  not  deemed  essential  to  refer  in  this  connection.     It  was  for- 


^Pudney  v.  Griffilhs,  15  How.  Pr. 
410;  Nagle  v.  Jaynes,  7  Abb.  Fr.  234; 
Ritterband  v.  Maryatt,  12  N.  Y.  Leg. 
Obs.  158;  Albany  City  Bank  v.  Door, 
Walk.  Ch.  317. 

If,  however,  it  appears  that  the 
officer  has  in  good  faith  made  an  in- 
effectual effort  to  find  property  then 
the  proceeding  will  be  upheld.  White- 
head V.  Hellen,  74  N.  C.  679;  Hart  v. 
Stearns  A  N.  Y.  Week.  Dig.  540. 

Some  doubt  has  been  entertained, 
however,  as  to  the  power  of  the  court 
to  go  back  of  the  sheriff's  return  and 
enquire  into  the  good  failh  of  his  acts 
in  the  matter,  discovering  property, 
levying  thereon  and  returning  the  ex- 
ecution nulla  bona  in  supplemen- 
tary proceeding,  such  being  in  the 
nature  of  a  collateral  attack  upon  an 
official  act  of  an  officer  of  the  court. 
Sperling  v.  Levy,  10  Abb.  Pr.  426; 
Owen  V.  Dupignac,  9  Abb.  Pr.  180; 
Methodist  Book  Concern  &  Co.  v.  Hud- 
son, 1  How.  Pr.  N.  S.  517;  Browning 
V.  Hanjord,  5  Denio,  586;  Putnam  v. 


Man,  3  Wend.  202;  Wheeler  v.  Lamp- 
man,  14  John.  481;  Flint  v.  Webb,  25 
Minn.  263. 

These  authorities,  as  a  rule,  hold 
that  the  return  of  the  sheriff  must  be 
attacked  in  a  direct  proceeding  for 
such  purpose  by  the  judgment  debtor. 

Where  there  is  collusion  between 
the  creditor  and  debtor  for  the  pur- 
pose of  enabling  the  latter  to  carry 
on  his  business  without  interference 
on  the  part  of  creditors  it  is  a  fraud 
upon  the  rights  of  creditors,  and  upon 
an  intervening  petition  by  judgment 
creditors  setting  up  the  fraud,  the 
original  bill  was  dismissed  for  want 
of  equity  and  receiver  discharged. 
Stirlen  v.  Jewett,  63  111.  App.  55. 

"^Marx  V.  Spaulding,  35  Hun,  478. 
And  in  Wisconsin  the  sheriff's  return 
on  its  face  must  show  diligent  search 
for  real  and  personal  property  subject 
to  levy  and  sale  and  a  mere  return  un- 
satisfied is  not  sufficient.  Re  Rem- 
ington, 7  Wis.  643.  But  see  Second 
Ward  Bank  v.  Upmann,  12  Wis.  499. 


CREDITOR'S  BILLS,  ETC.  255 

merly  the  practice  under  creditors  bills  to  appoint  a  receiver 
almost  as  a  matter  of  course  and  then  by  discovery  or  otherwise 
proceed  to  ascertain  if  the  debtor  had  property  that  should  be  ap- 
plied towards  the  satisfaction  of  liis  debts.  Under  the  modified 
and  summary  proceedings  in  i^ew  York  and  other  code  states, 
the  more  reasonable  practice  prevails  of  discovering  property 
first  and  then  appointing  a  receiver,  and  where  no  property  is 
discovered  subject  to  the  payment  of  debts  no  receiver  will  be 
appointed.'  Where  a  creditor's  bill  is  filed  against  tlie  estate  of 
a  deceased  debtor  it  is  necessary  to  allege  and  prove  the  insufli- 
ciency  of  the  personal  estate  to  pay  debts/  but  where  the  estate 
is  suflicient  to  pay  debts  a  receiver  of  the  rents  and  profits  will 
not  be  appointed. 

§  153.     Appointment  of  receirer,  order,  dnties,  etc. 

The  appointment  of  a  receiver  in  this  class  of  proceedings,  like 
the  appointment  in  general,  rests  in  the  sound  judicial  discretion 
of  the  court,  under  the  statutory  provisions,  and  the  practice  of 
the  court,  upon  notice  given  to  the  debtor  and  those  interested  in 
the  property,  or  their  appearance.  The  order  should  receive  spe- 
cial care  and  be  drawn  with  reference  to  the  object  or  purpose  of 
the  receivership,  having  reference  to  the  nature  and  character  of 
the  property  involved.  The  general  duties  imposed  upon  the 
receiver,  and  the  general  rules  regarding  the  regularity  of  the  ap- 
pointment, and  the  methods  of  attacking  the  same,  are  equally 
applicable  to  this  class  of  receiverships ;  and  so  with  reference  to 
the  bond  and  sureties  of  the  receiver,  as  well  as  the  general  prin- 
ciples governing  the  selection  of  a  receiver,  his  powers,  duties, 
functions,  and  liabilities. 

The  receiver's  title  is  in  all  respects  similar  to  the  receiver's 
title  in  other  proceedings  of  a  general  nature,  and  is  subject  to 
the  same  limitations  and  restrictions,  as  to  previous  liens,  exemp- 
tions, possession,  trust  relationships,  etc. 


■■See  Hoffman,  Prov.  Rem.  pp.  523,  (Ont.)  137;  3TcKaig  v.  Jamen,  66  Md. 

524,  525;  but  see  Second  Ward  Bank  583.     It   is   otherwise    if    tliere   is  a 

V.  Upmann,  12  Wis.  490.  strong  probability  of  the  estate  beiog 

^Sanders  v.   Christie,  1  Grant,  Ch.  insufficient. 


2oQ 


RECEIVERSHIPS. 


§  154.    Keceiver's  powers  in  supplementary  proceedings. 

Under  creditors'  bills  and  supplementary  proceedings  the  re- 
ceiver becomes  vested  with  the  debtor's  assets  and  equitable 
interests  without  conveyance  or  assignment,'  and  inasmuch  as  in 
this  proceeding  he  is  the  representative  of  the  creditors  he  may 
impeach  and  set  aside  the  fraudulent. transfers  of  the  debtor,  and 
thereby  subject  the  propert}^  to  the  payment  of  his  debts.'^ 
In  general,  it  may  be  said  that  the  filing  of  a  creditor's  bill 
and  the  service  of  process  creates  an  equitable  lien  upon  the 
effects  of  a  judgment  debtor,  and  is  in  effect  an  equital)le 
levy.'     Before  the  receiver  is  authorized  to  enter  upon  the  duties 


>  Bosttcick  v^  Me7ick,  40  N.  Y.  383; 
Cooney  v.  Cooney,  Go  Barb.  524;  Porter 
V.  Williams,  9  N.  Y.  142;  and  this,  too, 
•whether  the  property  is  in  the  debtor's 
hands  or  in  the  hands  of  another;  but 
this  right  only  extends  to  such  prop- 
.  erty  as  is  not  exempt  from  execution. 
Hudson  V.  puts,  11  Paige,  180;  An- 
drews V.  Rowan,  28  How.  Pr.  126; 
Tillotson  V.  Wolcott,  118  N.  Y.  190. 
But  see  Chautauque  County  Bank  v. 
Ruley,  19  N.  Y.  369;  Moak  v.  Coats, 
33  Barb.  498 ;  of.  Manning  v.  Evans, 
19  Hun,  500;  Wing  v.  Disse,  15  Hun, 
190;  Hayes  v.  Buckley,  53  How.  Pr. 
173;  Harrison  v.  Maxwell,  44  N.  J.  L. 
816. 

«  Bostwick  V.  Menck,  40  N.  Y.  383. 
But  his  right  only  extends  to  so  much 
•  of  the  debtor's  property  so  fraudu- 
lently assigned  as  will  be  sufficient  to 
satisfy  the  creditor  or  creditors  whom 
he  represents.  Cf.  Porter  v.  Williams, 
■  9  N.  Y.  142;  Dollard  v.  Taylor,  1  Jones 
&  S.  496;  Gillet  v.  Moody,  3  N.  Y. 
479;  Leavitt  v.  Palmer,  3  N.  Y.  19; 
Brouwer  v.  Hill,  1  Sandf.  629;  Hyde 
V.  Lynde,  4  N.  Y.  392;  Underwood  v. 
Sutdiffe,  77  N.  Y.  58  (reversing  10 
Hun,  453).  While  the  receiver  has 
power  to  institute  proceedings  to  set 
aside  fraudulent  transfers  of  property 
made  by  the  debtor,  yet  he  does  so  as 
the  representative  of  the  creditor  or 


creditors  at  whose  instance  he  has 
been  appointed,  and  in  so  doing  he 
has  no  greater  power  than  such  credi- 
tors would  have  were  proceedings  in- 
stituted by  them,  and  if  the  creditors 
have  waived  the  frauds  by  an  affirm- 
ance of  the  contract,  as  in  case  of  a 
suit  thereon,  the  receiver  cannot 
attack  the  transaction  as  fraudulent. 
Kennedy  v.  Thorp,  51  N.  Y.  174  (re- 
versing 2  Daly,  258);  cf.  Parish  v. 
Murj>hree,  54  U.  S.  13  How.  99,  14 
L.  ed.  67;  Savage  v.  Murphy,  34  N.Y. 
508;  Walter  v.  Laiie,  1  McArth.  275. 

8  Miller  v.  Sherry,  69  U.  S.  10  Wall. 
237,  17  L.  ed.  827,  citing  Bayard  v. 
Hoffman,  4  John.  Ch.  450;  Beck  v. 
Burdett,  1  Paige,  308;  Storm  v.  Wad- 
dell,  2  Sandf.  Ch.  491;  Corning  v. 
White,  2  Paige,  567;  Edgell  v.  Hay- 
wood, 3  Atk.  352;  Tilford  v.  Burnham, 
7  Dana,  110. 

An  execution  creditor  can  only 
come  into  a  court  of  equity  to  enforce 
his  judgment  against  property  not 
capable  of  being  reached  at  law;  but 
where  the  debtor  has  mortgaged  his 
property  and  has  only  an  equitable 
interest  remaining,  the  creditor  may 
have  a  receiver  of  the  rents  and 
profits  of  the  debtor's  land,  subject 
to  the  rights  of  the  prior  incum- 
brances, but  not  of  the  debtor's  busi- 
ness   (theatre).      Cadogan    v.     Lyric 


CREDITOR'S  BILLS,  ETC.  257 

of  his  office  and  take  control  of  the  debtor's  assets  he  must  i>-ive 
bond  as  required.'  When  he  has  done  so  it  has  been  held  that 
the  court  has  power  to  compel  the  debtor  to  convey  to  the  re- 
ceiver all  the  real  estate  owned  by  him  situated  without  the  state, 
as  well  as  personal  property.^  When  property  of  the  judgment 
debtor  is  in  the  hands  of  a  third  person,  under  a  valid  transfer, 
or  where  the  debtor  has  placed  on  such  property  a  Ixniajide  lien 
or  incumbrance,  the  receiver's  possession  is  subject  thereto,  or  in 
other  words,  as  to  such  property  the  receiver  succeeds  to  such 
rights  only  in  such  property  as  the  judgment  debtor  had  at  the 
date  of  liis  appointinent."  If  the  receiver  desires  to  attack  the 
title  to  property  held  by  a  thiixl  person  he  must  bring  an  action 
for  that  purpose,  making  defendants  to  such  action  such  persons 
as  claim  to  have  an  interest  therein."  There  are  certain  interests 
of  the  judgment  debtor  in  property  that  he  may  have  in  his 
possession  at  the  time  of  the  receiver's  appointment  that  do  not 
vest  in  the  receiver,  such  as  property  in  which  the  debtor  has  the 
mere  naked  i)ossession,*  or  where  he  holds  it  as  trustee,  or  which 
is  exempt  from  levy  and  sale,"  or  after-accpiired  property  of 
the  debtor.'  Under  the  general  rule  the  receiver's  title  relates 
back  to  the  date  of  his  appointment,  and  the  sanie  rule  applied 


Theatre,  7  Rep.  594  [1894]  3  Ch.  338,  ceiver  succeeds  only  to  the  right  of 

6:J  L.  J.  Ch.  775,  71  L.  T.  8.  redemption    and    not    the    right    of 

'  Voorheex  v.  Seymour,  26  Barb.  569;  possession.     Campbell  v.  Fish,  8  Daly, 

Banks  v.   Potter,   21   How.    Pr.    469;  162. 

Conrjer  v.  Sands,  19  How.  Pr.  8.  *  Wright  v.  JVostrand,  94  N.  Y.  31. 

*  Chautauque  County  Bank  v.  Risley,  *  Gardner  v.  Smith,  29  Barb.  68.' 

19N.  Y.  369;  .SwnTiv.  i*^(?w<ia,  2N.Y.  ^Hancock  v.   Sears,  93  N.    Y.    79; 

Code  Rep.  70;  of.  Steele  v.  Sturges,  5  Finnin,  v.  Malloy,  1  Jones  &  S.  382; 

Abb.  Pr.  442;  hni  sue  contra.  Amy  v.  Cvoney    v.     Cooney,     65     Barb.    524; 

Manning,  149  Mass.  487,  as  to  choses  Tilloison  v.    Wolcott,    48  N.    Y.    188; 

in  action  in  a  foreign  jurisdiction.    It  Campbell  v.    Foster,    35   N.    Y.    361; 

is  also  held  that  neither  in  England  Graff  v.  Bonnett,  31  N.  Y.  9;  Scott  v. 

nor  in  Massachusetts  is  it  within  the  Nevins,   6  Duer,   672;    Underwood  v. 

general  powers  of  a  court  of  equity  to  Sutcliffe,  77  N.  Y.  58. 

compel  an  assignment  of  the  debtor's  '  Graff  v.  Bonnett,  25  ITow.  Pr.  470; 

property  or  his  choses  in  action.  Genet  v.    Foster,    18    How.    Pr.    50; 

'  Voorheen  v.  Seymour,  26  Barb.  585;  Merritt  v.  Satcyer,  6  Thorn  p.  &  C.  160. 

Gardner  v.  Smith,  29  Barb.  68.     If  a  Nor  to  the  wages  of  the  debtor  for 

mortgagee  is  rightfully  in  the  posses-  |)ersonal  services,  Uowell  v.  McDowell, 

sion  of  mortgaged   chattels  the   re-  47  N.  J.  L.  359. 
17 


258  RECEIVERSHIPS. 

to  the  former  code  in  New  York,'  thougli  under  the  present 
code  his  title  dates  from  the  time  of  the  service  of  the  warrant  or 
order,  though  there  are  decisions  holding  that  his  title  relates 
V)ack  to  the  date  when  j^roceedings  were  begun  resulting  in  his 
appointment.*  Under  the  codes  of  procedure  as  a  rule  the  re- 
ceiver is  authorized  to  sue  in  his  own  name  in  all  actions  whore 
he  is  authorized  to  sue.^  As  a  general  rule  in  this  class  of  receiver- 
ships it  may  be  stated  that  he  takes  the  property  and  effects  of 
the  judgment  debtor  as  he  hnds  it  subject  to  all  rights  therein 
and  incumbrances  thereon  in  favor  of  third  parties,  and  his  rights 
and  powers  are  measured  and  determined  by  the  rights  and 
powers  of  the  judgment  debtor  had  no  receiver  been  ajjpointed, 
subject,  however,  to  the  exception  that  a  receiver  may  avoid  the 
frauds  of  the  debtor  which  the  latter  could  not  do,  but  in  doing 
so  the  receiver  is  the  representative  of  the  creditor  and  not  the 
debtor.* 

§  155.    Receiver's  functions  in  supplementary  proceedings. 

The  functions  of  a  receiver  in  supplementary  proceedings, 
except  where  regulated  by  statute,  are  not  materially  different 
from  his  functions  in  other  proceedings  of  a  general  nature,  and 
his  duties  are,  in  general,  fixed  by  the  order  of  appointment,  the 
scope  of  the  order,  of  course,  being  determined  by  the  character 
of  property  over  which  the  receivership  extends.  It  is  to  be 
observed,  however,  that  in  this  class  of  proceedings  the  receiver 
occupies  the  position  of  a  trustee   for   the   creditors  in  whose 

'  Banks  v.  Potter,  21  How.  Pr.  469;  gun,    and  cannot   maintain   replevin 

Becker   v.   Torrance,    31    N.    Y.   C31 ;  for  such   chattels   against   the  mort- 

Fillmore  v.  Horton,  31  How.  Pr.  424;  gagee.     VarnpbeU  v.  FisJi,  8  Daly,  162. 

Lodimore  v.  Lord,  4  E.  D.  Smith,  183.  A  receiver  appointed  in  aid  of  exe- 

*  Coleman  v.  Eoff,  45  N.  J.  L.  7;  cution  may  maintain  a  bill  of  dis- 
Clurk  V.  Gilbert,  10  Daly,  316.  covery  and  clear  the  debtor's  property 

3  Seymour  v.  Wilson,  15  How.  Pr.  from    fraudulent    liens.      Bergen    v. 

355,  reversing  16  Barb.  294;  Bostwick  Littell,  41  N.  J.  Eq.  18. 

V.  Meiick,  40  N.   Y.   383;   Porter  v.  In  an   action   by   a  receiver  of  a 

Williams,  9  N.  Y.  142.  judgment  debtor,   appointed  in  sup- 

*  A  receiver,  appointed  in  supple-  plementary  proceedings  to  set  aside  a 
mentary  proceedings,  takes  only  an  conveyance  by  the  judgment  debtor 
equitable  right  of  redemption  in  as  being  in  fraud  of  creditors,  the 
chattels  mortgaged  by  the  judgment  judgment  debtor  is  a  proper  party, 
debtor  and  reduced  to  possession  by  Allison  v.  Weller,  6  Thomp.  &  C.  291. 
the  mortgagee  before  proceedings  be- 


CREDITOR'S  BILLS,  ETC.  259 

behalf  he  is  appointed,  and  not  that  of  a^i^cnt  or  representative  of 
the  debtor.  He  succeeds  to  the  ri^■hts  of  such  creditors,  and  by 
reason  of  his  trust  relationsliip  is  entitled  to  enforce  these  rights 
to  the  extent  necessary  to  satisfy  the  creditor's  claims,  the  measure 
of  his  power  being  fixed  by  that  of  the  creditors  he  represents. 
He  becomes  vested  by  his  appointment  with  the  legal  title  of  the 
debtor  to  all  property  owned  by  him  at  that  time,  whether  in  the 
actual  possession  of  the  debtor,  or  in  the  possession  of  any  one 
for  his  own  use,  and  the  receiver  may  reduce  such  property  to 
his  possession  irrespective  of  the  amount  due  the  creditors  he 
represents.  As  to  property  of  the  debtor  which  has  been  con- 
veyed by  him  the  vendee  has  a  right  to  retain  possession  until 
the  superior  right  of  the  creditors  to  divest  him  is  shown,  and  in 
such  case  it  sometimes  happens  that  one  or  more  of  the  creditors 
represented  by  the  receiver  has  estopped  himself  from  question- 
ing the  validity  of  the  transfer,  in  which  case  the  receiver's  ri<'ht 
of  recovery  is  confined  to  those  creditors  not  estopped.'  The 
receiver  may  institute  actions  to  set  aside  fraudulent  transfers  of 
the  debtor  in  behalf  of  the  creditors,  and  apply  the  proceeds 
derived  therefrom." 

1  Bostwick  V.  Menck,  40  N.  Y.  383;  Williams,  9  N.  Y.  143;  Mandeville  v. 

Mandeville  v.  Avery,  124  N.  Y.  376,  Avery,  20  N.  Y.  S.  R.  801;  tiwarlout 

reversing    57    Hun,    78;    Haynes    v.  v.    Scltwerier,    5   Redf.    497;    EUl  v. 

Brooks,  116  N.  Y.  487;  WrifjU  v.  Noa-  Western  &  A.  R.  Co.  86  Ga.  284  (see 

trand,  94  N.   Y.   31;  Van  Ahtyne  v.  sial. );  Prescott  y.  Pfeiffer,  57  Mich.  21; 

Cook,  25  N.Y.  489;  Becker  y.  Torrance,  Walsh  v.  Byrnes,  39Miun.  527;  Cham- 

31  N.  Y.  631;   Porter  v.   Williams,  9  berlain  v.   O'Brien,  46  Minn.  80  (see 

N.   Y.   142;  Metcalf  V.   BelValle,    64  stat.);  Merrills.  Bessler, 'dlUinn.  S2 

Hun,  245,  affirmed  in  137  N.  Y.  545;  (see  stat.);  Hamlin  v.  Wright,  23  Wis. 

Petlibone  v.  Brakeford,  37  Hun,  628;  491;  cf.  Loos  v.  Wilkinson,  110  N.  Y. 

Salter  v.  Bowe,   32  Hun,   236   (as  to  195,  1  L.  R.  A.  250;  Murtha  v.  Curley, 

amount  recoverable);  Manley  v.  Eas-  90  N.  Y.  'dl'i;  Adsit  w.  Butler,  Ql'^.Y. 

>>i(ja,  13  Hun,  288;  Mandeville  v.  Avery,  585;  Davenport  v.  McChesney,  86  N.  Y. 

20  N.  Y.  S.  R.  801;  Lore  v.   Bierkes,  242;  Underwood  v.  Sutcliffe,  77  N.  Y. 

16  Abb.  N.  C.  47;  Mann  v.  Pentz,  2  58;  Bostwick  v.  Merick,  40  N.  Y.  383; 

Sandf.  Ch.  257;  lie  iStewarVs  Estate,  8  Lawrence  v.  Bank  of  the  Itepnblic,  35 

N.Y.  Civ.  Proc.  354;  Olney  v.  Tanner,  N.  Y.  320;  Campbell  v.  Erie  R.  Co.  46 

10  Fed.  Rep.  101,  affirmed  in  18  Fed.  Barb.  540;  Storm  v.  Waddell,  2  Sandf. 

Rep.  636.  Ch.   494.     In  Uifjgins  v.   Gillexheincr, 

»  Mandeville  v.    Avery,    124   N.   Y.  26  N.  J.  Eq.  308,  the  court  held  that 

376;  Pittsbunj  Carbon  Co.  v.  McMillan,  tlJ«  receiver  has  no  such  power  in  the 

119  N.  Y.  46,  7L.  R.  A.  46;  Wrir/ht  absence  of  a  statute. 
V.  Nostrand,  94  N.  Y.  31;  Porter  v. 


260 


RECEIVERSHIPS. 


§  156.    Right  to  sue  and  be  sued. 

As  to  the  rij^-ht  of  the  receiver  to  sne,  and  be  sued,  and  the  va- 
rious limitations  and  restrictions  thereof,  as  well  as  the  protection 
thrown  around  him  in  his  possession,  under  this  class  of  proceed- 
ings there  is  no  distinction  from  the  ordinary  rnles  applicable  to 
receiverships  in  general,  and  his  liabilities  and  duties  to  the 
court,  and  those  whose  interests  he  represents,  are  the  same  in  all 
cases,  lie  being  regarded  as  a  trustee  of  an  express  trust,  and  the 
property  in  his  possession  being  in  custodia  legis.  The  right  of 
the  receiver  to  sue  has  been  fully  treated  heretofore,  and  it  is 
only  necessary  to  remark  generally  in  this  connection  concerning 
the  receiver's  right  to  sue,  in  this  class  of  actions,  is  unquestioned, 
where  the  debtor  has  fraud nlently  conveyed  or  assigned  his  prop- 
erty,' and  so  witli  regard  to  the  fraudulent  and  illegal  acts  of  an 
insolvent  corporation,"  but  under  the  modern  supplementary  pro- 
ceedings, the  right  is  usually  conferred  by  statute. 


^Porter  v.  Williams,  9  N.  Y.  143, 
citing  Osborne  v.  Moss,  7  Johns.  161; 
Jackson  v.  Garnaey,  16  Johns.  189; 
Jackson  v.  Cadwell,  1  Cow.  632; 
Leach  v.  Kelsey,  7  Barb.  466;  Jeicettv. 
Palmer,  7  John.  Ch.  65;  Padgett  v. 
Lawrence,  10  Paige,  170;  DeMoit  v. 
Slarkey,  3  Barb.  Ch.  403;  Underwood 
V.  Sutdiffe,  77  N.  Y.  58.  In  this  case 
it  was  held  that  the  receiver's  power 
did  not  extend  to  an  action  to  enforce 
a  statutory  trust,  as  where  lands  were 
paid  for  by  him  but  conveyed  to  an- 
other. See  1  Rev.  Stat.  728,  §§  51, 
52. 

Willet  V.  Moody,  3  N.  Y.  479;  Leavitt 
V.  Palmer,  3  N.  Y.  19;  Brouwer  v. 
mil,  1  Sandf.  629;  Hyde  v.  Lynde,  4 
2SI.  Y.  392;  Chautaucjue  County  Bank 
V.  White,  6  N.  Y.  236;  BoUwick  v. 
Menck,  40  N.  Y.  383  (1  Hand). 

Barclay  v.  Quicksilver  Min.  Co.  6 
Lans.  25.  This  was  an  action  brought 
in  the  state  of  New  York  by  a  se- 
questrator of  the  state  of  Pennsylva- 
nia, but  the  principles  discussed  are 
applicable  to  receivers;  it  was  held 
that    the  foreign  sequestrator  might 


sustain  his  action  to  set  aside  a  fraud- 
ulent transfer  of  property  made  by  a 
Pennsylvania  corporation.  On  the 
question  of  comity  the  court  say: 
"This  state  has  not  yet  become  a  sanc- 
tuary for  the  protecti<m  of  property  in 
the  hands  of  a  transferee  who  has  ac- 
quired itbya  fraudulent  contrivance." 
Cf.  Uamlin  v.  Wright,  23  Wis.  491; 
Dunham  v.  Byrnes,  36  Minn.  106; 
Barker  v.  Dayton,  28  Wis.  367; 
Wright  v.  Nostrand,  94  N.  Y.  31;  Carr 
V.  Hilton,  1  Curt.  C.  230;  Kennedy  v. 
Thorp,  51  N.  Y.  174.  In  Olncy  v.  Tan- 
ner, 18  Fed.  Rep.  636,  it  is  held  that 
the  title  to  property  fraudulently  con- 
veyed does  not  vest  in  the  receiver, 
but  merely  the  right  to  prosecute  a 
suit  to  set  aside  the  fraudulent  con- 
veyance; and  where  there  has  been  an 
assignee  in  bankruptcy  appointed  the 
right  of  action  is  in  the  assignee  and 
not  the  receiver.  Citing  Qlenny  v. 
Langdon,  98  U.  S.  20,  25  L.  ed.  43; 
Trimble  v.  Woodhead,  102  U.  S.  647,  26 
L.  ed.  290;  Moyer  v.  Deicey,  103  U.  S. 
301,  26  L.  ed.  394.  The  rights  of  as- 
signees in  insolvency  proceedings  to 


CREDITOR'S  BILLS,  ETC.  261 

Pending  a  chancery  suit  having  for  its  object  the  subjection  of 
the  debtor's  real  estate  to  the  payment  of  Hens  tliereon  the  ap- 
pointment of  a  receiver  may  be  dispensed  with  if  tlie  debtor  will 
give  security  to  account  for  the  rents  and  profits  in  case  there 
should  be  a  deficiency  arising  on  the  sale  of  the  premises,  but  if 
the  debtor  does  not  ask  permission  to  give  such  bond  the  appoint- 
ment will  be  regular,' 

§  157.     Order  of  appointment. 

As  we  have  already  seen  the  order  appointing  a  receiver  can- 
not be  questioned  in  a  collateral  proceeding,^  and  in  a  supple- 
mentary proceeding  against  an  insolvent  corporation  the  same 
doctrine  prevails.'  Upon  the  opening  up  of  a  judgment  against 
a  railroad  corporation  in  order  to  permit  the  corporation  to  come 
in  and  defend,  the  order  appointing  a  receiver  in  a  sequestration 
proceeding  founded  on  the  judgment  should  be  vacated."  A  re- 
ceiver in  supplementary  proceedings  is  fully  protected  by  the 
order  of  appointment  for  all  acts'  done  thereunder,  though  the 
order  of  appointment  is  afterwards  reversed."  An  order  of  ap- 
pointment in  this  class  of  actions  vests  in  the  receiver  the  per- 
sonal estate  and  equitable  interests  of  the  judgment  debtor  as  of 
the  date  of  the  order,  where  the  order  is  followed  by  giving  bond 
as  required,^  but  he  is  not  necessarily  a  trustee  for  all  creditors, 
but  is  a  trustee  only  for  the  benefit  of  the  creditors  at  whose  in- 
stance he  is  appointed,  and  in  such  case  he  must  apply  the  money 
arising  from  a  sale  to  the  satisfaction  of  the  judgments  which 

avoid   fraudulent  transfers  which  in  nandez  y.  Drake,  81  IW.  34;  Wenne7'v. 

manj-^  respects  is  similar  to  that  of  re-  Tkornloii,  98  111.  156.    The  validity  of 

ceivers  is  discussed  in  the  following  an  order  of   appointment  cannot  be 

cases.     KUbourne  v.  Fay,  29  Ohio  St.  tried     in     a    contempt     proceeding. 

264;  Southard  V.  Bemier,  72  N.  Y.  424;  Bagky  v.  Scudder,  66  Mich.  97. 

Simpson  V.  Warren,  55  Me.  18;  Clough  ^Rodbimi  v.  Utica,  I.  &  E.  li.  Co.  28 

V.    Thompson,   7  Gratt.  26;  Slalon  v.  Ilun,  369. 

Pittman,   11   Gratt.   99;   Moncure  v.  ^ J lolcombe  v.  Johnson,  2T  Minn.  2^)3. 

Ean.wn,  15  Pa.  385;  2\ims  w.  Bullitt,  ^Wilson  v.  Allen,  6  Barb.   542;  Al- 

35  Pa.  308.  hany   City  Bank  v.  Schermerhorn,  1 

Wrantham  v.  Lucas,  15  W.  Va.  425.  Clarke  Ch.  297;  Porter  v.  Williams,  9 

'Chap.  II.  ^  22.  t  (b)  N.  Y.  142;  Butter  v.  Tallis,  5  Saudf. 

^Commercial  Nat.   Bunk  v.  Burch,  611;  Cooncy  v.  Cooney,  65  Barb.  524; 

141  111.  519;  Harris  v,  Lester,  80  111.  except   such  property   as    is  exempt 

307;  Wing  v.  Bodge,  80  111.  564;  Uer-  from  levy  and  sale. 


262  RECEIVERSHIPS. 

form  the  bfiras  of  tlic  bill  nnder  wliicli  lie  is  appointed.'  Tlie 
court,  even  in  a  creditor's  proceedin^^,  has  a  rio-ht  to  limit  tlie 
order  as  to  the  amount  of  ])roperty  over  which  the  receivership  is 
extended.^ 

§  158.    Power  of,  in  foreign  jnrisdiction. 

The  power  of  the  receiver  to  go  into  a  foreign  jnrisdiction  for 
the  purpose  of  reaching  tlie  assets  and  property  of  a  judgment 
debtor  has  elsewhere  been  considered.  A  question,  somewhat 
analogous,  as  to  the  power  of  a  receiver  upon  the  return  of  an 
execution  oiulla  hona  to  go  into  a  court  of  equity,  and  through 
the  instrumentahty  of  a  receiver  reach  choses  in  action  due  the 
judgment  debtor  from  non-resident  persons,  has  recently  been 
considered  in  Massachusetts,  where  it  is  held  that  neither  in  that 
state  nor  in  England  has  a  court  of  equity  power  to  compel  a 
debtor  to  make  a  general  assignment  of  his  choses  in  action  in 
in  this  class  of  proceedings ;  that  in  the  absence  of  statutory 
power,  the  mere  appointment  of  a  receiver  does  not  pass  the  title 
to  such  choses  in  action ;  and  the  right  of  a  judgment  creditor  to 
file  his  bill  in  chancery,  based  on  judgment  and  execution,  and 
seek  to  reach  choses  in  action  due  the  judgment  debtor  from  non- 
resident parties  is  doubtful,  and  that  if  such  power  exists  it  is 
based  upon  the  doctrine  of  equitable  attachment,  in  which  case 
the  debt  and  the  person  or  persons  sought  to  be  reached,  must  be 
specifically  described  as  definitely  as  at  law.* 

^Foung  v.  Clapp,  147  HI.  176.  ^Amy  v.  Manning,  149  Mass.  487; 

Though  the  defendant  in  a  credit-  Ilarvcy  v.  Varney,  104  Mass.  436.    Cf. 

or's  bill   admits  that  he  has  certain  Booth  v.  Clark,  58  U.  S.  17  lipw.  322, 

property,  but  denies  that  he  has  any  15  L.  ed.  104;  Brigham  v.  Lnddington, 

other,  the  order  for  the  delivery  of  12  Blatchf.  237;   Yeager  v.  Wallace,  44 

his  property  to  the  receiver  must  be  Pa.  294. 

general.     Browning  v.  Bettis,^V&\ge,  A  receiver  may  be  appointed,  al- 

5G8.  though  all  the  property  the  debtor 

'^ Jones    V.    La   Touclie,  2  Sugden's  has  is  real  estate  in  another  state,  and 

Dec.    671;    cf.    Wardell    v.    Leaven-  he  may  be  required  to  convey  the  same 

worth,  3  Edw.  Ch.  258;   but  the  court  to  the  receiver.     Towne  v.   Campbell, 

in   Billing  v.    Foster,  21    S.   C.    334,  35  Minn.  231; /S/mY/t  v.  Tozer,  42  Uun, 

say:     "It  is  difficult  to   understand  22. 

how  the  court  could  in  advance,  and  Where  debtors  are  beyond  the  juris- 

wilhout  an  inquiry  on  the  point,  ascer-  diction,  their  creditors  n  umerous,  their 

tain  how  much  would  be  necessary;  assets  in  the  shape  of  money  and  cred- 

in  fact  the  only  certain  means  of  as-  its,  many  of  those  indebted  to  them 

certaining  it  would  be  by  a  sale."  unknown,  and  where  they  have  an 


CREDITOR'S  BILLS,  ETC.  2G3 

§  150.    Priorities  under  creditor's  bills. 

Where  a  creditor's  bill  is  tiled  in  Ijehalf  of  the  plaintiff  therein, 
and  not  in  behalf  of  other  creditors  of  the  debtor,  the  receiver  is 
a  trustee  in  bc.alf  of  the  creditor  in  whose  behalf  he  is  appointed 
only,'  and  he  does  not  become  an  agent  of  the  debtor  for  the  dis- 
tribution of  the  property  in  the  sense  that  an  assignee  in  an 
insolvent  proceeding  does/  After  the  filing  of  a  bill  of  this 
nature,  other  creditors  may  intervene  and  therel)y  become  parties 
to  the  proceeding,  but  the  proceeding  by  creditor's  bill  necessa- 
rily recognizes  priorities  among  creditors  and  makes  distribution 
of  the  assets  according  to  such  priorities,' 

Where  property  in  litigation  under  a  creditor's  bill  is  liable  to 
depreciation  and  will  be  inevitably  sacrificed  if  sold  by  a  sheriff 
under  an  existing  levy,  a  receiver  will  be  appointed  to  take 
charge  of  sncli  property  and  sell  it  under  the  direction  of  the 
court,  and  distribute  the  proceeds  as  the  rights  of  parties  may 
appear/ 

The  question  has  sometimes  arisen  as  to  the  priority  of  rights  ob- 
tained by  a  receiver  under  a  creditor's  bill  and  the  purchaser  at  an 
execution  sale.  Thus,  where  a  bill  was  filed  to  set  aside  a  fraud- 
ulent transfer  of  the  debtor  on  which  a  receiver  was  appointed, 
and  an  assignment  made  in  general  terms,  pursuant  to  an  order 
of  court,  of  all  the  debtor's  personal  and  real  estate,  the  property 
not  being  described,  the  receiver's  title  is  good  as  against  a  pur- 
chaser under  a  judgment  docketed  after  the  assignment/  The 
law  is  otherwise  where  the  judgment  is  prior  to  the  assignment 

agent  within  tbe  jurisdiction,  cogni-  Logan  v.  McCall  Pub.  Co.  140  N.  Y. 

zant  of  all  their  resources  and  where  447. 

conflicting    claims    among    different  ^Russell  v.    Chicago    Truat   &  Sav. 

creditors  touching  equilable  priority,  Bank,  139  111.  588,  17  L.  R.  A.  345; 

are   to    be   settled,    the    remedy    for  Young  v.  Clapp,  147  111.  176. 

creditors  by  bill,  injunction,  and  the  "^Bouton   v.   Dement,    123    111.    142; 

ai)!)oiutment  of  a  receiver,  is  proper.  Young  v.  Clapj),  s^ipru. 

Bidlin  V.  Ferst,  55  Ga.  540.  ^  Young  v.  Clapp,  nupra;  Eiissell  v. 

Under    New   York   Code   of  Civil  Chicago  Trust  <fc  Sav.  Bank,  139  111. 

Proc.  i^§  2435,  2452,  2458,  24G3,  sup-  538,  17  L.  R.  A.  345. 

pleraentary  proceedings  may  be  sus-  *Kuhlv.  Martin,  26  N.  J.  Eq.  60. 

tained  against  a  foreign  corporation  ^Cltautavque  County  Bank  v.  While, 

having  no  agent  and  doing  no  bus!-  6N.Y.  236;  Chautawiue  County  Bank 

tie.«s  in  that  .slate,  and  a  receiver  may  v.  Pauley,  19  N.  Y.  309;  Porter  v.  WiU 

bo    api>oiuted    in    such    proceeding.  liauin,  9  N.Y.  142. 


264  RECEIVERSHIPS. 

to  the  receiver.'  It  is  premature,  hojvcver,  before  the  hearing  to 
determine  whether  creditors  or  any  of  them  are  entitled  to  prioritj 
in  payment,  and  order  their  payment." 

A  mortgage  prior  in  point  of  time  to  a  judgment  entitles  the 
mortgagee  to  interest  on  his  mortgage  before  the  judgment  cred- 
itor is  entitled  to  payment.  But  the  rule  is  dilferent  where  one 
incumbrancer  obtains  the  appointment  of  a  receiver,  and  subse- 
quently the  receivership  is  extended  in  an  independent  proceed- 
ing by  another  incumbrancer.  In  such  case  the  latter,  though  a 
prior  incumbrancer,  loses  the  rents  received  before  the  extension.' 

§  160.    Courts  reluctant  to  appoint  where  legal   title  in- 

Yolved. 

Courts  are  reluctant  in  appointing  a  receiver  on  behalf  of  a 
judgment  creditor  over  real  estate  where  the  legal  title  and  pos- 
session are  in  third  parties.  It  is  not  ordinarily  the  province  of 
a  court  of  equity  to  determine  the  legal  title  to  real  property  as 
between  contestants  therefor,  and  it  will  not  appoint  a  receiver 
in  such  cases  except  in  cases  of  fraud  clearly  proved,  accompa- 
nied by  danger  of  loss,  and  the  plaintiff  must  show  a  clear  right 
to  the  property,  or  some  lien  upon  it,  or  that  it  constitutes  a 
special  fund  to  which  he  has  a  right  to  resort  for  the  satisfaction 
of  his  judgment.*  Courts  are  equally  reluctant  to  disturb  a  mort- 
gagee in  possession  who  holds  as  security  for  the  payment  of  his 
mortgage  debt,  and  a  receiver  will  not  be  appointed  if  the  mort- 
gagee is  financially  able  to  respond  for  the  receipts.'  But  a 
receiver  may  be  appointed  in  such  case  if  it  is  necessarj^  to  pro- 
tect the  interest  of  all  parties,  as  where  the  mortgagee  is  guilty 
of  fraud  or  is  acting  in  collusion  with  the  mortgagor  and  for  his 
benefit.* 

^Chantanque  County  Bank  v.  Rislcy,  68;  Mays  v.  Rose,  Freem.  Cb.  (Miss.) 

19  N.  Y.  369;    White's  Bank  v.   Far-  718;    Vanse  v.  Woods,  46  Miss.  120. 

thing.  101  N.  Y.  344;  Shand  v.  Ban-  ^Quin  v.  Brittain,  3  Edw.   Ch.  314; 

ley,  71  N.Y.  319.  Furlong  v.  Edwards.  3  Md.  99;  Silver- 

^Penn  v .Whitehead,  12  Gratt.  74.  man  v.  Kxihn,  53  Iowa,  436. 

^Holland  v.  Cork  &  K.  R.  Co.  2  Ir.  ^Gouthwaite  v.  Rip-pon,  8  L,  J.  Ch. 

Rep.  Eq.  417.  N.  S.  139;  Rose  s.Bevan,  10  Md.  466. 

*Lloyd  V.  Fassitigham,  16  Ves.  Jr. 


CHAPTER   X. 


RECEIVERSHIP  IN  FORECLOSURE  OP  MORTGAGES. 


§  170.  Generally. 

§  171.  Usual   grounds    for    invoking 
jurisdiction. 

(a)  Where  mortgage  provides  for 

receiver. 

(b)  Where  statute  provides  for 

receiver. 

(c)  Where     security    is    inrde- 

quate. 

(d)  Where  waste  is  being  com- 

mitted. 

(e)  Where   mortgagor  is   guilty 

of  fraud. 
§  172.  When  appointed. 

(a)  Where  rents  and  profits  are 

pledged. 

(b)  Where     security    is     inade- 

quate. 

(c)  Wheie  trustee  refuses  to  take 

possession. 

(d)  Where  there   are   equitable 

grounds  for  appointment. 

(e)  Where  statute   provides  for 

appointment. 

(f)  Necessity  for  appointment  to 

be  clearly  shown. 

(g)  Where  there  is  a  contest  as 

to  property  mortgaged. 

(h)  Where  the  mortgagor  or  his 
grantee  are  guilty  of 
fraud. 

(i)  Where  the  mortgagor  is  com- 
mitting waste. 

(j)  Where  default  in  interest  and 
property  indivisible. 
§  173.  When  not  appointed. 

(a)  Where  legal  title  is  in  mort- 

gagee and  he  has  a  legal 
remedy. 

(b)  Where  ])y  the  terms  of  the 

mortgage  the  right  is  not 
given. 

(c)  Where  by  statute  mortgagor 

entitled  to  possession  until 
sale. 


(d)  Where  plaintiff's  allegations 

are  denied  or  amount  due 
is  disputed. 

(e)  Where   insolvency  of   mort- 

gagor  or  his  grantee  not 
shown. 

(f)  Where  right  of   plaintiff   to 

foreclosure      not      clearly 
shown. 

(g)  Where  plaintiff  has  no  equi- 

table standing  in  court. 

(h)  Where  pending  appeal,  ap- 
peal bond  affords  protec- 
tion. 

(i)  Where  defendant  secures 
plaintiff  by  deposit,  etc. 

(j)  Where  receivership  property 
is  a  statutory  homestead. 

(k)  Where    plaintiff    guilty    of 
laches. 
§  174.  Inadequacy    of     security    as 
ground  for. 

(a)  Two  elements. 

(1)  Insufficiency   of   property 

to  pay  debts. 

(2)  Insolvenc}'  of  mortgagor  or 

his  grantee. 

(b)  One  element   not   sufFicient. 

(c)  Presumption  as  to  adequacy. 

(d)  Rule  in  N.  J.,  Cal.,  S.  C, 

la.  and  Mich. 

(e)  Inadequacy  has  reference  to 

plaintiff's       indebtedness 
alone. 

(f)  Rule    relaxed    when    other 

equitable  grounds  shown. 

(g)  English  practice  as  to  rents 

collected  before  and  after 
time  for  redemption. 

§  175.   Same  subject  continued. 

§  176.   Over  wiiat  appointed. 

§  177.   When  appointed. 

(a)  Before  decree. 

(b)  After  decree 


2G: 


266  RECEIVERSHIPS. 

§  178.  General  rules  applicable.  §  180.  Application   of    parties    other 
§  179.  Relative  rights  of   senior  and  than  mortgagees. 

junior  mortgagees.  (a)  In  behalf  of  wife. 

(a)  English  rule.  (b)  In  bebalf  of  annuitants. 

(b)  American  rule.  (c)  In  behalf  of  bondholders. 

(d)  In  behalf  of  vendors. 

§  170.     Generally. 

Uiuler  proper  circumstances  courts  exercising  equitable  juris- 
diction frequently  appoint  receivers  over  mort^-aged  property  on 
application  of  the  mortgagee,  usually  in  proceedings  in&'tituted 
for  the  j)iirpose  of  foreclosure  of  the  mortgage.  The  usual  and 
ordinary  grounds  upon  which  the  court  or  chancellor  will  grant 
this  relief  are  considered  in  the  following  sections.  It  is  proper 
to  observe,  however,  that  nnder  the  English  practice,  until 
changed  by  statute,  the  appointment  of  a  receiver  for  mortgaged 
premises  was  exceedingly  rare  for  the  reason  that  the  mortgagee 
had  the  legal  title  to  the  property  and  was  entitled  by  reason 
thereof  to  the  possession  of  the  mor-tgaged  premises  wdiich  were 
recoverable  in  the  common  law  action  of  ejectment,  and,  there- 
fore, the  equitable  jurisdiction  of  the  court  could  not  be  called 
into  action.  It  was  only  where  the  mortgagee  held  the  equitable 
title  as  in  the  case  of  a  junior  mortgagee,  or  where  for  some  other 
reason  the  mortgagee  had  no  adequate  legal  remed}',  that  the 
English  court  of  chancery  was  called  upon  to  appoint  a  receiver. 
Some  of  the  courts  in  this  country  have  been  disposed  to  follow 
the  English  practice,  but  the  courts  of  both  countries  have  now 
come  to  recognize  the  appointment  of  receivers  in  foreclosure 
proceedings,  on  the  application  of  the  mortgagee,  as  one  .of  the 
most  connnon  modes  of  ecpiitable  relief,  under  the  rules  and  prac- 
tice of  chancery  courts. 

§  171.     Usual  groiuuls  for  invoking  jurisdiction. 

The  grounds  upon  which  a  receiver  is  usually  appointed  in 
mortgage  foreclosure  cases  are: 

(a)  Where  by  the  terms  of  the  mortgage  a  receiver  is  provided 
for  upon  default  in  the  payment  of  the  principal  and  interest,  or 
other  default  in  the  covenants  of  the  mortgage  or  trust  deed.* 

^Whitehead  v.  Wooten,  43  Miss.  523; 
Morrison  v.  Buckner,  Ilempst.  443. 


RECEIVERSHIP  IN  FORECLOSURE  OF  MORTGAGES. 


2G7 


(b)  Where  there  is  a  statutory  cause  for  the  appointment  of  a 
receiver.' 

(c)  Where  the  morti^age  security  has  ])ecouie  inadequate  by 
reason  of  a  depi'eciation  in  tlie  vahic  of  the  pi-operty  and  the  in- 
solvency of  the  niorto-agor  or  other  person  liable  for  the  mortgage 
indebtedness.'* 

(d)  Where  the  mortgagor  is  committing  waste,  or  is  otherwise 
injuring  the  value  of  the  security,  or  permits  the  proj)erty  to  be 
sold  for  taxes,  or  permits  the  insurance  to  expire.^ 

(e)  Where  the  mortgagor  or  his  grantee  is  guilty  of  fraud  or 
bad  faith." 

§  172.     When  appointed. 

In  foreclosure  proceedings,  as  in  other  cases,  the  court  is  vested 
with  discretion,"  and  in  the  matter  of  appointment  is  governed 


'Tripp  V.  CMrd  R.  Co.  21  Eng.  L. 
&  Eq.  53.  17  Jur.  887;  Uurtth  v. 
JIursh,  99  Ind.  500;  Douglattn  v.  Cline, 
12  Bush,  608;  WooUey  v.  Holt,  14 
Bush,  788;  Norlliwealern  Mut.  L.  Ins. 
Co.  V.  Park  Hotel  Co.  37  Wis.  125. 

'^United  Statea  Trunt  Co.  v.  New 
York,  W.  8.  &  B.  R.  Co.  101  N.  Y. 
478;  Quincy  v.  Cheeseman,  4  Sanclf. 
Ch.  405;  Sea  Ins.  Co.  v.  Slehhini^,  8 
Paige.  565;  Shotirell  v.  SmitJi,  3  Edw. 
Ch.  588;  Warner  v.  Qouverncur,  1 
Barb.  36;  Commercial  &  Sav.  Bank  v. 
Corhett,  5  Sawy.  172;  Phillips  v. 
Eiland,  52  Miss.  721 ;  Myers  v.  Estell, 
48  Miss.  372;  Hill  v.  Robertson,  24 
Miss.  368;  Lehman  v.  Tallahassee  Mfg. 
Co.  64  Ala.  507;  Kerchner  v.  Fairley, 
80  N.  C.  24;  Henshaw  v.  Wells,  9 
Humph.  568;  Finch  v.  Houghton,  19 
Wis.  150;  Douglass  v.  Cline,  12  Bush, 
608;  Newport  &  C.  Bridge  Co.  v. 
Dot/glass,  12  Bush,  673;  Woolley  v. 
Ifolt,  14  Busli,  788;  Hyman  v.  Kelly,  1 
Nev.  179;  Price  v.  Doudy,  34  Ark.  285; 
Brown  v.  Chase,  Wallc.  Ch.  43. 

^Stockman  v.  Wallis,  30  N.  J.  Eq. 
449;  Chetwood  v.  Coffin,  30  N.  J.  Eq. 
450;  Schreiber  v.  Carey,  48  Wis.  208; 


Finch  V.  Honghton,  19  Wis.  140; 
Wallsh  F.  Ins.  Co.  v.  Loud,  20  ILiw. 
Pr.  95;  Es'am  v.  Crampton,  61  Ala. 
507. 

*Cortleyeu  v.  Hathaway,  11  N.  J. 
Eq.  43. 

'"In  the  appointment  of  a  receiver, 
especially  in  a  foreclosure  case,  very 
much  must  be  left  to  the  discretion  of 
the  district  judge,  and  uule.«s  it  is 
made  to  appear  that  this  discretion  has 
been  exercised  unvyisely  and  to  the  in- 
jury of  the  party  complaining,  this 
court  will  not  interfere."  Jacobs  v. 
Gibson,  9  Neb.  380.  "Assuming  that 
the  court  has  power  to  compel  the 
owner  to  pay  the  rents  to  the  receiver 
after  his  appointment,  the  exercise  of 
the  power  is  in  the  discretion  of  the 
court  and  so  not  reviewable  here." 
Rider  v.  Bagley,  84  N.  Y.  461.  By 
the  appointment  of  the  receiver  the 
plainlilf  obtained  an  equitable  lien  on 
the  unpaid  rents  and  upon  them  only. 
Lofsky  V.  Monjer,  3  Sandf.  Ch.  69; 
Howell  V.  Ripley,  10  Paige,  43;  Astor 
V.  Turner.  11  Paige,  43(5;  Mitchell  v. 
Bartlett,  51  N.  Y.  447;  Argall  v.  Pitts, 
78  N.  Y.  242.     The  power  is  discre- 


268 


RECEIVERSHIPS. 


largely  by  the  circumstances  of  each  particular  case,'  yet  it  is 
possible  from  the  geuerul  uniformity  of  decisions  to  \ay  down  the 


lionary  and  often  of  great  utility. 
Skip  V.  Ilarwood,  3  Atk.  564.  It  is  dis- 
creliouary  as  to  the  person  appointed 
ordinarily.  Benneson  v.  Bill,  62  111. 
408.  The  appointment  generally  is  in 
the  sound  discretion  of  the  court  and 
not  to  be  exercised  except  in  stronij 
cases',  and  in  no  case  should  the  power 
be  exercised  if  it  is  clear  that  on  a 
foreclosure  the  property  will  bring 
enough  to  pay  the  debt,  interest  and 
costs.  Pullan  v.  Cincinnati,  &  G.  A. 
L.  R.  Co.  4  Biss.  35.  See  further  §5; 
^  1,  ante. 

Under  the  English  Judicature  Act 
of  1873  it  is  provided  that  a  receiver 
may  be  appointed  by  an  interlocutory 
order  in  all  cases  in  which  it  shall  ap- 
pear to  the  court  to  be  just  or  con- 
venient that  such  order  shall  be  made. 

See  also  Milwaukee  &  M.  R.  Co.  v. 
Sotitter,  m  U.  S.  2  Wall.  510,  17  L.  ed. 
900. 

State  V.  Wiltner,  65  Md.  178;  Anon, 

12  Ves.  Jr.  4;  Middleton  v.  Dodnioell, 

13  Ves.  Jr.  266;  Long  v.  Miijentre,  1 
Johns.  Ch.  305. 

It  is  not  an  abuse  of  discretion  to 
refuse  to  appoint  a  receiver  of  the 
rents  and  profits  of  premises,  the  legal 
title  of  which  has  been  transferred  to 
the  person  applying  therefor  as  mort- 
gagee, where  the  amount  due  him  is 
in  dispute.  Valentine  v.  Juch,  46  N. 
Y.  S.  R.  64. 

In  Tyseti  v.  Wabash  R.  Co.  8  Biss. 
247,  it  is  declared  that  while  the  court 
exercises  a  broad  discretion  in  the 
matter  of  appointment,  yet  it  will  not 
make  such  appointment  if  it  per- 
ceives that  a  much  greater  injury  will 
result  to  those  interested  in  the  rail- 
road than  by  leaving  the  property  in 
the  hands  of  those  then  holding  it. 

In  Myers  v.  Estell,  48  Miss.  372.  it 


is  said  that  the  appointment  of  a  re- 
ceiver on  the  application  of  the  mort- 
gagee being  a  matter  resting  in  the 
sound  discretion  of  the  court  the  bet- 
ter rule  to  govern  that  discretion  is 
that  which  will  grant  the  order  of  the 
appointment  as  it  may  or  may  not  be 
an  essential  means  to  pay  the  debt  se- 
cured by  the  mortgage.  The  exercise 
of  this  power  depends  upon  sound  dis- 
cretion and  is  governed  to  a  great  ex- 
tent by  the  circumstances  of  each  par- 
ticular case.  Morrison  v.  Buckner, 
Hempst.  442;  Ver  Plank  y.  Caines,  1 
John.  Ch.  58;  Cone  v.  Paute,  12  Hcisk. 
506. 

In  Farmers''  Loan  <&  T.  Co.  v.  Kansas 
City,  W.  <&  N.  W.  R.  Co.  53  Fed.  Rep. 
182,  it  is  held  that  the  appointment  of 
a  receiver  in  a  railroad  foreclosure  is 
not  a  matter  of  right,  but  rests  in  the 
sound  discretion  of  the  court  and  is  a 
power  to  be  exercised  sparingly  and 
with  great  caution.  See  also  Mil- 
waukee &  M.  R.  Co.  V.  Hoicard,  131 
U.  S.  Appx.  81, 18  L.  ed.  252;  Fosdick 
V.  Schall,  99  U.  S.  235,  25  L.  ed.  339; 
Sage  v.  Memphis  &  L.  R.  R.  Co.  125 
U.  S.  361,  31  L.  ed.  694;  Owen  v.  Uo- 
man,  4  H.  L.  Cas.  997. 

In  Williimson  v.  New  Albany,  etc. 
R.  Co.  1  Biss.  198,  it  is  said  that  where 
a  court  of  equity  is  asked  to  interfere 
with  the  management  of  a  corporation 
it  will  look  into  the  facts  and  exercise 
an  equitable  discretion  and  will  not 
enforce  the  strict  penalty  of  the  deed. 

'  In  McIIenry  v.  New  York,  P.  & 
0.  R.  Co.  25  Fed.  Rep.  114,  upon  a 
hearing  of  both  sides,  and  it  not  ap- 
pearing that  the  property  of  the  com- 
pany was  in  jeopardy,  or  in  need  of 
the  protecting  control  of  the  court, 
and  the  continuance  of  the  receiver- 
ship being  likely  to  prove  prejudicial 


RECEIVERSHIP  IN  FORECLOSURE  OF  MORTGAGES.        269 

followino-  general  princi})les  under  which  the  court  will  appoint  a 
receiver  over  the  mortgaged  property,  or  of  the  rents  and  profits 
tliereof:  as, 


to  innocent  holders  of  the  securities, 
the  (^rder  appointing  the  receiver  was 
rescinded. 

In  Fcivmers'  Loan  &  T.  Co.  v. 
Chicago  &  A.  R.  Co.  27  Fed.  Rep.  140, 
the  trustee  brought  suit  for  the  benefit 
of  the  bondholders  to  foreclose  a  trust 
deed  for  overdue  interest,  and  it  was 
held  that  upon  payment  of  the  amount 
due,  the  foreclosure  decree  would  be 
suspended  until  default  again  oc- 
curred in  the  payment  of  interest,  the 
appointment  of  a  receiver  resting  in 
the  sound  discretion  of  the  court.  In 
this  case  it  was  held,  also,  that  mere 
insolvency  may  or  may  not  call  for  the 
appointment  of  a  receiver  and  the 
motion  of  the  appointment  was  de- 
ferred. 

In  Tysen  v.  WabuHh  li.  Co.  8  Biss. 
247,  it  was  held  that  the  mere  fact 
that  there  had  been  a  default  in  the 
payment  of  the  debt  is  no  ground  for 
the  appointment  of  a  receiver  in  ihe 
absence  of  a  provision  in  the  mort- 
gage that  the  mortgagee  shall  have 
the  rents,  and  the  court  twill  not,  in 
deference  to  the  mere  technical  rights 
of  a  very  small  minority  of  the  bond- 
holders, appoint  a  receiver  without 
consulting  the  interests  of  others 
whose  rights  are  entitled  to  equal  pro- 
tection. Cf.  Vone  v.  Heed,  1  Woods, 
650. 

In  Syracuse  City  Bank  v.  Tallman, 
'6\  Barb.  201,  it  is  held  that  where  a 
mortgagor  is  insolvent  and  fails  to 
pay  at  the  time  appointed  and  the 
mortgaged  premises  are  inadequate  se- 
curity as  between  the  mortgagee  and 
the  mortgagor  it  is  within  the  equita- 
ble discretion  of  the  court  to  allow  the 
latter  to  intercept  the  rents  and 
profits  for  his  better  protection  from 


loss,  and  that  this  is  the  utmost  extent 
to  which  relief  has  been  granted 
within  any  admitted  principles  of 
equity. 

In  First  Nat.  Bank  v.  Gaga,  79  111. 
207,  it  is  held  that  a  receiver  should 
not  be  appointed  in  any  case  unless 
it  is  made  to  appear  that  there  has 
been  a  particular  necessity  for  the 
step,  to  preserve  some  particular  prop- 
erly for  such  persons  as  shall  be  en- 
titled thereto,  and  from  all  the  circum- 
stances in  the  case  the  appointment 
was  refused. 

In  Silverman  v.  Northwestern  Mat. 
L.  Ins.  Co.  5  111.  App.  134,  it  is  held 
that  in  case  of  foreclosure  a  receiver 
should  not  be  appointed  unless  it  is 
made  to  appear  that  there  is  a  com- 
parative necessity  for  such  action  by 
reason  of  the  insolvency  of  the  mort- 
gagor, or  in  order  to  protect  some  par- 
ticular property  for  such  parties  as 
are  entitled  to  the  benefit  thereof,  and 
where  the  owner  of  the  equity  of  re- 
demption is  solvent,  although  the 
mortgagor  is  insolvent,  there  is  no 
such  reasonable  case  as  will  warrant 
the  appointment  of  a  receiver. 

In  Eslava  v.  Crampton,  61  Ala.  507, 
it  is  said  that  where  the  mortgagor 
had  agreed  in  the  mortgage  to  insure 
the  property,  pay  taxes,  and  keep  it  in 
repair  and  had  failed  to  do  so  and  was 
shown  to  be  insolvent  the  court  would 
not  closely  scrutinize  confiletiug  evi- 
dence as  to  the  value  of  the  mortgaged 
premises  upon  which  a  receiver  was 
appointed. 

In  Cortleyeu  v.  Hathaway,  11  N.  J. 
Eq.  39,  it  is  held  that  inadecpiacy  in 
the  value  of  the  mortgaged  premises 
and  insolvency  of  the  mortgagor  do 
not  constitute   sulllcient  grounds  for 


270 


RECEIVEliSHlPo. 


(a)  Wlicro  tliere  is  an  express  i:;i';mt  or  plcdi^e  of  the  rents  and 
profits  to  secure  the  niortij;a<j;e  indehtedness.' 


the  appointment  of  a  receiver,  but 
under  the  peculiar  circumstances  of 
the  case  a  receiver  was  appointed. 
Among  these  were  that  the  mortgagor 
had  sold  the  property  and  he,  and  his 
grantee,  were  insolvent,  inadequacy 
of  the  security  for  the  mortgage 
money;  violation  of  an  agreement  on 
the  part  of  the  mortgagor  to  reduce 
the  amount  of  the  mortgage,  etc. 

In  Keep  v.  j\r(chif/iin,  L.  S.  R.  Co. 
6  Chicago  L.  N.  101,  tbe  court  say: 
"Receivers  are  not  appointed  as  a  mat- 
ter of  course,  but  it  rests  in  the  sound 
discretion  of  tiie  court.  Whether  the 
power  will  be  exercised  depends 
always  upon  the  facts  and  rights  as 
lliey  appear  before  the  court.  There 
are  a  mulliUide  of  cases  showing  where 
the  power  has  and  where  it  has  not 
been  exercised,  each  case  depending 
upon  its  own  particular  facts  and  cir- 
cumstances. 

Assumitig  that  the  court  has  power 
in  a  foreclosure  suit  to  appoint  a  re- 
ceiver of  the  rents  the  exercise  of  such 
power  is  in  the  discretion  of  the  court, 
and  not  reviewable.  Eider  v.  Bagley, 
8i  N.  Y.  461. 

The  power  to  appoint  a  receiver 
pendente  lite  in  a  foreclosure  proceed- 
ing is  a  part  of  the  incidental  jurisdic- 
tion of  the  court  and  does  not  depend 
on  a  statute.  Uniied  Slates  Trust  Co. 
v.  New  York.  W.  S.  cfi  B.  E.  Co.  101 
N.  Y.  478;  Uullenhcck  v.  Donnell,  94 
N.  Y.  343. 

'  In  American  Bridge  Co.  v.  Heidel- 
bach,  94  U.  S.  798,  24  L.  ed.  144,  the 
mo'lgage  covered  the  property,  rents, 
issues  and  profits,  with  the  provision 
llial  if  there  was  a  default  in  paying 
tlie  interest  the  mortgagee  might  take 
pfissession  of  the  property,  manage 
the  same  and  receive  and  collect  all 


rents  and  claims  due  and  to  become 
due.  After  default  the  mortgagee 
filed  his  bill  setting  forth  that  the 
company  had  on  hand  moneys  and 
claims  due  it  and  asked  to  have  the 
same  applied  to  the  mortgage.  Swb- 
sequently  a  judgment  creditor,  on  the 
return  of  an  execution  unsatistieil, 
filed  a  bill  to  subject  such  moneys 
and  claims  to  the  payment  of  his 
judgment,  and  it  was  held  that  inas- 
much as  the  mortgagee  had  not  taken 
possession  his  claim  to  the  rents  ar;d 
income  on  hand  at  the  time  of  filing 
his  bill  must  be  postponed  to  that  of 
the  judgment  creditor.  See  also 
Galveston,  U.  <£•  H.  R.  Co.  v.  Cowdry, 
78  U.  8.  11  Wall.  459,  20  L.  ed.  199, 
and  Gilman  v.  Illinois  &  M.  Teleg.  Co. 
91  U.  S.  603,  23  L.  ed.  405. 

In  Des  Moines  Gas  Co.  v.  West,  44 
Iowa,'  23,  the  mortgage  pledged  the 
income,  rents  and  profits  to  the  pay- 
ment of  the  debts,  and  it  was  held 
that  the  creditor  need  not  conclusively 
establish  his  right  to  recover  before 
he  is  entitled  to  ask  for  the  appoint- 
ment of  a  receiver;  it  is  sufficient  if 
he  show  a  probable  right,  and  in  such 
case  if  the  debtor  is  insolvent  the 
appointment  follows  as  a  matter  of 
course. 

The  court  say:  "There  is  a  clear 
and  well-defined  distinction  as  to  the 
right  to  have  a  receiver  appointed 
where  the  bond  and  mortgage,  as  in 
this  case,  pledge  the  rents  or  income 
to  the  payment  of  the  debt  and  where 
they  do  not." 

In  Wagar  v.  Stone,  36  Mich.  3G4,  it 
is  held  that  the  mortgagor  being 
entitled  under  the  statute  of  Michigan 
to  the  possession  and  consequently  to 
the  rents  and  profits  of  the  mort 
gaged   premises  until  such  a  time  as 


RECEIVERSHIP  IN  FORECLOSURE  OF  MORTGAGES.        271 
(b)  Where  the  mortgaged  property  is  aa  inadequate  security  for 


his  title  is  divested  by  a  perfected 
foreclosure,  it  is  not  competent  to 
cut  short  his  right  in  this  regard  by 
means  of  a  receiver  appointed  in  a 
foreclosure  suit.  It  should  be  noticed 
that  in  Michigan  the  mortgage  con- 
veys no  title  to  the  mortgagee,  but  a 
security  merely  for  the  debt,  and  be- 
fore the  foreclosure  tlie  mortgagee 
has  no  legal  interest  in  the  mortgaged 
premises.  See  also  Lee  v.  CLary,  38 
Mich.  223;  Hnzeltine  v  Granger,  44 
Mich.  503;  Beading  v.  Waterman,  46 
Mich.  107.  This  provision  is  for  the 
benefit  of  the  mortgagor,  however, 
and  he  may  waive  it.  Beecher  v. 
Marquette  cfc  P.  Bulling  Mill  Co.  40 
Mich.  307. 

In  DuiD  V.  Memphis  &  L.  B.  B.  Co. 
20  Fed.  Rep.  260,  it  is  held  that  when 
not  varied  by  the  contract,  the  law  of 
the  state  where  the  mortgage  is  exe- 
cuted and  the  mortgaged  property  is 
situated  furnishes  the  rule  for  de- 
termining the  rights  of  the  mortgagees 
after  condition  broken  ;  that  in  Arkan- 
sas a  common  law  rule  prevails  and  the 
failure  of  a  mortgagor  to  pay  the 
mortgage  debt  at  the  law  day  the 
mortgagee  is  entitled  to  the  possession 
of  the  mortgaged  property  and  may 
maintain  ejectment  therefor.  But  in 
case  of  a  railway  mortgage  embracing 
rolling  stock  and  other  personal  prop- 
erty the  proper  remedy  of  the  mort- 
gagee is  by  a  bill  in  equity  for  a 
specific  performance  of  the  mortga- 
gee's rights.  See  also  Morrison  v. 
Buckner,  Hempst.  442. 
•  In  Union  Triint  Co.  v.  St.  Louis,  I. 
M.  &  S.  B.  Co.  4  Dill.  114,  the  court 
refused  to  appoint  a  receiver  of  a 
railroad  on  the  showing  merely  that 
there  had  been  a  default  in  the  pay- 
ment of  interest  secured  by  a  mort- 
gage of  the  property  and  incomes  of 


the  company.  It  was  held  that  it 
was  necessary  in  addition  to  this  to 
show  that  ultimate  loss  would  happen 
to  the  beueticiaries  of  the  mortgage 
by  permitting  the  property  to  remain 
in  the  hands  of  the  owners  until  final 
decree  and  sale.  The  facts  in  the 
case  were  considered  as  not  suUicienl 
to  warrant  the  appointment  of  a  re- 
ceiver, under  the  authority  of  Will- 
iamwn  v.  New  Albany,  etc.,  B.  Co.  1 
Bliss.  198. 

In  Allen  v.  Dallas  &  W.  B.  Co.  3 
Woods,  316,  where  the  mortgage 
covered  the  income  and  profits  as 
well  as  the  property  of  the  railroad 
company  to  secure  principal  and  in- 
terest, and  authorized  the  trustee  in 
default  in  the  payment  of  interest  to 
take  possession  of  the  mortgagetl 
premises  and  apply  the  income  to  the 
payment  of  the  interest,  it  was  held 
upon  the  application  of  the  trustee 
that  such  default  was  sufficient 
ground  for  the  appointment  of  a 
receiver.  In  such  a  case  the  appoint- 
ment of  a  receiver  would  not  be  de- 
nied because  it  was  not  shown  that 
the  properly  mortgaged  was  in- 
sufficient to  pay  the  mortgaged  debt, 
or  that  it  is  in  jeopardy,  or  the  com- 
pany insolvent,  or  the  amount  due 
was  in  dispute.  Where  the  receipts 
and  income  of  a  railroad  are  pledged 
for  the  payment  of  principal  and  in- 
terest, it  is  said  that  this  provision  of 
the  mortgage  or  trust  deed  gives 
credit  to  the  bondholders,  which  en- 
Lances  their  value,  and  induces  capi- 
talists to  purchase  them.  See  also 
Whitehead  v.  Wooten,  43  Miss.  523; 
Morrison  v.  Buckner,  Ilempst.  442. 

As  to  the  right  of  the  mortgagor  to 
the  rents  and  profits  generally,  see 
Freedman's  Sav.  cfe  T.  Go.  v.  Shepherd, 
127  U.  S.  500,  32  L.  ed.  186;  Oilman 


272 


RECEIVERSHIPS. 


the  payment  of  the  mortii;age  indehtedness,  and  there  is  danger  of 
loss  unless  a  receiver  should  be  appointed.' 


V.  Illinois  &  M.  Tdeg.  Co.  91  U.  8. 
COo,  23  L.  ed.  405;  United  Slates  Trust 
Co.  V.  WabashW.  E.  Co.  150  U.  S.  307, 
37  L.  ed.  1091;  Mercantile  Trust  Co.  v. 
Missouri,  K.  <&  T.  li.  Co.  36  Fed.  Rep. 
226;  Smith  Charities  Trustees  v.  Con- 
nolly, 157  INIass.  276;  Be  Life  Associa- 
tion of  America,  96  Mo.  636;  Childs  v. 
Uurd,  32  W.  Va.  87.  As  to  when  the 
mortgagor  must  account  to  the  mort- 
gagee for  the  earnings,  see  Suge  v. 
jVinneapolis  S  L.  li.  R.  Co.  125  U.  S. 
378,  31  L,  ed.  699;  American  Bridge 
Co.Y.  Heidelbach,  94  U.  S.  800,  24  L.  ed. 
144.  Under  a  railroad  mortgage  as  to 
■who  is  entitled  to  the  income,  see 
Oilman  v.  Illinois  &  M.  Teleg.  Co.  91 
U.  S.  603,  23  L.  ed.  405;  American 
Bridge  Co.  v.  Heidelbach,  supra;  Fos- 
dick  V.  Scliall,  99  U.  S.  253,  25  L.  ed. 
339;  Teal  v.  Walker,  111  U.  S.  250.  28 
L.  ed.  418;  Brown  v.  Maryland,  114 
U.  S.  605,  29  L.  ed.  235;  Young  v. 
Northern  Illinois  Coal  &  I.  Go.  9  Blss. 
305;  Dow  v.  Memphis  &  L.  R.  R,  Co.  20 
Fed.  Rep.  771;  Farmers'  Loan  &  T. 
Co.  V.  3Iissouri,  I.  &  N.  R  Co.  21  Fed. 
Rep.  271;  White  v.  Pulley,  27  Fed. 
Rep .  441 ;  Hay  v.  Alexandria  &  W.  R. 
Co.  4  Hughes,  373. 

'  la  Kelly  v.  Alabama  <&  C.  B.  Co. 
Trustees,  58  Ala.  489,  it  appeared  that 
the  corporation  had  been  declared 
bankrupt,  interest  had  accumulated 
on  its  bonds  exceeding  the  value  of 
the  property  mortgaged,  and  pur- 
chasers of  the  equity  of  redemption 
at  the  assignee's  sale  were  in  posses- 
sion of  the  road  and  property  mort- 
gaged, receiving  the  income,  profits 
and  earnings  of  the  road  which  the 
mortgagee  was  entitled  to  take,  and 
using  the  same  for  their  own  exclusive 
benefit,  a  clear  case  was  presented,  it 
was  held,  for  the  appointment  of  a 


receiver.  See  also  Lehman  v.  Talla- 
hassee Mfg.  Co.  64  Ala.  567. 

In  Checver  v.  Rutland  &  B.  R.  Co. 
39  Vt.  653,  it  is  held  that  when  the 
mortgagor  or  assignees  are  in  posses- 
sion, denying  the  right  of  the  mort- 
gagee to  a  foreclosure,  the  utmost  the 
court  can  do  is  the  appointment  of  a 
receiver  for  the  purpose  only  of  pre- 
serving the  property  and  its  rents  and 
profits  from  waste  and  diversion. 

In  Hamilton  v.  Austin,  36IIun,  138, 
it  is  held  that  after  foreclosure  is  be- 
gun the  plaintiff  may,  if  the  security 
is  in  jeopardy,  intercept  through  the 
aid  of  a  receiver,  the  rents  or  emble- 
ments or  both,  upon  the  theory  that 
the  whole  estate  is  pledged  as  secur- 
ity for  the  debt,  and  that  the  creditor 
is  immediately  entitled  to  his  money 
or  the  property  pledged  [Hollenbeck 
v.  Bunnell,  94  N.  Y.  347;  Ogdensburg 
Bank  v.  Arnold,  5  Paige,  40] ;  but  in 
such  case  the  receiver  is  not  entitled 
to  recover  for  rents  collected  or  emble- 
ments removed  prior  to  the  date  of 
his  appointment,  his  right  being  con- 
fined to  subsequent  rents  and  profits, 
and  the  rents  uncollected  at  the  time 
of  his  appointment. 

In  regard  to  waste  of  mortgaged 
premises  the  court  say:  "  Waste  is 
an  improper  destruction,  or  material 
alteration  or  deterioration  of  the  free- 
hold, or  of  thiugs  forming  an  essential 
part  of  it  done  or  suffered  by  a  person 
rightfully  in  possession  as  tenant,  or 
having  but  a  partial  estate  like  the 
mortgagor.  It  is  not  waste  for  a 
mortgagor  of  the  land  to  sell  timber, 
remove  or  change  fixtures,  if  done  in 
good  faith  and  in  the  usual  course  of 
good  husbandry  and  before  fore- 
closure is  begun  or  default  has 
occurred  upon  the  mortgage.     Nor  is 


ItEUElVEUSHIP  IN  FORECLOSURE  OF  MORTGAGES.         273 


ft  waste  for  him  to  sell  stone  from 
opeu  quarries  or  minerals  from  open 
mines  if  done  in  the  usual  course  of 
business,  thounb  tlie  product  removed 
may  exceed  tlie  value  of  the  remain- 
ing freehold." 

In  Hollenbeck  v.  Donnell,  94  N.  Y. 
343,  it  is  held  that  the  power  to  ap- 
point a  receiver  of  rents  and  profits 
of  mortgaged  premises  accruing  pend- 
ing a  foreclosure  was  inherent  in  the 
court  of  chancery  prior  to  the  adop- 
tion of  the  code,  and  was  continued 
by  the  code  and  not  abrogated  by  the 
section  defining  cases  in  which  receiv- 
ers may  be  appointed;  and  where  it 
appeared  that  about  one  sixth  of  the 
mortgage  debt  was  due  and  the  prem- 
ises were  divided  into  equal  parcels 
capable  of  being  sold  separately  with- 
out injury  to  the  parties  interested, 
assuming  the  appointment  of  the  re- 
ceiver to  have  been  proper  in  the  ab- 
sence of  a  specific  pledge  of  the  rents 
and  profits,  plaintiff  is  not  entitled  to 
a  receiver  for  that  portion  of  the  debt 
not  yet  due  or  of  that  portion  oi  the 
premises  as  to  which  his  rights  to  sell 
have  not  yet  accrued. 

In  Dow  V.  Memjihis  &  L.  R.  R.  Co.  20 
Fed.  Rep.  261.  it  is  held  that  a  mort- 
gagee after  condition  broken  at  com- 
mon law  is  entitled  to  the  possession  of 
the  mortgaged  premises  and  may  main- 
tain ejectment  therefor.  This  law  is 
embodied  in  the  mortgage  in  effect, 
and  where  a  mortgage  embraces  real, 
personal  and  mixed  property,  the  ap- 
l^ropriate  remedy  is  in  equity.  See 
also  Shej)ley  v.  Atlantic  &  St.  L.  R.  Co. 
55  Me.  395;  First  Nat.  L.  Ins.  Go.  v. 
Salisbury,  180  Mass.  303;  Warner  v. 
Ri-iiiif/  Fawn  Iron  Co.  3  Woods,  514; 
North  Carolina  R.  Co.  v.  Brew,  3 
Woods,  713;  State  v.  Northern  C.  R. 
Co.  18  Md.  193. 

See  Ueinaheimer  v.  Dayton  R.  Co. 
3  Ry.  &  Corp.  L.  J.  208. 

In  Keep  V.  Middfjan,  L.  S.  R.  Co.  6 

18 


Chicago  L.  N.  101,  it  is  held  that  to 
justify  the  ap[)ointmcnt  of  a  receiver 
in  a  case  of  foreclosure,  one  ingredient 
is  that  the  security  is  inadequate,  and 
another  ingredient  is  that  the  mortga- 
gor or  party  personally  liable  for  the 
debt  must  be  shown  to  be  irresponsi- 
ble for  any  deficiency  in  the  sale  of 
the  mortgaged  premises. 

In  Tyson  v.  WabaaJt.  R.  Co.  8  Diss. 
247,  it  is  said  the  mere  fact  that  there 
has  been  a  default  in  the  payment  of 
the  debt  is  not  ground  for  the  appoint- 
ment of  a  receiver,  unless  there  be  a 
stipulation  in  the  mortgage  that  the 
mortgagee  shall  have  the  rents.  Mr. 
Justice  Harlan  says  (page  254):  "Upon 
examination  of  these,  and  other  au- 
thorities cited,  it  will  be  found  that 
the  action  of  the  courts  has  depended 
largely  upon  the  peculiar  circum- 
stances of  each  case.  In  no  instance 
has  the  action  of  the  court  in  appoint- 
ing or  refusing  to  appoint  a  receiver 
rested  exclusively  upon  the  technical 
legal  right  of  the  parties."  Mr.  Jus- 
tice Bradley,  in  Vose  v.  Reed,  1  Woods, 
650,  usesthe  following  language:  "But 
all  the  circumstances  in  the  case  are 
to  be  taken  into  consideration,  and  if 
the  case  be  such  that  a  greater  injury 
would  ensue  from  the  appointment  of 
a  receiver  than  from  leaving  the  prop- 
erty in  the  hands  now  holding  it,  or 
if  any  other  considerations  of  propri- 
ety or  convenience  rentier  the  appoint- 
ment of  a  receiver  im[)roper  or  inex- 
pedient, none  will  be  appointed." 

In  Union  lYust  Co.  v.  St.  Louin,  I. 
M.  &  S.  R.  Co.  4  Dill.  114,  the  court 
refused  to  appoint  a  receiver  merely 
upon  a  showing  that  there  had  been  a 
default  in  the  payment  of  interest. 

In  Brassey  v.  New  York  &  N.  E.  R. 
Co.  9  Fed.  Rep.  603,  it  is  said  that 
an  insolvent  railroad  corporation  may 
be  put  in  the  hands  of  a  receiver  when 
the  welfare  of  all  interests  clearly  re- 
quires it,  even  though  no  default  has 


274 


EECEIVERSHIPS. 


actually  been  made  by  the  Cdrpora- 
tion  in  its  ohliyalions  to  the  plaintiH: 
but  where  the  default  is  imminent 
and  manifest  and  where  the  corpora- 
tion is  in  peril  of  breakini^  up. 

In  Bnrlimjamev.  Parce,  12  Hun,  144, 
the  court  say :  "  To  entitle  a  mortgagee 
to  have  a  receiver  appointed,  it  must 
appear  that  the  mortgaged  premises 
are  inadecjuate  security  for  the  debt 
and  that  the  mortgagor  or  other  per- 
son personally  liable  for  the  debt  is 
insolvent,"  on  the  authority  of  Syra- 
cuse City  Bank  v.  Tallman,  31  Barb. 
201;  Re  Prime,  1  Barb.  306;  Orjdens- 
burg  Bank  v.  Arnold,  5  Paige,  38; 
Shotwell  V.  Smith,  8  Edw.  Ch.  588. 
See  also  Sea  Ins.  Co.  v.  Stehbens,  8 
Paige,  5G5;  Aalor  v.  Turner,  11  Paige, 
436 ;  Frelinyhuytien  v.  Golden,  4  Paige, 
204. 

In  Shotwell  v.  Smith,  stq^ra,  the  vice 
chancellor  says:  "Indeed,  I  consider 
that  the  court  has  no  authority  to  in- 
terfere with  a  mortgagor's  right  to  the 
rents  unless  such  rents  as  well  as  the 
property  have  been  pledged  as  secu- 
rity for  the  debt,  or  there  is  a  clear 
want  of  security." 

In  Grant  v.  Phoenix  Mut.  L.  Ins.  Co. 
121  U.  S.  105,  30  L.  ed.  905,  it  is  held 
that  where  the  trust  deed  does  not 
convey  the  rents  and  profits  of  the 
property,  the  court  may  appoint  a  re- 
ceiver where  the  debtor  is  insolvent 
and  the  mortgaged  property  insufh- 
cient  security  and  there  is  good  cause 
to  believe  that  it  would  be  wasted  or 
deteriorated. 

In  Callanan  v.  Shaio,  19  Iowa,  183, 
it  is  held  that  it  must  clearly  appear 
that  the  whole  mortgaged  premises 
are  insufficient  in  value  to  pay  the 
debt  or  that  the  court  should  take 
control  of  the  estate  to  protect  the 
rights  of  a  party  who  has  a  clear, 
strong  claim  against  it.  The  court 
say:  "  In  this  state  the  mortgagor 
being  in  possession,  this  possession 


under  the  legal  estate  should  not  be 
disturbed  by  the  appointment  of  a  re- 
ceiver unless  indeed  in  cases  of  fraud 
clearly  proved  or  danger  to  the  mort- 
gagee (having  a  strong  claim),  if  the 
intermediate  estate  or  possession 
should  not  be  brought  under  the 
court.  In  any  case  the  receiver  is 
appointed  against  the  holder  of  the 
legal  title  with  reluctance."  Tliis 
case  is  based  on  LUryd  v.  Passinyliam, 
16  Ves.  Jr.  59;  Smith  v.  Smith,  2 
Younge  &  C.  351 ;  Knight  v.  Duplent^in, 
"2  Ves.  Sr.  360;  Toldewy  v.  Colt,  1 
Younge  &  C.  021. 

In  Morrison  v.  Buckner,  Hempst. 
442,  the  court  say,  adopting  the  lan- 
guage of  Coote  on  Mortgages  in  part 
(Law  Lib.  256):  "If  the  mortgagee 
having  the  legal  estate  neglect  to  take 
the  precaution  of  an  agreement  with 
the  mortgagor  for  the  appi>iutment  of 
a  receiver  he  cannot  obtain  such  ap- 
pointment by  order  of  the  court,  but 
must  proceed  to  eject  the  mortgagor. 
Now,  without  adopting  this  rule  to  its 
fullest  extent,  it  is  proper  to  observe, 
generally,  that  receivers  in  mortgage 
cases  will  never  be  appointed  unless 
it  is  clearly  shown  that  the  security  is 
inadequate  or  that  the  rents  and  prof- 
its have  been  expressly  pledged  for 
the  debt;  or  that  there  is  imminent 
danger  of  waste,  removal,  or  destruc- 
tion of  the  properly.  There  must 
be  some  very  strong  special  reason 
for  it." 

In  Ileavilon  v.  Farmers'  Bank,  81 
lud.  249,  it  is  said  that  a  petition  for 
the  appointment  of  a  receiver  must 
show  affirmatively  the  facts  which 
make  the  receiver  necessary  and  it 
will  not  be  sufficient  to  allege  ignor- 
ance of  material  facts,  nor  allege  a 
legal  conclusion  without  stating  the 
facts  upon  which  it  is  predicated. 

In  Schreiber  v.  Carey,  48  Wis.  208, 
where  by  the  law  of  Wisconsin  the 
mortgagor  retains  the  legal  title  until 


RECEIVERSHIP  IN  FORECLOSURE  OF  MORTGAGES. 


!(0 


foreclosure  sale  a  receiver  may  be  ap- 
pointed in  a  proper  case  when  it  is 
necessary  to  protect  the  mortgagee's 
interest.  And  when  the  propertj'  was 
more  than  sufficient  in  value  to  pay 
the  amount  due  under  the  mortgage, 
yet  if  it  appear  that  the  property 
could  not  be  sold  in  parcels,  and  that 
the  whole  mortgage  debt  v;ould  be- 
come due  before  there  could  be  a  sale 
made  under  the  judgment,  so  far  as 
the  appointment  of  a  receiver  is  con- 
cerned the  whole  debt  would  be 
treated  as  due. 

In  Finch  v.  Hourjldon,  19  Wis.  149, 
it  appeared  that  the  mortgage  debt 
was  due  and  considerable  amount  of 
interest  unpaid,  and  the  owner  of  the 
equity  of  redemption  who  was  in  pos- 
session neglected  to  pay  the  taxes,  and 
the  evidence  tended  to  show  that  he 
had  endeavored  to  obtain  a  tax  deed 
upon  the  property  to  defeat  the  mort- 
gage, and  also  that  the  mortgaged 
premises  were  inadequate  security  and 
the  parties  personally  liable  were  un- 
able to  pay  the  deficiency  that  might 
arise  upon  the  sale,  it  was  held  that  a 
receiver  was  proper. 

In  Boston  &  P.  R.  Corp.  v.  Neio 
York  &  N.  E.  R.  Co.  13  R.  I.  220, 
where  the  mortgagee  was  in  possession 
and  a  suit  to  redeem  was  brought  by 
the  mortgagor  a  receiver  was  refused 
as  against  the  mortgagee  so  long  as 
there  was  a  balance  due  under  the 
mortgage  unless  it  was  shown  thai  the 
mortgagee  was  mismanaging  the  prop- 
erty. 

See  further  inadequate  security, 
§  174,  poHt. 

In  Stockman  v.  Wallits,  30  N.  J.  Eq. 
449,  it  appeared  that  the  owner  of 
part  of  the  mortgaged  premises  re- 
ceived the  rents  therefrom  and  refused 
to  apply  ihem  on  account  of  the  in- 
terest due  on  the  mortgage  and  ne- 
glected to  pay  the  taxes,  and  there 
being  no  personal   security   and  the 


premises  being  insufficient  a  receiver 
was  appointed. 

InWall  Street F.  Ins.  Co.  v.  Loud,  20 
How.  Pr.  95,  it  appeared  that  the 
mortgagor  had  conveyed  the  premises 
subject  to  the  mortgage  and  it  was 
held  that  he  was  not  in  a  position  to 
object  to  a  receiver,  having  no  interest 
in  the  rents  and  profits  nor  the  pos- 
session, and  where  it  is  shown  that 
his  grantee  neglected  to  pay  taxes, 
that  a  sale  therefore  had  been  made, 
that  the  insurance  of  the  buildings 
had  been  neglected  and  the  mortg.agor 
being  insolvent  a  case  is  presented  for 
the  appointment  of  a  receiver. 

In  Bolles  v.  I)tiff,  38  How.  Pr.  492, 
it  is  held  that  where  anything  is  due, 
the  mortgagee  in  possession  will  not 
be  deprived  of  such  possession  by  the 
appointment  of  a  receiver  and  par- 
ticularly so  where  he  is  responsible 
and  able  to  account  for  and  pay  any 
excess  of  rents  collected  after  the  pay- 
ment of  his  debt,  or  will  give  security 
to  do  so.  If,  however,  it  appears  that 
the  mortgagee  is  irresponsible,  or  that 
the  rents  and  profits  would  be  lost  or 
be  in  danger  of  loss,  or  was  commit- 
ting waste  or  materially  injuring  the 
premises  a  different  rule  would  pre- 
vail. 

In  Milwaukee  &  M.  R.  Co.  v.  Sout- 
ter,  69  U.  S.  2  Wall.  510,  17  L.  ed. 
900,  it  is  held  that  while  the  appoint- 
ment of  a  receiver  ordinarily  rests 
wholly  within  the  discretion  of  the  ap- 
pointing court  yet  such  rule  is  not  al- 
ways absolutely  true,  and  under  the 
facts  and  circumstances  of  the  case  it 
was  held  the  refusal  to  api)oiut  was  a 
judicial  error. 

Failure  of  the  mortgagee  to  pay 
taxes,  insurance  or  interest,  and  in- 
adequacy of  security  and  diversion  of 
the  income  are  adequate  grounds  for 
a  receiver  in  a  foreclosure  proceeding. 
S1iej)hcrd  v.  Pepper,  133  U.  S.  020,  33 
L.  ed.  700. 


276 


RECEIVERSHIPS. 


(c)  Where  the  trustee  in  express  terms  has  power  upon  default, 
to  take  possession  of  the  mortgaged  ])rcniises,  and  he  refuses  so 
to  do. ' 

(d)  Wliere  the  leo;al  title  to  the  property  mortijja^ed  remains  in 
the  niorto-ai^or,  and  the  morto;ai!;ce  has  only  an  e(]uital)le  title,  and 
there  are  equitable  <;-ronnds  for  relief,  such  as  inade(puicy  of  se- 
curity, waste  and  nonpayment  of  taxes." 


•Alllioiigh  a  trustee  may  bave  a 
right  to  take  possession  under  the 
trust  deed,  yet  he  may  waive  this 
right  and  file  a  bill  to  foreclose. 
Williamson  v.  New  Albany,  etc.  E.  Co. 

1  Biss.  198.  See  also  Scott  v.  Clinton 
&  8.  It.  Co.  6  Biss.  52'J.  A  demand 
on  the  trustees  was  made  after  default 
thai  they  should  take  possession  of 
the  trust  property,  and  a  refusal  on 
their  part  authorizes  a  bill  by  the 
stockholders  requiring  them  to  take 
possession,  and  a  failure  to  do  so  jus- 
tifies the  appointment  of  a  receiver. 
Wilmer  v.  Atlanta,  B.  A.  L.  B.  Co.  2 
Woods,  409;  Warner  v.  Rising  Fawn 
Iron  Co.  3  Woods,  514. 

In  Ellis  V.  Boston,  II.  &  E.  R.  Co. 
107  Mass.  1,  it  was  held  that  the  dis- 
claimer of  a  trust  by  one  trustee  vests 
the  estate  in  the  remaining  trustees, 
without  any  express  provision  in  the 
deed  therefor.  See  also  O'Beilly  v. 
Alderson,  8  ITare,  101;  Eato7i  v.  Smith, 

2  Beav.  23G;  Be  Moravian  Soc.  26 
Beav.  101.  In  Minnesota  the  holder 
of  a  mortgage  does  not  have  such  title 
as  authorizes  a  suit  at  law  for  posses- 
sion and  in  such  case  a  foreclosure  is 
the  appropriate  remedy,  but  where  the 
mortgage  or  trust  deed  gives  the  trus- 
tees the  right  to  take  possession  on  de- 
fault and  they  fail  to  do  so  a  receiver 
cannot  be  appointed  in  the  foreclosure 
proceeding.  An  action  of  ejectment 
under  the  terms  of  the  mortgage  or 
trust  deed  could  have  been  sustained. 
Bicev.St.Pmd  tfc  P.B.  Co.24:  Minn.  404. 

''Ilollenbeck  v.  Doiinell,  29  Hun,  84, 


94  N.  Y.  342;  Kirchner  v.  Fairlcy,  80 
N.  C.  34;  Durant  v.  Orowcll,  97  N.  C. 
3(J7;  Grant  V.  Plmnix  Mat.  L.  Ins.  Co. 
121  U.  S.  105,  30  L.  ed.  905;  Konnize 
v.  Omaha  Hotel  Co.  107  U.  S.  378,  27 
L.  ed.  GIO;  Frmlman's  Sav.  &  T.  Co. 
V.  Shepherd,  127  U.  S.  500.  32  L.  ed. 
160;  Cone  v.  Combs,  18  Fed.  Rep.  570. 

And  see,  as  to  the  legal  title  remain- 
ing in  the  mortgagor  and  the  mort- 
gagee being  entitled  to  an  equitable 
interest,  Packer  v.  Bochester  &  8.  B. 
Co.  17  N.  Y.  295;  Kottright  v.  Cady. 
21  N.  Y.  360;  Uubbell  v.  Moulson,  53 
N.  Y.  228;  Syracuse  City  Bank  v.  Tall- 
man,  31  Barb.  201;  Sherman  v.  Willett, 
42  N.  Y.  146;  Trimm  v.  Marsh,  54 
N.  Y.  599. 

Mr.  Jones  in  his  work  on  Mortgages 
(vol.  2,  §  1521,  4th  ed.)  lays  down  the 
rule  upon  this  subject  briefly  and 
concisely,  in  the  following  language: 
"The  prevailing  rule  in  those  states 
in  which  the  legal  title  is  regarded  as 
being  in  the  mortgagor  until  foreclos- 
ure is  that  a  receiver  will  be  appointed 
upon  the  application-  of  a  mortgagee 
after  default,  without  reference  to  his 
legal  rights,  whenever  sufllcient  equi- 
table grounds  for  this  relief  are  shown, 
which  are  in  general  that  the  premises 
are  an  inadequate  security  for  the 
debt  and  the  mortgagor,  or  other  per- 
son in  possession,  who  is  personally 
liable  for  the  debt  is  unable  to  make 
good  the  deficiency."  In  support  of 
the  proposition  the  following  cases 
are  cited:  Scott  v.  Ware,  65  Ala.  174; 
Lehman  v.    Tallahassee   Mfg.    Co.  64 


RECEIVERSHIP  IN  FORECLOSURE  OF  MORTGAGES.        277 

(e)  Where  l^y  statute  the  mortgagee  is  entitled  to  the  appoint, 
ment  of  a  receiver. ' 

(f)  The  necessity  for  the  appointment,  the  special  grounds  npon 
which  the  relief  is  asked,  must  be  clearly  alleged  and  shown.^ 

(g)  Where  there  is  a  contest  as  to  the  property  covered  by  the 


Ala.  5G7:  Price  v.  Dorndy,  34  Ark.  285; 
Haas  V.  Chicago  BMg.  Soc.  89  111.  498; 
White  V.  Griggs,  54  Iowa,  650;  Burnett 
V.  Nelson,  54  Iowa,  41 ;  Myton  v.  Dav- 
enport, 51  Iowa,  583;  Sleeper  v.  Iselin, 
59  Iowa,  379;  Broton  v.  Chase,  Walk. 
Cb.  (Mich.)  43;  Myers  v.  Estell,  48 
Miss.  372;  Whitehead  v.  Wooten,  43 
Mif^s.  523;  PhilUiis  v.  Eiland,  52  Mi.ss. 
721;  Woolley  v.  Holt,  14  Busli,  788; 
Warwick  v.  Ilammell,  82  N.  J.  Eq. 
427;  Bank  of  Ogdensburg  v.  Arnold,  5 
Paige,  39;  Shoticell  v.  Smith,  3  Edw. 
Ch.  588;  Sea  Ins.  Co.  v.  Stebbins,  8 
Paige,  565;  Jenkins  v.  Ilinman,  5 
Paige,  309;  TFaj-ne?-  v.  Oouverneur,  1 
Barb.  36;  Syracuse  City  Bank  v.  Ta^^ 
wiara,  31  Barb.  201;  Patten  v.  Acces- 
sor?/ Ti-ansit  Co.  4  Abb.  Pr.  235;  BoUes 
V.  Z>(/1',  35  How.  Pr.  492;  Smith  v. 
Tiffany,  13  Hun,  671. 

'  See  Jones  on  Mortgages,  vol.  2, 
§§  1521,  1522,  and  statutes  and  cases 
there  cited. 

Under  the  Judicature  Act  1873 
(§  25,  sub  sec.  8),  a  mortgagee  in  pos- 
.session  is  entitled  to  the  appointment 
of  a  receiver,  notwithstanding  he  has 
been  paid  all  his  interest  and  costs 
out  of  rents  received  while  in  posses- 
sion, and  that  he  has  surplus  rents  in 
his  hands.  Mason  v.  Westoby,  L.  R. 
32  Ch.  Div.  206.  But  see  Re  Pry- 
therch,  L.  R.  42  Ch.  Div.  590,  where 
it  is  held  that  if  a  mortgagee  has  once 
taken  po.s.session  he  cannot  relinquish 
at  pleasure;  that  having  assumed  the 
responsibilities  attaching  to  posses.si()n 
he  cannot  at  his  own  pleasure  get  rid 
of  them  and  as  a  general  rule  the  court 


will  not  by  appointing  a  receiver  as- 
sist him  to  do  so. 

'  Ileaviion  v.  Farmers'  Bank,  81  Ind. 
249;  First  Nat.  Bank  v.  Cage,  79  111. 
207,  where  it  is  said:  "The  bill  con- 
tains no  clear  and  distinct  charge  that 
defendants  have  any  particular  prop- 
erty or  things  in  action  in  their  pos- 
session, and  there  can  be  no  necessity 
for  a  restraining  order  of  court  and 
still  less  reason  can  there  be  for  the 
appointment  of  a  receiver." 

In  Callanan  v.  Shaio,  19  Iowa,  183, 
it  is  held  that  a  receiver  will  not  be 
appointed  where  it  does  not  clearly 
appear  that  the  whole  mortgaged 
premises  are  insufficient  in  value  to 
pay  the  debt,  or  that  the  court  should 
take  control  of  the  estate  to  protect 
the  rights  of  a  party  who  has  a  clear, 
strong  claim  against  it. 

In  Morrison  v.  Buckner,  Hempst. 
442,  the  court  say:  "It  is  proper  to 
observe  generally  that  a  receiver  ia 
mortgage  cases  will  never  be  ap- 
pointed unless  it  is  clearly  shown  that 
the  security  is  inadequate,  or  that  the 
rents  and  profits  have  been  expressly 
pledged  for  the  debt  (Shotwell  v. 
Smith,  3  Edw.  Ch.  588),  or  that  there 
is  imminent  danger  of  waste,  re- 
moval or  destruction  of  the  property. 
There  must  be  some  strong  special 
reason  for  it.  Ilackett  v.  Snow,  10  Ir. 
Eq.  Rep.  220. 

■■'Wall  Street  F.  Ins.  Co.  v.  Loud,  20 
How.  Pr.  95;  Kslava  v.  Crampton,  61 
Ala.  507.  TJie  right  of  the  court  of 
equity  to  try  disi)iited  titles  to  prop- 
erty is   doubtful   in  any  ca.se   and  it 


278 


RECEIVERSHIPS. 


(li)  Where  tlie  morti>;i.i^ee  or  Lis  grantee  is  in  possession  and  ib 
guilt}^  of  fraud  or  bad  faith.' 

(i)  "Where  the  mortga^'or  is  committino-  waste.' 
(i)  Where  the  principal  is  not  due  l)ut  an  instalhuent  is  of  in- 
terest, and  the  premises  are  not  divisible;''  nut  so  however  if  the 
preniiunis  are  divisible.* 

§  173.     Wlieii  not  ai)iMn'nted. 

In  foreclosure  proceedings  the  general  principles  upon  which 
the  court  bases  its  action  in  refusing  to  appoint  a  receiver  may 
be  stated  in  general  terms  as  follows  : 

(a)  Where  the  legal  title  is  in  the  mortgagee,  as  in  JNew  Jersey, 
and  he  has  an  adecpiate  legal  remedy.^ 


will  not  do  so  except  where  the  com- 
mon law  remedies  are  clearl}'  inade- 
quate. MerchanW  &  M.  Nat.  Bank  v. 
Kent,  43  Mich.  292. 

Wortlei/eu  v.  Hatlunray,  11  N.  J. 
Eq.  39.  In  this  case  it  is  held  that 
the  rule  in  New  York  that  inade- 
quacy of  security  and  insolvency  of 
the  mortgagor  are  suflicient  to  obtain 
the  appointment  of  a  receiver,  has 
never  been  adopted  in  New  Jersey, 
but  if  the  inadequacy  grows  out  of 
the  fact  of  thebuildings  being  burned, 
or  being  permitted  to  decay,  or  in 
case  of  waste,  and  the  depreciation 
grows  out  of  the  fault  or  negligence 
of  the  mortgagor,  or  tenant  in  posses- 
sion, or  fraud  on  the  part  of  the  mort- 
gagor, or  bad  faith  in  misappropriat- 
ing the  rents  and  profits  to  other  pur- 
poses than  that  of  keeping  down  the 
interest,  then  the  court  may  properly 
appoint  a  receiver,  though  with  cau- 
tion. And  see  as  to  waste,  Brasted  v. 
Sutton,  30  N.  J.  Eq.  462. 

*  Brasted  v.  Sutton,  supra. 

3  Quincy  v.  Cheeseman,  4  Sandf.  Ch. 
433. 

^  Qiiinry  v.  Cheeseman,  supra;  Bank 
of  O'jdensburg  v.  Arnold,  5  Paige,  38; 
Morris  v.  Branchaud,  52  Wis.  187; 
Hollenbeck  v.  Donnell,  94  N.  Y.  342, 


reversing  29  Hun,  94.  A  receiver 
maybe  appointed  before  the  maturity 
of  the  debt  if  default  is  imminent  and 
unavoidable,  and  it  is  necessary  to 
prevent  a  destruction  of  the  business. 
Thompson  v.  Natchez,  W.  &  S.  Co.  68 
Miss.  423.  Cf.  Burrows  v.  Malloy,  3 
Jones  &  L.  521,  8  Ir.  Eq.  Rep.  482; 
Chinnery  v.  Evans,  11  H.  L.  Cas.  115. 

*In  McLean  v.  Fre.sley,  56  Ala.  211, 
it  is  held  that  a  receiver  of  the  rents 
and  profits  of  mortgaged  premises  will 
sometimes  be  appointed  at  the  instance 
of  the  mortgagee  in  aid  of  an  action 
at  law  to  recover  the  possession  when 
the  mortgagor  is  insolvent,  but  when 
the  mortgagee  having  bought  at  his 
own  sale  under  the  power  in  the  mort- 
gage files  a  bill  to  have  the  uncer- 
tainty of  his  title  resolved  by  a  con- 
firmation of  the  sale  or  a  resale,  he 
cannot  have  a  receiver  of  the  rents 
and  profits  because  the  mortgagor  is 
committing  waste  and  is  insolvent. 

In  Johnson  v.  Tucker,  2  Tenn.  Ch. 
398,  a  judgment  creditor  who  filed  his 
bill  to  reach  the  equitable  interest  of 
his  debtor  in  realty  previously  mort- 
gaged was  held  to  be  entitled  to  a  re- 
ceiver where  the  rents  are  required 
for  the  payment  of  his  debt,  subject 
however,  to  the  rights  of  the  prior 


RECEIVERSHIP  IN  FORECLOSURE  OF  MORTGAGES.         279 


mortgagee  to  take  possession;  but  the 
receiver  will  be  dispensed  with  upon 
the  owner  of  the  properly  giving  bond 
with  security  to  account  for  the  rents; 
Sea  Ins.  Co.  v.  Stebbins,  8  Paige,  565; 
Overton  v.  Bigelow,  10  Yerg.  54;  Will- 
iams V.  JSoland,  2  Tenn.  Ch.  151.  In 
this  case  it  was  held  that  failure  of 
the  party  in  possession  of  land  in 
litigation  to  pay  the  taxes  is  sufficient 
ground  for  the  appointment  of  a  re- 
ceiver. It  was  also  held  that  the  ap- 
pointment of  a  receiver  for  an  equita- 
ble creditor  must  always  be  without 
prejudice  to  persons  having  prior  legal 
estates  or  prior  equities.  Dam:^  v. 
Duke  of  Marlborough,  2  Swanst.  118; 
Berney  v.  SeicelL  1  Jac.  &  W.  648; 
Corileyeu  v.  Hathaway,  11  N.  J.  Eq. 
39;  Anonymous,  6  Ves.  Jr.  287;  Angel 
v.  SmUh,  9  Ves.  Jr.  336.  The  rights 
of  a  prior  mortgagee  may  be  asserted 
by  a  suit  at  law  or  by  applying  to  be 
examined  pro  inter  esse  suo. 

In  Olivers.  Decatur,  4Cranch,  C.  C. 
458,  in  a  suit  to  foreclose  a  legal  mort- 
gage, the  court  refused  to  grant  an  in- 
junction and  appoint  a  receiver  where 
the  mortgagor  was  in  po.ssession,  re- 
ceiving the  rents  and  profits,  the  de- 
fendant being  in  no  default  for  not 
an.«wering. 

In  Best  V.  Schermier,  6  N.  J.  Eq. 
154,  the  court  refused  toapjioint  a  re- 
ceiver on  the  filing  of  a  bill  to  fore- 
close a  mortgage,  holding  that  the 
mortgagor  was  entitled  to  the  rents 
while  he  was  in  possession  of  the 
premises  by  his  tenants. 

In  Corileyeu  v.  IIatliaii'a,y ,  11  N.  J. 
Eq.  39,  it  is  held  that  the  rule  of  New 
York  where  premises  are  inadequate 
security  and  the  mortgagor  is  insolv- 
ent the  court  will  appoint  a  receiver 
has  not  been  adopted  in  the  slate  of 
New  Jersey  by  the  chancery  courts, 
on  the  ground  tliat  the  first  mortgagee 
having  the  legal  rigiit  to  the  rents  and 
profits  has  his  remedy  at  law  by  eject- 


ment. That  a  subsequent  mortgagee 
has  a  better  right  to  a  receiver  because 
he  has  no  right  to  possession  at  law  as 
against  his  prior  mortgagee,  and  if  the 
first  mortgagee  refu.ses  to  exercise  his 
legal  right  the  court  may  interfere  on 
application  of  the  subsequent  mort- 
gagee, but  without  prejudice  to  the 
prior  mortgagee  or  other  incum- 
brancer, and  the  receiver  will  be  di- 
rected in  such  case  to  keep  down  the 
interest  of  the  prior  incumbrance.  It 
was  also  held  that  mere  inadequacy  in 
the  value  of  the  mortgaged  premises 
and  insolvency  of  the  mortgagor  did 
not  constitute  sufficient  ground  for 
the  appointment.  In  any  case,  how- 
ever, the  appointment  is  made  with 
great  caution  and  where  there  is  a 
necessity  for  it. 

In  Frisbie  v.  Bateman,  24  N.  J.  Eq. 
28,  it  is  held  that  in  an  ordinary  fore- 
closure suit  mere  inadequacy  in  value 
and  insolvency  of  the  mortgagor  are 
not  a  sufficient  foundation  for  the  ap- 
pointment of  a  receiver.  See  also 
Best  V.  Schermier,  6  N.  J.  Eq.  154. 
This  decision  is  based  upon  the  ground 
that  where  a  man  takes  a  mortgage 
security  for  his  debt  and  permits  the 
mortgagor  to  remain  in  possession,  if 
tJiere  is  default  in  payment  the  mort- 
gagee must  appropriate  the  property 
in  the  usual  way  to  the  payment  of 
the  debt.  If  he  is  a  first  mortgagee 
and  wishes  possession  he  must  take 
his  legal  remedy  by  ejectment.  If 
he  is  a  second  mortgagee  he  takes  his 
security  with  the  disadvantage  of  a 
second  incumbrancer. 

In  Mahon  v.  Crothers,  28  N.  J.  Eq. 
567,  the  court  say:  "It  is  very  clear 
that  when  the  first  mortgagee  has 
come  into  this  court  to  foreclose  his 
mortgage  and  presents  a  case  which 
would  entitle  a  subsequent  mortgagee, 
according  to  the  practice,  to  a  receiver 
it  is  not  according  to  the  principles 
and  practice  of  lids  court  to  refer  him 


280 


RECEIVERSHIPS. 


to  the  courts  of  law  for  means  to  reach 
the  rents  aud  prolils.  The  complaiu- 
ant  in  this  case  shows  that  he  has  no 
personal  security  for  his  mortgage 
debt;  that  the  mortgaged  premises  are 
insullicient  security;  that  the  mort- 
gagor who  is  in  receipt  of  the  rents 
and  profits  not  only  has  not  kept  down 
tlie  interest  but  has  not  paid  taxes, 
wiiereby  a  lien  on  the  premises  there- 
for paramount  to  that  of  the  mortgage 
and  bearing  a  high  rate  of  interest 
has  been  created  and  still  exists;  a 
lien  which  unless  the  property  be  re- 
deemed therefrom  will  extinguish  the 
mortgage,  he  is  entitled  to  a  receiver." 

In  Brasted  v.  Sutton,  30  N.  J.  Eq. 
462,  it  appeared  that  an  application 
was  made  through  a  court  of  equity 
to  aid  a  mortgagee  who  was  prosecut- 
ing an  action  at  law  to  obtain  posses- 
sion of  the  property  under  his  mort- 
gage and  where  it  appeared  that  the 
mortgagor  was  insolvent  and  had  re- 
moved from  the  premises  and  given 
possession  of  the  premises  to  another 
who  occupied  them  for  his  own  use 
without  paying  rent,,  and  it  appeared 
also  that  the  mortgagor  had  committed 
waste  and  threatened  to  commit  more 
and  that  the  premises  were  insuffi- 
cient security,  a  receiver  was  ap- 
pointed. 

In  Warwick  v.  Jlammell,  32  N.  J. 
Eq.  427,  a  second  mortgagee  obtained 
an  order  for  the  sale  on  foreclosure 
the  mortgagor  being  in  possession  of 
the  premises  and  insolvent  and  no 
taxes  or  interest  on  any  of  the  incum- 
brance having  been  paid  for  three 
years,  the  second  mortgagee  was  held 
to  be  entitled  to  the  appointment  of  a 
receiver  pending  the  litigation. 

Williainsv.  Robinson,  16  Conn.  517. 
The  foregoing  decisions  in  New  Jer- 
sey are  not  in  harmony  with  the  gen- 
eral rule  prevailing  in  the  different 
states  where  the  mortgagor  is  regarded 
as  the  owner  of  the  legal  title  until 


foreclosure.    In  such  states  a  receiver 
will  be   appointed  upon  the  a))pliea- 
tion   of   the  mortgagee  after  default 
without  reference  to  the  legal  rights 
of  the  mortgagee  whenever  adequate 
equitable  grounds  for  the  mortgagee's 
relief  are   shown,   such  as  that  the 
premises  are  an  inadequate  security 
for  the  debt  aud  the  mortgagor  or 
other  person  in  possession  who  is  per- 
sonally liable  for  the  indebtedness  is 
unaljle  to  pay  the  delicieucy  arising 
under  the  sale. 
See  also  Alabama:  Scott  v.    Ware, 
65  Ala.  174;  Lelivym  v.  Tallahassee 
Mfg.  Co.  64  Ala.  567. 
Arkansas:  Price  \.  Doicdy,  34  Ark. 

285. 
Iowa:  White  v.  Griggs,  54  Iowa, 
650;  Barnett  v.  Nelson,  54  Iowa, 
41;  Myton  v.  Davenport,  51  Iowa, 
583;  Sleeper  V.  Iselin,  59  lovi'a,  371). 
Illinois:  Haas  v.  Cldcago  BUlg.  Soc. 

89  111.  498. 
Indiana:  Ilursh  v.   JJursh,  99  Ind. 
500;  Ponder  v.  Tate,  90  Ind.  330. 
Kentucky:  Woolley  v.  Uolt,  14  Bush, 

788. 
Michigan:  Broicn  v.   Chase,  Walk. 

Ch.  (Mich.)  43. 
Mississippi:  Myers  v.  Estell,  48 
Miss.  372,  per  Simrall,  J.;  White- 
head, V.  Wooten,  43  Miss.  523, 
520:  Phillips  v.Eila?ul,52  Miss. 721. 
New  Jersey:    Warwick  v.  Hammill, 

32  N.  J.  Eq.  427. 
New  Yoik;  Bank  of  Ogdenshurg  v. 
Arnold,  5  Paige,  39;  Shotwell  v. 
Smith,  3  Edw.  Ch.  588;  Sea  Ins. 
Co.  V.  Stehbins,  8  Paige,  bQ>b;War- 
ner  v.  Goiiverneur,  1  Barb.  36,  38; 
Jenkins  v.  Ilinman,  5  Paige,  309; 
Syracuse  City  Bank  v.  Tollman, 
31  Barb.  201;  Patten  v.  Accessory 
Transit  Co.  4  Abb.  Pr.  235,  13 
How.  Pr.  502;  Bolles  v.  Duff,  35 
How.  Pr.  481;  Smith  v.  Tiff'any, 
13  Hun,  671;  Ilollenbeck  v.  Donell, 
29  Hun,  94,  94  N.  Y.  342. 


rix;eiveiisiiip  in  foreclosure  of  mortgages.       2Si 

(b)  Where  by  the  terms  of  the  mortgage  no  right  to  a  receiver 
is  uivcn.' 


North   Carolina:  Kerchner  v.  Fair- 
ley,    80    N.    C.    24;    JJiirant    v. 
Civwell,  97  N.  C.  5507. 
Tennessee:    Ilenshaw    v.     Wells,    9 

Humph.  5G8. 

Uniied    Stales:    Grant    v.    riimnix 

Mat.  L.  Im.  Co.  121  U.  S.  105,  30 

L.    ed.    905;   Kouutze   v.    Omaha 

Ilolel  Go.  107  U.  S.  378,  27  L.  ed. 

609;  Frcedmaii's  Sav.  tfc  7\  Go.  v. 

Shepherd,  127  U.  S.  494,  32  L.  ed. 

1G3;  Gone  v.  Go7nbs,  18  Fed.  Rep. 

570,  5  McCrary,  651. 

Wisconsin:  Schreiber   v.   Carey,  48 

Wis.  208:  Morris  v.  Branchaud, 

52  Wis.  187;  Finch  v.  Hoiujhton, 

19  Wis.  150. 

In  Hill  V.  Robertson,  24  Miss.  368,  a 

failure  to   pay  a  mortgage  vests  the 

legal  title  in  the  mortgagee  and  carries 

with  it  the  right  to  the  possession  of 

the  mortgaged  premises,  thus  giving 

the  legal  possession  to  the  person  who 

holds  the  legal  title.     See  also  Ilyman 

V.  Kelly,  1  Nev.  179. 

In  Broion  v.  Chase,  Walk.  Ch. 
(Mich.)  43,  it  is  held  that  before  ap- 
pointing a  receiver  of  mortgaged 
premises  in  a  suit  for  foreclosure  of  a 
mortgage  the  court  must  be  satisfied, 
first,  that  the  premises  are  insufficient 
to  pay  the  debt,  and  second,  that  the 
party  personally  liable  is  insolvent  so 
that  an  execution  for  the  balance  due 
from  the  sale  would  be  unavailing. 
And  see  Uaas  v.  Chicago  <&  Bldy.  Soc. 
89  111.  498. 

'  In  Frcedman's  Sav.  &  T.  Co.  v. 
Shepherd,  127  U.  S.  494,  32  L.  ed.  16:'.. 
the  mortgage  contained  no  provision 
for  the  iJaymont  of  rents  and  profits 
of  the  mortgaged  premises  while  the 
mortgagor  remained  in  possession, 
but  it  was  belli  that  the  mortgagee 
waa    not   entitled   to    the   rents   and 


profits  of  the  mortgaged  premises  as 
against  the  owner  of  the  equity  of  re- 
demption until  such  mortgagee  takes 
the  actual  possession  or  until  it  is 
taken  in  his  behalf,  even  though  the 
income  may  be  expressly  pledged  as 
security  for  the  mortgage  debt  with 
the  right  in  the  mortgagee  to  take  pos- 
session upon  failure  of  the  mortgagor 
to  perform  the  conditions  of  the  mort- 
gage. In  this  case  the  deed  did  not 
give  the  mortgagee  or  the  trustees  the 
right,  immediately  upon  default,  to 
take  possession  and  appropriate  the 
rents  of  the  property,  but  only  gave 
the  trustees  authority  when  such  de- 
fault occurred  to  sell  upon  short  no- 
tice and  in  that  way  oust  the  mort- 
gagor and  suspend  his  right  to  further 
appropriate  the  income  of  the  prop- 
erty, even  if  the  deed  had  expressly 
pledged  the  income  as  security  for  the 
debts  named  the  mortgagor,  accord- 
ing to  the  doctrines  of  the  cases  cited 
would  have  been  entitled  to  the  in- 
come until  at  least  possession  was  de- 
manded under  the  deed;  or  until  his 
possession  was  disturbed  by  the  sale 
under  the  deed  of  trust  or  in  advance 
of  a  sale  by  having  a  receiver  ap- 
pointed for  the  benefit  of  the  mort- 
gagee. As  was  said  in  Kountze  v. 
Omaha  Hotel  Co.  107  U.  S.  395,  27  L. 
ed.  610,  "Courtsof  equity  always  have 
the  power  where  the  debtor  is  insolv- 
ent and  the  mortgaged  property  is  in- 
sufficient security  for  the  debt  and 
there  is  good  cause  to  believe  that  it 
will  be  wasted,  or  deteriorated,  in  the 
hands  of  the  mortgagor,  as  by  culling 
of  timber,  suffering  dilapidation,  etc., 
to  take  cliarge  of  the  property  by 
means  of  a  receiver  and  preserve  not 
only  the  crops,  but  the  rents  and 
profits  for  the  sati.sf action  of  the  debt. 


282 


RECEIVERSHIPS. 


(c)  Where  the  statute  gives  the  mortgagor  the  right  of  posses- 
sion and  use  until  the  foreclosure  is  complete  by  a  sale  of  the 
mt)rtgage  premises,  and  sometimes  until  the  expiration  of  the 
statutory  periud  of  redemption.' 


When  justice  rcciuires  lliis  course  to 
be  pursued  and  it  is  resorted  to  by  the 
mortgagee  it  will  give  him  ample  pro- 
tection." See  also  Dow  v.  Memphis  <& 
L.  li.  B.  Co.  124  U.  S.  6.J2,  31  L.  ed. 
56G;  Sftge  v.  Memphis  &  L.  R.  R.  Co. 
125  U.  S.  361.  31  L.  ed.  GM;  Gmnt  v. 
Phosnix  Mvt.  F.  Ins.  Co.  121  U.  S.  105, 
30  L.  ed.  905;  Teal  v.  Walker,  111  U. 
S.  242,  28  L.  ed.  416;  Chiamry  v. 
Blnckman,  3  Dougl.  390;  American 
Bridge  Co.  v.  Ileiddhach,  94  U.  S.  798, 
24  L.  ed.  144;  Galreston,  II.  &  II.  R. 
Co.  V.  Cowdrey,  78  U.  S.  11  Wall.  459, 
20  L.  ed.  199;  Cilman  v.  lUiaois  tfi 
M.  Teleph.  Co.  91  U.  S.  603,  23  L.  ed. 
405. 

lu  Cliadbourn  v.  Henderson,  2  Baxt. 
460,  where  the  maker  of  a  mortgage 
by  its  express  stipulation  is  allowed 
to  retain  possession  of  the  property 
until  foreclosure,  it  is  held  that  he 
is  entitled  to  the  rents,  and  a  receiver 
should  not  be  appointed  in  such  case. 

'In  WJute  V.  Griggs,  54  Iowa,  630,  it 
is  held  that  the  morlgagee  has  a  right 
to  the  appointment  of  a  receiver  only 
for  the  property  upon  which  his 
mortgage  is  a  lion,  and  then  only 
where  there  is  danger  of  its  being  lost 
or  materially  injured  or  impaired  in 
value.  He  is  not  entitled  to  a  receiver 
to  lake  charge  of  the  crops  upon 
mortgage  premises.  The  fact  that 
the  debtor  has  fraudulently  disposed 
of  property  upon  which  the  creditor 
had  no  lien  is  no  ground  for  the  ap- 
pointment of  a  receiver  to  take  pos- 
session of  property  upon  which  lie 
has  no  lien.  See  also  Myton  v.  Duven- 
j)ovl,  51  Iowa,  583. 

In  Swan  v.  Mitchell,  82  Iowa,  307, 


where  the  provision  in  the  mortgage 
was  for  the  conveyance  of  the  "  tene- 
ment, hereditiments,  and  ai)purten- 
ances  threunto  belonging,  and  the 
rents,  issues,  products,  and  protits 
thereof,"  and  giving  the  mortgagee 
upon  the  default  of  the  mortgagor  in 
the  payment  of  interest  or  of  other 
covenants  mentioned  the  right  to  take 
possession  of  the  properly  and  rent  or 
cultivate  the  same,  is  not  sufficient 
ground  of  itself  in  a  foreclosure  pro- 
ceeding to  warrant  the  appointment 
of  a  receiver  of  the  property  during 
the  period  of  redemption  as  against  a 
lessee  in  possession  thereof  under  a 
lease  covering  such  period  and  for 
which  the  rent  has  been  paid. 

In  Union  Mut.  L.  Ins.  Co.  v.  Union 
Mills  Plaster  Co.  37  Fed.  Rep.  286, 
3  L.  R.  A.  90,  it  was  held  that  mere 
disuse  of  a  manufacturing  plant  under 
an  agreement  with  other  manufactur- 
ers to  restrict  production,  though 
attended  with  decay  and  dilapidation 
inseparable  from  disuse,  is  not  such 
distruction  or  waste  as  eniitles  the 
mortgagee  to  ask  for  a  receiver.  To 
justify  such  an  appointment  the 
waste  must  be  serious  and  the  danger 
of  destruction  or  impairment  of  the 
security  imminent.  Pullman  v.  Cin- 
cinnati &  C.  A.  L.  R.  Co.  4  Biss.  47; 
Morrison  v.  Buckner,  Heinpst.  442; 
Beverly  v.  Brooke,  4  Gratt.  187; 
Wagar  v.  Stone,  36  Mich.  364.  In 
the  latter  case  it  was  held  that  the 
mortgage  in  Michigan  conveyed  no 
title  to  the  mortgagee,  but  is  a  secur- 
ity merely  for  the  debt,  and  the  mort- 
gagee before  foreclosure  has  no  legal 
interest  in   the  mortgaged   premises 


RECEIVERSHIP  IN  FORECLOSURE  OF  MORTGAGES. 


283 


(d)  Where  the  allegations  of  the   bill  or  petition  npon  wliicli 
the  appointment  of  a  receiver  is  sought,  are  denied,  or  wliere  the 


and  is  not  entitled  to  the  possession. 
See  also  Lee  v.  Clary,  38  Mich.  223; 
Ilazeltir.e  v.  Granger,  44  Mich.  503; 
Ren.tUng  v.  Waterman,  46  ]\Iich.  107; 
Morse  v.  Bijam,  55  Mich.  594. 

The  mortgagor  being  entitled  under 
the  statute  (Comp.  L.  §  G2G3)  to  pos- 
session and  subsequently  to  the  rents 
and  profits  of  the  mortgaged  premises 
until  such  time  as  his  title  is  dive.sted 
by  a  perfected  foreclosure  it  is  not 
competent  to  cut  short  his  right  in 
this  regard  by  means  of  a  receiver. 
Wagar  v.  Stone,  supra;  and  a  receiver 
cannot  be  appointed  after  default  to 
take  the  rents  and  profits,  although 
the  mortgage  so  stipulates.  Hazeltine 
V.  Granger,  44  Mich.  503,  and  see 
Beecher  v.  Marquette  &  P.  Rolling  Mill 
Co.  40  Mich.  307.  If,  however,  the 
mortgagor  voluntarily  puts  the  mort- 
gagee in  possession  he  cannot  treat 
the  possession  as  wrongful  and  bring 
ejectment  without  notice  or  payment. 
Reading  v.  Waterman,  46  Mich.  107; 
Morse  v.  Byam,  55  Mich.  594.  See 
also  upon  the  doctrine  of  the  rights  of 
the  mortgagor  and  mortgagee  in  this 
state,  Hogsett  v.  Ellis,  17  Mich.  363; 
Ladue  v.  Detroit  &  M.  R.  Co.  13  Mich. 
380;  Van  Ilusan  v.  Kanouse,  13  Mich. 
303;  Caruthers  v.  E.um'plirey ,  12  Mich. 
270. 

It  will  be  noticed  that  in  Michigan 
(Comp.  L.  §  62G3)  the  statute  forbids 
ejectment  by  the  mortgagee  before  a 
foreclosure  absolute.  It  is  also  held 
in  Beeclier  v.  Marquette  &  P.  Rolling 
Mill  Co.  svpra,  that  an  order  denying 
the  appointment  of  a  receiver  in  a 
foreclosure  suit  is  interlocutory  and 
therefore  not  appealable.  And  in  the 
same  case  it  is  held,  also,  that  if  the 
default  is  not  admitted  it  cannot  be 
determine*!  upon  a  motion  to  appoint 
a  receiver. 


In  Guy  V.  Ide,  6  Cal.  99,  under  a 
statute  which  forbids  a  mortgagee 
from  recovering  a  mortgaged  estate 
and  confines  his  remedy  to  a  foreclo- 
sure, it  was  held  that  the  same  reason 
does  not  exist,  as  by  the  English  rule, 
for  appointing  a  receiver  to  collect 
the  rents  and  profits  pending  the 
litigation  for  the  reason  that  the  mort- 
gage is  considered  as  only  a  security 
for  the  debt,  and  that  the  estate  re- 
mains that  of  the  mortgagor  in  the 
character  of  owner,  and  must  con- 
tinue to  remain  so  with  all  the  inci- 
dents of  ownership  until  by  a  fore- 
closure and  sale  a  new  owner  is 
substituted. 

In  Uyman  v.  Kelly,  1  Nev.  179,  it 
is  said  that  courts  of  equity  upon  the 
filing  of  a  bill  to  foreclose  a  mortgage 
have  usually  appointed  a  receiver 
where  there  was  an  allegation  that 
the  property  mortgaged  was  insufli- 
cient  to  pay  the  debt  and  the  mortga- 
gor was  insolvent.  If  in  addition  to 
this  it  appears  there  was  a  specific 
pledge  of  the  rents  and  profits  to  keep 
down  the  interest  and  they  were  being 
diverted,  it  always  furnished  a  strong 
additional  reason  for  the  appointment 
of  a  receiver.  That  the  remedy  in 
Nevada  of  ejectment  having  been 
abolished  by  statute  and  the  mortga- 
gee confined  to  his  remedy  to  fore- 
close, it  was  held  to  be  reason  for  a 
more  liberal  exercise  by  the  chan- 
cellor of  the  power  to  appoint  a  re- 
ceiver, liolding  contrary  to  the  doc- 
trine in  California  under  a  similar 
statute  in  the  case  of  Guy  v.  Idc,  G 
Cal.  99,  and  the  appointment  of  a  re- 
ceiver was  sustained. 

In  Adair  v.  Wright,  IG  Iowa,  385, 
it  was  held  that  where  the  evidence 
showed  tiiat  the  mortgaged  property 
was  not  gomg  to  waste  or  in  need  of 


284 


RECEIVERSHIPS. 


amount  due  is  in  dispute  and  the  answer  denies  the  alleviations  of 
the  plaintiff  as  to  the  inadequacy  of  the  secul■it3^' 

(e)  AVhere  the  insufficiency  of  the  pro})erty  covered  by  the 
morto-ao-e  is  shown,  but  the  proof  fails  to  show  that  the  mort- 
gagor or  other  person  liable  for  the  mortgage  debt  is  insolvent." 


repairs  but  that  it  was  in  compara- 
tively a  good  state  of  preservation,  it 
was  lield  that  the  order  appointing  a 
receiver  should  be  vacated. 

'  In  Callanan  v.  Shaw,  19  Iowa,  183, 
it  was  held  that  a  receiver  would  not 
be  appointed  on  the  application  of  a 
mortgagee  to  take  possession  of  mort- 
gaged  premises,   where  it  does  not 
clearly  appear  that  the  whole  mort- 
gaged   premises    are    insufficient    in 
value  to  pay  the  debt,  or  that  the 
court  should  take  control  of  the  es- 
tate to  protect  the  rights  of  a  party 
who  has  a  clear,  strong  claim  against 
it.     The  court  say:     "Formerly  the 
mortgagee  held  the  legal  title  and  was 
entitled  to  possession.    Under  owr  law 
the  rule  is  changed  and  the  mortgagor 
has  or  is  entitled  to  both,  and  this  is 
emphatically  so  as  to  the  homestead. 
Now  the  rule  has  been  from  an  early 
date  at  common  law,  as  between  the 
mortgagee  and  mortgagor,  that  if  the 
mortgiigee  says  by  his  answer  (in  a  bill 
to  redeem)  that  anything  is  due  him, 
the  court  will  not  disturb  the  posses- 
sion; will  not,  upon  the  application 
for  the  appointment  of  a  receiver,  set- 
tle and  ascertain  the  accounts  between 
them.     See    Qnarrell  v.  Beckford,   13 
Ves.  Jr.  377;  Codrimjion  v.  Parker,  16 
Ves.  Jr.  469;  Berney  v.  Seicell,  2  Jac. 
&  W.  629;  Rowe  v.  Wood,  2  Jac.  &  \V. 
r)53.     In  this  state  the  mortgagor  be- 
ing   in    possession,   this    pos.sc'Ssion, 
under  the  legal  estate,  should  not  be 
disturbed  by  the  appointment  of  a  re- 
ceiver, unless  indeed  in  case  of  fraud 
clearly  proved  or  of   danger  to  the 
mortgagee  (having  a  strong  claim),  if 
the  intermediate  estate  or  possession 


should  not  be  brought  under  the  care 
of  the  court.  In  any  case  the  receiver 
is  ap[)ointed  against  the  holder  of  the 
legal  title  with  reluctance,"  Lloyd  v. 
Pamngham,  19  Ves.  Jr.  59;  Smith  v. 
Smith,  2  Younge  &  C.  351;  Knight 
V.  Dupldms,  2  Ves.  Jr.  360;  Toldervy 
V.  Colt,  1  Younge  &  C.  621. 

In  Sea  Ins.  Co.  v.  Stthbins,  8  Paige, 
567,  it  is  held  that  to  authorize  the 
court  to  interfere  and  appoint  a  re- 
ceiver, where  there  is  a  mortgagor  or 
other  party  to  the  suit  who  is  person- 
ally liable  for  the  debt  secured  by  the 
mortgage,  in  case  the  amount  raised 
upon  the  sale  shall  be  found  insufQ- 
cient  to  pay  the  debt  and  costs,  the 
parly  applying  for  such  receiver  must 
not  only  satisfy  the  court  that  there 
is  a  probability  that  the  mortgaged 
premises  will  not  sell  for  enough  to 
satisfy  the  decree,  but  also  that  the 
party  who  is  thus  individually  liable 
is  himself  irresponsible  for  the  proba- 
ble amount  of  such  anticipated  de- 
ficiency, after  paying  all  his  other 
just  debts. 

-In  Pullan  v.  Cincinnati  &  0.  A.  L. 
B.  Co.  4  Biss.  35,  it  is  held  that  a  re- 
ceiver should  only  be  appointed  in  a 
strong  case,  and  in  no  case  of  a  mort- 
gage ought  a  receiver  to  be  appointed 
if  it  is  not  clear  that  on  a  foreclosure 
the  mortgaged  property  will  not  bring 
enough  money  to  pay  the  debt,  inter- 
est and  costs. 

In  Morrison  v.  Buckner,  Hempst. 
442,  the  general  rule  is  said  to  be  that 
receivers  will  not  be  appointed  in 
mortgage  foreclosure  cases,  unless  it 
clearly  appears  that  the  security  is  in- 
adequate or  there  is  immediate  danger 


RECEIVERSHIP  IN  FORECLOSURE  OF  MORTGAGES.         285 

(f)  AVliere  tlie  rii^-lit  of  plaiutili  to  a  furccludiire  id  not  clearly 
shown.' 


of  the  waste,  removal  or  destruction 
of  the  niorlgii<r<'d  property,  or  that  the 
rents  aud  i)r()tils  have  been  expressly 
pledged  for  the  debt.  See  Sliotwell  v. 
Smith,  '6  Edw.  Ch.  588. 

In  Astor  v.  Turner,  2  Barb.  444,  it 
was  held  that  where  a  bill  is  filed  to 
foreclose  a  mortgage  on  leasehold 
premises,  which  are  a  scant  security 
for  the  debt  and  the  mortgagor  is  insol- 
vent and  his  assignee  in  possession,  a 
receiver  will  be  appointed  and  the 
owner  of  the  equity  of  redemption  be 
directed  to  pay  the  occupation  rent. 

In  Myers  v.  Estell,  48  Miss.  372,  it 
is  said  that  if  the  mortgagee  or  bene- 
ficiary in  a  trust  deed  do  not  stipulate 
for  the  rents  and  profits  of  the  estate 
conveyed,  ordinarily  he  is  not  entitled 
to  them,  nor  has  he  any  claim  upon 
them  until  he  has  taken  possession, 
and  that  ordinarily,  in  the  absence  of 
such  a  stipulation  that  the  mortgagee 
shall  have  the  rents  and  profits,  iie  has 
no  claim  thereto  merely  on  the  ground 
that  tlie  debt  is  due  and  the  title  has 
become  absolute,  but  is  only  enlitled 
to  a  receiver  for  the  colketiou  aud 
approprialion  of  the  rents  where  the 
properly  is  insufficient  to  pay  tlie 
debt,  and  the  mortgagor  is  insolvent 
and  unable  to  pay  any  deOcieucy  tliat 
might  remain  after  the  sale  of  the 
property  mortgaged. 

In  Quincy  v.  CJiCffU'man,  4  Sandf. 
Ch.  404,  it  is  held  that  where  mort- 
gaged premi.ses  are  so  situated  that 
'hey  cannot  be  sold  in  parcels,  a  re- 
ceiver of  the  rents  will  be  appointed 
on  a  part  only  of  the  mortgage  debt 
falling  due,  provided  the  otlier  requi- 
site facts  be  made  to  appear,  to  wit: 
tlie  insullicieiicy  of  the  premises  in 
value  to  pay  the  debt  and  costs  and 
the   insolvency  or   irrespousiiiility  of 


the  party  personally  liable  to  pay  the 
debt. 

In  Uyman  v.  Kelly,  1  Nev.  179,  in- 
adequacy of  property  to  satisfy  the 
lien  and  insolvency  of  the  mortgagor 
was  held  to  be  a  sufficient  reason  for 
the  appointment  of  a  receiver  and  that 
a  specific  pledge  of  the  rents  and 
profits  to  keep  down  the  interest,  and 
the  diversion  thereof,  furnished  an  ad- 
ditional reason  for  the  appoiulmeni; 
of  a  receiver. 

In  Brown  v.  Chase,  Walk.  Ch. 
(Mich.)4:j,  it  is  held  that  before  ap- 
pointing a  receiver  to  take  charge  of 
the  mortgaged  premises  in  a  suit  for 
the  foreclosure  of  a  mortgage  the 
court  must  be  satisfied,  first,  that  the 
premises  are  insufficient  to  pay  the 
debt,  and  second,  that  the  party  per- 
sonally liable  is  insolvent  so  that  an 
execution  for  the  balance  due  after 
sale  would  be  unavailable,  aud  that 
security  is  presumed  sufficient  until 
the  contrary  is  shown,  but  the  applica- 
tion must  be  made  within  a  reasonable 
time  or  the  delay  will  be  construed  as 
a  waiver  of  the  right  to  make  the  ap- 
plication. 

'  In  Quincy  v.  Cheeaeman,  4  Sandf. 
Cli.  405,  the  court  say:  "the  mortgage 
debt  must  also  be  due  so  as  to  entitle 
the  complainant  to  a  foreclosure  of 
the  premises  over  which  he  .seeks  the 
apjioiutment  of  a  receiver." 

In  IJullenbeck  v.  VonncU,  94  N.  T. 
343,  it  appeared  that  aliout  one  sixth 
of  the  mortgage  debt  was  due  aud  the 
premises  were  divided  into  two  nearly 
equal  parcels  which  could  be  sold 
seiiarately  without  injury  to  the  par- 
ties interested.  It  was  held  that  hh- 
suining  tlie  appointment  of  a  receiver 
of  the  rents  and  profits  was  proper  in 
the  absence  of  a  specific  pledge  thereof 


286 


RECEIVERSHIPS. 


(<t)  Where  the  plaintiil:  has  no  equitahle  staiidiiii:;  m  court  by 
reason  of  his  faihire  to  keep  his  agreement  respecting  the  con- 
sideration for  which  the  niortiraire  was  «;iven.' 


yet  plaintiff  was  not  entitled  to  a  re- 
ceiv(.'i>hip  for  the  protcclion  of  tliat 
portiou  of  the  delit  which  was  not  yet 
due  or  of  that  portion  of  the  premises 
as  to  which  his  rights  to  sell  have  not 
accrued  and  that  plaintiff  was  not  en- 
titled to  a  receivership  of  Ihs  whole  of 
the  premises  but  only  to  one  of  the 
parcels.  Ilollenbeck  v. Donvell,  29  Ilun, 
9-1,  reversed.  See  also  Bank  of  Og- 
densburg  v.  Arnold,  5  Paiee,  40. 

In  Morris  v.  BraiicJiaud,  52  Wis. 
187,  a  bill  to  foreclose  a  mortgage  was 
tiled  but  it  did  not  allege  waste,  fail- 
ure to  pay  taxes,  or  diminution  of  the 
value  of  the  security  or  increase  of  the 
mortgage  debt;  but  on  the  contrary  it 
was  shown  that  the  debt  had  been  re- 
duced since  the  securities  were  taken 
and  less  than  half  of  the  remaining 
debt  was  due,  including  only  a  small 
amount  of  interest  and  the  property 
was  salable  in  parcels.  It  was  held 
that  a  receiver  should  not  be  appointed, 
the  party  liable  for  the  piiyment  of 
the  indebtedness  not  appearing  to  be 
irresponsible. 

In  Bank  of  Ogdensburg  v.  Arnold, 
supra,  it  appeared  that  the  whole 
amount  of  the  mortgage  was  not  due 
and  the  premises  could  be  ^old  in  par- 
cels without  injury  to  the  interest  of 
the  parties,  and  it  Wiis  held  that  only 
so  much  of  the  premises  as  would  be 
suUieient  to  satify  the  amount  then 
due  with  costs  sho\ild  be  sold,  though 
the  remaining  portion  of  the  premises 
would  be  insufficient  to  satisfy  the 
money  yet  to  become  due.  It  was 
also  held  that  wliere  the  mortgagee 
has  neglected  to  take  a  specific  pledge 
of  the  rents  and  profits  of  the  mort- 
gaged premises  for  the  security  of  the 


debt  before  it  becomes  due  he  has  no 
equitable  right  to  such  rents  and 
profits  in  the  mean  time. 

In  Buchanan  v.  Berksliire  L.  Inx. 
Co.  90  Ind.  510,  it  is  held  that  pending 
a  suit  to  foreclose  a  mortgage  if  the 
mortgnged  premises  are  indivisible, 
the  debtor  insolvent  and  the  property 
sold  for  taxes  a  junior  mortgagee  de- 
fendant whose,  debt  is  not  due  having 
filed  a  counterclaim  setting  up  his  de- 
mand, may  on  petition  showing  the 
facts  and  that  the  property  is  less  in 
value  than  the  amount  of  incum- 
brance may  have  an  interlocutory 
order  appointing  a  receiver  to  collect 
the  rents.  Brinkman  v.  liilzinger,  82 
Ind.  353. 

'  In  McKellar  v.  Rogers,  20  Jones  & 
S.  3G0,  a  mortgage  was  given  to  se- 
cure advances  to  be  used  in  the  erec- 
tion of  buildings  on  the  mortgaged 
premises,  which  advances  the  mort- 
gngee  failed  to  make,  as  required  by 
the  mortgage,  in  consequence  whereof 
the  mortgagor  was  comi^elled  person- 
ally to  advance  large  sums  of  money 
to  complete  the  work,  and  then  to 
save  his  credit  was  compelled  to  sell 
the  houses  erected  at  a  large  reduc- 
tion from  their  actual  value.  It  was 
contended  that  this  was  an  adequate 
defense  to  the  appointment  of  a  re- 
ceiver but  the  evidence  in  support  of 
the  objection  was  vague  and  indef- 
inite, from  which  the  court  was  unable 
to  determine  whether  the  defense  was 
valid  or  not,  there  being  in  the  mort- 
gage a  covenant  pledging  the  rents 
and  profits.  This  case  was  after- 
wards affirmed  in  the  court  of  ap- 
peals but  upon  other  grounds.  109 
N.  Y.  4G8. 


RECEIVERSHIP  IN  FORECLOSURE  OF  MORTGAGES. 


287 


(h)  Where  pending  an  appeal  the  ap})eal  bond  constitntcs 
ample  protection.' 

(i)  Wliere  tlie  defendant  by  a  deposit  in  conrt,  or  otherwise, 
secures  the  plaintifi".^ 

(j)  Where  the  propert}'  over  which  a  receiver  is  son2:ht  is  a 
statutory  lioniestead  and  the  defendant  entitled  to  the  occupancy 
and  use  thereof.'' 

(k)  Wliere  the  plaintiff  is  i^'uilty  of  ladies  in  makini;;  his 
application.'' 

§  174.     Iiuideqiiacy  of  security  as  ground  for. 

Inaderpiacy  of  security  is  tlie  most  usual  ground,  in  foi-eclosure 
proceedings,  upon  which  application  for  a  receiver  of  the  mort- 
gaged premises  is  based.  A  careful  examination  of  the  ad  jud<2,-ed 
cases  bearing  upon  this  subject,  it  is  believed,  will  result  in  the 
establishment  of  the  following  principles  : 

(a)  Inadequacy  of  security,  such  as  warrants  the  appointment 
of  a  receiver,  consists  of  two  separate  elements,  each  of  which  is 
necessary  to  be  established  by  adequate  proof :  (1)  The  insuf- 
ficiency in  value  of  the  mortgaged  premises  to  pay  the  debt,  in- 


'In  Adair  v.WrigTd,  16  Iowa,  ;-i85, 
it  was  held  lliat  the  appointment  of  a 
receiver  of  mortgaged  property  after 
final  decree  and  foreclosure  proceed- 
ings is  unusual  and  if  allowed  at  all 
must  be  supported  by  strong  showing 
of  facts,  and  if  the  evidence  showed 
that  the  mortgaged  property  was  not 
going  to  waste  or  in  need  of  repairs, 
but  in  a  comparatively  good  state  of 
preservation,  it  was  held  that  the 
order  appointing  a  receiver  should  be 
vacated  and  especially  where  the 
plaintiff  had  approved  security  for 
the  whole  debt  on  the  appeal  bond. 

■"Welch  V.  Henry,  82  Kan.  425. 

^In  Cdllanan  v.  Shaw,  19  Iowa, 
183,  a  receiver  was  refused  on  the  ap- 
plication of  a  mortgagee  to  take  pos- 
session of  mortgaged  premises,  where 
it  did  not  clearly  appear  that  the 
whole  mortgaged  premises  were  in- 
sufficient in  value  to  pay  the  debt  or 


that  the  court  should  take  control  of 
the  estate  to  protect  the  rights  of  a 
party  who  had  a  clear  strong  claim 
against  it.  It  was  doubled  whether  in 
any  case  a  receiver  should  be  ap- 
pointed to  take  possession  and  charge 
of  the  mortgagor's  homestead  pend- 
ing proceedings  to  foreclose  the  mort- 
gage. 

In  Cone  v.  Combu,  18  Fed.  Rep.  570, 
great  doubt  was  expressed  as  U) 
whether  the  defendant's  possession  of 
the  homestead  should  be  interfered 
"witli  until  after  a  sale  and  deficiency 
decree  rendered  and  in  this  case  it  ap- 
peared that  the  mortgagor  and  his 
family  were  not  occupying  the  prem- 
ises as  a  homestead,  but  was  deriving 
an  income  from  it  as  a  homestead. 
See  also  Ifor/e  v.  IloUUtev,  8  Baxt.  ^as. 

•'See  Cone  v.  Combs,  18  Fed.  Rep. 
570. 


288 


RECEIVERSHIPS. 


terest  and  costs.  (2)  The  insolvency  of  tliu  niortuajj^or,  ln*.s 
o-rantec,  or  other  person  liable  for  the  payment  of  the  niort,o;a«;c 
debt,  or  at  least,  as  has  been  held  in  some  cases,  snch  a  de<i::ree  of 
irresponsibility  linancially  as  ren(h!rs  the  collection  of  a  deliciency 
iudt2;me!it  against  him  ini[irobable.' 


'  In  Warner  v.  Qouverneur,  1  Buib. 
3G,  where  a  mortgagee  bad  not  pro- 
vided for  keeping  down  the  accruing 
interest  upon  the  mortgage  by  secur- 
ing a  lien  upon  the  rents  and  profits, 
a  court  will,  it  is  held,  interfere  with 
the  mortgagor's  possession  prior  to  a 
decree  of  foreclosure,  and  appoint  a 
receiver  of  the  rents  and  profits  where 
it  appears  that  the  premises  are  inade- 
quate security  for  the  debt  and  the 
mortgagor,  or  other  person  in  possess- 
ion, is  insolvent,  but  in  any  such  case 
the  receiver  will  not  be  appointed 
upon  mere  allegation  that  the  mort- 
gaged premises  are  not  an  adequate 
security  for  all  just  incumbrances 
thereon.  The  mortgagee  applying 
for  a  receiver  must  allege  in  his  bill 
that  the  premises  are  not  an  adequate 
security  for  the  amount  due  him. 

In  Astar  v.  Turner,  2  Barb.  444,  a 
bill  was  filed  to  foreclose  a  mortgage 
of  leasehold  premises  which  were 
scanty  security  for  the  debt,  and  the 
mortgagor  was  insolvent  and  his  as- 
signee in  possession,  a  receiver  was 
appointed  and  the  owner  of  the  equity 
of  redemption  directed  to  pay  an  oc- 
cupation rent. 

In  Sea  Ins.  Co.  v.  Stchbins,  8  Paige, 
505,  it  was  held  that  the  plaintiff  must 
state  that  the  premises  are  not  of  suf- 
ficient value  to  satisfy  his  debt  and 
costs,  and  that  the  mortgagor  or  otlier 
person  who  is  personally  liable  for  tlie 
payment  of  the  mortgage  debt  is  irre- 
sponsible or  unable  to  pay  the  antici- 
pated deficiency.  He  must  also  show 
who  is  in  possession  of  the  mortgaged 
premises,  as  a  receiver  can  only  be  ap- 


pointed in  a  case  where  the  person  in 
possession  of  the  m(irig;iged  premises, 
by  himself  or  his  tenants,  is  a  l)arty  to 
the  suit. 

In  Quincy  v.  Cliceseman,  4  Sandf. 
Ch.  405,  it  was  held  to  be  a  requisite 
fact  to  be  made  to  appear,  Jirfit,  that 
the  premises  were  iiisullicieut  in  value 
to  pay  the  debt  and  costs,  and  second, 
the  insolvency  or  irresponsibility  of 
the  person  liable  to  pay  the  debt. 

In  lloUenbeck  v.  Donnell,  94  N.  Y. 
342,  it  is  said  that  in  New  York  the 
right  to  a  receiver  of  the  rents  and 
profits  is  placed,  not  upon  the  mort- 
gagee's legal  right  to  the  possession  of 
the  mortgaged  premises  and  therefore 
his  legal  rights  to  the  rents  thereof, 
but  his  right  was  inherent  in  the  court 
of  chancery  before  the  code  of  pro- 
cedure was  adopted,  and  was  con- 
tinued by  that  code  under  subd.  5, 
§  244,  and  was  not  abrogated  by  a 
provision  of  the  code,  §  713,  defining 
cases  in  which  receivers  may  be  ap- 
pointed, but  on  the  contrary  is  reaf- 
firmed by  the  general  provisions  of  the 
code,  §  4,  declaring  that  each  of  the 
courts  therein  named  shall  continue 
to  exercise  the  jurisdiction  and  pow- 
ers now  vested  in  it,  except  as  other- 
wise prescribed. 

In  Commercial  &  Sav.  Bank  v.  Cor- 
bctt,  5  Sawy.  172,  it  was  held  that  the 
facts  essential  to  the  appointment  of 
a  receiver  need  not  be  pleaded,  but 
may  be  shown  by  affidavit  and  at  the 
hearing,  and  that  a  prayer  for  a  re- 
ceiver is  unnecessary.  This  decision 
is  strangely  at  variance  with  a  great 
many  well  considered  cases. 


RECEIVERSHIP  IN  FORECLOSURE  OF  MORTGAGES. 


289 


In  Schreiber  v.  Carey,  48  Wis.  208 
the  mortgage  included  the  homestead, 
and  neither  the  interest  nor  principal 
Lad  been  paid,  and  the  debt  was  larger 
than  the  sum  for  which  the  premises 
could  be  sold,  and  there  were  other 
unsatisfied  judgments  against  the 
mortgagor,  it  was  held  that  in  the  ab- 
sence of  rebutting  evidence,  the  in- 
solvency of  the  mortgagor  was  suffi- 
ciently established.  In  this  case, 
however,  in  addition  to  the  foregoing 
facts,  it  was  further  shown  that  the 
mortgagor  was  wilfully  neglectmg  to 
pay  the  taxes  on  the  land. 

In  Eerchner  v.  Fairley,  80  K  C.  24, 
it  appeared  that  the  property  conveyed 
was  inadequate  to  pay  the  debt,  and 
that  the  mortgagor  in  possession  was 
insolvent.  Esld,  that  the  appointment 
of  a  receiver  was  proper,  though  the 
plaintiff  denied  an  alleged  payment  of 
the  debt  and  the  existence  of  assets  in 
his  hands  applicable  thereto.  Ten 
Broeck  v.  Orchard,  74  N.  C.  409;  Rol- 
lins V.  Henry,  11  N.  C.  467.  It  is  in- 
cumbent, however,  that  the  plaintiff 
should  establish  an  apparent  right  to 
the  property  in  litigation,  and  where 
it  is  neither  alleged  nor  shown  that 
there  is  danger  of  waste  or  injury  to 
the  properly  or  loss  of  the  rents  and 
profits  by  reason  of  the  insolvency  of 
the  party  in  possession,  a  receiver  will 
not  be  appointed.  Twitty  v.  Logan, 
80  N.  C.  69. 

In  Durant  v.  Crowell,  97  N.  C.  367, 
it  was  held  that  where  the  plaintiff 
establishes  a  'prima  fade  right  to  prop- 
erty, which  is  not  rebutted  by  the  de- 
fendant, a  receivershould  be  appointed 
where  it  is  shown  that  there  is  danger 
of  loss  of  the  rents  and  profits,  and  in 
such  case  the  value  of  the  property  in 
controversy  ought  not  to  be  considered 
in  passing  upon  the  question  of  the 
solvency  of  the  defendant.  In  this 
case  the  defendant  was  permitted  to 
19 


execute  a  bond  to  secure  the  rents  and 
profits  and  such  damages  as  might  be 
adjudged  to  the  plaintiff,  in  lieu  of  a 
receiver. 

In  Dunlap  v.  Hedges,  35  W.Va.  287, 
it  appeared  that  judgment  had  been 
rendered  against  the  mortgagor,  a  sec- 
ond mortgage  given  upon  the  prop- 
erty, and  it  was  alleged  that  the  mort- 
gagor was  insolvent  and  had  been 
allowing  the  mortgaged  premises  to 
run  down  and  there  was  waste,  a  re- 
ceiver was  appointed  to  rent  and  pre- 
serve the  property  until  the  conflict- 
ing claims  should  be  adjudged. 

In  Grant  v.  Phoinix  Mut.  L.  Ins. 
Co.  121  U.  S.  105,  30  L.  ed.  905,  it  is 
held  upon  the  authority  of  Kountze^. 
Omaha  Hotel  Co.  107  U.  S.  378,  395, 
27  L.  ed.  609,  616,  as  follows:  "Courts 
of  equity  always  have  the  power 
where  the  debtor  is  insolvent  and  the 
mortgaged  property  is  an  insufficient 
security  for  the  debt  and  there  is  good 
cause  to  believe  that  it  will  be  wasted 
or  deteriorated  in  the  hands  of  the 
mortgagor  by  cutting  off  timber,  suf- 
fering dilapidation,  etc. ,  to  take  charge 
of  the  property  by  means  of  a  receiver 
and  preserve  not  only  the  corpus,  but 
rents  and  profits  for  the  satisfaction 
of  the  debt." 

In  Buchanan  v.  Berkshire  L.  Ins. 
Co.  96  Ind.  510,  it  was  held  in  a  fore- 
closure proceeding  where  it  appears 
that  the  mortgaged  premises  are  in- 
divisible, the  debtor  insolvent  and  the 
property  sold  for  taxes,  a  junior  mort- 
gagee defendant  whose  debt  is  not  due, 
having  filed  a  counterclaim  setting  up 
his  demand  and  showing  that  the  prop- 
erty is  less  in  value  than  the  amount 
of  incumbrance,  may  have  a  receiver. 

A  receiver  appointed  at  the  instance 
of  a  mortgagee  is  not  entitled  to  the 
rents  and  profits  in  the  possession  of 
the  mortgagor,  accruing  from  the 
mortgaged  properly  prior  to  his  up- 


290 


RECEIVERSHIPS. 


(b)  The  establishment  of  one  of  these  elements  and  the  failure 
to  establish  the  other,  is  fatal  to  the  appointment.' 


pointment.  Alabama  Nat.  Bank  v. 
Mary  Lee  Coal  cfc  R.  Go.  (Ala.)  19  So. 
404. 

In  determining  whether  a  receiver 
of  mortgaged  property  shall  be  ap- 
pointed pending  a  foreclosure  suit, 
because  of  the  inadequacy  of  the  prop- 
erty to  pay  the  debt,  the  proper  esti- 
mate is  that  placed  on  the  property  at 
the  time  of  hearing  instead  of  at  some 
other  time.  Jackson  v.  Hooper  (A.la.) 
18  So.  254. 

'  In  Sea  Ins.  Co.  v.  Stebbins,  8  Paige, 
565,  the  court  say:  "To  authorize  the 
court  to  interfere  and  appoint  a  re- 
ceiver where  there  is  a  mortgagor  or 
other  party  to  the  suit  who  is  person- 
ally liable  for  the  debt  secured  by  the 
mortgage  in  case  the  amount  raised 
upon  sale  shall  be  found  insufficient 
to  pay  the  debt  and  costs,  the  party 
applying  for  such  receiver  must  not 
only  satisfy  the  court  that  there  is  a 
probability  that  the  mortgaged  prem- 
ises will  not  sell  for  enough  to  satisfy 
the  decree,  but  also  that  the  party  who 
is  thus  individually  liable  is  himself 
irresponsible  for  the  probable  amount 
of  such  anticipated  deficiency  after 
paying  all  his  other  just  debts," 

In  Morris  v.  Branchaud,  52  Wis. 
187,  where  there  was  nothing  in  the 
record  indicating  that  the  mortgagor 
was  irresponsible,  it  was  held  that  this 
was  an  insurmountable  objection  to 
the  appointment  of  a  receiver. 

In  Warner  v.  Qouverneur,  1  Barb. 
86,  there  was  no  doubt  from  the  evi- 
dence of  the  mortgagor's  insolvency, 
but  there  was  a  good  deal  of  doubt  as 
to  the  inadequacy  of  the  security  of 
the  mortgaged  premises  and  it  was 
held  that  a  receiver  should  not  be  ap- 
pointed. 

In  Myers  v.  Estell,  48  Miss.  372-403, 


it  is  said  that  a  better  rule  is  to  grant 
or  refuse  a  receiver  as  it  may  or  may 
not  be  an  essential  means  to  pay  the 
debt;  that  there  can  be  no  necessity 
for  this  auxiliary  remedy  if  the  mort- 
gagor is  solvent  and  able  to  pay  any 
delicieucy.  In  such  case  the  creditor 
ought  to  be  left  to  his  legal  remedy  to 
get  at  the  rents. 

In  Brown  v.  Chase,  "Walk.  Ch. 
(Mich.)  43,  the  court  say:  "The  court 
must  be  satisfied,  before  making  the 
appointment,  that  the  mortgaged 
premises  are  insufficient  to  pay  the- 
mortgage  debt  and  that  the  mortgagor 
or  other  party  to  the  suit  who  is  per- 
sonally liable  for  this  payment  is  in- 
solvent or  out  of  the  jurisdiction  of  the 
court  so  that  an  execution  against 
him  for  the  balance  that  should  remain 
due  after  a  sale  of  the  mortgaged 
premises  would  be  unavailable. 

In  Gone  v.  Combs,  18  Fed.  Rep. 
576,  the  court  say:  "It  must  clearly 
appear  that  the  mortgagor  is  hope- 
lessly insolvent  and  the  property  in- 
adequate security  for  the  debt  to  war- 
rant the  appointment  of  a  receiver. 
If  the  property  mortgaged  is  of  much 
less  value  than  the  debt  and  accrued 
costs  and  the  mortgagor  who  is  per- 
sonally liable  is  insolvent  the  mort- 
gagee is  usually  entitled  to  a  receiver, 
and  this  court  heretofore  granted  this 
relief  when  these  elements  have  been 
clearly  found  to  exist.  In  this  case 
the  proof  is  beyond  doubt  that  the 
personal  liability  of  the  mortgagor  is 
gone,  and  should  a  deficiency  exist 
after  sale  of  the  mortgaged  premises  it 
could  not  be  collected.  The  mort- 
gagor has  been  discharged  as  a  bank- 
rupt and  is  not  personally  liable  for 
this  debt.  But  it  is  not  satisfactorily 
proved  that  the  mortgaged  property 


RECEIVERSHIP  IN  FORECLOSURE  OF  MORTGAGES.        291 


(c)  In  the  absence  of  deterioration  in  the  value  of  the  mort- 
gage premises  and  property  from  fire  or  other  extraordinary 
causes,  the  presumption  is  that  the  vahie  thereof  is  adequate 
security  for  the  payment  of  the  debt,  interest  and  costs.' 

(d)  The  above  rule  as  to  the  inadequacy  of  the  security  as  a 


is  inadequate  security.  The  burden 
is  upon  tlie  mortgagee  to  establish  this 
fact  as  the  presumption  is,  the  prop- 
erty when  mortgaged  was  ample  se- 
curity and  this  presumption  continues 
until  the  contrary  is  proved." 

'  See  Cone  v.  Combs,  supra. 

Mortgagors  who  have  stipulated  in 
the  mortgage  for  the  appointment  of 
a  receiver,  upon  default  in  payment, 
to  collect  the  rents  and  profits,  cannot 
complain  of  such  appointment  after  a 
default,  especially  where  the  mort- 
gage security  is  insufficient.  Clark  v, 
Jolm  A.  Logan  Mut.  L.  &  Bldg.  Asso. 
58  111.  App.  311. 

A  receiver  of  a  newspaper  will  not 
be  appointed  in  an  action  to  foreclose 
a  mortgage  thereon,  notwithstanding 
the  defendant's  insolvency,  where  de- 
fendant alleges  that  he  is  not  indebted 
to  plaintiff,  the  property  is  steadily 
increasing  in  value,  and  the  appoint- 
ment of  a  receiver  would  absolutely 
destroy  its  value  and  render  the  prop- 
erty worthless  as  a  newspaper.  White- 
head V.  Hale  (N.  C.)  24  S.  E.  360. 

A  receiver  will  not  be  appointed  to 
take  possession  of  property  on  behalf 
of  subsequent  lienholders,  where  it  is 
in  the  possession  of  one  to  whom  it 
has  been  transferred  as  owner  by  the 
letter  of  the  transfer  to  extinguish  a 
prior  vendor's  lien,  and  whose  worst 
position  is  that  of  a  mortgagee  in  pos- 
session. Untied  States  v.  Masich.  44 
Fed.  Rep.  10. 

Pending  a  proceeding  to  foreclose  a 
mortgage  a  receiver  will  not  be  ap- 
pointed to  take  charge  of  the  mort- 
gaged premises,   where   it    does  not 


clearly  appear  that  the  whole  mort- 
gaged premises  are  insufficient  in 
value  to  pay  the  debt,  so  that  the 
court  should  take  control  of  the  estate 
to  protect  the  rights  of  a  party  having 
a  clear,  strong  claim  against  it.  Cal- 
lanan  v.  Shaw,  19  Iowa,  183. 

A  provision  in  a  mortgage,  that  the 
mortgagee  may  take  possession  of  the 
premises  and  rent  them,  accounting 
for  net  profits  only,  without  depriving 
him  of  the  right  to  foreclose,  does  not 
contemplate  the  appointment  of  a  re- 
ceiver after  foreclosure  to  collect  the 
rents  and  profits  during  the  time  al- 
lowed for  redemption.  Swan  v. 
Mitchell,  82  Iowa,  307. 

While  it  is  proper  to  appoint  a  re- 
ceiver to  continue  a  business  already 
established,  but  it  is  not  proper  to  ap- 
point a  receiver  to  begin  a  business  if 
neither  of  the  parties  have  taken  steps 
thereto.  Merrell  v.  Pemberton,  62  Ga. 
29. 

A  receiver  should  not  be  appointed 
of  property  on  which  a  lien  of  a  mort- 
gage exists  if  the  property  is  not  ample 
to  pay  the  receiver  his  compensation 
over  the  mortgage.  This  when  mort- 
gagee does  not  apply.  Lammon  v. 
Giles,  3  Wash.  Ter.  117. 

Upon  the  application  of  the  mort- 
gagees after  condition  broken  pending 
bill  to  foreclose,  unless  the  property, 
if  permitted  to  remain  in  control  of 
mortgagor,  is  likely  to  be  wasted  or 
diverted  so  as  to  impair  the  mort- 
gagee's claim,  a  receiver  will  not  be 
appointed.  Cheever  v.  Rutland  tt  B. 
R.  Co.  3y  Vt.  653. 


292 


RECEIVEKSHIPS. 


ground  for  the  appointment  of  a  receiver,  in  the  absence  of  proof 
of  further  equitable  grounds,  has  not  been  adopted  in  some  states, 
as  in  New  Jersey,  on  the  ground  that  the  mortgagee  has  an  ade- 
quate legal  remedy,'  while  in  other  states,  as  in  California  and 
South  Carolina,  the  general  doctrine  has  not  been  enforced, 
upon  the  ground  that  the  mortgagor  remains  the  owner  of  the 
legal  estate,  even  after  condition  broken,  until  his  estate  is 
divested  by  a  foreclosure,  sale  and  deed  thereunder,  and  is  conse- 
quently, during  such  period,  entitled  to  the  rents  and  profits.  In 
Iowa  and  Michigan  the  mortgagor  is  entitled  to  the  use  and  occu- 
pation of  the  mortgaged  premises  until  the  exjDiration  of  the  statu- 
tory period  of  redemption/ 


iln  Gheticood  v.  Coffin,  30  N.  J.  Eq. 
450,  where  it  was  admitted  that  there 
was  no  personal  security  for  the  pay- 
ment of  the  mortgage  debt;  that  the 
premises  were  insufficient  security; 
that  the  property  was  rented  and  the 
rents  not  applied  in  payment  of  taxes, 
or  the  interest,  a  receiver  was  ap- 
pointed. And  see  also  Brasted  v. 
Sutton,  30  N.  J.  Eq.  462,  where  waste 
had  also  been  committed  and  was 
threatened.  Cortleyeu  v,  Hathaway, 
11  N.  J.  Eq.  39;  but  in  Frisbie  v.  Bate- 
man,  24  N.  J.  Eq.  28,  it  was  held  that 
mere  inadequacy  of  security  and  in- 
solvency were  not  a  foundation  for  a 
receiver  on  the  authority  of  Cortleyeu 
V.  Hathaway,  supra;  and  Best  v. 
Schermier,  6  N.  J.  Eq.  154.  A  con- 
trary rule  exists  in  New  York.  Warner 
V.  Oouverneur,  1  Barb.  38;  Bank  of 
Ogdensburg  v.  Arnold,  5  Paige,  39; 
Shotwell  V.  Smith,  3  Edw.  Ch.  588; 
Sea  Ins.  Co.  v.  Stebbins,  8  Paige,  566. 
See  also  Oliver  v.  Decatur,  4  Cranch 
C.  C.  458;  Union  Trust  Co.  v.  St.  Louis, 
I.  M.  &S.  R.  Co.  4  Dill.  114;  William- 
son V.  New  Albany,  etc.  R.  Co.  1  Biss. 
198. 

A  receiver  of  rents  and  profits  will 
not  be  appointed  at  the  instance  of  a 
mortgagee  of  the  land,  no  express  lien 
having  been  given  upon  the  rents  and 


profits,  although  the  mortgaged  estate 
be  inadequate  to  secure  the  loan  and 
the  mortgagor  insolvent.  Phoinix 
Mut.  L.  Ins.  Co.  V.  Grant,  3  MacArth. 
220. 

*In  West  V.  Conant,  100  Cal.  231,  it 
is  held  that  a  purchaser  at  a  foreclos- 
ure sale  is  entitled  to  the  rents  and 
profits,  or  the  value  of  the  use  and 
occupation,  from  the  time  of  sale 
until  redemption,  still  the  debtor  is 
entitled  to  remain  in  possession  until 
the  expiration  of  the  redemption 
period,  and  is  entitled  to  the  crops. 
WJiite  v.  Griggs,  54  Iowa,  650. 

In  Guy  v.  Ide,  6  Cal.  99,  it  is  said: 
"Our  statute  forbids  a  mortgagee 
from  recovering  the  mortgaged  estate 
and  confines  his  remedy  to  foreclos- 
ure. .  .  .  The  mortgage  is  con- 
sidered as  only  a  security  for  the  debt; 
the  estate  remains  that  of  the  mort- 
gagor in  the  character  of  owner,  and 
must  continue  to  remain  so,  with  all 
the  incidents  of  ownership  until,  by  a 
foreclosure  and  sale,  a  new  owner  is 
substituted."  McMillan  v.  Richards, 
9  Cal.  410. 

In  Hardin  v.  Hardin,  34  S.  C.  77, 
it  is  held  that  as  the  mortgagor  re- 
mains the  owner  of  the  mortgaged 
land,  the  rents  belong  to  him  until  a 
foreclosure,  and  the  mortgagee  baa 


KECEIVERSHIP  IN  FORECLOSURE  OF  MORTGAGES.        293 


no  Hen  on  the  rents  and  profits,  unless 
it  is  so  stipulated  in  the  mortgage. 
Reeder  v.  Dargan,  15  S.  C.  185;  Seig- 
nious  V.  Pate,  33  S,  C.  134. 

A  receiver  of  the  rents  of  mort- 
gaged premises,  appointed  in  an  ac- 
tion to  foreclose  the  mortgage  on  the 
ground  of  the  insuificiency  of  the  se- 
curity, is  entitled  to  the  rents  accru- 
ing during  the  pendency  of  the  action 
and  before  his  appointment,  as  against 
a  receiver  in  supplemental  proceedings 
maintained  against  the  mortgagor. 
Donlon  &  M.  Mfg.  Co,  v.  Cannella,  89 
Hun,  21. 

A  mortgagee  is  not  entitled,  before 
foreclosure,  to  the  appointment  of  a 
receiver  to  preserve  the  rents  and 
profits,  unless  the  lands  are  of  insuf- 
ficient value  to  secure  the  mortgage 
debt.  Lindsay  v.  American  Mortg. 
Co.  97  Ala.  411;  Blondheim  v.  Moore, 
11  Md.  365;  Moritz  v.m'«er,87Ala.331. 

A  receiver  will  not  be  appointed  in 
Michigan  in  a  suit  by  persons  suc- 
ceeding to  the  right  of  a  mortgagee 
of  a  reversioner's  interest  in  land, 
against  the  life  tenant,  to  establish  a 
lien  for  taxes  paid  by  complainant  on 
the  premises,  and  to  compel  the  pay- 
ment of  other  taxes  assessed  thereon, 
the  appointment  of  a  receiver  not  be- 
ing the  proper  remedy,  under  the 
Michigan  method  of  enforcing  the 
collection  of  unpaid  taxes  upon  lands 
and  of  foreclosing  liens.  Jenks  v. 
Morton,  96  Mich.  13.  Otherwise  in 
New  York.  See  Cairns  v.  Chabert,  3 
Edw.  Ch.  313;  Sidenberg  v.  Ely,  90  N. 
Y.  257. 

The  right  of  a  mortgagor  to  the 
rents  and  profits  pendente  lite  is  a  sub- 
stantial one,  under  the  laws  of  Mich- 
igan (How.  St.  §  7847),  which  must 
be  recognized  in  the  courts  of  the 
United  States  in  administering  the 
rights  of  the  parties  to  a  mortgage; 
and  they  cannot,  therefore,  appoint  a 


receiver  to  take  the  rents  and  profits 
to  apply  on  the  mortgage  prior  to  the 
completion  of  foreclosure  by  sale  and 
confirmation,  although  the  security  is 
inadequate.  Union  Mut.  L.  Ins.  Co. 
V.  Union  Mills  Plaster  Co.  37  Fed.  Rep. 
286,  3  L.  R.  A.  90. 

In  Sioan  v.  Mitchell,  82  Iowa,  307, 
it  was  held  where  the  mortgage  cov- 
ered the  "  rents,  issues,  products  and 
profits  thereof,"  and  gave  the  mort- 
gagee the  right,  upon  default,  to  take 
possession  and  rent  or  cultivate  the 
same,  this  of  itself  was  not  ground 
for  a  receiver  during  the  redemption 
period.  White  v.  Griggs,  54  Iowa, 
650;  Paine  v.  McElroy,  73  Iowa,  81; 
Hazeltine  v.  Granger,  44  Mich.  503; 
Beecher  v.  Marquette  &  P.  Rolling  Mill 
Co.  40  Mich.  307;  Wagar  v.  Stone, 
36  Mich.  364;  Newton  v.  McKay,  30 
Mich,  380;  Humphrey  v.  Hurd,  29 
Mich.  44;  Hogsett  v.  Ellis,  17  Mich. 
363;  Newton  v.  Sly,  15  Mich.  391;  Van 
Husan  v.  Eanouse,  13  Mich.  303;  La- 
due  v.  Detroit  &  M.  R.  Co.  13  Mich. 
380;  Crippen  v.  Morrison,  13  Mich. 
23;  Caruthers  v.  Humphrey,  13  Mich. 
270;  Baker  v.  Pierson,  5  Mich.  456. 
See  contra,  Hollenbeck  v.  Donnell,  94 
N.  Y.  343;  Pasco  v.  Gamble,  15  Fla. 
562  (see  this  case  as  to  right  of  posses- 
sion of  mortgagor);  JennerFust  v. 
Needham,  L.  R.  31  Ch.  Div.  500. 

A  receiver  cannot  be  appointed  of 
mortgaged  property  to  take  the  rents, 
issues,  profits  and  crops,  and  apply 
them  in  payment  of  the  mortgage,  al- 
though the  mortgage  expressly  pro- 
vides therefor,  under  the  Oregon  stat- 
ute providing  that  a  mortgage  shall 
not  be  deemed  a  conveyance  so  as  to 
enable  the  mortgagee  to  recover  pos- 
session without  foreclosure  and  sale, 
and  by  which  he  is  not  entitled  to 
rents  and  profits  before  actual  posses- 
sion. Thomson  v.  Shirley,  09  Fed. 
Rep.  484. 


294  RECEIVERSHIPS. 

(c)  The  inadequacy  of  security  contemplated  by  the  rule  above 
has  reference  solely  to  the  plaintiff's  indebtedness,  and  does  not 
include  other  lien  indel)tedness  against  the  property.' 

(f)  The  proof  must  be  clear  and  satisfactorj^,  in  order  to  war- 
rant the  court  in  granting  the  relief,  under  the  rule  under  discus- 
sion i''  but  this  rule  is  relaxed  if,  in  addition  to  the  inadequacy 
of  security,  other  equitable  grounds  for  relief  are  shown,  such  as 
the  nonpayment  of  taxes,  insurance  premiums,  waste,  and  the 
like.' 

(g)  Under  the  present  English  practice,  rents  collected  between 
the  date  of  the  certificate  under  foreclosure  judgment  and  the 
day  fixed  for  redemption  by  the  mortgagee  or  receiver,  go  in  re- 
duction of  the  amount  due  on  the  mortgage,  but  if  collected  after 
redemption  date  they  belong  to  the  mortgagee.* 

§  175.     Same  subject  continued. 

A  few  observations  relative  to  the  causes  which  have  brought 
about  the  disagreement  noted  above  may  be  profitably  stated  in 
this  connection.  In  some  states  the  mortgagor  is  regarded  as  re- 
taining the  legal  title  to  the  mortgaged  premises,  and  the  mortgagee 
as  being  vested  only  with  an  equitable  title  held  as  security  for 
the  indebtedness.  In  other  states  the  mortgagee  is  regarded  as 
holding  the  legal  title  subject  to  the  defeasance  in  the  mortgage, 
and  of  course  in  such  case  one  condition  broken  has  a  right  to  re- 
cover possession  in  a  common  law  action.  Some  courts  have  con- 
strued the  mortgage  as  transferring  the  rents  and  profits  of  the 

» Warner  v.  Oouverneur,  1  Barb.  36.  the  mortgage  premises  are  cultivated 

s  Cone  V.  Combs,  18  Fed.  Rep.  576;  in  »  wasteful  manner,  a  receiver  may 

Burlinname  ^.  Farce,   12   Hun,   144;  be  appointed.  Dunlap  v.  Hedges, Z5W. 

Shoiwell  V.  Smith,  3  Edw.  Ch.  588.  V*^"  -^^-    ^^^^^  v.  Dale.   150  111.  239. 

^Corlleyeu  v.  nathaway,  11   N.   J.  'Jenner-Fust  v.  Needham,  L.  R.  81 

Eq.  39;  Oldham  v.  First  Nat.  Bank,  Ch.  Div.  500,  Affirmed   in   L.  R  33 

84  N.  C.  304;  Stockman  v.  Wallis,  30  Ch.  Div.  582.     But  see  Hoar$  v.  St^ 

N.  J.  Eq.  449;  Chetwood  v.  Coffin,  30  i^^'^««.  L.  E.  32  Ch.  Div.  194. 

N  J   Eq   450  -^  receiver  has  no  right  to  purchase 

Where  a  mortgagor  has  sold  the  the  mortgaged   premises  during  the 

mortgaged   premises,  he  is  not  in  a  Period  allowed  for  redemption,  and  if 

position  to  oppose  the  appointment  of  ^^  does  so  will  not  be  entitled  to  the 

a  receiver.     Wall    Street  F.  Ins.    Co.  rents  and  profits.     Heirick  v.  Miller, 

V.  Loud,  20  How.  Pr.  95.  123  Ind.  804. 

If  the  mortgagor  is  insolvent  and 


RECEIVERSHIP  IN  FORECLOSURE  OF  MORTGAGES.        295 

mortgaged  premises  as  part  and  parcel  of  the  estate  granted,  while 
others  have  looked  upon  such  rents  and  profits  as  separate  and 
distinct  from  the  estate  conveyed,  and  inseparable  from  tlie  use 
and  occupation,  and  viewed  in  this  latter  aspect  some  courts  have 
maintained  that  the  right  of  the  mortgagor  to  the  rents  and 
profits  terminated  with  sale  of  the  premises  under  the  foreclosure 
decree  and  othei-s  that  the  rights  of  the  mortgagor,  thereto  ceased 
only  at  the  end  of  the  statutory  period  of  redemption.  It  is 
probable  that  the  irreconcilable  differences  noted  are  due  to  tlie 
methods  of  construction  adopted  by  different  courts,  some  of  them 
construing  the  mortgage  deed  strictly  in  accordance  with  its 
terms,  while  others  from  a  broader  standpoint  have  given  it  a 
more  liberal  construction  in  accordance  with  the  actual  intention 
of  the  parties.  One  is  the  legal  and  the  other  the  equitable  con- 
struction, one  is  the  express  legal  intent  and  the  other  the  unex- 
pressed equitable  intent. 

1 176.    Oyer  what  appointed. 

The  receivership  in  mortgage  foreclosures  is  limited  to  the 
property  embraced  in  the  mortgage,'  or  such  portion  thereof  as 
may  be  necessary  for  the  payment  of  the  mortgage  indebtedness.' 
It  may  be  either  real  property,  personal  property  or  a  leaseliold 
interest,^  and  where  the  parties  in  interest  are  within  the  juris- 
diction the  property  may  be  beyond  the  jurisdiction  of  the  court.^ 
If  the  mortgage  includes  the  rents,  issues  and  profits  and  the  re- 
ceiver takes  possession  he  is  entitled  to  the  growing  crops,  in  case 
of  a  deficiency.^     So  also  in  case  of  a  mortgage  of  chattels,  if  they 

>  Wormser  v.  Merchants^  Nat.  Bank,  share.       Sumsion    v.     Creejicell,     31 

49  Ark.  117;  Staples  v.  May,  87  Cal.  Week.    Rep.  399;    Wortnsej-    v.  Mer- 

178.  If  the  mortgage  embraces  a  hotel,  cTiants'  Nat.  Bank,  49  Ark.  117. 

the  receiver  may  run  the  hotel  in  order  ^Barrett  v.  Mitchell,  5  Ir.  Eq.  501. 

to  prevent  an  impairment  of  the  se-  *  Davis  v.  Barrett,  13  L.  J.  Ch.N.  S. 

curity.     Lowell  v.  Doe,  44  ^Minn.  144.  304;  Langfordv.  Langford,  5L.  J.  Ch. 

Not  sohovfcfever  if  the  good  will  is  not  N.  S.  60;  Sliaw  v.  Shore,  5  L.  J.  Ch. 

included  in  the  mortgage.     WJatleyv.  N.  S.  79. 

vJiallis  [1892]  1  Ch.  64;  St.  Louis  Car  »  Montgomery  v.  Merrill,  65  Cal.  432; 

Co.  V.  Stillwater  Street  R.  Co.  53  Minn.  and  see  Simpson  v.  Robert,  35  Ga.  180. 

129;  Lowell  v.  Doe,  44  Minn.  144.  In   Indiana   where,    by   statute,    the 

'  Trissilianv.  Caniffe,  4Ir.  Ch.  N.  S.  mortgagor  is  entitled  to  possession,  in 
S99.  A  receiver  may  be  appointed  the  absence  of  a  stipulation  to  the  con- 
over  the  whole  of  property  at  the  in-  trary,  this  gives  him  the  right  to  the 
stance  of  a  mortgagee  of  an  undivided  crops  and  they  may  be  levied  on  and 


296 


RECEIVERSHIPS. 


are  being  levied  on  in  the  hands  of  the  morto;agor  by  attach- 
ments/ but  a  mortgagee  in  possession  will  not  be  disturbed  by  a 
receiver,  while  a  balance  remains  due  liira  ;'  or  in  case  of  a  mort- 
gage of  a  leasehold  interest,  where  the  mortgagor  fails  to  pay  the 
rent  and  an  eviction  is  threatened,*  or  where  the  mortgagor  is  in- 
solvent and  has  transformed  his  equity  in  the  premises,"  and  the 
security  is  inadequate,'  or  in  case  of  equitable  mortgages  as  in  the 
case  of  the  deposit  of  title  deeds.'  A  receiver  appointed  in  a 
mortgage  foreclosure  proceeding  where  the  mortgagor,  or  other 
person  liable  for  the  mortgage  debt,  is  insolvent  is  entitled  to  the 
rents  and  profits  of  the  mortgaged  premises,  not  yet  paid  and  to 
accrue.'  By  the  appointment  the  mortgage  becomes  entitled  to 
an  equitable  lien  on  the  rents  and  profits. 


sold  by  a  judgment  creditor.  This 
decision  is  based  upon  the  doctrine 
that  the  mortgagee  only  has  a  lien 
upon  the  property,  and  that  theriahts 
of  the  receiver  are  not  retrospective. 
Favorite  v.  Deardorff,  84  Ind.  555. 
Cf.  Lilly  V.  Dunn,  96  Ind.  220;  Bryson 
V.  McCreary,  102  Ind.  4;  Merritt  v. 
Qibson,  129  Ind.  155,  15  L.  R.  A.  277. 

^Crow  V.  Bed  River  County  Bank,  52 
Tex.  362;  Maish  v.  Bird,  59  Iowa, 
307. 

^Quinn  v.  Brittain,  3  Edw.  Ch.  314; 
Patten  v.  Accessory  Transit  Co.  4  Abb. 
Pr.  235,  13  How.  Pr.  502;  Bayaud  v. 
Fellows,  28  Barb.  451;  Washington  Iron 
Works  Co.  V,  Jensen,  3  Wash.  584. 

The  judge  in  vacation  has  no  power, 
in  a  suit  to  foreclose  a  chattel  mort- 
gage, to  appoint  a  receiver  and  order 
a  sale  of  the  property  in  advance  of 
the  regular  foreclosure  sale,  on  the 
ground  that  the  conditions  of  the 
mortgage  have  not  been  performed, 
and  that  there  is  danger  of  the  prop- 
erty being  materially  injured  and  de- 
preciated in  value.  Wilson  v.  Ault- 
man  &  T.  Co.  91  Ky.  299.  (See  Civ. 
Code  Ky.  §  299).  Cf.  Furlong  v. 
Edwards,  3  Md.  99. 

^  Barrett  V.  Mitchell,  5  Ir.  Eq.  501. 


*Astor  v.  Turner,  2  Barb.  444,  3 
How.  Pr.  225;  Reid  v.  Middleton,  7 
Turn  &  R.  455;  Smith  v.  Kelley,  31 
Hun,  387. 

''Smith  V.  Eelley,  31  Hun,  387;  Astor 
V.  Turner,  2  Barb.  444;  Reynolds  v. 
Quick,  128  Ind.  316. 

^Holmes  v.  Bell,  2  Beav.  298;  Aber- 
deen v.  Chitty,  3  Younge  &  C.  379; 
Shakel  v.  Duke  of  Marlborough,  4 
Madd.  463. 

In  England  all  junior  mortgages  are 
treated  as  equitable  mortgages. 

An  equitable  mortgagee  is  entitled 
to  a  receiver  when  the  mortgagor  is  in 
possession,  whether  the  security  is 
scanty  or  not.  A  mortgagee  on  de- 
fault is  entitled  to  possession  without 
any  reference  to  the  value  of  the  prop- 
erty. Aikins  v.  Blain,  13  Grant.  Ch. 
(Ont.)  646. 

''Astor  v.  Turner,  11  Paige,  436;^ 
Eowell  V.  Ripley,  10  Paige,  43;  Lajsky 
V.  Mavjer,  3  Sandf.  Ch.  69;  Oakford 
V.  Robinson,  48  111.  App.  270;  Conover 
V.  Orover,  31  N.  J.  Eq.  589;  Rider  v. 
Bagley,  84  N.  Y.  461;  Hayes  v.  Dickin- 
son, 9  Hun,  277;  Post  v.  Dorr,  4  Edw. 
Ch.  412;  Johnston  v.  Riddle,  70  Ala. 
219;  Stirm  v.  Ermantrout,  89  Ind.  214. 
But  see  Best  v.  Schirmier,  6  N.  J.  Eq. 


RECEIVERSHIP  IN  FORECLOSURE  OF  MORTGAGES.        297 


§  177.  When  appointed. 

(a)  Before  decree. 
As  a  general  rule  application  is  made  for  the  appointment  of  a 
receiver  before  the  entry  of  a  decree  of  foreclosure,  and  usually 
in  an  interlocutory  proceeding  after  notice,  pending  the  action, 
the  application  being  based  upon  the  allegations  of  the  bill  or 
petition,  alone,  or  upon  such  allegations  supported  by  affidavits 
in  addition,  or  sometimes  evidence  taken  before  a  master  on  a 
reference  had  for  that  purpose. 

(b)  After  decree. 
The  appointment,  however,  is  sometimes  made  after  decree  of 
foreclosure,  and  after  a  sale  thereunder,  (1)  where  the  equitable 
right  of  the  mortgagee  to  appropriate  tlie  rents  and  profits  pend- 
ing the  statutory  period  allowed  for  redemption  is  recognized, 
and  where  the  right  of  the  mortgagor  to  such  rents  during  such 
period  is  not  given  to  him  by  statute ;  (2)  where  the  property  is 
permitted  to  be  sold  for  taxes ;'  or  (3)  where  the  mortgagor  is 


154;  Cortleyeu  v.  Hathaway,  11  N.  J. 
Eq.  39;  Frisbie  v.  Bateman,  24  N.  J. 
Eq.  28. 

The  mere  default  in  the  payment  of 
the  debt  is  not  ground  for  the  ap- 
pointment of  a  receiver,  but  this  is  not 
true  where  there  is  a  stipulation  in  the 
mortgage  that  the  mortgagee  shall 
have  the  rents.  Allen  v.  Dallas  &  W. 
B.  Co.  3  Wood,  316;  Whitehead  v. 
Wooten,  43  Miss.  523;  American  Bridge 
Co.  V.  Heidlebach,  94  U.  S.  798,  24  L. 
ed. 144. 

Until  possession  is  taken  of  mort- 
gaged property  by  the  receiver  the 
mortgagor  is  entitled  to  the  profits. 
Frayser  v.  Richmond  &  A.  R.  Co.  81 
Va.  388;  Williamson  v.  Washington 
City,  V.  M.  &  G.  8.  R.  Co.  33  Gratt. 
624;  Oilman  v.  Illinois  &  M.  Teleg. 
Co.  91  U.  S.  603,  23  L.  ed.  405;  Amer- 
ican Bridge  Co.  v.  Ueidelbach,  94  U.  S. 
798,  24  L.  ed.  144;  Edwards  v.  Ed- 
wards, L.  R.  2  Ch.  Div.  291. 

Since,  on  the  dissolution  of  a  cor- 


poration, a  copartnership  of  which  the 
corporation  was  a  member  is  dissolved 
and  the  property  vests  in  the  surviving 
partner,  the  appointment  of  a  re- 
ceiver of  the  corporation  does  not  vest 
him  with  any  of  the  copartnership 
property,  or  give  him  any  right  to  in- 
terfere with  the  management  of  the 
copartnership.  Gray  v.  Oxnard  Bros. 
Co.  31  N.  Y.  S.  R.  968. 

In  an  action  to  foreclose  a  mortgage 
which  affects  only  the  right  of  the 
lessee  it  is  not  competent  for  the  court 
to  appoint  a  receiver  who  shall  rep- 
resent not  only  his  rights  but  those  of 
the  lessor.  Woodward  v.  Winehill 
(Wash.)  44  Pac.  860. 

^Schreiber  v.  Carey,  48  Wis.  208; 
Finch  V.  Uovghton,  19  Wis.  150; 
Brinkman  v.  Ritzinger,  82  Ind.  358; 
Bank  of  Utica  v.  Finch,  3  Barb.  Ch. 
293;  Syracuse  City  Bank  v.  Tallman, 
31  Barb.  201;  Smith  v.  Tiffany,  13 
Hun,  671;  Astorv.  Turner,  11  Paige, 
436;  Uackett  v.  Snow,  10  Ir.  Eq.  Rep. 


298 


RECEIVERSPIIPS. 


o;iiilty  of  fraud  or  bad  faith ;'  or  (4)  in  case  of  adverse  posses- 
sion ;'  or  (5)  wliere  it  is  necessary  to  preserve  the  property ;"  or 
(6)  there  is  danj^er  of  loss ;'  or  (7)  where  the  application  could 
not  have  been  made  on  the  hearing/ 


220;  Cooke  v.  Gicyn,  3  Ark.  690; 
Thomas  v.  Davies,  11  Beav.  29;  Bow- 
man V.  Ball,  14  Sim.  392;  Wright  v. 
Vernon,  3  Drew,  112. 

It  is  sufficient  ground  for  the  ap- 
pointment of  a  receiver  pendente  lite 
in  an  action  to  foreclose  a  mortgage, 
that  the  security  is  inadequate  and 
the  mortgagor  is  insolvent  and  has 
failed  to  apply  the  rents  of  the  mort- 
gaged premises  to  the  payment  of  de- 
linquent taxes  and  past-due  interest 
on  a  prior  mortgage.  Farmers'  Nat. 
Bank  v.  BacJcus  (Minn.)  66  N.W.  5. 

Appointment  of  a  receiver  of  mort- 
gaged property  pending  a  foreclosure 
suit  is  authorized,  where  the  value  of 
the  property  is  inadequate,  the  mort- 
gagors are  insolvent,  and  refuse  to 
oeliver  possession,  and  are  collecting 
the  rents,  applying  them  to  their  own 
use,  and  have  failed  to  pay  the  taxes 
or  keep  the  property  insured  as  they 
agreed  in  the  mortgage.  Jackson  v. 
Hooper  {h.\&.)  \S  ^o.  254. 

1  Haas  V.  Chicago  Bldg.  Soc.  89  111. 
498. 

*  Thomas  v.  Davies,  11  Beav.  20. 

^  Grant  v.  Phcenix  Mut.  L.  Ins.  Co. 
121  U.  S.  118.  30  L.  ed.  909. 

"^Uaas  V.  Chicago  Bldg.  Soc.  89  111. 
498;  Brinkman  v.  Ritzinger,  82  Ind. 
358;  Connelly  v.  Dickson,  76  Ind.  440; 
Bidwetl  V.  Paul,  5  Baxt.  693;  Schrei- 
ber  V.  Carey,  48  Wis.  208;  Smith  v. 
Tiffany,  13  Hun,  671. 

See  Orant  v.  P/icenix  Mut.  L.  Ins. 
Co.  121  U.  S.  118,  30  L.  ed.  909. 

'  Bainbridge  v.  Blair,  4  L.  J.  Ch.  N. 
S.  207. 

An  appeal  from  the  final  decree 
does  not  deprive  the  lower  court  of  its 


power  to  adjudicate  in  relation  to  re- 
pairs for  the  preservation  of  the  prop- 
erty. Grant  v.  Phcenix  Mut.  L.  Ins. 
Co.  121  U.  S.  118,  30  L.  ed.  909. 

Under  the  Act  of  1879  in  Indiana  a 
receiver  could  not  be  appointed  to 
take  possession  and  collect  the  rents 
of  property  sold  on  foreclosure,  while 
the  property  was  in  the  possession  of 
and  occupied  by  the  mortgagor,  du- 
ring the  year  allowed  for  redemption. 
Sheeks  v.  Klotz,  84  Ind.  471.  But  oth- 
erwise where  the  mortgaged  property 
is  in  the  hands  of  an  assignee  of  the 
mortgagor.  Davis  v.  Newcomb,  72 
Ind.  413.  Or  in  the  possession  of  a 
tenant.  Connelly  v.  Dickson,  76  Ind. 
440;  Ridgetcay  v.  First  Nat.  Bank,  78 
Ind.  119. 

See  also  Buchanan  v.  Berkshire  L. 
Ins.  Co.  96  Ind.  510,  531;  Travelers 
Ins.  Co.  V.  Brouse,  83  Ind.  62;  Mevritt 
v.  Gibson,  129  Ind.  155,  161,  15  L.  R. 
A.  277. 

The  appointment  of  a  receiver  under 
stipulation  of  the  parties  in  a  foreclos- 
ure action,  after  judgment,  is  not 
prevented  by  Iowa  Code,  §  2903,  pro- 
viding only  for  the  appointment  of 
receivers,  under  certain  conditions,  in 
foreclosure  actions  during  the  pend- 
ency thereof.  Hubbell  v.  Avenue 
Divest.  Co.  (Iowa)  66  N.  W.  85. 

A  receiver  of  the  rents  and  profits 
of  mortgaged  premises  may  be  ap- 
pointed pending  an  appeal  from  an 
order  confirming  a  sale  on  foreclosure 
where  the  mortgaged  property  is  prob- 
ably insufficient  to  pay  the  morigage 
debt.  Philadelphia  Mortg.  &  T.  Co. 
V.  Goos  (Neb.)  66  N.W.  843. 


KECEiVERSHIP  IN  FORECLOSURE  OF  MORTGAGES.'      299 

§  178.     General  rules  applicable. 

The  rules  applicable  to  the  appointment  of  receivers  in  o-en- 
eral  are  applicable  in  all  respects  to  the  appointnient  of  receivers 
in  mort2;ag-e  foreclosures,  so  far  as  relates  to  the  proj)er  person 
to  be  selected.'  In  foreclosure  proceedings  the  receiver  is  the 
representative  not  only  of  the  mortgagee  but  of  all  parties  in 
interest,  and  if  for  any  reason  a  mortgagee  is  appointed,  his 
duties  as  receiver  are  paramount  to  any  other  personal  interests 
he  may  have.  His  claims  as  an  individual  must  not  be  permitted 
to  interfere  with  his  duties  as  receiver,  or  with  the  purposes  or 
interests  for  which  he  was  appointed."  It  has  been  held  that  a 
mortgagee  appointed  receiver  is  not  entitled  to  commissions.' 
In  foreclosure  proceedings,  when  a  receiver  is  asked,  the  applica- 
tion must  show  who  is  in  jDOSsession  of  the  premises.  Thus,  a 
tenant  in  possession  will  not  be  disturbed  if  not  a  party  to  the 
suit." 

§  179.     Relative  rights  of  senior  and  junior  mortgagees. 

(a)  English  rule. 
Under  the  early  English  practice  the  prior  mortgagee  was  re- 
garded as  being  vested  with  the  legal  title  to  the  premises  and 
entitled  to  the  immediate  possession,  and  was  therefore  called  the 
legal  mortgagee.  The  holder  of  a  subsequent  mortgage  was 
called  the  equitable  mortgagee.  Upon  default,  the  legal  mort- 
gagee was  entitled  to  take  possession  of  the  premises  under  his 
mortgage,  and  appropriate  the  rents,  issues  and  profits  to  the 
satisfaction  of  his  indebtedness.  This  right  resulted  in  the  estab- 
lishment of  the  doctrine  in  the  English  courts  of  refusing  to 
interfere  with  the  right  of  possession  of  the  legal  mortgagee,  on 
the  application  of  a  junior  incumbrancer,  by  the  appointnient  of 
a  receiver,  until  the  former  was  fully  paid."     And  the  same  rule 

'  §  21.  6  Trenton  Bkg.    Co.  v.    Woodruff,  2 

^BoUesv.  Duff,  37  How.  Pr.  162.  Green's  Ch.  210;  Quinn  v.   Brittain, 

^  Langtttaff  v.  Fenwick,  10  Ves.  .Jr.  3  Edw.  Ch.  314;  Berney  v.  Sewell,  1 

405;  Chambers  v.  Goldwin,  5  Ves.  Jr.  Jac.  &  W.  647;   United  States  v.  Ma- 

834,  note  a  J  Moore  v.  Cable,  1  Johns.  sich,  44  Fed.  Rep.  10;  Codrington  y. 

Ch.  885;  Breckenridge  v.  Brooks,  2  A.  Parker,  IG  Ves.  Jr.  469;  Hilea  v.  Moore, 

K.  Marsh.  339.  15  Beav.  175. 
*Sea  Ins.   Co.  v.  Stebbins,  8  Paige, 

665. 


300  RECEIVERSHIPS. 

applies  where  the  application  is  by  a  judgment  creditor.'  If, 
however,  the  senior  mortgagee  does  not  take  possession,  or  is  not 
in  possession  of  the  premises  under  his  mortgage,  on  the  applica- 
tion of  a  junior  mortgagee  a  receiver  may  be  appointed,  but  it  is 
without  prejudice  to  the  rights  of  the  former.' 

(b)  American  rule. 
The  general  practice  in  this  country  is  for  the  mortgagee  to 
foreclose  his  mortgage  and  procure  a  sale  of  the  mortgaged  prem- 
ises, for  the  purpose  of  satisfying  the  indebtedness,  and  not  resort 
to  the  possession  and  appropriation  of  the  rents  and  profits,  so 
that  the  question  of  the  relative  rights  of  a  senior  mortgagee  in 
possession  and  a  junior  mortgagee  seeking  to  appropriate  the 
rents  through  a  receivership  have  seldom  arisen  as  under  the 
English  practice.  Besides,  in  some  of  the  states  the  mortgage  is 
regarded  as  a  security  simply  for  the  payment  of  the  mortgage 
indebtedness,  the  legal  title  remaining  in  the  mortgagor,  and  in 
other  states  the  right  to  appropriate  the  rents  and  profits  is  based 
upon  equitable  grounds  rather  than  upon  legal  grounds,  based 
upon  the  legal  title.  But  as  between  the  holders  of  senior  and 
junior  mortgages,  where  the  right  to  appropriate  the  rents  and 
profits  after  default  and  prior  to  the  execution  of  a  deed  is  recog- 
nized and  enforced  through  a  receivership,  the  general  rule  may 
be  stated  as  follows:  (1)  The  senior  mortgagee  has  a  prior 
right ;  (2)  but  if  he  does  not  seek  to  enforce  such  right,  and  a 
receiver  is  appointed  on  the  application  of  a  junior  mortgagee, 
the  latter  will  be  entitled  to  the  rents  and  profits  until  such  time 
as  a  receiver  is  appointed  under  the  prior  mortgage,  or  until  the 
receivership  under  the  junior  mortgage  is  extended  to  the  prior 
mortgage.     It  is  an  equitable  lien  secured  by  diligence.*     If  the 

»  Qi«nn  V.  i5n«am,  3  Edw.  Ch.  314;  ^ Post  v.    Doi-r,   4  Edw.    Ch.   412; 

United  States  v.  Masich,  4A  Fed.  Rep.  Howell  v.  Ripley,  10  Paige,  43;  Rider 

10.  V.  Vrooman,  12  Hun,  301;    Washing- 

^Dalmer  v.  Dashwood,  2  Cox  Ch.  ton  L.  Ins.  Co.  v.  Fleisc7iaver,  10  Hun, 

878;   Bryan  v.   Cormick,  1   Cox  Ch.  120;   Ranney  v.  Peyser,  83  N.  Y.  1; 

422;  Fairfield  v.  Irvine,  2  Russ.  149;  Bank  of  Ogdensburgh    v.    Arnold,   5 

Tome  V.  King,  64  Md.  166;  Davis  v.  Paige,  38;  Wiswall  v.  Sampson,  55  U. 

Duke  of  Marlborough,  2  Swanst.  137.  S.  14  How.  52,  14  L,  ed,  322;  Sales  v. 

But  see  under  Supreme  Judicature  Lusk,  60  Wis.  490. 

Acts  of  1873;  also  Mason  v.  Westoby,  In  Washington  L.  Ins.  Co.  v.  Fleisch- 

L.  R.  32  Ch.  Div.  206.  aner,  supra,  the  court  say,  upon  the 


KECEIVERSHIP  IN  FORECLOSURE  OF  MORTGAGES.        301 


prior  mortgager  is  a  party  to  the  bill  of  the  junior  mortgagee, 
the  latter  has  no  exclusive  right  to  the  receivership  income/ 


authority  of  Post  v.  Dorr,  supra:  "It 
is  an  established  rule  that  a  second  or 
third  mortgagee  who  succeeds  in  get- 
ting a  receiver  appointed  becomes 
thereby  entitled  to  the  rents  and  prof- 
its collected  during  the  appointment, 
although  a  prior  mortgagee  steps  in 
and  obtains  a  receivership  in  his  be- 
half and  fails  to  obtain  enough  out  of 
the  property  to  pay  his  debt.  This  is 
on  the  principle  that  a  mortgagee  ac- 
quires a  specific  lien  upon  the  rents, 
by  obtaining  the  appointment  of  a  re- 
ceiver of  them,  and  if  he  be  a  second 
or  third  encumbrancer,  the  court  will 
give  him  the  benefit  of  his  superior 
diligence  over  his  senior  in  respect  to 
the  rents  which  accrued  during  the 
time  that  the  elder  mortgagee  took  no 
measures  to  have  the  receivership  ex- 
tended to  his  suit  for  his  benefit."  Cf. 
Miltenberger  v.  Logansport,  C.  &  8.  W. 
B.  Co.  106  U.  S.  286,  27  L.  ed.  117; 
Favorite  v.  Deardorf,  84  Ind.  558; 
Douglass  v.  Cline,  12  Bush,  637;  Cod- 
dington  v.  Bispliam,  36  N.  J.  Eq.  577; 
Williamson  v.  Gerlach,  41  Ohio  St. 
684;  Re  Snedaker,  4  Nat.  Bankr.  Reg. 
44;  Thomas  v.  Brigstocke,  4  Russ.  64. 

And  the  right  of  an  equitable  mort- 
gagee to  a  receiver  of  rents  and  prof- 
its is  superior  to  the  rights  of  purchas- 
ers of  the  mortgagor's  equity  of  re- 
demption. Douglass  v.  Cline,  12 
Bush,  646;  Lofsky  v.Mauujer,S  Sandf. 
Ch.  69.  And  also  superior  to  the 
rights  of  judgment  creditors  in  pos- 
session by  sequestration.  Shaw  v. 
Wrig7it,  3  Ves.  Jr.  22;  Walker  v.  Bell. 
2  Madd.  21. 

In  Virginia  a  receiver  must  account 
according  to  the  priorities  of  the  dif- 
ferent incumbrancers.  Beverley  v. 
Brooke,  4  Gratt.  187. 

'  A  prior  incumbrancer  has  a  right 


as  against  a  mortgagor  and  subsequent 
incumbrancers  to  the  rents  and  profits 
accruing  subsequent  to  the  appoint- 
ment. Leeds  v.  Oifford,  41  N.  J.  Eq. 
464. 

Though  a  receiver  will  not  be  ap- 
pointed on  the  application  of  the 
holder  of  the  legal  title,  on  the  ground 
his  legal  remedy  to  obtain  possession, 
yet  if  the  legal  mortgagee  is  prevented 
by  the  mortgagor  from  taking  posses- 
sion, a  receiver  will  be  appointed. 
Truman  v.  Redgrave,  L.  R.  18  Ch.  D. 
547.  The  same  rule  also  applies  where 
the,  trustee  in  a  trust  deed  refuses  to 
take  possession  after  default  in  the 
payment  of  principal  and  interest. 
Warner  v.  Rising  Fawn  Iron  Co.  3 
Woods,  514. 

On  a  bill  filed  by  a  junior  mortga- 
gee against  a  senior  mortgagee  and 
the  mortgagor,  the  senior  mortgagee 
may  be  compelled  to  resort  in  the  first 
instance  to  other  property  held  by 
him  as  security  for  the  mortgage  in- 
indebtedness,  and  a  receiver  be  ap- 
pointed. Henshaw  v.  Wells,  9  Humph. 
568. 

Miltenberger  v.  Logansport,  C.  &  S. 
W.  R.  Co.  106  U.  S.  286,  27  L.  ed. 
117. 

Where  the  equity  of  redemption 
has  become  vested  in  a  first  mortga- 
gee, and  a  second  mortgagee  files  a 
bill  to  redeem,  a  receiver  will  be  ap- 
pointed if  it  appears  that  the  first 
mortgagee  has  cut  timber  of  greater 
value  than  the  amount  of  his  mort- 
gage. SteinJioff  v.  Brown,  11  Grant 
Ch.  (Ont.)  114. 

A  mortgagee  in  possession  of  lands, 
authorized  to  pay  ta.ves  and  apply  the 
excess  to  the  payment  of  interest  and 
principal,  cannot  be  dispos.sessed  by  a 
receiver  in  the  absence  of  proof  of 


302  RECEIVERSHIPS. 

Where  the  application  is  on  behalf  of  a  junior  mortgagee  and 
it  appears  that  the  senior  mortgagee  is  satisfied  with  tlie  manage- 
ment and  it  fiirtlier  appears  that  the  rents  are  being  applied  in 
payment  of  the  mortgage  indebtedness,  taxes,  etc.,  a  receiver  will 
be  refused  even  if  the  mortgagor  is  insolvent  and  the  security 
inadequate.' 

§  180.    Application  of  parties  other  than  mortgagees. 

(a)  In  behalf  of  wife. 
In  foreclosure  proceedings  where  the  mortgagor's  wife  has 
joined  her  husband  in  the  execution  of  a  mortgage  on  his  real 
estate  to  secure  a  debt  due  from  him,  and  her  inchoate  interest  in 
the  mortgaged  lands  has  for  some  cause  become  absolute,  she  is, 
upon  a  foreclosure  of  the  mortgage  entitled  to  an  order  that  two 
thirds  of  the  lands  to  which  she  has  no  claim  shall  be  first  ex- 
hausted before  a  resort  shall  be  had  to  her  interest  in  the  mort- 
gao"ed  property  upon  the  theory  that  she  occupies  the  relation  to 
the  mortgage  somewhat  analogous  to  that  of  a  surety  for  her  hus- 
band, and  in  such  case  the  wife  may  procure  the  appointment  of 
a  receiver  of  the  rents  and  profits  in  order  to  protect  her  interest 
in  the  premises,'' 

(b)  In  behalf  of  annuitants. 
Where  annuities  are  charged  upon  real  estate  which  has  been 
mortgaged  to  different  mortgagees,  the  annuitant  is  entitled  to  a 

waste  or  an  abuse  of  his  right  of  pos-  ceiver  appointed  in  aid  of  proceedings 

session.     Oummings  v.  Gummings,  75  to  foreclose  a  mortgage  does  not  rest 

Cal.  434.  exclusively  with  the  mortgagee,  or  his 

^Myton  V.  Davenport,  51  Iowa,  583.  assigns,  but  may  be  exercised  by  any 

A  receiver,  in  general,  is  only  entitled  other  party  to  the  proceeding  when 

to  the  rents  uncollected  at  the  time  of  necessary  to  protect   his  interests  in 

his  appointment,  and  he  is  not  entitled  the  subject-matter  of  the  litigation." 

to  the  rents  collected  by  an  assignee  Cf.  Medeker  v.  Parker,  70  Ind.  509; 

in  bankruptcy  of  mortgagor  prior  to  Haggerty  v.  Byrne,  75  Ind.  499;  Leary 

his  appointment.     Rider  v.  Vrooman,  v.  Shaffer .IQlnA.  567;  Grave  v.  Bunch, 

12  Hun,  299.  Nor  is  the  mortgagor  ac-  83  Ind.  4;  Trentman  v.   Eldridge,  98 

countable  for  rents  collected  prior  to  Ind.  525;  Pouder  v.  Ritzinger,  102  Ind. 

the  appointment.     Rider  y.  Bagley,  84:  572;  Cuppv.  Campbell,  103  Ind.  213; 

N.  Y.  461.  Ejppes  v.  Hoppes,  123  Ind.  397;  Pur- 

^Main  v.  Qinfhart,  92  Ind.  180.  The  viance  v.  Emley,  126  Ind.  419. 
court  say:  "The  right  to  have  a  re- 


RECEIVERSHIP  IN  FORECLOSURE  OF  MORTGAGES.        303 

receiver  of  the  rents  and  profits  where  the  prior  mortgao-ees  are 
not  in  possession.' 

(c)  In  behalf  of  bondholders. 

"Where  bonds  of  a  corporation  are  issued  and  the  property  of 
the  company  real,  and  personal,  is  pledged  to  secure  the  same,  a 
receiver  may  be  appointed  in  behalf  of  the  bondholders,  the  bonds 
being  in  the  nature  of  a  mortgage.* 

(d)  In  behalf  of  vendors. 

Where  a  vendor  sells  land  and  gives  a  title  bond  and  there  is 
a  default,  tender  of  a  deed  and  bill  filed  for  a  specific  performance 
and  it  appears  that  the  vendee  is  insolvent  a  receiver  of  the  rents 
and  profits  pendente  lite  will  be  appointed.* 


^Dahner  v.  Dashwood,  2  Cox,  Ch. 
378. 

''White  Water  Valley  Canal  Co.  v. 
Vallette,  62  U.  S.  21  How.  414,  16  L. 
ed.  154.  The  court  will  not  appoint  a 
receiver  in  behalf  of  a  judgment  cred- 
itor when  the  mortgagee  is  in  posses- 
sion and  has  not  been  paid.  Quinn 
V.  Brittain,  3  Edw.  Ch.  314;  United 
States  V.  Masich,  44  Fed,  Rep.  10;  nor 
in  behalf  of  heirs-at-law  of  a  deceased 
mortgagor  where  the  mortgagee  is  in 
possession.  Faulkener  v.  Daniel,  10 
L.  J.  N.  S.  Ch.  33. 

The  paramount  lien  acquired  by  a 
prior  chattel  mortgage  authorizes  the 
appointment  of  a  receiver  on  a  fore- 
closure thereof  to  take  charge  of  the 
mortgaged  property,  notwithstanding 
it  has  been  sold  pending  such  fore- 
closure under  an  attachment  by  other 
creditors  of  the  mortgagor.  Cooper  v. 
Berney  Nat.  Baiik,  99  Ala.  119;  Dol- 
lins  V.  Lindsey,  89  Ala.  217. 


^The  principle  that  a  mortgagee,  who 
files  a  bill  to  foreclose,  and  prays  for  a 
receiver  of  rents  pendente  lite,  is  enti- 
tled to  a  receiver  when  the  mortgaged 
property  is  insufficient  to  pay  the  debt, 
and  the  mortgagor  is  insolvent,  applies 
where  the  vendor  of  lands  by  title- 
bond  files  his  bill  for  specific  per- 
formance. Phillips  V.  Eiland,  52 
Miss.  721;  Tanner  v.  Hicks,  4i  Smedes 
&  M.  294. 

When  a  mortgagee  is  in  possession, 
and  is  properly  managing  his  trust  his 
possession  will  not  be  permitted  to  be 
interfered  with  by  a  receiver  ap 
pointed  in  a  creditor's  proceeding. 
Ftirlong  v.  Edwards,  3  ]Md.  99.  It  is 
only  when  the  mortgagee  in  possession 
is  guilty  of  fraud,  waste  or  misman- 
agement that  a  receiver  will  be  ap- 
pointed. Cummings  v.  Cummings,  75 
Cal.  434. 


CHAPTER  XL 


RECEIVERSHIP  IN  PARTNERSHIP  MATTERS. 


§  190.  Power  to  appoint. 
§  191.  When  appointed. 

(a)  Where     partnership    agree- 

ment or  duty  is  violated. 

(b)  Where  one  partner  is  guilty 

of  fraud. 

(c)  Where   there  is  serious  dis- 

agreement   between    part- 
ners. 

(d)  Where  one  partner  is  guilty       § 

of  mismanagement. 

(e)  Where  there  is  a  violation  of 

dissolution  agreement. 

(f)  Where  one  partner    misap- 

propriates firm  property.  § 

(g)  Where  there  is  insolvency  of       § 

limited  partnership, 
(h)  Where  plaintiff  is  entitled  to       § 

a  dissolution, 
(i)  Where     upon     dissolution       § 

partners  cannot  agree, 
(j)  Where    partner    in    charge       § 

after  dissolution  is  insolv-       § 

ent.  § 

(k)  Where  there  is  an  exclusion 

of  one  partner  f  re  m  profits.       § 
(1)   Where    both    partners    are       § 

dead, 
(m)  Where  surviving  partner  is       § 

guilty  of  mismanagement. 
§  193.  When  not  appointed.  § 

(a)  Where  there  is  a  mere  dis-       § 

agreement    between    part- 
ners. § 

(b)  Where  existence  of  partner-       § 

ship  is  not  established.  § 

(c)  Where  the   only  ground  is       § 

unprofitable  business. 

(d)  Where  defendant  is  responsi- 

ble and  charges  not  estab- 
lished. 

304 


(e)  Where  plaintiff  is  in  posses- 

sion and  charge. 

(f)  Where  plaintiff's  allegations 

are  fully  denied. 

(g)  Where    it   does  not  appear 

that  a  dissolution  will  re- 
sult, 
(h)  Where    a    receiver    is    not 
necessary. 

193.  Prerequisites  to  appointment. 

(a)  Copartnership    must    be  es- 

tablished, and, 

(b)  A    substantial    violation   of 

agreement  or  duty  shown. 

194.  Who  appointed. 

195.  Appointment  in  case  of  retiring 

partner. 

196.  In  case  of  assignment  by  in- 

solvent partner. 

197.  In    case    of    dissolution    by 

death. 

198.  On  application  of  creditors. 

199.  In  case  of  limited  partnership. 

200.  In  case  of  expiration  of  part- 

nership. 

201.  In  case  of  exclusion  of  partner. 

202.  In  case  of  fraud  by  one  part- 

ner. 

203.  Where  one  partner  is  misman- 

aging business. 

204.  On  ground  of  insolvency. 

205.  Where  dissolution  has  taken 

place. 

206.  Before  dissolution. 

207.  On  miscellaneous  grounds. 

208.  Appointment  refused  when. 

209.  Receiver's  power  and  duty. 

(a)  Power  depends  on  scope  of 

order. 

(b)  Legal  title  to  property  does 

not  vest  in  him. 


RECEIVERSHIP  IN  PARTNERSHIP  MATTERS. 


305 


(c)  Cannot     loan     receivership 

fund    to    himself    or    his 
firm. 

(d)  Is  representative  of  all  par- 

ties in  interest. 

(e)  Must  use  ordinary  care  and 

reasonable  dilicence. 


(f)  Maj'    maintain    actions    in 

other  states  when. 

(g)  Has  no  greater  power  than 

partners  had. 
§  210.  Efifect  of  appointment, 
§  211.  Receiver  as  manager. 


§  190.     Power  to  appoint. 

The  power  of  a  court  of  equity,  or  of  a  court  exercising  equity 
powers,  to  appoint  a  receiver  in  matters  of  partnership  is  of  long 
standing  and  "unquestioned,  and  usually  is  incidental  to  the  main 
proceeding.  The  inability  of  partners  to  sue  each  other  at  law 
has  always  rendered  an  equity  court  the  proper  and,  as  a  rule,  the 
only  forum  for  the  adjustment  of  partnership  difficulties,  and  the 
winding-up  of  such  concerns  in  a  proper  case,  and  distribution  of 
the  partnership  assets.  Hence  the  receivership  in  all  such  cases  is 
only  incidental,  and  usually  the  question  of  jurisdiction  and  the 
inadequacy  of  relief  in  common  law  courts  is  not  involved.  The 
question  of  the  necessity  of  a  receiver  is,  however,  involved  in 
every  case,  for,  in  this  class  of  actions,  as  in  others,  the  appoint- 
ment is  not  to  be  made  merely  because  no  one  will  be  injured 
thereby,  and,  in  fact,  the  necessity  has  been  termed  imperative.* 
But  this  probably  is  stating  the  doctrine  too  strongly,  at  any  rate, 
the  appointment  rests  in  the  sound  judicial  discretion  of  the  court 
or  chancellor,  to  be  exercised  or  not  as  the  circumstances  of  each 
case  seem  to  demand,  taking  into  consideration  the  preservation  of 
the  property,  or  its  proceeds,  and  the  protection  of  the  riglits  of 
all  parties,  as  their  interests  may  appear  in  the  final  adjtidication.* 


^Morey  v.  Grant,  48  Mich.  326. 

*  In  Slemmer's  Apjieal,  58  Pa.  108, 
it  is  said:  "A  partnership  will  not  be 
dissolved  on  slight  grounds."  "In 
making  such  a  decree  the  court  will 
consider  not  merely  the  terms  of  the 
express  contract  between  the  partners 
but  also  the  duties  and  obligations  im- 
plied in  every  partnership  contract. 
Smith  v.  Jeyes,  4  Beav.  503.  Where  a 
valuable  business  has  grown  up,  by 
the  joint  labors  and  contributions  of 
all,  the  court  should  be  careful  to  pre- 
20 


serve  it,  if  possible,  and  put  all  par- 
ties upon  a  fair  and  equal  footing  in 
competing  for  it.  To  appoint  a  re- 
ceiver, to  direct  a  sale  of  the  whole 
and  a  windingup  of  the  business 
would  destroy  its  value  without  bene- 
fiting either  party."  The  Master  of 
Rolls  in  Madijwick  v.  Wunble,  6  Beav. 
495,  says:  "It  must  be  admitted  that 
when  an  application  is  made  for  a 
receiver  in  partnership  cases  the  court 
is  always  phieed  in  a  position  of  very 
great  dilliculty.    On  the  one  hand,  if  it 


306 


RECEIVERSHIPS. 


§  191.     Wlieu  appointed. 

Stated  in  general  terms  a  receiver  will  be  appointed  in  partner- 
ship matters  : 

(a)  Where  there  has  been  a  violation  of  the  partnership  agree- 
ment, or  a  breach  of  partnership  duty." 

(b)  Where  one  of   the  partners  is  guilty  of  fraudulent  acts 
towards  his  copartner.' 

(c)  Serious  disagreement  between  partners  as  to  the  manage- 
ment or  disposition  of  the  firm  property.' 

(d)  Mismanagement  on  the  part  of  one  partner  in  charge  of 
business.* 


grants  the  motion  the  effect  of  it  is  to 
put  an  end  to  the  partnership  whichone 
of  the  parties  claims  a  right  to  have 
continued ;  and  oa  the  other  hand,  if  it 
refuses  the  motion  it  leaves  the  defend- 
ant at  liberty  to  go  on  with  the  part- 
nership business  at  the  risk  and  prob- 
ably at  the  great  loss  and  prejudice  of 
the  dissenting  party.  Between  these 
difficulties  it  is  not  very  easy  to  select 
the  course  which  is  best  to  be  taken 
but  the  court  is  under  the  necessity  of 
adopting  some  mode  of  proceeding  to 
protect  according  to  the  best  view  it 
can  take  of  the  matter,  the  interests  of 
both  parties,  and  it  has  accordingly 
interfered  in  many  such  cases."  In 
the  case  of  New  v.  Wright,  44  Miss. 
203,  the  court  say:  "In  order  to  justify 
the  dissolution  of  a  partnership  on 
the  ground  of  misconduct,  abuse,  or 
ill-faith  of  one  of  the  parlies  it  is  not 
sufficient  to  show  that  there  is  a 
temptation  to  such  misconduct,  abuse, 
or  ill-faith  but  there  must  be  an  un- 
equivocal demonstration,  by  overt  acts 
or  gross  departures  from  duty,  that 
the  danger  is  imminent  or  the  injury 
already  accomplished."  Citing  Story, 
Partn.  §  288;  Williams  --j.  Wilson,  4 
Sandf.  Ch.  379;  Harding  v.  Glover, 
18  Ves.  Jr.  281. 

•JVeio  V.  Wright,  44  Miss.  202;  Allen 
V.   Eawley,   6  Fla.  164;   Heathcot  v. 


Eavenscroft,  6  N.  J.  Eq.  113;  Jackson 
V.  Sheldon,  9  Abb.  Pr.  127;  Const  v. 
Harris,  Turn.  &  R.  496;  Harding  v. 
Qlover,  18  Ves.  Jr.  281;  Henn  v. 
Walsh,  2  Edw.  Cb.  129;  OraicsJiayv. 
Maule,  1  Swanst.  507;  Gowan  v.  Jef- 
fries, 2  Ashm.  296;  Estwick  v.  Con- 
ningsby,  1  Vern.  118;  Suirov.  Wagner, 
23  N.  J.  Eq.  388. 

^Barnes  v.  Jo?ies,  91  Ind.  161 ;  Shan- 
non V.  Wright,  60  Md.  520. 

^Terrell  v.  Goddard,  18  Ga.  664; 
Goodman  v.  Whitcomb,  1  Jac.  &  W. 
589;  Marten  v.  Van  Shaick,  4  Paige, 
479;  Laio  v.  Ford,  2  Paige,  310;  Mc- 
Cracken  v.  Ware,  3  Sandf.  688;  Bun- 
hum  V.  Jarvis,  8  Barb.  88;  W/dtman 
v.  Robinson,  21  Md.  30;  Loomis  v. 
McKenzie,  31  Iowa,  425;  Roberts  v. 
Eberhai'dt  or  Everhardt,  1  Kay,  148; 
Const  V.  Harris,  Turn.  &  R.  518; 
Speights  v.  Peters,  9  Gill,  472;  William- 
son V.  Wilson,  1  Bland,  Ch.  418;. 
Walker  v.  House,  4  Md.  Ch.  39. 

*Boyce  v.  Burchard,  21  Ga.  74;  Sutro 
V.  Wcgrcer,  23  N.  J.  Eq.  388;  William- 
son V.  Wilson,  1  Bland,  Ct^  418;  Todd 
V.  Rich,  2  Tenn.  Ch.  107;  Jeffreys  v. 
Sinith,  1  Jac.  &  W.  298;  Bentley  v. 
Bates,  4  Younge  &  C.  182;  Hart  v. 
Clarke,  19  Beav.  349;  Roberts  v.  Eber- 
hardt  or  Everhardt,  1  Kay,  148;  Shejh- 
pard  V.  Oxenford,  1  Kay  &  J.  491. 


RECEIVERSHIP  IN  PARTNERSHIP  MATTERS. 


307 


(e)  Yiolation  of  the  terms  of  a  dissoiution  agreement.' 

(f )  Appropriating  firm  property  to  individual  nse/ 

(g)  Insolvency  of  a  limited  partnership/ 

(h)  Where  the  plaintiff  on  a  bill  for  that  purpose  is  entitled  to 
a  dissolution.* 

(i)  Where  upon  dissolution  the  firm  cannot  agree  upon  an 
adjustment.' 

(j)    Insolvency  of  a  partner  in  charge  after  dissolution.* 

(k)  Exclusion  of  one  partner  from  the  profits  or  the  man- 
agement.^ 


^  White  V.  Colfax.  1  Jones  &  S.  297; 
SiTnon  v.  Schloss,  48  Mich.  233;  West 
V.  Chasten,  13  Fla.  315;  Drury  v, 
Roberts,  2  Md.  Ch.  157;  Word  v.  Word, 
90  Ala.  81;  Berry  v.  FoUces,  60  Miss. 
576;  Miller  v.  Jones,  39  111.  54;  Bal- 
lard V.  CalKson,  4  W.  Va.  326. 

^rini  V.  Boncoroni  [1892]  1  Ch.  633; 
Harding  v.  Qlover,  18  Ves.  Jr.  281; 
Dams  V.  Qrove,2Rohi.  134,  635;  White- 
sides  V.  Lafferty,  3  Humph.  150. 

^Jackson  v.  Sheldon,  9  Abb.  Pr.  127 
Loitimer  v.  Lord,  4  E.  D.  Smith,  183 

*  Smith  V.  Jeyes,  4  Beav.  503;  Chap 
man  v.  Beach,  1  Jac.  &  W  589;  Gar- 
retson  v.  Weaver,  3  Edw.  Ch.  385 
Henn  v.  Walsh,  2  Edw.  Ch.  129;  Jack 
son  V.  DeForest,  14  How.  Pr.  81;  Will- 
iamson V.  Wilson,  1  Bland,  Ch.  418 
Wolhert  V,  Harris,  7  N.  J.  Eq.  605 
Harding  v.  G^^ot-er,  18  Ves.  Jr.  281 
Marten  v.  Fan  Schaick,  4  Paige,  479 
McElvey  v.  iewis,  76  N.  Y.  373.  See 
Jordan  v.  ift'Z/er,  75  Va.  442. 

*  Van  Rensselaer  v.  Emery,  9  How. 
Pr.  135;  McElvey  v.  Zeic/.s,  76  N.  Y. 
373;  Law  v.  i^or(?,2  Paige,  310;  Mar- 
tin V.  iSmVi,  21  Jones  &  S.  277;  ilfar- 
ten  V.  F«n  Schaick,  4  Paige,  479;  Dunn 
V.  McNaught,  38  Ga.  179;  5a^for  v. 
Mockhie,  9  Iowa,  209. 

^Randall  V.  Morrcll,  17  N.  J.  Eq.  343. 

Failure  of  surviving  partners  to 
clo.se  out  the  partnership  business 
within  a  year  after  the  death  of  one 
of  the  partners,  as  provided  for  in  the 


articles  of  copartnership,  will  not  re- 
quire the  appointment  of  a  receiver, 
where  they  acted  in  good  faith  be- 
lieving that  such  action  would  be 
prejudicial  to  all  concerned,  and 
agree  to  close  out  the  business  at 
once  upon  the  commencement  of  pro- 
ceedings for  an  accounting.  Mason 
V.  DaiDson,  15  Misc.  595. 

''Katsch  V.  Schenck,  18  L.  J.  Ch.  N. 
S.  386;  Wolbert  v.  Harris,  7  N.  J.  Eq. 
605;  Kirby  v.  Ingersoll,  1  Dougl. 
(Mich.)  477;  Katz  v.  Brewington,  71 
Md.  79;  Wilson  v.  Greemcood,  1 
Swansl.  482;  Const  v.  Harris,  Turn. 
&  R.  496,  535;  Seibert  v.  Seibert,  1 
Brewst.  531 ;  Norway  v.  Bowe,  19  Ves. 
Jr.  144;  Milbank  v.  Bevett,  2  Meriv 
405;  Boyce  v.  Burchard,  21  Ga.  74 
See  Terrell  v.  Ooddard,  18  Ga.  664 
Butter  yr.  Tallis,  5  Sandf.  610;  William 
son  V.  Wilson,  1  Bland,  Ch.  418;  Hayes 
V.  Heyer,  3  Sandf.  284;  McCracken  v. 
Ware,  3  Sandf.  688;  Wetter^.  Schlieper, 
4  E.  D.  Smith,  707;  Speights  v.  Deters, 
9  Gill,  472;  Harding  v.  Glover,  18 
Ves.  Jr.  281 ;  Haight  v.  Burr,  19  Md. 
130;  Gowan  v.  Jeffries,  2  Ashm.  296; 
Shannon  v.  Wright,  60  Md.  520;  Butch- 
art  V.  Dresser,  4  DeG.  M.  &  G.  543; 
Barnes  v.  Jones,^\  Ind.  110;  cf.  Baylor 
V.  Sidener,  100  Ind.  179;  Blackeney  v. 
Dufaur,  15  Beav.  40;  Norway  v.  7Zr>w«, 
19  Ves.  Jr.  159;  Deacockv.  Peacock,  16 
Ves.  Jr.  49. 


308 


RECEIVERSHIPS. 


(1)   TVliere  both  partners  are  dead.' 

(m)  AVliere  one  partner  is  dead  and  the  survivor  is  misman- 
aging." 

§  192.  Wlieii  not  appointed. 

A  receiver  will  not  be  appointed  on  the  application  of  one  part- 
ner against  his  copartner : 

(a)  Where  it  appears  that  there  is  a  mere  disagreement  between 
the  partners.' 

(b)  Where  it  does  not  clearly  appear  that  the  relation  between 
the  parties  constitutes  a  partnership.* 

(c)  Where  the  only  ground  alleged  is  the  unprofitableness  of 
the  business.* 

(d)  Where  the  defendant  is  resj)onsible  and  danger  of  loss  is 
not  alleged  and  shown." 

(e)  Where   the   plaintiff   is  in  possession   of   the   partnership 
property.'' 

(f)  Where  the  case  made  by  plaintiff's  bill  or  petition  is  fully 
.  denied  by  defendant's  answer.* 


^Philips  V.  Atkinson,  2  Bro.  C.  C. 
273;  Wilson  v.  Oreemcood,  1  Swanst. 
480;  IMl  V.  Hall,  3  Macn.  &  G.  79. 

nValkerv.  House,  4  Md.  Ch.  39; 
Miller  v.  Jones,  39  111.  54;  Madgicick 
V.  Wiinhle,  6  Beav.  495;  Nelson  v. 
Hayner,  66  111.  487;  Oratz  v.  Bayard, 
11  Serg.  &  R.  41;  Jacquin  v.  Buisson, 
11  How.  Pr.  385;  Clegg  v.  Fishwick, 
1  Macn.  &  G.  264;  Evans  v.  Evans,  9 
Paige,  178;  Renton  v.  Chaplain,  9  N. 
J.  Eq.  63;  Hubbard  v.  Ouild,  1  Ducr, 
662;  Law  v.  Ford,  2  Paige,  310. 

^Henn  v.  Walsh,  2  Edw.  Ch.  129; 
Law  V.  Ford,  2  Paige,  310;  Loomis  v. 
McKenzie,  31  Iowa,  425;  Marten  v. 
Van  Schnick,  4  Paige,  479;  New  v. 
Wright,  44  Miss.  202;  Slemmer's  Ap- 
peal, 58  Pa.  168. 

*KerT  V.  Potter,  6  Gill,  404;  Nutting 
V.  Colt,  7  N.  J.  Eq.  539;  Incin  v. 
Everson.  95  Ala.  64;  Peacock  v.  Pea- 
cock, 16  Ves.  Jr.  49;  Hohartv.  Ballard, 
31   Iowa,  521;    Qoulding  v.   Bain,  4 


Sandf.  716;  Popper  v.  Scheider,  7  Abb. 
Pr.  N.  S.  56.  See  Katsch  v.  Schenck, 
18  L.  J.  Ch.  N.  S.  386. 

^Moies  V.  ONeill.  23  N.  J.  Eq.  207; 
Shoemaker  v.  Smith,  74  Ind.  71. 

\Kilbreth  v.  Root,  33  W.  Va.  600; 
Loomis  V.  McKenzie,  31  Iowa,  425; 
Simon  v.  Schloss,  48  Mich,  233;  HejU- 
bower  v.  Buck,  64  Md.  15;  Wellman  v. 
Harker,  3  Or.  253;  Quinlivan  v.  Eng- 
lish, 44  Mo.  46;  Buchanan  v.  Comstock, 
57  Barb.  568;  Hayes  v.  Heyer,  4 
Sandf.  Ch.  485;  Renton  v.  Chaplain,  9 
N.  J.  Eq.  62;  Ex  parte  Owen,  L.  R. 
13  Q.  B.  Div.  113. 

"iSmith  V.  Lowe,  1  Edw.  Ch.  33.  See 
Hoffman  v.  Duncan,  17  Jur.  825;  Rob- 
erts V.  Eberhardt  or  Everhardt,  1  Kay, 
148;  Buchanan  v.  Comstock,  57  Barb. 
568. 

^Williamson  v.  Monroe,  3  Cal.  383; 
Rhodes  v.  Lee,  32  Ga.  470;  Hottenstein 
V.  Conrad,  9  Kan.  435;  Coddington  v. 
Tappan,  26 N.  J.Eq.  141;  Parkhurstv. 


KEUEIVERSHIP  IN  PARTNERSHIP  MATTERS. 


309 


(g)  Where  it  does  not  appear  that  on  final  decree  the  partner- 
ship will  be  dissolved.' 

(li)  And  where  a  dissolution  is  probable  but  it  does  not  appear 
that  a  receiver  is  necessary  to  protect  the  interests.* 

§  193.  Prerequisites  to  appointment. 

The  appointment  of  a  receiver  in  matters  of  partnership  is  in 
all  cases  dependent  upon  certain  facts,  the  existence  of  which  is 
necessary  to  be  alleged  and  shown  as  preliminary  to  the  relief 
prayed  for,  and  as  preliminary  to  the  jurisdiction  of  the  court  in 
granting  such  relief. 

(a)  A  partnership  must  be  alleged,  or  at  least,  such  relationship 
inter  se  as  practically  amounts  to  a  partnership,  which  is  usually 
determined  by  a  participation  in  the  profits  of  the  concern.  Such 
partnership  must  exist  in  fact  and  not  merely  in  name,  for  an  em- 
ployee though  nominally  a  partner,  is  not  entitled  to  invoke  the 
aid  of  the  court  in  the  appointment  of  a  receiver,  nor  is  the  exis- 
tence of  an  agreement  between  the  parties  which  may  ripen  into 
a  partnership  sufiicient.' 


Muir,  7  N.  J.  Eq.  307;  Rennv.  Walsh, 
3Edw.  Ch.  129;  Popper  v.  Sclieider, 
7  Abb.  Pr.  N.  S.  56. 

^Garretson  v.  Weaver,  3  Edw.  Ch 
385;  Jackson  v.  De  Forest,  14  How.  Pr 
81 ;  Van  Rensselaer  v.  Emery,  9  How 
Pr.  135;  Bufkin  v.  Boyce,  104  Ind 
53;  Whitman  v.  Robinson,  21  Md.  30. 
Richards  v.  Baurman,  65  N.  C.  162; 
Roberts  v.  Eberhardt  or  EverJiardt,  1 
Kay.  148;  Hall  v.  Hall,  3  Macn.  &  G. 
79;  Goodman  v.  Whitcomb,  1  Jac.  & 
"W.  589;  Chapman  v.  Beach,  1  Jac.  & 
W.  594;  Smith  v.  Jeyes,  4  Beav.  503. 

"^Birdsall  v.  Colie,  10  N.  J.  Eq.  63; 
Cox  V.  Peters.  13  N.  J.  Eq.  39.  If  the 
defendant  offers  to  secure  the  plaintiff 
a  receiver  is  not  necessary.  Buchanan 
V,  Com&tock,  57  Barb.  568;  cf.  Saverios 
V.  Levy,  1  N.  Y.  S.  R.  758;  Popper  v. 
Scheider,  7  Abb.  Pr.  N.  S.  56;  Garret- 
son  V.  Weaver,  3  Edw.  Ch.  385;  Tom- 
linson  v.  Ward,  2  Conn.  396;  Page  v. 
Vankirk,  1  Brewst,  290;  Slemmer's 
Appeal,  58  Pa.  168. 


»In  EerrY.  Potter,  6  Gill,  404,  one 
of  the  parties  was  to  have  one  fourth 
of  the  net  profits  of  the  business,  but 
under  a  provision  of  the  contract  it 
was  provided  that  they  were  not  to  be 
partners  by  reason  of  the  division  of 
the  profits;  it  was  held  not  to  be  a 
partnership  and  there  was  error  in  ap- 
pointing a  receiver.  And  so  where  a 
person  was  employed  at  a  salary  of 
$500  and  one  fourth  the  net  profits. 
Nutting  v.  Colt,  7  N.  J.  Eq.  539.  Con- 
tra, where  the  salary  was  £100  and 
one  fifth  of  the  net  profits  on  all  new 
business.  Eatsch  v.  Schenck,  18  L. 
J.  Ch.  N.  S.  386.  An  agreement  of 
partnership  which  has  not  been  exe- 
cuted is  not  suflScient.  Hohartv.  Bal- 
lard, 31  Iowa,  521.  In  the  absence  of 
proof  of  danger  the  court  will  not  ap- 
point a  receiver  where  the  partnership 
is  denied.  Goulding  v.  Bain,  4  Sandf. 
716;  citing  Peacock  v.  Peacock,  16  Ves. 
Jr.  49.  And  where  it  is  distinctly  de- 
nied that  certain  property  is  partner- 


310 


EECEIVERSHIPS. 


The  appointment  of  a  receiver  in  matters  of  partnership  is  also 
dependent  upon  certain  well-defined  principles  recognized  by 
courts  of  chancery,  and  without  the  existence  of  which  in  all  cases 
the  court  will  refuse  to 'grant  the  relief  prayed  for.  Many  of 
these  principles  are  universal  in  their  nature  and  are  applicable 
alike  to  all  classes  of  receiverships  and  having  already  been  con- 
sidered will  not  in  this  connection  be  repeated.  It  may  be  stated, 
however,  in  general  terms  as  necessary  elements  in  the  applica- 
tion for  a  receiver  in  all  partnership  matters : 

(b)  The  existence  of  a  partnershij)  agreement  being  established, 
on  a  bill  tiled  by  one  partner,  it  must  be  shown  that  there  has 
been  a  substantial  violation  of  some  material  portion  of  the  part- 
nership agreement,  such  as  will  be  sufficient  cause  for  a  dissolu- 
tion of  the  partnership.  It  follows  that  mere  disagreements  and 
quarrels  between  the  partners  will  not  warrant  the  intervention 
of  the  court.' 


ship  property  the  court  will  decline  a 
receivership.  Gregory  v.  Gregory,  1 
Sweeney,  613.  In  King  v.  Barnes,  51 
Hun,  550,  the  action  was  brought  to 
establish  and  enforce  the  rights  of  the 
parties  who  had  advanced  money  and 
incurred  liabilities  in  reliance  upon 
the  agreement  for  a  joint  enterprise, 
and  it  was  held  that  the  case  was  pe- 
culiarly within  the  jurisdiction  of  a 
court  of  equity  and  that  a  receiver  was 
necessary  to  final  and  complete  relief. 
See  same  case  on  joint  relationship  of 
the  parties  in  109  N.  Y.  267.  In  Law 
V.  Garrett,  L.  R.  8  Ch.  Div.  26,  the 
court  refused  a  receiver  on  the  ap- 
plication of  one  partner  on  the  ground 
that  the  partners  by  an  agreement  had 
referred  all  matters  in  dispute  to  a 
foreign  court,  and  although  the  court 
had  a  right  to  appoint  pending  an  ar- 
bitration it  would  not  do  so  unless  a 
special  case  was  made,  on  the  ground 
that  it  would  interfere  with  the  court 
of  arbitration.  Cf.  Semple  v.  Flynn 
(N.  J.)  8  Cent.  Rep.  549.  As  to  part- 
nership as  between  the  parties  see 
Waagh  v.  Carver,  2  H.  Bl.  235,  246. 


A  receiver  will  not  be  appointed  nor 
an  injunction  granted  in  proceedings 
to  dissolve  an  alleged  partnership 
where  the  partnership  is  denied,  un- 
less it  clearly  appears  that  a  partner- 
ship exists  or  that  the  fund  is  in  dan- 
ger. McCartyv.  Stanwix,  16  Misc.  133. 

^ Speights  \.  Peters,  9  Gill, 472.  In  this 
case  the  court  held  in  an  action  be- 
tween two  parties  that  as  against  the 
legal  title,  or  a  strong  presumptive 
title  in  the  defendant  the  court  would 
interfere  with  great  reluctance,  and 
only  where  theproperty  wasin  danger 
of  being  materially  injured  or  lost. 
In  Whitman  v.  Robinson,  21  Md.  30, 
the  evidence  showed  "a  serious  and 
irreconcilable  disagreement  between 
the  parties  both  as  to  the  control  and 
disposition  of  the  property  and  ef- 
fects," a  receiver  was  appointed. 
In  Sloan  v.  Moore,  87  Pa.  217,  the 
court  say:  "Indeed  it  is  difficult  to  see 
how  the  necessity  of  a  receiver  can  be 
avoided  on  the  dissolution  of  a  part- 
nership when  the  parties  cannot  agree 
as  to  the  disposition  of  the  joint  ef- 
fects for  no  one  has  a  right  to  their 


RECEIVERSHIP  IN  PARTNERSHIP  MATTERS. 


811 


§  194.     Who  appointed. 

The  general  principles  in  regard  to  the  proper  person  to  be  se- 
lected as  receiver  have  elsewhere  been  considered,  and  as  a  rule 
are  applicable  to  receiverships  in  partnership  matters.  And  while 
it  is  not  the  usual  practice,  or  a  very  common  practice,  to  appoint 
one  of  the  partners  receiver,  yet  it  is  sometimes  done  where  the 
circumstances  indicate  that  such  a  course  would  be  productive  of 
the  best  interests  of  all  parties  concerned.  This  course  is  espe- 
cially beneficial  where  the  partnership  property  consists  largely 
of  the  good  will,  and  the  protection  of  the  good  will  depends 
upon  the  continuation,  for  the  time  being,  of  the  business  by  a 
person  thoroughly  acquainted  with  the  nature  of  the  business,  and 


possession  and  control  superior  to  that 
of  the  other."  Cf.  Walker  v.  House, 
4Md.  Ch.  43;  Speights  v.  Peters,  supra. 
In  AlUn  V.  Rowley,  6  Fla.  142,  164, 
the  court  say:  "From  the  examination 
which  we  have  made  of  the  authorities 
on  this  subject  we  think  the  law  may 
be  considered  as  settled  that  whenever 
the  intervention  of  a  court  of  equity 
becomes  necessary,  in  consequence  of 
dissensions  or  disagreements  between 
the  partners,  to  effect  a  settlement  and 
closing  up  the  partnership  concerns, 
upon  a  bill  filed  by  any  of  the  partners 
showing  either  a  breach  of  duty  on 
the  part  of  the  other  partners  or  a  vio- 
lation of  the  agreement  of  partnership 
a  receiver  will  be  appointed  as  a  mat- 
ter of  course."  Where  the  petition 
showed  a  probable  right  to  the  prop- 
erty in  the  plaintiff,  or  a  portion 
thereof  and  that  there  was  danger  of 
being  lost  or  materially  injured  or  im- 
paired, the  appointment  is  proper. 
Saylor  v.  Mockbie,  9  Iowa,  209.  In 
Slemmefs  Appeal,  58  Pa.  168,  it  was 
held  that  if  it  appeared  that  the  part- 
nership could  no  longer  be  carried  on 
•with  comfort  and  advantage  a  receiver 
■would  be  appointed.  Cf.  Jordan  v. 
Miller,  75  Va.  442 ;  Gridley  v.  Conner, 
2  La.  Ann.  87. 


In  American  Loan  &  T.  Co.  v.  To- 
ledo, C.  &  S.  R.  Co.  29  Fed.  Rep.  416, 
which  was  a  foreclosure  case  on  the 
subject  of  di-sagreements  the  court 
says:  '  'All  this  character  of  allegations 
in  the  bill  amount  to  protests  against 
the  management  of  the  company  un- 
der its  present  control,  and  are  such 
as  a  critical  business  judgment  might 
make  against  the  management  of  al- 
most any  railroad  enterprise  a  mere 
conflict  of  opinions  as  to  business 
operations.  In  Uale  v.  Hale,  4  Beav. 
369,  it  was  held  that  a  dormant  part- 
ner was  entitled  to  a  receiver  as 
against  the  managing  partners.  Where 
there  is  such  a  difference  between  the 
parties  that  each  files  a  bill  in  equity 
for  relief  and  the  business  consists 
principally  of  goodwill,  the  court  will 
order  an  immediate  sale  of  the  prop- 
erty and  good  will,  and  restrain  the 
parties  from  conducting  the  same  busi- 
ness directly  or  indirectly  in  the  city 
where  the  partnership  had  been  car- 
ried on.  Williams  v.  Wilson,  4  Sandf. 
Ch.  405.  Cf.  Pratt  v.  Underwood,  4 
N.  Y.  Civ.  Proc.  167,  cs  to  continua- 
tion of  the  business  by  one  partner, 
and  also  as  to  the  character  of  dis- 
agreement which  will  authorize  the 
appointment. 


'312 


RECEIVERSniPS. 


in  many  cases  no  one  can  be  selected  who  is  so  competent  for  this 
as  one  of  the  partners,  particularly  if  he  be  one  through  whose  in- 
strumentality and  business  judgment  the  business  has  been  es- 
tablished. An  element  to  be  considered  in  the  discretion  to  be 
exercised  in  this  connection  is  the  interest  of  the  respective 
parties.  Thus  if  the  defendant  in  possession  has  a  much  larger 
interest  in  the  profits  of  the  business  and  has  been  the  manager 
thereof  and  the  plaintiff  has  comparatively  a  small  proportion  of 
the  net  profits  and  has  not  been  in  the  active  management  it 
would  seem  to  be  peculiarly  a  case  where  the  defendant  should 
be  continued  in  charge  as  receiver,  and  particularly  so  in  the  ab- 
sence of  mismanagement  or  insolvency.  Of  course  where  one  of 
the  j)artners  is  appointed  receiver  he  becomes  an  officer  of  court, 
and  conducts  the  business  and  closes  it  up,  in  all  respects  as  other 
receivers,  and  his  duties  and  liabilities  are  governed  in  all  respects 
by  the  same  rules,  except  in  the  matter  of  compensation,  the 
court  usually  requiring  such  receiver  to  act  without  compensation.' 


'As  to  the  appointment  of  one  of 
tlie  parties  as  receiver  the  court  in 
Blakeney  v.  Dufaur,  15  Beav.  40,  says: 
"It  is  probable  that  if  the  master 
should  appoint  either  of  the  partners 
he  will  select  the  one  who  is  at  pres- 
ent in  possession  of  the  assets;  but  he 
would  then  be  in  possession  of  the  as- 
sets in  a  totally  different  character 
from  that  in  which  he  is  at  present. 
He  would  then  be  the  officer  of  the 
court,  having  given  due  security  to 
account  for  the  moneys  he  shall  re- 
ceive; but  in  such  case  it  is  without 
salary.  In  Brien  v.  Uarriman,  1 
Tenn.  Ch.  467,  it  was  held  to  be  un- 
usual to  appoint  one  of  the  partners 
receiver,  but  if  it  was  done  it  must  be 
without  salary."  Citing  Wilson  v. 
Greenioood,  1  Swanst.  481.  Where  a 
partner  is  appointed  receiver  and 
carries  on  the  business  under  the  di- 
rection of  the  court  and  large  profits 
accrue  therefrom,  all  the  parties  are 
permitted  to  participate  in  such  profits. 
McMahon  v.  McClernan,  10  W.  Va. 
419,  467;  but  see  Durbinv.  Barber,  14 


Ohio,  311;  Whitesides  v.  Lafferty,  3 
Humph.  150;  Taylor  v.  Hutchison,  25 
Gratt.  536.  In  Beverley  v.  Brooke  and 
Beverley  v.  Scott,  4  Gratt.  212,  it  is  said: 
"  During  such  controversy  the  rents 
are  accruing  in  the  custody  of  the  court 
ready  to  be  paid  over  to  the  party  ulti- 
mately prevailing.  In  truth  from  the 
time  of  the  order  of  appointment  both 
parties  are  in  possession  by  the  hand 
of  the  receiver  and  when  the  question 
of  right  is  ultimately  decided  the  pos- 
session of  the  party  prevailing  be- 
comes exclusive  throughout  the  whole 
period  by  relation  to  the  date  of  the 
order.  This  is  clear  both  upon  prin- 
ciple and  authority.  In  such  case 
there  can  be  no  rule  of  diligence  for 
the  exclusive  appropriation  of  the 
rents."  As  to  the  propriety  of  ap- 
pointing one  of  the  partners  receiver 
and  manager  the  master  of  rolls  in 
Sargant  v.  Read,  L.  R.  1  Ch.  Div.  600. 
608,  says:  "  It  seems  the  plaintiffs  are 
entitled  on  the  undisputed  figures  to 
rather  more  than  three  fourths  of  the 
capital;    they  are    entitled  either  to 


RECEIVERSHIP  IN  PARTNERSHIP  MATTERS. 


313 


The  appointment  of  one  of  the  partners  as  receiver  is  frequently 
made  by  agi-eement  of  the  parties  in  interest,  as  in  so  doino-  he  is 
under  the  control  and  direction  of  the  court,  so  that  no  inteix-st 
can  be  prejudiced  and  the  bond  given  is  a  protection  as  to  the 
proceeds.' 

§  195.    Appoiiitnient  in  case  of  retiring  partner. 

The  court  is  frequently  called  upon  to  appoint  a  receiver  in  tiie 
interest  of  a  retiring  partner  where  the  terms  of  the  dissolution 
agreement  are  being  violated.  Thus  where  a  partnership  has  been 
dissolved  by  mutual  agreement  and  by  the  terms  of  dissolution 
the  remaining  partners  continuing  the  business  assume  and  agree 
to  pay  the  outstanding  firm  liabilities  and  there  is  a  violation  of 
the  agreement  in  this  regard,  the  court  may  properly  appoint  a 
receiver,  at  least  of  so  much  of  the  firm  assets  as  will  be  sufficient 
to  discharge  the  remaining  firm  indebtedness.^     This   is  based 


three  fourths  or  four  fifths  of  the 
profit;  and  they  are  the  original  own- 
ers of  the  business  who  have  been  car- 
rying it  on  without  any  substantial  in- 
terference on  the  part  of  the  defend- 
ant for  upwards  of  a  year.  It  ap- 
pears that  the  defendant  was  unable 
through  ill  health  to  attend  tobusiness, 
but  that  does  not  at  all  affect  the  fact 
that  they  are  the  persons  who  carried 
it  on.  *  *  *  On  the  other  hand  if 
I  deprive  the  plaintiff  of  the  oppor- 
tunity of  being  receiver  I  might  in- 
flict most  serious  injury  on  the  busi- 
ness." Cf.  Collins  V.  Barker  [ISUo]  1 
Ch.  578;  Reynolds  v.  Austin,  4  Del. 
Ch.  24. 

^Conner  v.  Belden,  8  Daly,  257; 
Whifeyides  v.  Litfferty,  3  Humph.  150; 
Todd  V.  Rich,  2  Tenn.  Ch.  107. 

^Wesl  V.  Chasten,  12  Fla.  315.  The 
court  held  that  so  long  as  the  effects 
are  impressed  with  the  character  of 
partnership  property  a  dissolution 
cannot  destroy  the  rights  each  partner 
has  to  a  general  accounting,  the  pay- 
ment of  tlie  partnership  debts,  and  a 
division  of  the  surplus,  according  to 


their  respective  interests.  The  disso- 
lution destroyed  the  relation  of  part- 
nership, but  with  it  a  new  relation 
was  created,  to  wit,  the  obligation  of 
the  remaining  partner  to  pay  the  debts 
of  the  firm  from  the  firm  assets  trans- 
ferred to  him  for  that  purpose.  In 
Drury  v.  Roberts,  2  Md.  Ch.  157, 
where  the  right  to  the  collection  of 
the  firm  assets  and  the  winding-up  of 
the  firm  business  was  delegated  to  one 
partner,  it  was  held  that  there  must 
be  an  abuse  of  this  delegated  power 
shown,  or  danger  in  order  to  justify 
the  court  in  appointing  a  receiver.  If 
he  is  wasting  or  misapplying  the  prop- 
erty, or  if  there  is  danger  of  insol  venc}', 
or  fraud,  the  court  will  intercede. 
If,  however,  all  these  allegations  are 
denied  by  answer  the  necessity  is  re- 
moved. If  the  parlies  on  dissolution 
have  agreed  upon  the  method  of  col- 
lection of  the  accounts  and  the  de- 
fendants are  responsible  no  sullicient 
ground  is  shown  for  a  receiver.  Simon 
V.  Schloss,  48  Midi.  233;  Arnold  v. 
Bright,  41  Mich.  210.  In  Hayes  v. 
Ueyer,  4  Sandf.   Ch.  485,  a  bill  was 


314 


RECEIVERSHIPS. 


upon  the  doctrine  of  principal  and  suretyship  or  perhaps  more 
properly  upon  the  relation  of  trusteeship.  By  the  terms  of  the 
dissolution  the  relirin,^  partner  transfers  to  the  remaining  part- 
ner the  legal  title  to  the  partnership  assets  and  the  latter  in  con- 
sideration of  such  transfer  undertakes  to  discharge  tlie  firm  lia- 
bilities. He  thus  liolds  the  property  of  the  late  iirm  charged  with 
a  specific  purpose  and  the  courts  jealously  protect  the  interests  of 
the  retiring  partner  therein.  There  may  also  be  a  violation  of 
the  terms  of  the  dissolution  agreement  in  other  important  par- 
ticulars which  will  be  ample  cause  for  the  intervention  of  the 


filed  by  one  partner  against  another 
partner  and  his  assignee  seeking  to 
set  aside  an  alleged  fraudulent  assign- 
ment made  by  the  latter  for  the  benefit 
of  creditors,  without  preference,  and 
on  motion  for  a  receiver  the  court  re- 
fused to  appoint,  declining  to  decide, 
however,  as  to  the  right  of  one  part- 
ner to  make  a  valid  assignment,  no 
insolvency  appearing.  (See  note  to  this 
case  as  to  the  power  of  one  partner  to 
make  an  assignment  without  the  con- 
sent of  the  other.)  Where  partners 
cannot  agree  as  to  the  mode  of  liquida- 
tion, the  court  will  appoint  a  receiver; 
and  if  on  the  dissolution  the  partners 
make  an  agreement  as  to  the  mode  of 
winding  up  the  affairs  and  select  one 
of  their  number  to  collect  the  assets, 
and  pay  the  debts  and  distribute  the 
remainder,  a  court  of  equity  will  not 
interfere  and  appoint  a  receiver,  unless 
the  parties  prove  recreant  to  the  trust 
imposed  upon  them  by  the  dissolution 
agreement.  The  retiring  partners 
have  a  right  to  receive  all  information 
respecting  collections  made,  and  ac- 
cess to  the  books,  and  where,  by  reason 
of  bitter  enmity  between  the  parties, 
this  information  and  access  cannot 
reasonably  be  expected,  and  money 
that  should  be  applied  on  firm  indebt- 
edness is  diverted  or  not  used  for  that 
purpose  a  receiver  will  be  appointed. 
White  V.    Colfax,  1  Jones  &  S.  297. 


In  Allyn  v.  Boorman,  30  Wis.  684,  the 
retiring  partner  is  held  to  occupy  the 
relation  of  surety  and  entitled  to  the 
rights  of  a  surety.  In  Law  v.  Ford,  2 
Paige,  310,  it  was  held  that  where 
either  partner  has  a  right  to  dissolve 
the  partnership,  and  there  is  no  pro- 
vision as  to  a  settlement  the  appoint- 
ment of  a  receiver  is  a  matter  of 
course,  and  the  court  will  direct  the 
receiver  to  apply  the  assets  ratably 
and  without  preference.  To  the  same 
effect  is  Marten  v.  Van  Schaick,  4 
Paige,  479.  On  a  creditor's  bill 
against  a  dissolved  firm  where  one  has 
assumed  the  indebtedness,  it  was  held 
that  a  receiver  should  be  appointed 
over  the  separate  property  of  the  re- 
maining partner  and  the  partnership 
property  but  not  over  the  separate 
property  of  the  retiring  partner. 
Henry  v,  Henry,  10  Paige,  814.  In 
the  absence  of  danger  the  court  will 
not  appoint  a  new  receiver  in  lieu  of 
coreceivers  previously  appointed  by 
consent  of  all  parties,  where  the  only 
cause  of  disagreement  was  their  in- 
compatibility of  temper  and  personal 
quarrels.  Conner  v.  Belden,  8  Daly, 
257.  Cf.  Harding  v.  Olover,  18  Ves. 
Jr.  281;  Peacock  v.  Peacock,  16  Ves. 
Jr.  49;  Wilson  v.  Oreemcood,  1  Swanst. 
471;  Butchartv.  Dresser,  4  DeG.  M.  «& 
G.  542. 


EECEIVERSHIP  IN  PARTNERSHIP  MATTERS. 


315 


court  and  the  appointment  of  a  receiver.'  But  in  this  class  of 
receiverships,  as  in  others,  the  element  of  danger  is  in  all  cases  a 
necessarj'  element  in  the  absence  of  which  the  court  will  refuse 
to  act.^ 

§  196.     Ill  case  of  assignment  by  insolvent  partner. 

The  appropriation  of  the  firm  assets  by  an  insolvent  member  of 
the  lirm  by  means  of  an  assignment  for  the  benefit  of  creditors 
will  not  be  permitted  by  the  court,  and  on  application  of  the 
solvent  members  against  such  insolvent  member  thus  seeking  to 
dispose  of  the  firm  property  and  his  assignee,  the  assignment  may 
be  set  aside  and  an  injunction  granted  and  receiver  appointed.' 


'  White  V.  CoJfax,  1  Jones  &  S.  297; 
also  preceding  note. 

^Simon  v.  Schloss,  48  Mich.  233;  West 
¥.•  Chasten.  12  Fla.  315;  Drury  v. 
Roberts,  2  Md.  Ch.  157. 

*  Davis  Y.Qrove,  2^oh\..  134,  635.  In 
thiscase  one  firm  entered  into  an  agree- 
ment with  another  firm  to  do  business 
on  joint  account  in  the  purchase  and 
sale  of  sugar.  One  of  the  firms  made 
a  general  assignment  for  the  benefit  of 
creditors,  without  preference.  The 
other  firm  filed  a  bill  against  the  in- 
solvent firm  and  its  assigns;  it  was 
held  that  the  relation  of  the  two  firms 
was  that  of  partners,  on  the  authority 
of  CumpstoriY.  McNair,  1  Wend.  457; 
Beynolds  v.  Cleveland,  4  Cow.  282; 
Mumford  v.  Nicoll,  20  Johns.  611;  and 
SmUh  V.  Wright,  1  Abb.  Pr.  243;  that 
the  interest  of  each  partner  in  the 
assets  and  stock  of  the  partnership 
was  subject  to  the  lien  of  the  other 
partners  for  payment  beyond  their 
share  of  the  debts  of  the  company, 
and  was  applicable  to  the  payment  of 
debts  not  paid,  before  any  division  of 
the  partnership  property  (Addison 
V.  Burckmyer,  4  Sandf.  Ch.  488;  Kirhy 
V.  Sehoonmaker,  3  Barb.  Ch.  46; 
Geortner  v.  CanajoJiarie,  2  Barb.  625) ; 
that  the  assignment  of  one  firm  only 
carried  that  residuary  interest,  as  it 


was  general  of  the  real  and  personal 
estate  of  the  assignors;  that  the  at- 
tempt of  the  assigning  firm  to  appro- 
priate the  partnership  assets  entitled 
the  other  firm  to  a  receiver.  Hard- 
ing V.  Clover,  18  Ves.  Jr.  281;  Roberts 
V.  Eberhardt,  23  Eng.  L.  &  Eq.  245; 
Wilson  Y.  Greenwood,  1  Swanst.  471, 
480;  Const  v.  Harris,  Turn.  &  R.  496; 
Hubbard  v.  Guild,  1  Duer,  662.  In 
Seibert  v.  Seibert,  1  Brewst.  531,  one 
partner  sold  his  interest  to  another 
member  and  it  was  held  that  the  sale 
was  a  dissolution  of  the  firm,  and  that 
the  vendee  bought  nothing  but  the 
right  to  account,  but  even  in  such 
case  the  remaining  partner  had  no 
right  to  exclude  the  selling  partner 
or  his  assignee  and  set  up  an  adverse 
interest.  The  court  say:  "  He  (the 
remaining  partner)  cannot  be  per- 
mitted to  close  the  door  in  the  face  of 
one  who  holds  the  undisputed  assign- 
ment of  a  partner's  share,  and  say  to 
his  cestui  que  trust  1  liold,  use,  and 
trade  with  all  the  property  as  my 
own."  Cf.  Hayes  v.  Heyer,  4  Sandf. 
Ch.  485;  Rutter  v.  Tallis,  5  Sandf. 
610. 

The  court  in  Kirby  v.  IngersoU,  1 
Dougl.  (Mich.)  477,  lays  down  the 
following  general  rule:  The  power  of 
dissolving  the  firm  and  at  the  same 


316 


RECEIVERSHIPS. 


But  ^yhen  a  firm  has  been  dissolved  by  agreement  and  one  part- 
ner agrees  to  close  up  the  business  and  pay  the  firm  liabilities, 
and  makes  an  assignment  for  the  benefit  of  creditors  equally  and 
without  preference,  such  assignment  will  be  upheld  in  the  absence 
of  any  showing  of  danger  of  loss  through  the  assignee  by  reason 
of  insolvency.' 

§  197.    Ill  case  of  dissolution  by  death. 

The  death  of  a  partner,  as  a  rule,  dissolves  the  partnership  but 
the  surviving  partner  or  partners  are  required  to  wind  up  the 
partnership  business  and  for  the  purpose  of  doing  so  are  entitled 
to  remain  in  possession  of  the  business  and  the  partnership  assets 
for  a  reasonable  time,  in  the  absence  of  a  statute,  to  close  up  the 


time  excluding  the  other  partners 
from  all  participation  in  the  adminis- 
tering of  the  property  by  the  appoint- 
ment of  a  trustee  for  preferred  cred- 
itors cannot  be  presumed  among  the 
powers  granted  by  partners  to  each 
other.  Power  beyond  this  may  be 
given  in  particular  instances.or  may  be 
inferred  from  the  conduct  and  course 
of  business  of  the  partners.  The  cir- 
cumstances in  which  one  partner  is 
placed  may  sometimes  give  him  power 
to  do  what  otherwise  the  law  would 
not  imply.  The  circumstances  must 
in  such  case  be  such  as  to  authorize 
the  presumption  that  such  power  was 
conferred  by  the  other  partners,  as 
where  one  partner  is  abroad  and  has 
confided  the  management  of  the  busi- 
ness to  the  home  partner.  Cf .  Ander- 
son V.  Tompkins,  1  Brock.  456. 

'  In  Benton  v.  Chaplain,  9  jST.  J.  Eq. 
62,  it  was  held  that  when  one  part- 
ner's interest  is  levied  on  and  sold  it 
works  a  dissolution  of  the  firm  but 
the  court  will  not  appoint  a  receiver 
except  in  case  of  gross  misconduct  of 
the  remaining  partner.  HeatJicot  v. 
Ravenscroft,  6  N.  J.  Eq.  113.  In 
Kirby  v.  Ingersoll,  1  Dougl.  (Mich.) 
477,  it  was  held  that  the  implied  au- 
thority arising  from  the  ordinary  con- 


tract of  partnership  does  not  authorize 
one  partner  without  the  assent  of  the 
other  partners  to  make  a  general  as- 
signment of  the  partnership  effects  to 
trustees  for  the  benefit  of  creditors, 
giving  preference  to  some  creditors 
over  others;  and  where  it  appears 
that  such  assignment  was  made  with- 
out any  pressing  necessity  therefor, 
and  with  a  view  of  dissolving  the 
partnership  and  thereby  depriving 
other  partners  of  the  power  in  the 
management  and  disposition  of  the 
partnership  property  it  was  fraudulent 
and  void.  The  general  rule  is  that 
one  partner  has  no  right  to  make  an 
assignment  of  the  partnership  effects 
without  the  consent  of  the  other  part- 
ner. Bickinwn  v.  Legare,  1  Desauss. 
Eq.  5§7.  But  this  rule  probably  has  an 
exception  where  one  partner  is  abroad 
and  has  confided  the  management  to 
the  resident  partner.  Harrison  v. 
Sterry,  9  U.  S.  5  Cranch.  289,  3  L.  ed. 
104;  Cf.  Egberts  v.  Wood,  3  Paige,  517; 
the  authority  in  such  case  would 
probably  be  implied,  but  no  authority 
by  implication  can  arise  by  the  simple 
partnership  relationship.  Hazens  v. 
Hussey,  5  Paige,  30;  Hitchcock  v.  Si. 
John,  1  Hoffm.  Ch.  511, 


RECEIVERSHIP  IN  PARTNERSHIP  MATTERS. 


317 


business  and  account  to  the  representatives  of  the  deceased  part- 
ner for  his  interest  in  the  concern.  During  the  winding-up  of 
the  partnership  business  by  the  surviving  partner  or  partners  the 
court  is  frequently  called  upon  to  protect  the  interest  of  the  de- 
ceased partner  against  misuianagement  or  fraud  or  great  danger 
of  loss,  which  is  usually  accomplished  by  the  appointment  of  a 
receiver.* 


'  In  Connor  v.  Allen,  Harr.  Ch. 
(ISIich.)  371,  it  is  held  that  a  surviving 
partner  has  a  legal  right  to  the  posses- 
sion of  the  partnership  property  and 
the  court  will  not  deprive  him  of  that 
right  except  upon  proof  of  misman- 
agement or  danger  to  the  partnership 
effects.  Cf.  Walker  v.  Home,  4  Md. 
Ch.  39;  Philips  v.  Atkinson,  2  Bro.  C. 
C.  272;  Jacquin  v.  Buisson,  11  How. 
Pr.  S85;  Davis  v.  Amer,  3  Drew.  64; 
Kirkpatrick  v.  McElroy,  41  N,  J.  Eq. 
589;  Murray  v.  Mumford,  6  Cow.  441; 
Case  V.  Abeel,  1  Paige,  393. 

If  both  partners  are  dead  the  court 
will,  as  a  matter  of  course,  appoint  a 
receiver.  Where  both  are  living  and 
either  has  a  right  to  dissolve  the  part- 
nership, and  the  partnership  agree- 
ment makes  no  provision  for  closing 
up  the  business  a  receiver  will  be  ap- 
pointed, as  of  course,  if  the  partners 
cannot  agree  between  themselves. 
Walker  v.  House,  supra;  Law  v.  Ford, 
2  Paige,  310;  Evans  v.  Evans,  9  Paige, 
178. 

If  the  survivor  does  not,  within  a 
reasonable  time,  account  with  the  ex- 
ecutor, and  come  to  a  settlement, 
equity  will  interfere,  in  order  to  pre- 
vent loss,  and  appoint  a  receiver. 
Hartz  v.  Schrader,  8  Ves.  Jr.  317. 

If  both  partners  are  living  it  must 
appear  that  in  the  end,  or  on  the  final 
hearing  there  will  be  a  dissolution  of 
the  copartnership.  Waters  v.  Taylor, 
15  Ves.  Jr.  10;  Peacock  v.  Peacock,  16 
Ves.  Jr.  57. 

The  court  will  not  interfere  in  case 


of  an  existing  partnership  except  for 
mismanagement  or  violation  of  the 
partnership  agreement,  and  where  one 
partner  dies  the  surviving  partner  has 
a  right  to  remain  in  possession  and 
close  up  the  partnership  business,  and 
in  such  case  the  court  will  not  inter- 
fere by  the  appointment  of  a  receiver 
in  the  absence  of  unfaithfulness  or  in- 
solvency. Where  by  agreement  the 
capital  in  the  business  is  to  remain 
for  a  given  length  of  time,  the  act- 
ing partner  has  a  right  to  use  such 
capital  and  can  only  be  interfered 
with  on  such  ground  as  would  justify 
a  dissolution  of  the  partnership  be- 
fore the  time  limited  therefor.  Jac- 
quin V  Buisson,  11  How.  Pr.  385. 
Where  a  partnership  has  terminated 
by  agreement  and  it  is  part  of  the 
terms  of  dissolution  that  a  third  per- 
son should  collect  the  outstanding 
assets,  and  afterwards  one  of  the  part- 
ners dies,  it  is  held  that  the  survivor 
could  not  repudiate  the  agreement 
and  if  he  does  so  the  legal  representa- 
tive of  the  deceased  partner  has  a 
right  to  a  receiver  Davis  v.  Ames,  3 
Drew.  64.  The  appointment  of  an 
executor  to  administer  on  the  estate  of 
a  deceased  partner  is  no  ground  for 
refusing  a  receiver.  Helme  v.  Little- 
John,  12  La.  Ann.  298. 

The  administratrix  has  an  interest 
in  a  renewed  lease  made  after  the 
death  of  her  intestate,  made  by  the 
surviving  partners.  Cler/gv.  J^Yshirick, 
1  Macn.  &  G.  294.  In  Maihjwick  v. 
Wimble,  6  Beav.  495,  it  was  lield  that 


318 


RECEIVERSHIPS. 


§  198.     On  application  of  creditors. 

In  matters  of  partnership  tlie  conrt  will  sometimes  appoint  a 
receiver  in  an  action  brought  by  the  general  creditors  of  the  firm 
in  behalf  of  themselves  and  the  other  creditors,  the  purj)ose  in 
such  case  being  primarily  the  appointment  of  a  receiver  and  nl- 
tiniately  the  ratable  distribution  of  the  assets  of  the  firm.  But  in 
this  class  of  cases  there  must  be  mismaiiagement  or  insolvency 
and  threatened  loss.' 


where  by  partnersbip  stipulation  a  son 
of  one  partner,  or,  in  case  of  bis  mi- 
nority, the  executor,  should  on  the 
death  of  such  partner  succeed  to  his 
share  in  the  partnership  business,  the 
court  considered  it  an  option  in  favor 
of  such  son  or  executor  and  not  an 
oblisration.  Where  the  defendant  in 
an  action  for  dissolution  set  up  a  claim 
to  the  whole  of  the  partnersbip  prop- 
erty for  himself,  it  was  held  that  it 
was  imnecessar}''  to  allege  or  show 
misconduct  or  mismanagement  on  his 
part. 

In  Geortner  v.  Canajoharie,  2  Barb. 
625,  it  appeared  that  after  the  death 
of  one  partner  the  remaining  insolvent 
partner  sold  a  part  of  the  partnership 
stock  to  pay  bis  individual  debts  and 
the  purchaser  had  knowledge  of  the 
insolvency  and  of  his  object  of  mak- 
ing the  sale,  it  was  held  that  the  sale 
was  void  and  that  each  partner  had  a 
right  to  have  the  funds  applied  di- 
rectly to  the  discbarge  of  the  partner- 
ship debts  and  that  if  the  funds  were 
not  so  applied  a  receiver  would  be  ap- 
pointed. Where  a  receiver  is  ap- 
pointed after  the  death  of  one  partner 
such  receiver  succeeds  to  the  rights  of 
the  surviving  partner.  Kirkpatrick 
V.  McElroy,  41  N.  J.  Eq.  539. 

In  all  cases  it  is  held,  except  where 
the  partners-hip  agreement  otherwise 
provides,  that  the  death  of  one  part- 
ner operates  instanter  as  a  dissolution 
of  the  partnership.    Ex  parte  Williams, 


11  Ves.  Jr.  5;  Vulliamy  v,  NoUe,  3 
Meriv.  614. 

After  the  death  of  one  partner  a  re- 
ceiver will  be  appointed  only  in  case 
of  a  breach  of  duty  or  in  a  breach  of 
contract;  and  where  a  surviving  part- 
ner is  carrying  on  the  business  on  his 
own  account  with  the  partnersbip  ef- 
fects, a  receiver  will  be  appointed. 
Harding  v.  Olover,  18  Ves.  Jr.  281. 

'In  Fechheimer  v.  Bmim,  37  Fed. 
Rep.  167,  2  L.  R.  A.  153,  the  court 
say:  "  It  is  now  settled  that  the  courts 
of  the  United  States  may  administer 
an  equitable  right  granted  by  the  law 
of  the  state  in  suits  of  which,  from 
other  reasons,  they  have  jurisdiction. 
It  was  urged  that  creditors  without 
judgment  had  no  right  to  apply,  in 
equity,  for  the  appointment  of  a  re- 
ceiver. That  this  is  the  general  rule 
is  undeniable,  but  there  are  exceptions 
to  it,  and  one  of  these  exceptions,  of 
apparently  clear  distinctness,  is  where 
the  lawmaking  power  has  enacted,  in 
terms,  that  the  debt  need  only  be  ma- 
tured, with  payment  demanded  and 
with  a  refusal,  as  is  the  law  in 
Georgia.  It  is  true  also — as  is  held  in 
this  circuit  in  Jaffrey  v.  Broion,  29 
Fed.  Rep.  477 — that  a  party  not  in- 
tending to  pay,  by  inducing  one  to  sell 
him  goods  on  credit,  through  the 
fraudulent  concealment  of  his  insolv- 
ency, and  of  bis  intent  not  to  pay  for 
them,  is  guilty  of  a  fraud,  which  enti- 
tles the  vendor,  if  no  innocent  third 


RECSIVERSHIP  IN  PARTNERSHIP  MATTERS. 


310 


§  190.     In  case  of  limited  partnerships. 

There  are  a  few  cases  holding  tliat  in  the  matter  of  limited 
partnerships,  where  the  firm  has  become  insolvent  and  a  bill  is 
filed  in  behalf  of  all  creditors  of  the  firm  a  receiver  may  be  ai)- 


party  has  acquired  an  interest  in  them, 
to  disaffirm  the  contract  and  recover 
the  goods."  Crittenden  v.  Coleman,  70 
Ga.  295;  Dojialdnon  v.  Farwell,  93  U. 
S.  633,  23  L.  ed.  994.  Upon  the  ques- 
tion of  the  right  of  a  seller  to  disaffirm 
the  sale  and  retake  the  property  sold 
by  him,  upon  the  ground  of  fraud  and 
misrepresentation,  see  note  to  Jaffrcy 
V.  Brown,  29  Fed.  Rep.  485.  In  La 
Chaise  v.  Lord,  1  Abb.  Pr.  213,  it  was 
held  that  the  court  would  not  appoint 
a  receiver  where  the  application  was 
in  behalf  of  one  firm,  out  of  a  large 
number  of  creditors  of  an  insolvent 
firm.  Suit  must  be  brought  by  all  the 
creditors  of  the  insolvent  firm  who  will 
unite  therein  and  all  the  defendants 
sought  to  be  made  liable,  as  partners, 
should  admit  the  indebtedness  or,  in 
other  words,  where  a  receiver  is  asked 
without  judgment  the  indebtedness 
must  be  admitted.  See  also  Hardt  v. 
Levy,  72  Hun,  225,  which  was  an  ac- 
tion by  the  general  creditors  and  all 
others  who  might  come  in  for  the  pur- 
pose of  procuring  a  receiver.  In  this 
case  it  was  held  that  such  an  action 
(without  judgment)  could  not  be  main- 
tained against  a  general  partnership 
but  that  it  might  be  maintained 
against  a  limited  partnership.  Cf. 
Innes  v.  Lansing,  7  Paige,  583;  Van 
Alstyne  v.  Cook,  25  N.  Y.  489. 

The  cases  of  Burgwyn  Bros.  Tohacco 
Co.  V.  Bentley,  90  Ga.  508,  and  Oliver 
V.  Victor,  74  Ga.  548,  were  actions 
brought  by  general  creditors.  In  the 
latter  case  suit  was  brought  to  set 
aside  a  voluntary  assignment  in  which 
a  receiver  was  appointed.  In  Henry  v. 
Henry,  10  Paige,  314,  it  was  held  that 


a  creditor  was  not  entitled  to  a  re- 
ceiver of  the  separate  property  of  one 
of  the  partners  who  had  sold  his  inter- 
est to  his  copartner,  the  latter  assum- 
ing the  payment  of  all  indebtedness; 
that  the  receivership  should  be  against 
the  firm  property  and  the  separate 
property  of  the  remaining  partner  un- 
less some  valid  excuse  should  be  given 
for  not  doing  so. 

In  Greenwood  v.  Brodhead,  8  Barb. 
593.  it  was  held  that  creditors  at  large 
must  have  a  judgment  and  a  lien 
either  legal  or  equitable  and  to  be  in  a 
position  to  assert  such  lien.  In  Vena- 
ble  v.  Smith,  98  N.  C.  523,  it  was  held 
that  before  a  receiver  would  be  ap- 
pointed it  must  be  manifest  that  there 
is  mismanagement  of  the  property  and 
that  it  is  in  danger  of  being  lost  or  that 
it  is  in  possession  of  an  insolvent  or 
unfit  trustee.  Cf.  Dick  v.  Laird,  4 
Cranch,  C.  C.  667. 

A  simple  partnership  creditor  of  a 
copartnership  has  no  such  lien  on  the 
partnership  assets  as  entitles  him  to 
the  appointment  of  a  receiver  to  settle 
up  the  partnership  estate  upon  its  in- 
solvency. Waples- Platter  Co.  v.  Mitchell 
(Tex.  Civ.  App.)  35  S.  W.  200. 

A  decree  permanently  appointing  a 
receiver  of  the  assets  of  an  insolvent 
firm,  on  the  ground  that  a  trustee  for 
the  payment  of  the  claims  of  creditors 
is  violating  his  duty  in  failing  to  keep 
such  assets  separate  from  hi^  individ- 
ual funds  and  in  some  place  of  safe 
keeping,  is  appealable  as  adjudging 
the  principles  of  the  case,aUhough  the 
possession  and  administration  of  per- 
sonal property  alone  is  involved. 
Wagner  v.  Coen  (W.  Va.)  23  S.  E.  735. 


320 


HKCElVEUSlllPS. 


p(iiiito<i.  Tlic  lu-tinii  is  based  upon  the  doctrine  that  upon  the 
iii.M.lvencv  of  the  iinn  tht-  assets  beeonie  a  trust  fund  to  be  divided 
etpiallv  between  all  creditors,  and  that  in  such  case  it  becomes  the 
thity  of  the  i^a'iH'ral  partners  to  place  the  firm  property  in  the 
hands  of  a  trustee  for  such  distribution,  and  in  default  of  doing 
so  court  will  appoint  a  receiver  for  such  purpose.  The  under- 
Iviiiir  jiriiiciple  upon  which  these  cases  rest  is  that  of  securing  an 
etiual  distril>ution  among  all  general  creditors,  and  the  inequitable 
principle  of  preferences  sometimes  recognized.  The  principle  of 
placini;  the  effects  of  a  limited  partnership  in  the  position  of  trust 
funds,  and  applying  to  the  general  partners  the  relationship  of 
trustees  has  its  analogy  in  the  rules  applied  to  private  corpora- 
tions in  cases  of  insolvency,  and  is  founded  upon  justice  and  fair 
dealin<»'  but,  strange  as  it  may  seem,  has  been  established  in  but  one 
of  the  United  States.' 


>  In  MUU  V.  Argall,  6  Paige,  577.  it 
WHS  bold  that  the  assignment  by  a 
limited  partnership  to  a  trustee  for  the 
benefit  of  creditors  after  the  tirra  had 
become  insolvent,  or  was  in  contem- 
plation of  insolvency,  was  void  as 
against  the  creditors  of  the  firm  if 
preferences  were  made  to  one  cred- 
itor, or  class  of  creditors;  and  also  if 
the  assignment  provides  for  the  pay- 
ment of  a  debt  of  the  special  partner 
ratably  with  other  creditors  of  the 
firm.  This  case  was  based  upon  the 
provisions  of  the  statutes  regarding 
limited  partnership  and  prohibiting 
preferences.  In  Innes  v.  Lansing,  7 
Paige,  583,  it  was  held  that  in  a  case 
of  limited  partnership  the  effects  of 
the  firm,  upon  its  becoming  insolvent, 
become  a  special  trust  fund  for  the 
payment  of  the  partnership  debts 
ratably  except  debts  due  special  part- 
ners, and  that  the  filing  of  a  bill  by 
one  creditor  in  behalf  of  himself  and 
of  others  is  a  bar  to  the  filing  of  an- 
other similar  bill.  In  Jackson  v. 
IShddon,  9  Abb.  Pr.  127,  the  same  doc- 
trine was  lield  as  in  the  case  last  cited, 
and  that  where  the  firm  becomes  in- 


solvent it  is  the  duty  of  the  partners 
to  place  in  the  hands  of  a  trustee  the 
partnership  effects  for  the  benefit  of 
all  creditors  without  preference.  It 
was  also  held  that  where  certain  cred- 
itors obtained  judgment  upon  a  failure 
of  the  parties  to  answer  and  levied 
executions  upon  the  partnership  ef- 
fects, after  which  the  partners  made  a 
general  assignment  for  the  benefit  of 
creditors  without  preference,  that  the 
court  should  enjoin  the  levy  and  sale 
on  the  execution  and  appoint  a  re- 
ceiver to  take  charge  of  the  effects  as 
they  existed  at  the  time  of  the  insolv- 
ency. The  decision  is  based  upon  the 
ground  that  the  failure  of  the  parties 
to  answer  and  thereby  suffering  a  de- 
fault of  the  firm  was  in  effect  giving 
a  preference  to  the  judgment  credit- 
ors. The  motion  to  set  aside  the  sale 
in  such  case  for  irregularity  must  be 
made  in  the  action  in  which  the  sale 
was  had,  but  the  order  on  the  sheriff 
to  retain  the  property  unsold  is  prop- 
erly made  in  the  creditor's  suit.  Cf. 
Whitewriglit  v.  Sdmpson,  2  Barb.  379. 
In  Hayes  v.  Heyer,  3  Sandf.  Ch. 
293,  the  court  say  in  relation  to  gen- 


RECEIVERSHIP  IN  PARTNERSHIP  MATTERS. 


321 


§  200.     In  case  of  expiration  of  partnership. 

Where  a  partnership  has  been  formed  for  a  definite  period  and 
this  period  has  expired  by  its  terms  a  receiver  is  not  usiiall}^  ap- 
pointed except  where  mismanagement,  improper  conduct,  or  other 
dereHction  in  duty  is  shown/ 

§  201.    In  case  of  exclnsion  of  partner. 

Courts  have  frequently  been  called  upon  to  appoint  a  receiver 
in  matters  of  partnership  where  one  or  more  partners  have  been 
excluded  from  participating  in  the  management  of  the  firm  busi- 
ness, or  otherwise  denied  recognition,  in  violation  of  the  copart- 
nership agreement,  or  the  implied  relationshij)  between  the  mem- 
bers of  the  lirm.  This  exclusion  may  be  from  a  participation  in 
the  business,  or  from  access  to  the  firm  books,  and  may  take  place 


eral  and  limited  copartnerships  that 
the  rule  is  the  same  in  both  cases  re- 
garding the  distribution  made  by  the 
court  but  when  the  order  of  distribu- 
tion is  made  by  the  partners  them- 
selves in  ordinary  copartnerships  they 
may  give  preference  to  one  creditor  or 
a  class  of  creditors  over  others,  while 
in  limited  partnerships  the  statute 
reserves  that  power  and  directs  the 
mode  of  distribution.  It  was  also 
held  that  a  single  member  of  a  failing 
firm  cannot  appoint  a  trustee  without 
the  consent  or  knowledge  of  the  other 
partners  and  thus  transfer  to  such 
trustee  the  entire  partnership  effects. 
See  also  Deming  v.  Colt,  3  Sandf.  Ch. 
284.  In  Hogg  v.  Ellis,  8  How,  Pr. 
473,  an  accounting  was  allowed  be- 
tween general  and  special  partners  as 
in  other  cases,  and  this  either  after  or 
before  dissolution.  Cf.  Lottimer  v. 
Ld'd,  4  E.  D.  Smith,  183. 

In  Van  Alstyne  v.  Cook,  25  N.  T. 
489,  it  is  held  that  the  members  of  a 
limited  partnership  before  or  after  in- 
solvency are  just  as  liable  to  suit  for 
their  debts  as  other  natural  persons. 
Their  creditors  are  entitled  to  recover 
judgment  against  them  with  a  view  of 
21 


reaching  the  individual  property 
as  well  as  partnership  property.  The 
property  of  a  limited  partnership  does 
not  constitute  a  trust  fund  in  the 
hands  of  partners  any  more  than  in 
ordinary  partnerships.  No  rule  of 
equity  exists  which  makes  them  trust 
funds  in  any  other  sense  or  which 
gives  a  court  of  equity  any  control 
over  them,  or  which  forbids  creditors 
of  the  copartnership,  or  an  individual 
from  obtaining  a  lien  on  them  by  due 
process  of  law. 

'  In  Bufkin  v.  Boyee,  104  Ind.  53, 
where  a  partnership  had  expired  by 
limitation  and  neither  partner  desired 
to  continue  the  business  it  was  held 
that  a  receiver  would  not  be  appointed 
on  the  application  of  one  to  settle  the 
partnership  affairs  in  the  absence  of 
any  showing  of  mismanagement  or 
improper  conduct  on  the  part  of  the 
person  against  whom  the  relief  is 
sought.  Cf.  Shoemaker  v.  Smith,  74 
Ind.  71;  Morey  v.  Orant,  48  Mich. 
326;  Baker  v.  Backus,  32  111.  79;  Wil- 
lis v.  Corlies,  2  Edw.  Ch.  281;  Jone$ 
V.  Schael,  45  Mich.  379;  Cook  v.  De- 
troit it  M.  li.  Co.  45  Mich.  453. 


522 


RECEIVERSHIPS. 


during  the  existence  of  the  partnership,  or  after  its  dissokitioiiy 
and  may  apply  under  some  circumstances  to  the  le^-al  representa- 
tives of  a  deceased  partner.' 


'  In  Wilson  v.  Oreenwood,  1  Swanst. 
471  (481),  it  was  held  that  in  the  or- 
dinary course  of  trade  if  one  partner 
exchules  another  from  taking  that 
part  in  the  concern  which  he  is  enti- 
tled to  it  is  ground  for  the  appoint- 
ment of  a  receiver;  so  also  if  in  the 
course  of  winding  up  the  affairs  after 
the  determination  of  the  partnership, 
the  court,  if  necessary,  interposes  on 
the  same  principle. 

In  Kirby  v.  Ingersoll,  1  Dougl. 
(Mich.)  477,  it  was  held  that  one  part- 
ner had  no  right,  without  the  consent 
of  his  copartners,  to  make  an  assign- 
ment and  thus  exclude  the  others 
where  it  appeared  that  the  assign- 
ment was  not  of  a  pressing  necessity. 

In  Const  V.  Harris,  1  Turn.  &  R. 
496  (525),  it  was  held  that  the  circum- 
stance of  one  partner  having  taken 
upon  himself  the  power  to  ex- 
clude another  from  his  full  share  in 
the  management  of  the  business,  au- 
thorizes the  court  to  appoint  a  receiver. 

In  Qowan  v.  Jeffries,  2  Ashm.  296, 
it  was  held  to  be  an  exclusion  where 
just  and  fair  books  were  not  kept  and 
where  one  partner  refused  to  furnish 
accounts  demanded. 

In  Blakeney  v.  Diifaur,  15  Beav. 
40,  it  is  said  that  exclusion  will  not 
be  permitted  except  in  cases  where 
the  parties  themselves  have  provided 
by  agreement  for  exclusion  upon  the 
happening  of  certain  events.  Cf. 
Terrell  v.  Qoddard,  18  Ga.  664;  Wol- 
bert  V.  Harris,  7  N.  J.  Eq.  605;  Mil- 
bank  V.  Bevett,  2  Meriv.  405. 

In  Ooodman  v.  Whitcomb,  1  Jac.  & 
W. 589,  where  money  was  received  and 
not  entered  in  the  books  and  the  books 
■were  not  held  open  to  inspection,  it 


was  held  to  be  a  violation  of  the  du- 
ties of  partners  to  each  other. 

In  Clegg  v.  Fishicick,  1  Macn.  &  G. 
294  (298),  where  partners  were  jointly 
interested  with  others  in  a  lease  which 
was  subsequently  renewed  in  the  name 
of  some  of  the  partners  without  the 
consent  of  the  others,  it  was  held  to 
be  an  exclusion.  And  see  Leach  v. 
Leach,  18  Pick.  68;  Clements  v.  Hall, 
2  DeG.  &  J.  173;  Clegg  v.  Edmondson, 
8  De  G.  M.  &  G.  787. 

In  Speights  v.  Peters,  9  Gill,  472,  it 
was  held  that  if  one  partner  in  the  or- 
dinary course  of  trade  seeks  to  ex- 
clude another  from  taking  that  part 
in  the  concern  which  he  is  entitled  to 
take,  a  receiver  should  be  appointed  on 
the  authority  of  Lord  Eldon  in  Wilson 
V.  Oreenwood,  1  Swanst.  481. 

In  Kershaw  v.  Matthews,  2  Russ.  62, 
where  by  the  article  of  agreement  it 
was  stipulated  that  upon  the  death  of 
one  partner  such  deceased  partner 
should  be  succeeded  in  business  by 
some  other  person,  or  by  his  executor, 
and  such  person  refused  to  act  it  was 
held  that  the  death  of  one  partner  put 
an  end  to  the  partnership  but  that  in 
such  case  it  was  not  an  exclusion  for 
the  reason  that  the  latter  had  never 
been  a  partner. 

In  Bilton  v.  Blakely,  6  Grant  Ch. 
(Ont.)  575,  it  was  held  that  the  repre- 
sentatives of  a  deceased  partner  had 
a  right  to  inspect  the  books  of  the 
partnership  and  to  be  informed  of  the 
proceedings  of  the  survivor,and,on  re- 
fusal by  the  latter,  were  entitled  to  a 
receiver.  Cf.  Steele  v.  Grossmith,  Id 
Grant,  Ch.  (Ont.)  141;  Wilcox  v.  PraU, 
52  Hun,  340. 

In  Katz  V.  Brewington,  71  Md.  79. 


RECEIVERSHIP  IN  PARTNERSHIP  MATTERS. 


32a 


§  202.   lu  case  of  fraud  by  one  partner. 

The  fraudulent  acts  of  a  partner  as  to  his  copartner,  such  as  a 
misappropriation  of  the  firm  property  or  funds,  false  entries  upon 
the  firm  books,  or  depriving  him  of  access  to  such  books,  conceal- 
ing from  him  the  true  condition  of  the  business,  afford  ground 
for  the  appointment  of  a  receiver.'     And  the  same  rules  apply 


the  allegation  was  that  the  defendant 
had  excluded  the  plaintiff  from  all 
control  over  ihe  business,  and  had  re- 
fused to  give  information  regarding  it, 
and  carried  away  the  books  from  the 
place  of  busi  ness,  and  refused  to  disclose 
the  place  in  which  they  were  kept.  The 
court  say :  ' '  Each  partner  has  an  equ  a 
right  to  take  management  of  the  busi- 
ness although  one  of  them  may  have 
only  an  interest  in  the  profits  and  not 
the  capital,  yet  his  rights  are  involved 
in  the  proper  conduct  of  the  affairs  of 
the  firm  so  the  profits  may  be  made. 
So  each  partner  has  an  equal  right  to 
information  about  the  partnership  af- 
fairs and  free  access  to  the  books. 
The  complainant  has  a  right  to  learn 
from  the  books  wliether  there  were 
profits  and  whether  there  were  debts." 

' '  In  Const  V.  Harris,  1  Turn.  &  R. 
496,  Lord  Eldon  said:  'The  most 
prominent  point  on  which  the  court 
acts  in  appointing  a  receiver  of  the 
partnership  concern  is  the  circum- 
stance of  one  partner  having  taken 
upon  himself  the  power  to  exclude 
another  partner  from  as  full  share  in 
the  management  of  the  partnership  as 
be  who  assumes  the  power  himself 
enjoys.'" 

In  Doupe  v.  Stewart,  13  Grant  Ch. 
(Ont.)  637,  where  after  a  dissolution 
one  partner  claimed  greater  portions 
of  the  profits  as  his  own  by  reason  of 
certain  alleged  misconduct  of  the 
plaintiff,  and  made  use  of  the  partner- 
ship funds  in  carrying  on  business  in 
his  own  behalf,  it  was  held  to  be  a 
proper  cause  for  a  receiver. 


In  Young  v.  Biiekett,  51  L.  J.  Ch. 
504,  the  partnership  agreement  pro- 
vided that  in  case  of  disputes  between 
the  partners  they  should  be  settled  by 
arbitration,  yet  a  receiver  was  ap- 
pointed. 

In  Word  v.  Word,  90  Ala.  81,  where 
a  surviving  partner  neglected  to  keep 
an  account  of  the  sales  it  was  held  that 
his  acts  were  negligent  and  faithless 
and  if  there  was  danger  of  loss  a  re- 
ceiver would  be  appointed,  or  the  sur- 
viving partner  placed  under  bonds  to 
account. 

In  Goulding  v.  Bain,  4  Sandf.  716, 
the  court  refused  to  appoint  a  receiver 
where  the  existence  of  a  partnership 
was  denied,  the  court  holding  that  the 
partnership  must  be  either  admitted  or 
established. 

'In  Barnes  v.  Jones,  91  Ind.  161,  it 
it  was  held  that  it  is  an  exceptional 
case  of  partnership  that  a  receiver  will 
be  appointed  unless  a  dissolution  is 
about  to  occur,  but  where  the  plaintiff 
shows  acts  of  fraud  on  the  part  of  the 
defendants  and  an  application  by 
them  of  partnership  property  to  their 
own  use,  false  entries  in  the  books, 
and  a  refusal  of  access  to  the  books 
and  a  concealment  of  the  condition  of 
the  partnership  business,  a  receiver 
should  be  appointed.  Citing  Howell 
V.  Harvey,  5  Ark.  270. 

In  Haight  v.  Burr,  19  Md.  130,  one 
partner  controlled  the  business  as  if 
exclusively  his  own  and  failed  to  pay 
the  debts  of  the  firm  and  fraudulently 
appropriated  the  assets,  it  was  held 
that  a  receiver  should  be  appointed 


324 


RECEIVERSHIPS. 


where  one  partner  has  retired  and  the  remaining  partner  is  com- 
mitting a  fraud  upon  him,  as  by  sending  the  funds  beyond  the 
state  instead  of  applying  them  in  payment  of  the  firm  debts  pur- 
suant to  the  dissohition  agreement/  Also  where  fraudulent 
representations  are  made  as  an  inducement  for  entering  into  the 
partnership  agreement.' 

§  203.    Where  one  partner  is  mismanaging  business. 

The  o-rounds  for  the  appointment  of  a  receiver  during  the  con- 
tinuance of  the  partnership  agreement,  or  before  the  expiration  of 
the  time  limited  for  the  dissolution  of  the  copartnership,  are 
numerous,  as  where  one  partner  is  destroying  the  firm  business,' 
or  does  not  account  for  the  firm  receipts,"  or  is  violating  the  terms 


where   the   defendant  was  irrespon- 
sible. 

So  also  in  Blondheim  v.  Moore,  11 
Md.  374,  the  court  say:  "That  fraud 
or  imminent  danger,  if  intermediate 
possession  should  not  be  taken  by  the 
court,  must  be  clearly  proved  and  that 
unless  the  necessity  be  of  the  most 
stringent  character,  the  court  will  not 
appoint  until  the  defendant  is  first 
heard  in  response  to  the  application." 

In  Shannon  v.  Wright,  60  Md.  520, 
It  was  held  that  a  refusal  to  apply 
money  to  the  payment  of  debts  and  a 
refusal  to  allow  an  examination  of  the 
books  and  threatening  to  litigate  with 
the  firm's  money  until  the  plaintiff 
was  ruined  thereby,  was  ground  for  a 
dissolution  of  the  firm  and  the  ap- 
pointment of  a  receiver. 

In  Brenan  v.  Preston,  2  DeG.  M. 
&  G.  813,  the  defendant  took  posses- 
sion of  part  of  the  machinery  of  a  ship 
and  refused  to  give  it  up.  A  receiver 
was  allowed. 

'In  West  V.  Chasten,12  Fla.315, where 
the  firm  was  dissolved  and  the  partner- 
ship assets  assigned  to  one  who  as- 
sumed the  debts,  it  was  held  that  the 
property  ceased  to  be  joint  property, 
and  became  the  separate  property  of 


one,  the  court  holding:  "If,  however, 
in  a  case  of  this  character  and  rising 
out  of  confidential  relations  the  party 
acts  iniqultously  and  unjustly  or 
fraudulently,  and  pays  no  attention  to 
his  covenants,  disregarding  the  claims 
of  his  surety,  and  is  pursuing  such  a 
course  as  threatens  to  result  in  his 
great  damage  or  injury,  the  court  will 
interfere.  It  will  not  do  to  wait  until 
the  threatened  damage  or  injury 
occurs  to  such  an  extent  as  to  ruin  the 
other.  Then  the  court  of  equity  will 
be  powerless  to  act." 

A  receiver  will  not  be  appointed  of 
a  partnership  at  will  in  the  absence  of 
fraud  and  mismanagement.  Dolphin 
V.  SteelliC.  P.)  2  Lack.  L.News.  111. 

*A  fraudulent  disposition  of  his  in- 
terest in  a  firm  by  one  of  the  copartners 
does  not  authorize  the  appointment  of 
a  receiver  to  settle  up  the  partnership 
estate  at  the  instance  of  a  contract  or 
general  creditor  before  judgment,  as 
the  remedy  at  law  is  adequate.  Waples- 
Platter  Co.  y.  Mitchell  (Tex.  Civ.  App.) 
35  S.  W.  200. 

^Sutro  V.  Wagner,  28  N.  J.  Eq.  388; 
New  V.  Wright,  44  Miss.  202;  Estwick 
V.  Conningsby,  1  Vern.  118. 

*Read  v.  Bowers,  4  Bro.  C.  C.  441. 


RECEIVERSHIP  IN  PARTNERSHIP  MATTERS. 


325 


of  the  partnership  agreement/  or  in  case  of  the  insolvency  of  one 
member,*  or  waste,'  or  mismanagement,*  or  serious  disagreement 
such  as  to  endanger  the  business,^  or  misappropriation,'  or  bank- 
ruptcy,^ or  absconds,*  or  colhision  with  creditors/ 

When  the  partnership  relation  has  been  entered  into  each  part- 
ner owes  a  duty  to  tlie  other  to  manage  the  business  in  such  way 
as  to  produce  the  greatest  profits  consistent  with  a  judicious  man- 
agement, and  he  has  no  right  to  conduct  it  in  such  way  as  to  en- 
danger its  success,  or  to  result  in  loss  to  the  firm.  This  may 
result  from  negligence  and  carelessness  or  wilful  inattention,  or  a 
reckless  investment,  contrary  to  and  against  his  copartner's  will 
or  without  his  knowledge  and  consent.'" 


'  Const  V.  Harriti,  Turn.  &  R.  496; 
Brenan  v.  Preston,  2  DeG.  M.  &  G. 
813;  White  v.  Colfax,  1  Jones  &  S.  297. 

^Speights  v.  Peters,  9  Gill,  472; 
Williamson  v.  Wilson,  1  Bland,  Ch. 
418;  Wiite  v.  Colfax,  1  Jones  &  S. 
297;  Todd  v.  Mich,  2  Tenn.  Ch.  107; 
Boyce  v.  Burchard.  21  Ga.  74;  Smith 
V.  Jeyes,  4  Beav.  503;  Williams  v.  Wil- 
son, 4  Sandf.  Ch.  379;  Sutro  v.  Wag- 
ner, 23  N.  J.  Eq.  388;  Pini  v.  Bon- 
coroni,  [1892]  1  Ch.  Div.  633;  Shan- 
non V.Wright,  60  Md.  520;  Phillips  v. 
Trezevant,  67  N.  C.  370. 

'See  preceding  note. 

*I)e  Tastet  v.  Bordicu,  2  Bro.  C.  C. 
272,  note;  Biifkin  v.  Boyce,  104  Ind. 
53;  Harding  v.  Glover,  18  Ves.  Jr.  281; 
Benton  v.  Chaplain,  9  N.  J.  Eq.  62; 
Wilson  V.  Fitchter,  11  N.  J.  Eq.  71; 
Cox  V.  Peters,  13  N.  J.  Eq.  39;  Ban- 
dall  v.Morrell.  17  N.  J.  Eq.  343;  Bird- 
sail  V.  Colie,  10  N.  J.  Eq.  63;  Page  v. 
Vanki7'k,  1  Brewst.  290;  Slemmer's  Ap- 
peal, 58  Pa.  168;  Word  YMord,  90 
Ala.  81. 

^Law  V.  Ford,  2  Paige,  310;  Marten 
V.  Van  Schaick,  4  Paige,  479;  Henn  v. 
Walsh,  2  Edw.  Ch.  129;  Goodman  v 
Whitcomb,  1  Jac.  &  W.  589;  Chapman 
V.  Beach,  1  Jac.  &  W.  596,  4  Beav. 
574;    Smith    v.    Jeyes,   4  Beav.    503; 


Garretson  v.  Weaver,  3  Edw.  Ch. 
385;  Jackson  v.  DeForest,  14  How. 
Pr.  81;  Harding  v.  Glover,  18  Ves. 
Jr.  2S\;Williamson  v.  Wilson,  1  Bland. 
Ch.  418. 

^Evans  v.  Coventry,  5  DeG.  M.  & 
G.  ^W;  Harding  v.  Glover,  18  Ves.  Jr. 
281 ;  Prentiss  v.  Brennan,  1  Grant,  Ch. 
(Ont.)  484. 

''Freeland  v.  Stansfeld,  2  Smale  & 
G.  479;  Wilson  v.Gree)itcood,  1  Swansl. 
471;  Fraser  v.  Eershaio,  1  Kay  &  J. 
496. 

^Shepperd  v.  Oxenfield,  1  Kay  &  J. 
491. 

^Estwickv.  Conningsby,  1  Vern.  118; 
Speights  v.  Peters,  9  Gill,  472. 

'"In  Sutro  V.  Wagner,  23  N.  J.  Eq. 
388,  it  was  held  that  where  it  appears 
that  the  defendant  has  deliberately  re- 
solved to  break  up  and  ruin  the  busi- 
ness of  the  firm  and  the  personal  rela- 
tions between  the  partners  were  such 
that  they  could  never  carry  on  busi- 
ness together  to  advantage,  a  receiver 
was  properly  appointed. 

In  lU'ew  v.  Wright,  44  Miss.  202,  it  is 
held  where  a  partnership  concern  is 
broken  up  by  controversial  suits  and 
it  is  apparent  there  can  be  no  agree- 
ment between  the  parties  in  interest  a 
receiver  will  be  appointed.     See  also 


326  RECEIVEKSHIPS. 

And  each  partner  is  required  to  keep  an  accurate  and  strict 
account  of  the  receipts  and  disbursements,  and  owinc^  to  the  rela- 
tion of  confidence  existing  between  members  of  a  firm  the  part- 
ners are  not  permitted  to  conceal  from  each  other  the  financial 
transactions  which  interest  all  alike. 

§  20i.     On  ground  of  insolvency. 

If  during  the  continuance  of  a  partnership  one  of  the  partners 
becomes  insolvent  and  he  is  in  charge  or  in  possession  of  the 
partnership  effects  and  danger  of  loss  is  liable  to  result  as  a  con- 
sequence, a  receiver  may  be  appointed.  And  where  a  dissolution 
has  taken  place,  or  such  a  state  of  facts  shown  as  will  justify  the 
court  in  appointing  a  receiver  and  one  of  the  partners  in  posses- 
sion becomes  insolvent  and  danger  is  likely  to  result  therefrom  it 
is  ground  for  the  appointment.  So  also  where  one  partner  has 
sole  charge  of  the  business  and  by  his  mismanagement  the  firm 
becomes  insolvent,  or  where  the  firm  is  insolvent  and  there  are 
mutual  allegations  of  waste,  or  where  the  insolvency  is  brought 
about  by  one  partner  wrongfully  withdrawing  a  large  sum  from 
the  partnership  funds/ 

Williams  v.  Wilson,  4  Sandf.  Ch.  379,  applied  for  a  particular  purpose  and 
where  the  facts  charged  were,  that  a  subsequent  agreement  was  made  by 
the  defendant  had  sold  goods  and  a  majority  of  the  partners  to  apply  the 
failed  to  account,  or  refused  to  ac-  the  profits  in  a  different  manner,  on 
count;  that  the  books  were  incorrect  the  application  of  the  owner  of  a  one 
and  the  defendant  irresponsible;  and  eighth  interest  a  receiver  was  ap- 
there  was  also  a  violation  of  the  part-  pointed  on  the  ground  that  the  part- 
nership agreements.  Cf.  Esiwick  v.  nership  agreement  could  not  be  altered 
Conningsby,  1  Vern.  118;  Ready.  without  the  sanction  of  all  the  parties. 
Bowers,  4  Bro.  C.  C.  441.  The  act  of  a  majority  of  the  partners, 

In  Woodward  v.  Schatzell,  3  John.  however,  will  bind  the  firm  provided 
Ch.  415,  it  was  held  that  the  mere  ap-  all  parties  have  notice  and  are  acting 
prehension  of  one  partner  that  the  in  good  faith.  It  was  also  held  that 
other  will  misapply  the  partnership  a  bill  merely  for  the  purpose  of  carry- 
funds  is  not  ground  for  an  injunction,  ing  on  the  business  will  not  be  main- 
the  same  rule  being  applied  to  a  re-  tained. 
ceivership.  '  In  Williamson  v.  Wilson,  1  Bland, 

In  Const  V.  Harris,  1  Turn.  &  R.  Ch.  418,  it  is  said  that  after  a  firm  has 
496,  it  is  said  that  the  court  will  en-  become  insolvent  the  partners  are  to  be 
tertain  a  bill  to  compel  partners  to  considered  as  trustees  for  the  benefit 
act  according  to  the  provisions  of  the  of  their  creditors  and  therefore  a  suit 
partnership  contract;  thus,  where  it  between  such  partners  might  be  con- 
was  agreed  that  the  profits  should  be  sidered  as  a  creditor's  suit  and  the 


RECEIVERSHIP  IN  PARTNERSHIP  MATTERS. 


32T 


partnership  estate  collected  and  dis- 
tributed accordingly.  Tke  allegation 
in  this  case  was  that  the  trading 
had  ceased,  the  firm  utterly  insol- 
vent and  a  receiver  was  asked  as 
the  only  means  of  saving  the  partner 
plaintiff  and  the  creditors  from  the 
fraudulent  practices  of  the  co-partner. 
The  court  say:  "So  long  as  a  man 
carries  on  his  business  and  has  a  pros- 
pect of  gain  he  is  not  considered  as 
insolvent;  but  if  in  addition  to  such 
deficiency  of  property  his  business  so 
far  declines  as  to  leave  him  no  pros- 
pects of  paying  his  debts  he  is  then, 
according  to  the  universal  sense  of 
mankind,  insolvent."  "Insolvency 
is  the  total  destruction  of  the  pe- 
cuniary capacity  of  the  partner  to 
fulfill  his  contract  of  co-partnership. 
But  his  pecuniary  capacity  was  the 
basis  on  which  it  rested.  The  con- 
tract itself  must  therefore  be  consid- 
ered as  effectually  annulled  as  if  the 
party  were  dead.  If  both  be  insolv- 
ent, or  dead,  there  is  no  efficient  or 
living  capacity  left  to  execute  the 
contract.  If  only  one  be  dead,  or  in- 
eolvent,  the  terms  cannot  be  complied 
with;  and  where  personal  confidence 
was  the  principal  inducement  for 
making  an  agreement,  as  in  contracts 
of  this  nature,  it  would  be  unreasona- 
ble; and  therefore  the  other  party 
should  not  have  the  executor,  admin- 
istrator, trustee  or  assignee  of  the  de- 
ceased or  of  the  insolvent  intruded 
upon  him.  Consequently  the  partner- 
ship between  these  parties  must  be 
considered  as  having  been  virtually 
and  effectually  terminated  by  their 
insolvency.  It  cannot  be  extended 
over  new  business  transactions  nor  be 
allowed  to  expand  any  more.  It  must 
be  wound  up  and  brought  to  a  close; 
and  except  for  such  purposes  must  be 
deemed  to  have  totally  ceased  to  exist.' 
See  Ex  parte  Williams,  11  Ves.  Jr.  5; 
Ha/rding  v.    Glover,   18  Ves.   Jr.  281; 


Vulliamy  v.    Noble,    3    Meriv.    614; 
Crawshay  v.  Maule,  1  Swanst.  506. 

"  While  a  man  continues  solvent 
the  order  in  which  he  pays  his  cred- 
itors is  a  matter  of  indifference  since 
none  can  suffer;  and  therefore  no 
creditor  has  the  right  to  complain  of 
the  rights  given  to  another.  But  as 
soon  as  he  becomes  insolvent  that 
privilege  ceases;  and  equity  requires 
that  he  should  make  an  equal  distribu- 
tion among  them  all.  The  giving  of 
undue  and  improper  preference  in 
such  circumstances  is  denounced  by 
the  express  provisions  of  our  insolvent 
laws  as  a  fraud.  And  in  all  cases 
where  the  court  of  chancery  can  be 
called  upon  and  does  interpose  for  the 
purpose  of  administrating  the  assets 
of  an  insolvent  debtor  it  is  governed 
by  the  rule  of  equality;  because 
equality  is  equity.  The  assets,  if  in- 
sufficient to  pay  all,  are  always  dis- 
tributed proportionately.  *  *  * 
These  parties  admit  themselves  to 
be  insolvent  debtors.  The  plaintiff 
charges  his  co-partners,  the  defend- 
ants, with  a  design  to  waste  the  joint 
property  and  apply  it  to  their  own 
use.  The  defendants  deny  this  alle- 
gation and  charge  the  plaintiff  with  a 
design  to  misapply  the  funds  and  give 
some  of  the  creditors  undue  prefer- 
ence. Taking  the  charges  of  the 
plaintiff  and  of  the  defendants,  or 
either  of  them,  to  be  true  or  allow  that 
each  or  either  party  was  about  to 
waste  the  property,  or  has  his  favorite 
creditors  to  whom  it  is  his  design  to 
give  an  undue  preference,  and  it  is 
clear  that  one  or  the  other  or  both  of 
them  have  formed  a  fixed  resolution  to 
violate  one  of  the  great  principals  of 
equity  whieh  it  is  the  province  of  this 
court  to  prevent.  None  of  the  cred- 
itors of  these  insolvent  debtors,  so  far 
as  it  appears,  have  as  yet  obtained  any 
legal  advantage.  It  is  proper  there- 
fore that  this  court  should  now  lay  its 


328 


RECEIVERSHIPS. 


Bankruptcy  of  one  partner  is  also  a  sufficient  ground  for  the 
appointment.' 


hands  upon  the  joint  property  of  this 
partnership  and  let  all  its  creditors 
come  in  'pan  passu  and  according  to 
their  respective  priorities,  if  any 
should  appear." 

In  White  v.  Colfax,  1  Jones  &  S. 
297,  it  is  held  that  although  the  arti- 
cles of  distribution  vest  the  right  of 
•winding  up  the  partnership  in  some 
one  or  more  of  the  partners,  yet  when 
they  violate  the  terras  of  the  dissolu- 
tion agreement,  such  as  refusing  access 
to  the  books,  and  when  the  feeling  is 
such  that  the  right  of  supervision  can- 
not be  exercised  without  great  embar- 
rassment or  unpleasantness  a  receiver 
should  be  appointed. 

In  Boyce  v.  Burcliard,  21  Ga.  74, 
where  one  partner  in  violation  of  his 
duty  mismanages  the  partnership 
business  to  the  great  detriment  of  the 
partnership  and  is  insolvent  it  was 
held  the  other  partner  was  entitled  to 
a  distribution  and  a  receiver. 

In  Smith  v.  Jeyes,  4  Beav.  503,  it  is 
held  that  the  specific  contract  of  part- 
nership cannot  and  does  not  cover  all 
the  implied  duties  of  the  partners  to 
each  other. 

In  Pini  V.  Boncoroni  [1892]  1  Ch. 
Div.  633,  one  partner  withdrew  from 
the  partnership  a  large  sum  of  money 
and  this  brought  about  its  insolvency; 
a  receiver  was  appointed  although  the 
partnership  agreement  provided  for 
referring  the  matters  in  dispute  to  ar- 
bitration. 

In  Bandall  v.  Morrell,  17  N.  J.  Eq. 
343,  the  court  say:  "  But  with  the  cir- 
cumstance of  the  insolvency  of  one  of 
the  partners  in  addition  to  the  fact  of 
the  dissolution  of  the  firm  would  un- 
der ordinary  circumstances  induce  this 
court  to  assume  the  administration 
of  the  partnership  affairs,  I  think,  ad- 


mits of  no  doubt.  *  •  *  It  is  only 
by  the  united  efficacy  of  these  two 
safeguards  (injunction  and  receiver- 
ship) that  when  insolvency  supervenes 
the  estate  of  the  co  partnership  can  be 
secured  and  preserved  for  the  benefit 
of  those  to  whom  they  equitably 
belong. 

In  Sutro  V.  Wagner,  23  N.  J.  Eq. 
388,  there  was  a  fraudulent  appropria- 
tion of  the  partnership  funds  and  a 
fraudulent  conveyance  of  the  partner- 
ship property  of  one  partner  in  order 
to  place  it  beyond  the  reach  of  the 
creditors  and  giving  notice  of  such 
transfer  to  a  commercial  agency  to 
ruin  the  credit  of  the  firm  and  it  was 
held  a  receiver  should  be  appointed. 
Cf.  Shannon  v.  Wrirjht,  60  Md.  520; 
Phillips  v.  Trezevant,  67  N.  C.  370. 

^  Fraser  v.  Kershaw,  2  Kay  &  J, 
496.  The  bankruptcy  of  one  partner 
puts  an  end  to  the  partnership,  but 
the  solvent  partner  cannot  transfer 
his  right  to  another  by  assignment  or 
otherwise  to  wind  up  the  concern,  or 
permit  the  same  to  be  sold  on  an  execu- 
tion. In  Wilson  v.  Oreenwood,  1  S  wanst. 
471,  It  is  held  that  on  the  bankruptcy 
of  one  partner  the  partnership  in 
one  sense  is  determined,  but  is  con- 
tinued until  all  the  partnership  affairs 
are  settled.  In  Freeland  v.  Sta.nsfeld, 
2  Smale  &  G.  479,  on  the  bankruptcy 
of  one  partner  the  solvent  partner  is 
entitled  to  a  receiver  and  the  assignee 
has  no  right  to  interfere  with  the 
partnership  matters  and  with  the 
collection  of  the  partnership  debts. 

A  firm  whose  articles  provide  that 
if  any  partner  becomes  bankrupt  he 
shall  cease  to  be  a  partner,  and  his 
share  in  the  capital  shall  remain  f.s  a 
loan  during  the  remainder  of  the  part- 
nership term,  the  solvent  partner  is 


RECEIVERSHIP  IN  PARTNERSHIP  MATTERS. 


329 


§  205.   Where  dissolution  has  taken  place. 

When  tliere  has  been  a  dissohition  of  the  copartnership  by 
limitation,  or  by  mutual  agreement,  or  otherwise,  and  tiie  partner- 
ship agreement  is  silent  as  to  the  method  of  closing  up  the  busi- 
ness, and  the  members  of  the  firm  cannot  agree  in  reference  there- 
to, a  receiver  may  be  appointed.  And  so  where  upon  the  dissolu- 
tion an  agreement  has  been  made  as  to  the  winding  up  of  the 
business,  and  the  agreement  is  being  violated  in  such  a  way  as  to 
result  in  loss. 

Where  a  partnership  has  been  dissolved  and  the  partners  have 
agreed  among  themselves  as  to  a  mode  of  collecting  the  accounts, 
in  the  absence  of  proof  of  irresponsibility  the  court  will  not  ap- 
point  a   receiver,'  but   where   there   is   a   serious   disagreement 


entitled  to  be  appointed  receiver  and 
manager  of  the  business,  but  he  must 
give  security,  pass  his  accounts, 
furnish  proper  accounts  to  trustees, 
allow  them  all  reasonable  access  to 
tbe  books,  and  pay  the  balances  in 
his  hands  into  court,  or  into  a  joint 
banking  account  of  such  trustees  and 
himself,  Collins  v.  Barker  [1893]  1 
Ch.  Div.  578. 

'  White  V.  Co!fax,  1  Jones  &  S.  297. 
Upon  the  dissolution,  partners  may 
make  such  an  agreement  as  to  the 
■winding  up  as  they  shall  deem  tit,  and 
a  court  of  equity  will  not  interfere 
and  appoint  a  receiver  unless  the 
parties  prove  recreant  to  the  trust  im- 
posed on  them.  When  such  an  agree- 
ment has  been  made  all  the  members 
of  the  firm  are  entitled  to  have  super- 
vision over  the  acts  of  tliose  selected, 
to  receive  information  from  them  re- 
specting collections  made,  to  ask  for 
and  have  imparted  information  why 
collections  are  not  pressed,  and  have 
access  to  the  books  of  the  firm ;  and  if 
those  selected  deny  this  right  or  un- 
reasonably interfere  with  its  exercises, 
or  even  if  the  relations  of  the  parties 
are  so  changed  that  the  exercise  of 
this  right   would   reasonably   be  ex- 


pected to  be  attended  with  unpleasant- 
ness or  embarrassment,  the  court  will 
appoint  a  receiver.  In  this  case  the 
feeling  of  friendliness  had  changed 
into  bitter  enmity  and  under  such  cir- 
cumstances it  would  be  unreasonable 
to  anticipate  that  the  plaintiff's  right 
of  supervision,  etc.,  could  any  longer 
be  exercised  without  great  unpleasant- 
ness and  embarrassment,  if  indeed  it 
could  be  exercised  at  all. 

In  Simon  v.  Schloss,  48  Mich.  233, 
it  is  said  that  where  the  partners 
have  agreed  as  to  the  winding  up  and 
where  the  defendants  are  responsible 
the  court  will  not  interfere  by  the  ap- 
pointment of  a  receiver  until  a  hear- 
ing on  the  merits. 

In  Brush  v.  Jay,  113  N.  Y.  483, 
overruling  50  Hun,  446,  it  is  held  that 
it  is  manifestly  improper  to  determine 
a  material  issue  upon  affidavits  in  an- 
ticipation of  the  trial  and  determina- 
tion of  the  issues  joined.  The  court 
say:  "We  know  of  no  practice  which 
authorizes  the  court  in  this  manner  to 
defeat  the  object  of  the  litigation  and 
place  the  subject  of  the  action  beyond 
the  reach  of  the  court  ultimately  to 
award  it  to  those  showing  title  thereto. 
We  do   not   thiuk  the   special   term 


330 


RECEIVERSHIPS. 


between   them  concerninj^  tlie  winding;   np,  or   tlie    dissolntiou 
agreement,  the  court  will  do  so ;'  and  it  seems  that  this  may  be 


had  authority  to  take  up  on  motion 
one  of  the  material  issues  of  the  case 
and  under  objection  by  one  of  the 
parties  malie  an  order  which  was  prac- 
tically a  final  judgment  in  respect  to 
the  property  involved  in  such  issue." 

In  Mitchel  v.  Lister,  21  Ont.  Rep.  22. 
it  is  held  that  wliere  the  partnership 
articles  provided  that  on  dissolution, 
the  partners  should  select  a  person  to 
collect  the  accounts  and  settle  tbe 
partnership  affairs,  the  court  would, 
upon  a  failure  of  the  parties  to  agree 
on  some  person,  appoint  a  receiver. 
Cf.  Davis  V.  Amer,  5  Drew.  64;  Laio  v. 
Garrett,  L.  R  8  Ch.  Div.  26;  Plewes 
V.  Baker,  L.  R.  16  Eq.  564. 

In  Harding  v.  Glover,  18  Ves.  Jr. 
281,  it  was  held  that  a  receiver  would 
not  be  appointed  upon  a  mere  dissolu- 
tion but  there  must  be  some  breach  of 
duty  of  a  partner  or  of  the  contract  of 
partnership.  In  this  case  the  defend- 
ant had  been  carrying  on  business  on 
his  own  account  with  the  partnership 
funds  and  a  receiver  was  appointed. 

So  in  Estwick  v.  Coningiiby,  1  Vern. 
118,  a  surviving  partner  was  carrying 
on  the  business  but  was  neglecting  the 
collection  of  the  debts,  a  receiver  was 
ordered  in  default  of  security  re- 
quired. 

In  Smith  V.  Jeyes,  4  Beav.  503,  it 
was  held  that  the  plaintiff  must  show 
a  dissolution  or  such  facts  as  would 
warrant  a  dissolution  before  the  court 
would  interfere. 

'In  Speiglits  v.  Peters,  9  Gill,  472, 
where  after  dissolution  the  partners 
failed  to  agree  upon  an  adjustment, 
the  funds  being  in  the  hands  of  one 
partner,  a  receiver  was  appointed. 

It  was  held  that  it  was  not  always 
necessary  that  the  court  should  be 
satisfied  that  the  property  is  in  immi- 


nent peril  and  that  where  one  partner 
in  the  ordinary  course  of  trade  seeks 
to  exclude  another  from  taking  that 
part  in  the  concern  which  he  is  en- 
titled to  take,  a  receiver  should  be  ap- 
pointed. And  after  dissolution  takes 
place,  or  is  intended,  if  one  partner 
acts  against  the  interest  of  the  other 
or  carries  on  trade  with  the  partner- 
ship funds,  or  in  any  other  manner 
excludes  his  copartner  from  that  share 
to  which  he  is  entitled  in  winding  up 
the  concern,  a  court  of  equity  will 
appoint  a  receiver. 

A  receiver  was  refused  in  Fairburn 
V.  Pearson,  2  Macn.  &  G.  144,  where 
the  question  raised  was  whether  the 
partnership  had  been  dissolved  or  not. 

In  Re  Hermanos,  L.  B.  24  Q.  B. 
Div.  640,  it  appeared  that  a  Paris  firm 
having  a  branch  office  in  England  had 
been  declared  a  bankrupt  in  the 
former  country  where  a  syndicate  had 
been  appointed  to  administer  the  es- 
tate. Subsequently  a  bankruptcy  pe- 
tition was  presented  in  England  and 
an  order  made  for  a  receiver.  The 
syndicate  appeared  in  court  and 
moved  to  set  aside  all  further  proceed- 
ings. There  was  no  evidence  as  to 
the  domicil  of  the  firm  further  than 
that  two  of  the  parties  resided  in  Eng- 
land where  the  firm  had  large  assets. 
The  court  held  that  it  had  jurisdiction 
to  appoint  a  receiver,  and  that  the 
fact  that  a  bankruptcy  proceeding 
had  been  commenced  prior  in  a  for- 
eign country  not  shown  to  be  the 
domicil  of  the  debtors,  was  no  ground 
for  staying  the  proceedings  in  Eng- 
land. 

In  Fischer  v.  Tuolumne  County 
Super.  Ct.  98  Cal.  67,  the  title  of  a 
mine  belonging  to  a  partnership  was 
in  the  name  of  a  corporation,  the  latter 


RECEIVERSHIP  IN  PARTNERSHIP  MATTERS. 


done  without  notice  to  noni-esident  partners,   wliere  tlie  resident 
partners  appear  ;'  and  is  applicable  to  limited  partnerships  as  well.^ 


however,  possessing  no  interest  in  the 
property.  It  was  held  that  the  court 
was  authorized  to  appoint  a  receiver 
for  such  property  in  an  action  for  dis- 
sohition  and  accounting,  notwith- 
standing the  legal  title  to  the  prop- 
erty was  in  the  corporation.  Cf .  Buf- 
kin  V.  Boyce,  104  Ind.  53. 

In  Smith  v.  Lowe,  1  Edw.  Ch.  33, 
it  was  held  that  the  plaintiff  being  in 
possession  of  the  partnership  prop- 
erty, was  not  entitled  to  a  receiver, 
the  other  partner  not  objecting  to  his 
possession. 

In  Martin  v.  Smith,  21  Jones  &  S, 
277,  where  a  dissolution  had  been 
made  by  agreement  and  subsequently 
one  of  the  members  died,  it  was  held 
that  his  death  was  not  an  objection  to 
the  appointment  of  a  receiver. 

In  McElvey  v.  Leicis,  76  N.  Y.  373. 
it  was  held  that  where  no  time  was 
fixed  for  the  continuance  of  the  part- 
nership, and  no  provision  made  for  a 
settlement  upon  such  dissolution,  such 
partnership  is  dissolvable  upon  the 
will  of  one  partner  and  the  appoint- 
ment of  a  receiver  is  proper.  Cf.  Law 
V.  Ford,  2  Paige,  310;  Marten  v.  Van 
Schaick,  4  Paige,  479. 

In  Dunn  v.  McNavght,  38  Ga.  179. 
■where  the  contract  provided  that  upon 
giving  six  month's  notice  if  the  firm 
did  not  pay  ten  per  cent  profits  on  the 
capital,  the  firm  should  be  dissolved, 
and  the  evidence  showed  that  it  did 
not  pay  ten  per  cent,  the  partnership 
was  terminated  and  a  receiver  appoint- 
ed.   Cf.  Hamill  v.  Hamill,  27  Md.  679. 

'  In  Alford  v.  Berkele,  29  Hun,  633, 
an  action  was  brought  for  dissolution 
where  the  resident  partners  appeared 
and  it  appeared  that  no  notice  was 
served  upon  the  nonresident  defend- 
ant partner,  but  the  court  appointed 


a  receiver  upon  the  authority  of 
Ptople  V.  Norton,  1  Paige,  17;  Ver- 
planck  V.  Mercnntile  Ins.  Co.  2  Paige, 
438:  Bhodgood  v.  Clark,  4  Paige.  574. 

In  Ogden  v.  Warren,  36  Neb.  715, 
a  receiver  was  appointed  of  the  part- 
nership goods  of  a  foreign  partner- 
ship having  effects  in  the  state  of 
Nebraska. 

2  In  Hogg  v.  Ellis,  8  How.  Pr.  473, 
the  court  appointed  a  receiver  in  a 
case  of  limited  partnership  on  the 
ground  of  disagreement  of  partners  as 
in  other  cases. 

In  Van  Alstyne  v.  Cook,  25  N.  Y. 
489,  it  was  held  that  until  the  order  of 
appointment  is  made  the  property  of 
an  insolvent  limited  partnership  is 
liable  to  execution  of  a  creditor  re- 
covering a  judgment  otherwise  than 
by  confession,  and  such  creditor  may 
thus  obtain  a  preference,  the  execution 
binding  the  partnership  property  al- 
though the  judgment  is  against  the 
general  partners  only.  "  The  mem- 
bers of  a  limited  partnership  before  or 
after  insolvency  are  just  as  liable  to 
suit  for  their  debts  as  other  natural 
persons.  Their  creditors  are  entitled 
to  recover  judgmentagainst  them  with 
a  view  of  reaching  the  individual 
property  as  well  as  partnership  prop- 
erty." Speaking  of  the  nature  of  the 
property  of  a  limited  partnership  the 
court  further  say:  "They  are  not 
trust  funds  in  the  hands  of  partners 
any  more  than  ordinary  partnerships. 
There  is  no  rule  of  equity  which 
makes  them  trust  funds  in  any  other 
sense  or  which  gives  a  court  of  equity 
any  control  over  them,  or  which  for- 
bids any  creditor  of  the  copartnership, 
or  of  any  individual,  from  obtaining  a 
lien  on  them  by  due  process  of  law  in 
any  hostile  proceedings." 


332  RECEIVERSHIPS. 

The  mere  fact  that  a  partnership  business  is  unprofitable,  and 
should  be  discontinued  is  not  of  itself  ground  for  a  receiver;'  nor 
that  the  firm  is  largely  indebted  and  is  not  making  money ;'  nor 
want  of  co-operation  between  the  partners;^  and  facts  must  be 
stated  in  the  bill  showing  the  necessity  or  propriety  of  the 
appointment.* 

§  206.     Before  dissolutiou. 

In  case  of  an  existing  partnership  before  the  court  will  inter- 
cede and  appoint  a  receiver  it  must  be  made  clear  that  in  the  end, 
or  when  the  final  decree  is  rendered,  a  decree  for  dissolution  will 
be  rendered.  Hence  it  has  become  a  rule  of  universal  application 
that  the  plaintiff  must  make  out  a  strong  case,  the  allegations 
must  be  distinct  and  positive,  and  relate  to  matters  of  substantial 
importance,  and  the  court  must  be  satisfied  that  the  continuation 
of  the  business,  under  the  firm  management,  is  no  longer  possible 
without  sacrifice  of  the  interests  of  the  partners,  or  of  the  firm 
creditors.  The  appointment  of  a  receiver  must  inevitably  result 
in  the  dissolution  of  the  firm,  and  the  destruction  of  its  business, 
and  therefore  the  court  will  intercede  with  great  caution  in  all 
cases  where  the  firm  has  not  already  been  dissolved  by  agreement, 
or  otherwise.^     It  must  likewise  appear  in  an  action  based  upon 

•  Moies  V,  O'Neill,  23  N.  J.  Eq.  207.  496,  it  is  said  that  the  court  willsome- 

*  Slioemaker  v.  Smith,  74  lad.  71.  times  entertain  a  bill  to  compel  part- 
^  Roberts  v.  Eberhardt,  Kay,  148.  It  ners  to  act  according  to  the  partner- 
must  be  shown  in  addition  that  one  ship  agreement  and  appoint  a  receiver; 
partner  has  interfered  so  as  to  prevent  but  the  general    rule   announced  in 
the  business  being  carried  on.  SmitJi,  v.  Jeyes,  4  Beav.  503,  is  that 

*Tomlinson  v.  Ward,  2  Conn.  396;  there  must  be  either  a  dissolutiou  or 

Const  V.  Harris,  1  Turn.  &  R.  496.  such  facts  alleged  which  if  proven  at 

'  Barnes  v.  Jones,  91  Ind.  161.  There  the  hearing  would  entitle  the  plaintiff 

may  be  cases  independent  of  statutory  to  a  decree  for  dissolution.     Cf.  Bob- 

provisions  where  a  receiver  may  be  erts  v.  Eberhardt,  Kay,  148.     The  rule 

appointed  to  bridge  over    an  emer-  laid  down  in  Sieghortner  v.  Weissen- 

gency  without  a  dissolution  of  the  born,  20  N.  J.   Eq.  172,  is  that  there 

partnership,  but  the  general  rule  is  that  must  be  a  cause  for  dissolution  shown 

a  receiver  for  the  business  of  a  firm  and  as  to  what  is  a  sufficient  cause,  it 

will  not  be  appointed  unless  a  disso-  may  be  shown  (1)  that  the  business  of 

lution  has  taken  place  or  is  about  to  the  partnership  is  impracticable  and 

take  place.      Dale  v.   Kent,   58  Ind.  cannot  be  carried  on  except  at  a  loss. 

584.  Citing  Baring  v.  Dix,  1  Cox,  Ch.  213; 

In  Const  V.  Harris,   1  Turn.  &  R.  Jennings  v.  Baddeley,  3  Kay  &  J.  78; 


RECEIVERSHIP  IN  PARTNERSHIP  MATTERS. 


333 


disagreements  and  dissentions  that  no  adjustment  is  probable.' 
And  yet  even  where  the  action  results  in  a  dissolution  the  ap- 
pointment of  a  receiver  will  not  necessarily  follow,  for  in  such  a 
case  there  must  be  evidence  of  mismanagement,  misconduct,  or 
danger.' 


Bailey  v.  Ford,  13  Sim.  495.  (3) 
That  all  confidence  between  the 
partners  has  been  destroyed  so  that 
they  cannot  proceed  together;  and  this 
usually  follows  where  one  partner 
has  been  guilty  of  mismanagement. 
Citing  Ilarrison  v.  Tennant,  21  Beav. 
482;  Baxter  v.  Welsh,  1  De  G.  &  S. 
173.  See  also  Goodman  v.  Whitcomb, 
1  Jac.  &  W.  589. 

'  In  Laio  V.  Lord,  2  Paige,  310,  it  is 
said  that  the  appointment  is  a  matter 
of  course  where  either  party  has  a 
right  to  dissolve  the  partnership,  where 
the  partners  have  not  made  provisions 
for  winding  up  the  partnership.  So 
also  in  Marten  v.  Van  Schaick,  4 
Paige,  479,  where  the  parties  could  not 
agree  among  themselves  as  to  the  dis- 
position and  control  of  the  property. 

In  Henn  v.  Walsh,  2  Edw.  Ch.  129, 
it  is  held  that  mere  dissatisfaction 
among  the  partners  is  not  enough  to 
authorize  the  filing  of  a  bill  for  disso- 
lution; to  authorize  a  receiver  there 
must  be  such  a  state  of  facts  as  would 
authorize  a  decree  of  dissolution,  such 
as  breach  of  duty  or  of  the  contract. 
Quarrels  among  the  partners  is  not 
enough. 

In  Oarretson  v.  Weaver,  3  Edw.  Ch. 
385,  it  is  held  that  the  court  will  not 
interfere  by  appointing  a  receiver 
of  a  subsisting  partnership  unless  it 
satisfactorily  appears  that  the  plaintiff 
will  be  entitled  to  have  the  partner- 
ship dissolved  and  wound  up,  but  a 
receiver  will  not  necessarily  be  ap- 
pointed because  an  injunction  is 
granted.  See  also  Jackson  v.  De 
Forest,  14  How.  Pr.  81. 


In  Williamson  v.  Wilson,  1  Bland, 
Ch.  418,  there  were  mutual  charges 
made  by  the  partners  against  each 
other  any  one  of  which  it  was  held 
being  sufficient  to  warrant  a  dissolu- 
tion of  the  partnership  a  receiver  was 
appointed,  insolvency  being  admitted 
on  both  sides. 

In  Harding  v.  Olover,  18  Ves.  Jr. 
281,  it  is  held  that  a  receiver  would 
not  be  appointed  merely  upon  the 
ground  of  a  dissolution  of  the  part- 
nership, but  that  there  must  be  a 
breach  of  duty  by  one  partner  or  a 
breach  of  the  contract. 

'  In  Bufkin  v.  Boyce,  104  Ind.  53,  it 
was  held  that  where  the  partnership 
expired  by  limitation  and  neither 
partner  was  desirous  of  continuing  the 
business  a  receiver  would  not  be  ap- 
pointed in  the  absence  of  a  showing  of 
mismanagement  or  improper  conduct. 

In  Benton  v.  Chaplain,  9  N.  J.  Eq. 
62,  one  partner's  interest  was  sold 
under  an  execution  and  it  was  held 
that  this  operated  as  a  dissolution  of 
the  firm  if  there  was  any  fraud  be- 
tween the  purchaser  and  the  insolvent 
partner.  If  the  sale  is  bona  fide  the 
purchaser  in  such  case  stands  in  no 
better  condition  than  the  insolvent  de- 
fendant to  whose  rights  he  has  suc- 
ceeded, and  the  court  will  not  inter- 
fere with  the  remaining  partner  in 
winding  up  the  business  unless  gross 
misconduct  calls  for  it.  Cf.  Birdsall 
V.  Colie,  10  N.  J.  Eq.  63. 

In  Cox  V.  Peters,  13  N.  J.  Eq.  39,  it 
was  held  that  where  the  partnership 
was  dissolved  by  mutual  consent  or 
determined  by  the  will  of  either  party 


334 


RECEIVERSHIPS. 


the  court  would  not  appoint  a  receiver 
as  a  matter  of  course,  but  this  would 
only  be  done  where  it  was  necessary 
to  protect  the  interests  of  the  parties. 
And  where  one  partner  advances  all 
the  capital  and  the  other  partner  is 
only  interested  in  the  profits,  in  the 
absence  of  insolvency  or  irresponsi- 
bility or  proof  of  fraud  a  receiver  will 
not  be  appointed. 

Randall  v.  Morrell,  17  N.  J.  Eq.  343, 
was  a  case  where  the  defendant  was 
insolvent  and  a  receiver  was  appointed. 
In  Page  v.  Van  Kirk,  1  Brewst.  282. 
the  court  say:  "Although  the  part- 
nership agreement  provides  for  a  no- 
tice of  six  months  of  the  intention  of 
dissolving    the    partnership    and    a 
clause  in  the  agreement  provides  for 
arbitration,  yet  a  court  of  equity  in  a 
proper  case  will  appoint  a  receiver, 
such  as  excluding  one  partner  from 
his  share  in  the  management  of  the 
concern,  and    refusing   information; 
also  using  the  partnership  money  for 
private  purposes,  impracticability  of 
carrying  on  the  business.     In  this  case 
the  court  ably  reviews  all  of  the  au- 
thorities authorizing  a  dissolution  of 
the  partnership  before  the  time  limited 
therefor  by  the  partnership  agreement, 
and  states  the  following  items  of  mis- 
management for  which  the  court  will 
decree  a  dissolution:  (1)  where  one  of 
the  partners  permits  a  friend,  without 
the  consent  of  the  other  partner,  to 
draw  upon  the  concern  for  a  large 
amount.     Citing  Master  v.  Kirton,  3 
Ves.  Jr.  75.     (2)  Where  the  conduct 
of  the  parties  makes  it  impossible  to 
carry  on  the  business  upon  the  terms 
stipulated,  citing  Walters  v.  Taylor,  2 
Ves.  &  B.  804.     (3)  Where  one  partner 
refuses  another  permission  to  inspect 
the  books,  sells  goods  for  an  inade- 
quate price,  and  appropriates  partner- 
ship funds  to  his  own  use,  etc."  Citing 


Goodman  v.  Whifcomb,  1  Jac.  &  W. 
589;  Chapman  v.  Beach,  1  Jac.  &  W. 
594.  It  is  also  held  that  in  case  of  oc- 
casional breaches,  but  not  of  such 
grevious  nature  as  to  make  it  impos- 
sible that  the  partnership  could  con- 
tinue, the  court  will  stand  neutral. 
Loscombe  v.  Russell,  4  Sim.  11. 

In  Smith  v.   Mules,   9  Hare,  556,  it 
was  held  that  a  refusal  by  one  partner 
to  enter  proper  receipts  is  ground  for 
a  receiver.     As  to  the  refusal  of  the 
court  to    dissolve   a    partnership  on 
slight  ground,  see  Anderson  v.  Ander- 
son, 25  Beav.  190;  Slemmer's  Appeal, 
58  Pa.  168.     In  the  latter  case  it  was 
held  that  where  the  partnership  can- 
not be  longer  continued  with  comfort 
and  advantage  to  all  concerned  a  dis- 
solution will  be  granted,  but  in  doing 
so  the  court  will  consider  the  agree- 
ment and  the  duties  and  obligations 
of  the  parties  expressed  and  implied. 
In  L'win  v.    Everson,  95  Ala.  64, 
which  was  a  suit  for  settlement  be- 
tween partners,  a  receiver  was  denied 
on  the  ground  that  the  defendant  in 
possession  denied  the  partnership  and 
was  solvent  and  able  to  respond  for 
all  damages,   upon  the  authority  of 
Peacock  v.   Peacock,    16  Ves.   Jr.  49; 
Fairburn  -7. Pearson,  2  Macn.  &  G.  144; 
Goulding  v.  Bain,  4  Sandf.  716;  Ho- 
bartv.  Ballard,  31  Iowa,  521:  William- 
son V.  Monroe,  3  Cal.  383;  Popper  v. 
Schreider,  7  Abb.  Pr.  N.  S.  56. 

In  Smith  v.  Lowe,  1  Edw.  Ch.  33,  a 
receiver  was  refused  on  the  ground  that 
the  plaintiff  was  in  possession  of  the 
partnership  property. 

In  Loomis  v.  McKenzie,  31  Iowa, 
425,  it  was  held  that  ill-feeling  or  dif- 
ferences between  the  partners  which 
are  not  shown  to  have  resulted  from 
the  fault  of  the  defendant  will  not 
justify  the  appointment.  Cf.  Mo 
Crackan  v.  Ware,  3  Sandf.  688. 


RECEIVERSHIP  IN  PARTNERSHIP  MATTERS.  33a 

§  207.     On  raiscellaueous  grounds. 

Where  a  partner  absconds/  or  appropriates  the  partnership 
property  or  funds  to  his  private  use/  or  where  partnersliip  money 
is  improperly  withdrawn  and  invested  on  private  account,  or 
where  the  partnership  books  are  taken  into  a  foreign  jurisdiction 
in  violation  of  an  injunction/  or  where  one  partner  is  acting  in 
collusion  with  creditors/  or  when  the  conduct  of  one  partner  is 
such,  or  the  condition  of  the  business  is  such,  as  a  result  of  mis- 
management, that  serious  loss  is  apparent  a  receiver  will  be  ap- 
pointed. 

§  208.    Appointment  refused  when. 

A  receiver  will  not  be  appointed  in  relation  to  rights  arising 
from  joint  transactions  where  such  transactions  have  been  coii.-,uui- 
mated,  in  the  absence  of  proof  of  insolvency  or  danger  of  loss,^ 
nor  where  the  ground  alleged  is  the  mere  refusal  of  one  partner 
to  assist  in  the  management  of  the  business,"  nor  where  the  part- 
nership is  denied,  insolvency  not  appearing,'  nor  on  the  aj^plica- 
tion  of  a  cestui  q%ie  trvst  having  but  a  small  interest,  where  the 
appointment  would  affect  large  interests  of  contractors  and  otlier 
third  persons/  nor  where  the  partner  in  possession  will  give  se- 

^S7ieppard  v.  Oxenford,  1  Kay  &  ^.  operations    had    been    consummated 

491.  except  the  collection  of  the  debts  and 

^In  Prentiss  v.  Brennan,  1    Grants  there  remains  simply  a  dispute  as  to 

Ch.  (Ont.)  App.  484,  it  appeared  that  the  proper  apponionment  of  the  fund 

a  partner  had  purchased  a  house  with  arising   from   the   business,   no  aver- 

partnership  funds,  had  withdrawn  all  ment  being  made  as  to  insolvency  or 

partnership  books  from  the  iurisdic-  danger  of  loss,  a  receiver  should  not 

lion  of  the  court  a  receiver  was  ap-  be  appointed. 

pointed.  «In  lioherts  v.  Eberliardt,  Kay,  148, 

^Prentiss  v.  Brennan,  supra.  it  was  held  that  merely  because  the 

*In  Estwick  v.    Coningaby,  1  Vern.  partners    did    not   co  operate   in   the 

118,  a  surviving  partner  was  carrying  business  was  no  ground  for  a  receiver, 

on  business  with  debtors  of  the  late  In  Rowe  v.  Wood,  2  Jac.  &  "\Y.  558, 

firm  and  forbearing  the  collection  of  a  mortgagee  became  a  partner  or  joint 

debts  against  them;  a  receiver   was  owner   and  was  in  possession  of  the 

appointed.    See  also  Speights  v.  Peters,  properly;  a  receiver  was  refused. 

9  Gill,  472.  1 1n   Irwin  v.  Ever.^on,  95   Ala.   64, 

^In  Mcintosh  v.  Perkins,  13  Mont.  where  the  dcieniiatit  denied  the  part- 

143,  it  is  said  that  where  it  appears  nership,  a  receiver  was  refused, 

from  the  complaint  that  all  the  joint  ^Devlin  v.  llope,  16  Abb.  Pr.  314. 


336 


RECEIVERSHIPS. 


cnrity  ;'  nor  will  the  court  appoint  as  against  a  non-resident  pur- 
chaser of  an  interest  in  the  firm." 

§  209.    Receiyer's  power  and  duty. 

The  receiver's  general  powers  and  duties  have  elsewhere  been 
fully  considered,  and  they  are  not  in  partnership  matters  materi- 
allv  different  from  those  applicable  to  other  classes  of  receiver- 
ships. But  we  repeat  in  this  connection  a  few  of  the  general 
principles  relating  to  the  power  and  duty  of  receivers  which  have 
received  the  sanction  of  the  courts  in  litigation  growing  out  of 
partnership  relations. 

(a)  A  receiver  pendente  lite  must  look  to  the  order  of  appoint- 
ment for  the  general  scope  of  his  power.' 

(b)  The  legal  title  to  the  partnership  property  does  not  vest  in 
him.* 


'  In  Buchanan  v.  Comstock,  57  Barb. 
568,  a  receiver  was  refused  before  it 
was  determined  bow  mucb  of  the 
partnership  effects  belonged  to  each 
partner,  where  no  insolvency  was  al- 
leged and  the  defendant  denied  the 
entire  equity  of  the  complaint  but  of- 
fered to  convey  one  half  of  the  stock 
to  the  plaintiff  to  indemnify  him. 

In  Saverios  v.  Levy,  1  N.  Y.  S. 
R.  758,  the  defendant  offered  to  exe- 
cute a  bond  in  such  sum  and  with 
such  sureties  as  the  court  might  re- 
quire, conditioned  to  obey  all  orders 
of  court;  a  receiver  was  refused.  In 
Popper  V.  Schreider,  "7  Abb.  Pr.  N.  S. 
56,  the  partnership  was  denied  and 
but  a  small  portion  of  the  capital  was 
controlled  by  the  plaintiff  and  the  de- 
fendants were  willing  to  give  security, 
a  receiver  was  refused,  McDonald  v. 
Trojan,  56  Hun,  648  (mem.) 

'^Uarvey  v.  Varney,  104  Mass.  436. 
This  rule  was  applied  in  case  of  a  non- 
resident partner,  where  it  appeared 
he  was  acting  in  good  faith.  Evans 
V.  Evans,  9  Paige,  178;  but  see  cc^w^ra 
Sheppard  v.  Oxenford,  1  Kay  &  J.  491. 
*In  Finclce  v.  Punke,  25  Hun,  616, 


where  an  action  was  commenced  by 
an  administrator  against  the  two  re- 
maining partners,  after  a  receiver 
was  appointed.  The  court  held  that 
the  receiver  had  no  specific  authority 
conferred  upon  him  to  bring  actions 
and  that  the  title  of  the  property  did 
not  vest  in  him;  that  the  receiver  in  a 
partnership  case  is  vested  only  with 
such  power  as  is  conferred  upon  him 
by  the  order;  that  he  is  merely  a  com- 
mon law  receiver  whose  duty  is  only 
to  protect  the  property,  the  title 
therein  remaining  in  the  partnership. 
*In  Tillinghast  v.  Champlin,  4  R.  I. 
173,  it  was  held  that  the  receiver  in  a 
partnership  case  is  vested  with  the 
whole  equitable  title  to  the  partner- 
ship property.  For  a  full  discussion 
of  the  powers  and  rights  of  receivers, 
see  Idding  v.  Bruen,  4  Sandf.  Ch.  417; 
Hutchinson  v.  Massareene,  2  Ball  &  B. 
55;  Davis  v.  Duke  of  Marlborough,  2 
Swanst.  118;  Green  v.  Bostwick,  1 
Sandf.  Ch.  186;  Mann  v.  Pentz,  2 
Sandf.  Ch.  271;  Waring  v.  Robinson, 
1  Hoffm.  Ch.  532. 

In  Wallace  v.  Teager,  4  Phila.  251, 
it  was  held  that  the  receiver  succeeds 


RECEIVERSHIP  IN  PARTNERSHIP  MATTERS. 


337 


(c)  He  cannot  loan  the  receivership  funds  to  himself  or  to  the 
firm  of  which  he  is  a  member.^ 

(d)  He  is  the  representative  of  the  interests  of  all  parties  con- 
cerned, and  the  special  representative  of  none."' 

(e)  He  must  use  ordinary  and  reasonable  diligence  in  the  exe. 
cution  of  his  trust/ 

(f)  He  may  maintain  an  action  in  another  state  to  set  aside  an 
.assignment  made  by  one  partner  to  a  creditor  in  fraud  of  another 
creditor  where  there  are  no  local  creditors  having  rights  affected 
thereby,"  and  generally  may  sue  in  his  own  name  to  collect  all 
debts.' 

(g)  He  has  no  greater  power  concerning  the  winding  up  of  the 
partnership  business  than  the  partners  possessed.' 


not  only  to  the  legal  title  of  the  part- 
ners as  joint  tenants,  but  also  to  the 
equitable  rights  and  remedies  of  the 
firm.  Pearce  v.  Gamble,  73  Ala.  341 ; 
Smith  V.  Danvers,  5  Sandf.  669.  Cf. 
Cox  V.  Volkert,  86  Mo.  505. 

In  Ogdeii  v.  Arnot,  29  Hun,  146,  it 
was  held  that  where  one  member  of  a 
firm  becomes  insolvent  and  makes  a 
general  assignment  for  the  benefit  of 
his  creditors,  the  partnership  is 
thereby  dissolved  and  the  solvent  part- 
ner has  a  right  to  close  up  the  busi- 
ness. In  this  case  in  an  action  brought 
by  the  solvent  partner  to  wind  up  the 
business,  the  right  of  a  receiver  to 
sue  is  discussed. 

In  Keeney  v.  Home  Ins.  Co.,  71  N. 
Y.  396,  an  action  was  brought  to  dis- 
solve the  partnership  and  it  was  held 
that  the  receiver  took  no  title  to  the 
property;  the  court  .say:  "A  receiver 
pendente  Hie  is  a  person  appointed  to 
take  charge  of  the  fund  or  property 
to  which  the  receivership  extends 
while  the  case  remains  undecided. 
The  title  of  the  property  is  not 
changed  by  the  appointment.  The 
receiver  acquires  no  title  and  only  the 

22 


right  of  possession  as  an  officer  of  the 
court.  The  title  remains  in  those  in 
whom  it  was  vested  when  the  appoint- 
ment was  made.  The  object  of  the 
appointment  is  to  secure  the  property 
pending  the  litigation  so  that  it  may 
be  appropriated  in  accordance  with 
the  rights  of  the  parties  as  may  be  de- 
termined by  the  judgment  in  the 
action."  Citing  Skip  v.  Harwood,  3 
Alk.  564;  Gresley  v.  Adderly,  1 
Swanst.  573;  Thomas  v.  Brigstocke,  4 
Russ.  65;  Bertrand  v.Davies,  31  Beav. 
436;  Green  v.  Bostwick,  1  Sandf.  Ch. 
165;  Singerly  v.  Fox,  75  Pa.  112; 
Eirkpatrick  v.  Corning,  38  N.  J.  Eq. 
234. 

^Ryan  v.  Morrill,  83  Ky.  352. 

^Tilliughast  v.  Champlin,  4  R.  I. 
173  (189). 

^Johnston  v.  Keener,  23  111.  App. 
220. 

*Sobernheimer  v.  Wheeler,  45  N.  J. 
Eq.  614;  Sloan  v.  Moore,  37  Pa.  217, 

^IJenning  v.  Raymond,  35  Minn.  303. 

^Niemann  v.  Niemann,  L.  R.  43 
Ch.  Div.  198;  Wiekersham's  Case,  L. 
R.  8  Ch.  831,  28  L.  T.  653. 


338 


RECEIVERSHIPS. 


§  210.    Effect  of  appointment. 

The  etl'ect  of  the  appointment  of  a  receiver  as  to  creditors 
havint^  liens  is  the  same  as  in  other  cases,  all  liens  remaining  un- 
affected by  the  appointment,  and  no  levies  of  execution  or  attach- 
ment being  permitted  thereafter  to  interfere  with  the  possession 
of  the  court  through  the  receiver,  and  no  rights  being  determined 
thereby.' 

'  In  Davenport  v.  Eelly,  42  N.  Y. 
193,  it  is  said  that  a  jiulgnient  cred- 
itor acquires  no  preference  by  the 
commencement  of  an  action  in  the 
nature  of  a  creditor's  bill  until  the 
appointment  of  a  receiver  therein  over 
a  junior  judgment,  as  to  personal 
property  which  is  the  subject  of  a 
levy  and  sale  on  execution.  Citing 
Storm  v.  Waddell,  2  Sandf.  Ch.  494, 
516;  Van  Alslym  v.  Cook,  supra.  It 
is  very  clear  that  as  to  personal  prop- 
erty which  is  the  subject  of  levy  and 
sale  on  execution  a  creditor  by  an 
equity  suit  acquires  no  preference  as 
against  a  judgment  creditor  of  the 
debtor  until  the  entry  of  an  order  ap- 
pointing a  receiver  in  such  equity 
Buit.  The  vigilant  creditor,  who  by  his 
execution  seizes  and  sells  the  property 
of  his  debtor  before  the  appointment 
of  a  receiver  in  an  equity  action,  se- 
cures a  preference  which  the  law 
sanctions  and  protects. 

In  Knode  v.  Baldridge,  73  Ind.  54,  a 
member  of  the  partnership  died  and  a 
receiver  was  appointed  to  take  posses- 
sion of  the  partnership  property,  but 
it  was  held  that  no  creditor  had  a 
right  to  have  such  property  seized  and 
sold  on  execution  for  his  own  benefit. 

In  Waring  v.  Rohinson,  Hollm.  Ch. 
534,  it  was  held  that  when  a  partner- 
ship was  dissolved  and  a  receiver  ap- 
pointed, notice  of  which  was  pub- 
lished in  a  paper  circulating  in  the 
town  where  the  defendant  lived,  the 
payment  of  a  debt  to  one  of  the  part- 
ners would  be  void  if  he  had  notice  of 


the  appointment  broiight  home  to  the 
debtor;  and  that  the  filing  of  a  bill 
was  not  a  dissolution,  but  the  receiver 
was  appointed  in  anticipation  that  a 
dissolution  must  take  place.  After 
the  appointment  of  a  receiver  one 
partner  cannot  give  preference  to 
creditors. 

In  Adams  v.  Hackett,  7  Cal.  187, 
where  one  partner  filed  a  bill  for  dis- 
solution of  the  partnership  and  the 
appointment  of  a  receiver  it  was  held 
that  until  the  dissolution  had  been 
judicially  declared  and  a  receiver  or- 
dered to  make  distribution,  creditors- 
are  not  prevented  from  asserting  ad- 
verse proceedings  and  gaining  a  pref- 
erence. Cf.  Adams  v.  Woods,  8  Cal. 
152,  9  Cal.  24;  Naglee  v.  Minium,  8- 
Cal.  540. 

In  Hanneh  v.  Chase,  1  Bland,  Ch. 
213,  it  was  held  that  the  appointment 
does  not  involve  the  determination  of 
any  right,  or  affect  the  title  of  either 
party  in  any  manner  whatever. 
"From  this  case  it  seems  to  be  settled, "^ 
the  court  say,  "  that  until  a  dissolu- 
tion has  been  judicially  declared  and 
a  receiver  ordered  to  make  a  pro  rata 
distribution  of  the  partnership  assets 
among  the  creditors  they  are  not  pre- 
vented from  resorting  to  adverse  pro- 
ceedings and  that  when  a  creditor 
does  resort  to  such  proceedings  he 
may  thereby  gain  a  preference  over 
other  creditors  who  are  less  diligent." 
The  reason  of -the  above  rule  is  based 
upon  the  fact  that  the  proceeding  is 
between    partners    and  the  plaintiff 


RECEIVERSHIP  IN  PARTNERSHIP  MATTERS. 


339 


§  211.     Receiyer  as  manager, 

A  court  of  equity  is  averse  to  appointing  a  receiver  to  continue 
a  partnership  business  indefinitely,  and  generally  will  refrain 
from  so  doing.  But  there  are  cases  where  the  court  in  the  exer- 
cise of  a  sound  discretion  is  justifiable  in  authorizing  the  receiver 
to  continue  the  business  in  order  that  it  may  be  sold  as  a  goino- 
concern.  It  not  unfrequently  happens  that  a  valuable  partner- 
ship business  consists  largely  of  the  goodwill  of  the  concern,  in 
which  case  the  cessation  of  business  works  an  immediate  and  per- 
manent loss  and  destroys  the  almost  only  element  of  value  in  the 
business,  and  thus  not  only  the  interest  of  the  members  of  the 
firm  is  sacrificed  but  often  the  interest  of  creditors  as  well. 
Under  such  circumstances  the  court  is  not  only  justified  but  it  is 
highly  commendable  to  continue  the  business  a  i*easonable  time 
having,  of  course,  in  mind  the  sale  of  the  partnership  effects  and 


may  at  any  time  dismiss  his  bill.  But 
Bee  Waring  v.  Robinson,  supra. 

In  Blakeney  v.  Dufaur,  15  Beav.  40, 
the  Master  of  Rolls  says:  "The 
province  of  this  court  upon  a  motion 
for  a  receiver  is  quite  clear;  its  duty 
is  merely  to  protect  the  property  and 
not  to  decide  the  ultimate  rights  be- 
tween the  parties." 

In  Gregory  v.  Gregory,  1  Sweeny, 
613,  the  court  refused  to  appoint  a  re- 
ceiver over  specific  property  without 
satisfactory  proof  that  such  specific 
property  is  in  fact  partnership  prop- 
erty. 

In  Higgins  v.  Bailey,  7  Robt.  613,  it 
was  held  improper  for  the  court  to 
appoint  a  receiver  upon  motion  and 
undertake  to  determine  what  is  part- 
nership property  as  between  the  part- 
ners and  third  persons. 

In  Morey  v.  Grant,  48  Mich.  326, 
it  is  said  that  in  an  interlocutory  order 
there  should  be  embraced  a  finding  of 
such  facts  as  would  give  authority  for 
divesting  the  possession  of  the  defend- 
ant, and  when  made,  after  the  evi- 
dence is  in,  the  necessity  that  the 
court  should  find  that  the  necessary 
facts  were  made  out  is  still  more  ob- 


vious. To  appoint  a  receiver  at  that 
stage  of  the  case  without  first  adjudg- 
ing the  merits  upon  which  the  right  or 
the  propriety  of  the  appointment 
necessarily  depend  was  very  plainly 
erroneous  and  must,  we  think,  have 
been  inadvertent. 

A  receiver  of  a  partnership  ap- 
pointed in  an  action  by  one  partner 
against  the  other  cannot  be  garnished 
in  an  action  by  a  creditor  of  the  firm 
without  leave  of  the  court  appointing 
him.  Blum  v.  Van  Vechten,  92  Wis. 
378. 

After  a  receiver  is  appointed  the 
property  is  in  the  control  of  the  court 
and  cannot  be  levied  on  by  attach- 
ment or  other  judicial  process.  Jack- 
son v.  Laliee,  114  ill.  287;  McGoican 
V.  Myers,  66  Iowa,  99. 

If,  however,  the  partnership  has 
been  wound  up  and  there  is  a  balance 
in  the  hands  of  a  receiver  which  be- 
longs to  one  partner  it  is  subject  to  the 
rights  of  creditors,  Willard  v.  De- 
catur, o9  N.  H.  137. 

A  purchaser  of  one  partner's  inter- 
ests after  the  appointment  is  subject 
to  the  rights  of  the  receiver.  Noonan 
V.  McNab,  30  Wis.  277. 


340 


RECEIVERSHIPS. 


<j-oodwilI  at  the  earliest  practicable  moment.  The  court,  however, 
under  no  circumstances  will  be  made  a  medium  through  its  receiver, 
of  tiding  the  firm  over  temporary  or  threatened  insolvenc3^' 

The  appointment  of  a  receiver  in  matters  of  this  character  has 
reference  to  the  final  winding-up  and  dissolution  of  the  partner- 
ship and  not  a  continuation  of  the  business  as  a  going  concern. 


'  In  Merrell  v.  Pemberton,  62  Ga.  29, 
the  defendant  had  no  place  of  busi- 
ness, and  if  the  plaintiff  had  any  it 
was  beyond  the  limits  of  the  state. 
The  court  refused  to  appoint  a  re- 
ceiver for  the  purpose  of  opening  up 
a  house  for  the  manufacture  and  sale 
of  medicines,  on  the  ground  that  it  is 
only  where  a  place  of  business  is  es- 
tablished that  the  court  will  appoint  a 
manager. 

In  Hall  V.  Hall,  3  Macn.  &  G.  79, 
the  purpose  of  the  suit  was  to  con- 
tinue the  business  through  a  receiver. 
It  was  held  tfhat  the  object  being  to 
continue  the  partnership  it  was  not 
according  to  the  practice  of  the 
court  to  appoint  a  receiver.  See 
also  Wilson  v.  Oreenwood,  1  Swanst. 
471;  Goodman  v.  Whitccmb,  1  .Jac.  & 
W.  589;  Walworth  v.  EoU,  4  Myl.  & 
C.  619;  Const  v.  Hariis,  Turn.  &  R. 
496.  "The  conclusion,"  the  court 
says,  "I  come  to  is  that  by  the  rule 
and  practice  of  this  court,  a  receiver 
or  manager  is  only  granted  where  it 
is  ancillary  to  the  object  of  dissolu- 
tion. 

In  Roberts  v.  Eberhardt,  Kay,  148, 
it  is  said  that  where  the  purpose  is 
the  appointing  of  a  receiver  to  con- 
tinue the  business  the  court  does  not 
readily  grant  the  order. 

In  Jackson  v.  De  Forest,  14  How. 
Pr.  81,  it  was  held  that  the  court 
would  not  take  upon  itself  the  re- 
sponsibility of  carrying  on  the  part- 
nership business.  In  some  cases 
where  it  may  be  necessaiy  to  secure 
the  goodwill  of  the  partnership  busi- 
ness to   the   purchaser  and   the  full 


value  of  the  partnership  property  to 
the  partners  on  the  sale  a  receiver  is 
allowed  to  carry  on  the  business  until 
he  can  make  a  favorable  sale  of  the 
property.  Cf.  Dayton  v.  Wilkes,  17 
How.  Pr.  510,  where  sufficient  time 
was  allowed  to  dispose  of  the  prop- 
erty advantageously.  Marten  v.  Van 
Schaick,  4  Paige,  479,  is  to  the  same 
effect. 

In  Allen  v.  Rawley,  6  Fla.  142  (164), 
it  is  said  that  it  could  never  have 
been  contemplated  that  a  court  of 
chancery  should  become  the  superin- 
tendent of  the  private  affairs  of  in- 
dividuals. Its  legitimate  purpose  is 
to  adjust  the  rights  and  settle  the  dis- 
agreements of  the  parties  growing  out 
of  such  transactions.  See  also  Wol- 
bert  V.  Harris,  7  N.  J.  Eq.  605. 

In  Heatlierton  v.  Hastings,  5  Hun, 
459,  the  court  say:  "Although  or- 
dinarily a  court  of  equity  will  not  un- 
dertake to  carry  on  the  business  of  con- 
tending parties  by  means  of  a  re- 
ceiver, yet  cases  sometimes  arise 
where  the  refusal  to  do  that  for  a 
limited  period  would  result  in  great 
loss  to  the  persons  interested.  That 
such  cases  are  exceptional  and  justify, 
as  well  as  require,  the  exercise  of 
authority  which,  under  other  circum- 
stances, would  be  plainly  improper." 
Citing,  among  other  cases,  Crane  v. 
Ford,  Hopk.  Ch,  114,  and  Jackson  v, 
De  Forest,  14  How.  Pr.  81.  See  also 
McMiihon  V.  McClernan,  10  W.  Va. 
419;  Taylor  v.  Neate,  L.  R.  39  Ch, 
Div.  538;  Marten  v.  Van  Scliaick,  4 
Paige,  479;  Williams  v.  Wilson,  4 
Sandf.  Ch.  379. 


CHAPTEK  XII. 


RECEIVERSHIP  OF  CORPORATIONS. 


§  220,  Jurisdiction. 

§  221.  Statutory  power. 

§  222.  Exercise  of  power  discretion- 
ary. 

§  223.  Power  to  appoint,  limitation 
of. 

§  224.  Application  ;  by  wliom  made. 

(a)  Stockholders. 

(b)  Sureties  for  corporation. 

(c)  Minority  stockholders. 

(d)  Defendant. 

(e)  Directors. 

(f)  Judgment  creditors. 

(g)  But  not  by  corporation. 
§  225.  Grounds  for  appointment. 

(a)  Statutory  grounds. 

(b)  Default  in  mortgage  indebt- 

edness, 

(c)  Mismanagement. 

(d)  Insolvency  and  officers  ceas- 

ing to  act. 

(e)  When  corporation  dissolved. 

(f)  When  charter  repealed. 

(g)  When  declared  bankrupt, 
(h)  Neglect  of  majority  to  elect 

officers. 

(i)  When  necessary  to  resort  to 
unpaid  subscription-s. 

(j)  Where  charter  rights  are  vio- 
lated. 

(k)  Judgment  creditors. 
§  226.  When  not  appointed. 

(a)  Unless  proceeding  is  to  dis- 

solve corporation. 

(b)  Mere  disagreement  not  suffi- 

cient. 

(c)  Where  no  effort  to  secure  re- 

dress through  company. 

(d)  Law  affords  adequate  rem- 

edy. 

(e)  Repairs,  are  required  by  law. 


(f)  Defendant   foreign  corpora- 

tion without  property. 

(g)  Title   to  premises  in   litiga- 

tion. 

(h)  In  foreclosures,  right  to  fore- 
close not  clear. 

(i)  No  showing  of  danger  or  loss. 

(j)  After  payment  of  mortgage, 
no  excess. 

(k)  Relative  indebtedness  small. 

(1)  Applicant  a  secured  creditor. 

(m)  Possession  rightfully  in 
mortgagee. 

227.  Fraud  as  ground  for  appoint- 

ment. 

228.  Insolvency  as  ground  for  ap- 

pointment. 

229.  In  foreclosure  proceedings. 

230.  Effects  of  appointment. 

(a)  Liens  remain  unimpaired. 

(b)  Possession  of  property  pro- 

tected. 

(c)  As  against  interference  from 

other  courts. 

(d)  As  to  unfriendly  litigation. 

(e)  Effect  as  to  unexpired  leases. 

(f)  Effect    as    to    predecessor's 

contracts. 

(g)  As  to  corporate  powers, 
(h)  As  to  owner's  control. 

(i)  Abatement  of  pending  ac- 
tions. 

231.  The  receiver's  relationship. 

(a)  Agent  of  the  court. 

(b)  Trustee  of  creditors. 

(c)  Representative    of    corpora- 

tion as  to  title. 

232.  The  receiver  as  manager. 

233.  Receiver's  powers  and  duties. 

(a)  Power  to  borrow  money. 

(b)  To  purchase  rolling  stock. 


341 


3i2 


RECEIVERSHIPS. 


(c)  To  make  necrlful  repairs. 

(d)  To  compromise. 

(e)  To  sue. 

(f)  To  redeem. 

(g)  To  pay  taxe3. 
(h)  To  lease. 

(i)  To  mortgage, 
(j)  To  invest, 
(k)  To  contract. 
(1)  To  sell. 

(m)  To  make  assessments, 
(n)  Duty  to  appeal. 
§  234.  Liability  of  receiver. 

(a)  On  his  contracts. 

(b)  For  rent. 

(c)  For  interest. 

(d)  For  debts  incurred. 

(e)  Personal  liability  for  torts. 

(f)  Otficial  liability  for  torts  and 

damages. 

(g)  Extent  of  liability, 

(h)  Liability  for  loss  in  manage- 
ment, 
(i)  Liability  on  order  of  court. 
§  235.  Suits  by  receiver  of  a  corpora- 
tion. 

(a)  Generally. 

(b)  When  he  may  sue  in  his  own 

name. 
(1)  Where  assets  have  been  as- 
signed. 
{£)  Where  decree  so  empowers. 
(3)  Where  statute  authorizes  it. 


§  236.  To  recover  stock  subscriptions. 

(a)  As  a  general  rule  he  may  re- 

cover. 

(b)  When  so  empowered  corpo- 

ration excluded. 

(c)  Extent  of  power  in  collusive 

transactions. 

(d)  Extent  of  liability  governed 

by  indebtedness. 

(e)  Court  must  first  determine 

corporate  indebtedness. 

(f)  In  what  action  to  be  recov- 

ered. 

§  237.  To  avoid  fraudulent  transfers. 

§  238.  To  recover  illegal  dividends. 

§  239.  Leave  of  court  to  sue  re- 
quired. 

§  240.  Suits  by  foreign  receiver  of 
corporation. 

(a)  By,  for  foreign  corporation 

dissolved. 

(b)  By,  as    against    creditor  of 

same  state. 

(c)  By,    where  recovery  not  in 

conflict  with  law  of  forum. 

(d)  By,  as  to  property  reduced 

to  possession. 

(e)  By,  to  recover  assessment  on 

premium  note. 

(f)  Necessary  allegations. 

§  241.  Collateral  attack  of  receiver. 
§  242.  Receiver's  possession. 


§  220.     Jurisdiction. 

Courts  of  equity,  in  the  exercise  of  their  ordinary  chancery  ju- 
risdiction, have  not  the  power  to  appoint  a  receiver  over  a  corpo- 
ration, and  thus  phice  tiie  management  of  its  business  and  affairs  in 
the  liands  of  an  officer  of  court.  Such  courts,  not  having  inherent 
power  to  wind  up  a  corporation,  cannot  indirectly,  through  the  ap- 
pointment of  a  receiver,  accomplish  what  cannot  be  done  directly. 
There  must  be  found  statutory  power  and  authority  vested  in  courts 
of  ecpiit}',  or  courts  exercising  equitable  jurisdiction,  enabling  them 
through  a  receivership  to  wind  up  incorporated  companies,  and 


RECEIVERSHIP  OF  CORPORATIONS. 


343 


distribute  their  assets  to  creditors  and  shareholders,  or  otlier  per- 
sons entitled  thereto,'     As  to  the  question  of  conflict  of  jurisdic- 


'A  court  of  equity  has  no  power  to 
interpose  its  authority  for  the  purpose 
of  adjusting  controversies  that  have 
arisen  among  the  shareholders  or  di- 
rectors of  a  corporation  relative  to 
the  proper  mode  of  conducting  the 
corporate  business,  as  it  may  do  in 
cases  arising  between  members  of  an 
ordinary  partnership.  It  is  for  the 
reason  that  corporations  have  a  legis- 
lative power  where  the  directors  or 
shareholders  are  duly  convened  that 
is  fully  adequate  to  settle  all  questions 
affecting  their  business  interests  or 
policy,  and  they  should  be  left  to  dis- 
pose of  all  questions  of  that  nature 
without  applying  to  courts  for  relief. 
A  stockholder  cannot  invoke  the 
power  of  this  court  to  control  its  offi- 
cers or  board  of  managers,  or  to  wrest 
the  corporate  property  from  iheir 
charge  through  the  agency  of  a  re- 
ceiver so  long  as  they  neither  do,  nor 
threaten  to  do,  any  fraudulent  or  ultra 
mres  acts,  and  so  long  as  they  keep 
within  the  limits  of  the  by-laws  which 
have  been  prescribed  for  their  govern- 
ance. Hawes  v.  Contra  Costa  Water 
Co.  ("Hawes  v.  Oakland")  104  U.  S. 
450,  26  L.  ed.  828;  Ogleshy  v.  Attrill, 
105  U.  S.  605,  26  L.  ed.  1186;  French 
V.  Gifford,  30  Iowa,  148.  It  is  also 
true  and  well  established  that  a  court 
of  equity  has  no  power,  at  the  suit  of 
an  individual,  to  decree  a  dissolution 
of  a  domestic  corporation  and  a  wind- 
ing up  of  its  affairs  unless  such  ex- 
traordinary power  has  been  conferred 
upon  it  by  the  terms  of  some  statute, 
even  though  such  power,  has  been  in- 
voked by  the  state  through  its  attor- 
ney general.  Folger  v.  Cotumhian  Ins. 
Co.  99  Mass.  267;  Slee  v.  Bloom,  5 
Johns.  Ch.  366;  French  v.  Gifford,  30 
Iowa,  148;  Atty.  Gen.  v.  Chicago  &  N. 


W.  R.  Co.  35  Wis.  425;  Baher  v. 
Louisiana  Portable  R.  Co.  34  La.  Ann. 
754.  Much  less  can  they  exercise 
such  power  with  reference  to  a  foreign 
corporation.  For  the  courts  of  a  state 
have  no  visitorial  power  over  foreign 
corporations  doing  business  within  the 
state  unless  such  power  is  expressly 
conferred  by  local  statutes.  North 
State  Copper  &  G.  Min.  Co.  v.  Field, 
64  Md.  151;  Wilkins  v.  Thome,  60 
Md.  253.  Cf.  Republican  Mountain 
Silver  Mines  v.  Brown,  58  Fed.  Rep. 
644.  24  L.  R.  A.  776. 

In  Patten  v.  Accessory  Transit  Co. 
4  Abb.  Pr.  235.  13  How.  Pr.  502,  it  is 
held  that  the  appointment  of  a  re- 
ceiver of  chattel  property  in  the 
possession  of  a  mortgagee,  except 
where  it  is  necessary  to  secure  the 
rights  of  other  parties,  is  an  impair- 
ment of  the  obligation  of  contract  be- 
tween the  parties  and  is  therefore  be- 
yond the  constitutional  power  of  both 
court  and  legislature.  As  to  the  want 
of  power  of  courts  of  equity  inde- 
pendent of  statutory  authority  to  dis- 
solve corporations  and  wind  up  their 
business,  see  Adler  v.  Milwaukee 
Patent  Brick  Mfg.  Co.  13  Wis.  57; 
Hinckley  v.  Pfister,  83  Wis.  64;  Pond 
V.  Frarningham  <&  L.  R.  Co.  130  Mass. 
194;  Neall  v.  Hill,  16  Cal.  145;  La 
Sociele  Francaise  v.  15th  Judicial  Dist. 
Ct.  53  Cal.  495:  Walters  v.  Anglo-Am- 
erican Mortg.  &  T.  Co.  50  Fed.  Rep. 
316;  Blatchford  v.  Ross,  54  Barb.  42; 
Belmont  v.  Erie  R.  Co.  52  Barb.  637; 
Waterbury  v.  Merchants'  U.  E.ip.  Co. 
50  Barb.  157;  Howe  v.  Deuel,  43  Barb. 
504;  Bangs  v.  3Mntosh,  23  Barb.  591; 
Bakery.  Backus,  32  111.  79;  Mason  v. 
Equitable  League  Sup.  Ct.  11  Md.  483; 
Hamilton  v.  Accessory  Transit  Co.  3 
Abb.  Pr.  255;  Briarfield  Iron  Works  v. 


344 


RECEIVERSHIPS. 


tion  the  general  rule  is  that  the  court  which  first  makes  an  order 
for  the  appointment  of  a  receiver  will  be  entitled  to  administer 
the  estate.' 


Foster,  54  Ala.  622;  Converse  v.  BimoeJe, 
22  Fed.  Rep.  573;  Hand  v.  Dexter,  41 
Ga.  454. 

"The  basic  principle"  says  Mr. 
Spelling  (Priv.  Corp.  vol.  II.,  §  842), 
"of  the  rule  which  denies  a  court  of 
equity  the  authority  to  appoint  a  re- 
ceiver of  a  corporation  without  a  stat- 
ute conferring  it  under  circumstances 
which  would  warrant  the  appoint- 
ment of  one  in  the  case  of  an  indi- 
vidual is  that  such  courts  in  adminis- 
tering relief  may  not  proceed  contrary 
to  a  positive  rule  of  law.  Now  the 
responsibility  of  a  corporation  for 
abuse  of  its  franchise  is  on  the  state, 
and  a  judgment  of  forfeiture,  which 
is  one  form  of  dissolution,  cannot  be 
rendered  at  law  at  the  suit  of  an  indi- 
vidual; nor  can  the  same  be  done  in 
substance  in  equity  by  putting  an  end 
to  all  its  operations,  taking  all  its 
property  into  possession  and  its  mo- 
tive power  away,  and  making  distri- 
bution, leaving  nothing  but  an  empty 
name." 

As  to  the  want  of  power  to  appoint 
a  receiver  over  a  corporation  in  the 
absence  of  a  statute,  see  Fischer  v. 
San  Francisco  Sup.  Ct.  2  Am.  &  Eng. 
Corp.  Cas.  N.  S.  339. 

What  is  termed  jurisdiction  as  used 
in  this  connection  has  reference  to  the 
power  to  do  a  judicial  act.  Wilnier 
v.  Atlanta  dk  R.  Air  Line  R.  Co.  2 
Woods,  409 ;  East  Tennessee,  V.  cfc  G. 
R.  Co.  V.  Atlanta  &  F.  R.  Co.  49  Fed. 
Rep.  608,  15  L.  K.  A.  109;  Merchants' 
&  P.  Nat.  Bank  v.  Masonic  Hall,  63 
Ga.  549;  Leadville  Coal  Co.  v.  Me- 
Creery,  141  U.  S.  475,  35  L.  ed.  824. 

This  rule  is  founded  upon  the  prin- 
ciple that  the  appointment  of  a  re- 
ceiver is  in  the  nature  of  an  equitable 


execution.  Davis  v.  Gray,  83  U.  S. 
16  Wall.  203,  21  L.  ed.  447;  Beverley 
V.  Brooke,  4  Gralt.  187;  Hunt  v.  Wolfe, 
2  Daly,  303. 

As  to  the  want  of  inherent  power 
of  a  court  of  equity  to  dissolve  a  cor- 
poration and  appoint  a  receiver  of  its 
property,  see  Verplanck  v.  Mercantile 
Ins.  Co.  2  Paige,  452;  Bank  Comrs.  v. 
Batik  of  Buffalo,  6  Paige,  497;  Water- 
bury  V.  Merchants'  &  U.  Exp.  Co.  50 
Barb.  167;  Robertson  v.  Bullions,  11 
N.  Y.  252;  Howe  v.  Deuel,  43  Barb. 
504;  Belmont  v.  Erie  B.  Co.  52  Barb. 
665;  Slee  v.  Bloom.  5  Johns.  Ch.  379; 
Van  Pelt  v.  United  States  Metallic 
Spring  B.  &  8.  H.  Co.  13  Abb.  Pr.  N. 
S.  331;  Neall  v.  Hill,  16  Cal.  150;  Bay- 
less  V.  Orne,  1  Freem.  Ch.  (Miss.)  172; 
French  v.  Gifford,  30  Iowa,  153;  Atty. 
Gen.  V.  Bank  of  Michigan,  Harr.  Ch. 
315;  State  v.  Merchants'  Lis.  &  T.  Co. 
8  Humph.  252;  Baker  v.  Backus,  32 
III.  79;  Fountain  Ferry  Tump.  Road 
Co.  V.  Jewell,  8  B.  Mon.  142;  La 
Societe  Francaise  v.  16th  Judicial  Dist. 
Ct.  53  Cal.  495. 

Where  a  case  is  pending  in  one 
court  in  the  matter  of  injunction  an- 
other court  may  properly  entertain 
jurisdiction  to  appoint  a  receiver. 
San  Antonio  &  G.  8.  R.  Co.  v.  Davis, 
2  Am.  &  Eng.  Corp.  Cas.  N.  S.  374. 

The  appointment  being  discretion- 
ary it  is  not  a  right  of  course  upon  the 
establishment  of  insolvency  of  the  cor- 
poration. McGeorge  v.  Big  Stone  Gap 
Improv.  Co.  57  Fed.  Rep.  2G2. 

The  president  of  a  corporation  has 
no  power  to  consent  to  the  appoint- 
ment of  a  receiver.  Walters  v.  Anglo- 
American  Mortg.  &  T.  Co.  50  Fed. 
Rep.  316. 

'  When  jurisdiction  is  obtained  it 


RECEIVERSHIP  OF  CORPORATIONS. 


S^d' 


§  221.     Statutory  power. 

In  England,  and  in  most  of  the  states  of  this  country,  the 
power  of  the  courts  of  chancery  over  the  affairs  of  corpora- 
tions has  been  enlarged,  in  some  instances  even  to  the  extent  of 
winding  up  the  corporations,  and  distributing  their  assets,  and 
in  nearly  all  cases  express  power  is  given  to  the  courts  to  appoint 
receivers  as  a  necessary  requisite  to  the  due  and  proper  exercise 
of  the  enlarged  duties  and  extraordinary  powers  conferred. 
These  statutory  powers  are  by  no  means  uniform  throughout  this 
country,  and  for  this  reason  there  is  lack  of  harmony,  in  some 
cases,  in  the  decisions  that  have  been  based  thereon,  yet,  as  a 
general  rule,  the  law  of  receivership  in  its  genei'al  sense  is  aj)pli- 
cable  to  receiverships  over  corporations.  The  jurisdiction  being 
statutory,  there  ought  in  all  cases  to  be  found  express  authority 
for  exercising  the  power  of  appointment  of  a  receiver.*     Courts 


will  be  retained  to  the  exclusion  of 
other  courts.  O'Mahoney  v.  Belmont, 
fi2  N.  Y.  13.3;  Wiswall  v.  Samiison,  55 
U.  S.  14  How.  52,  14  L.  ed.  322; 
FarnHicorth  v.  Western  U.  Teleg.  Go. 
25  N.  Y.  S.  R.  393;  Safford  v.  People, 
85  111.  558;  Slate  v.  Miller,  54  Kan. 
244;  Port  Royal  &  A.  P.  Co.  v.  King, 
93  Ga.  63,  24  L.  R.  A.  730;  May  v. 
Printup,  59  Ga.  129;  Ft.  Wayne,  M. 
<&  C.  R.  Co.  V.  Mellett,  92  lad.  535; 
Ohio  &  M.  R.  Co.  V.  Fitch,  20  Ind. 
498;  Young  V.  Rollins,  85  N.  C.  485; 
Texas  Trunk  R.  Co.  v.  State,  83  Tex. 
1;  State,  Men-iam,  v.  Ross,  122  Mo. 
462,  23  L.  R.  A.  534;  Minchin  v. 
Second  Nat.  Bank,  36  N.  J.  Eq.  436; 
Milwaukee  &  St.  P.  R.  Co.  v.  Milwau- 
kee &  M.  R.  Co.  20  Wis.  165;  Oelpeke 
V.  Milwaukee  &  H.  R.  Co.  11  Wis. 
454;  State  v.  Jacksonville,  P.  &  M.  R. 
Co.  15  Fla.  201;  Shields  v.  Coleman, 
157  U.  S.  168,  39  L.  ed.  660;  Jerome 
V.  McCarter,  94  U.  S.  737,  24  L.  ed. 
138;  Chittenden  v.  Brewster,  69  U.  S. 
2  Wall.  191,  17  L.  ed.  839;  Uatch  v. 
Bancroft- Thompson  Co.  67  Fed.  Rep. 
802;  Adams  v.  Mercantile  Trust  Co.  66 
Fed.   Rep.  617;  Central  Trust  Co.  v. 


Chattanooga,  R.  &  C.  R.  Co.  62  Fed. 
Rep.  950;  Ames  v.  Union  P.  R.  Co.  60 
Fed.  Rep.  966;  Central  Trust  Co.  v. 
South  Atlantic  &  0.  R.  Co,  57  Fed. 
Rep.  3;  Reinach  v.  Atlantic  <fe  G.  W. 
R.  Co.  58  Fed.  Rep.  33;  Hoiolett  v. 
Central  Carolina  Land  &  Improv.  Co. 
56  Fed.  Rep.  161 ;  Carey  v.  Houston  & 
T.  a  B.  Co.  52  Fed.  Rep.  671;  Liggett 
V.  Glenn,  51  Fed.  Rep.  381;  Central 
Nat.  Bank  v.  Hazard,  49  Fed.  Rep. 
293;  Lake  Superior  Iron  Co.  v.  Broion, 
44  Fed.  Rep.  539;  Young  v.  Moritgom- 
ery  &  E.  R.  Co.  2  Woods,  606;  West- 
ern TJ.  Teleg.  Co.  v.  Atlantic  &  P. 
Teleg.  Co.  7  Biss.  367;  Gay  lord  v.  Ft. 
Wayne,  M.  &  C.  R.  Co.  6  Biss.  286; 
Union  Trust  Co.  v.  Rockford,  R.  I.  & 
St.  L.  R.  Co.  6  Biss.  197;  Conkling  v. 
Butler,  4  Biss.  22;  Bill  v.  New  Albany, 
etc.  R.  Co.  2  Biss.  390;  Judd  v.  Bank- 
ers' &  M.  Teleg.  Co.  24  Blatchf.  420. 

'  Where  a  bill  is  filed  by  minority 
stockholders  of  a  beneficial  associntioa 
alleging  fraud,  mismanagement,  etc. 
on  the  part  of  the  corporate  authori- 
ties, it  may  be  a  case  for  the  annulment 
of  the  charter  by  the  legislature,  or 
for  proceeding  against  it  as  provided 


3tt0 


RECEIVERSHIPS. 


are  not  inclined  to  extend  these  statutory  powers  by  implication, 
first,  by  reason  of  the  power  being  in  derogation  of  the  ordinary 
chancery  jurisdiction  and,  second,  by  reason  of  the  consequences 
following  the  exercise  ot  such  power.''     And  while  the  courts  are 


by  the  corporation  laws,  but  the  court 
independent  of  the  statute  has  no 
power  to  dissolve  the  corporation  or 
forfeit  its  charter  or  correct  any  sup- 
posed abuse  or  misuse  of  corporate 
powers.  Mason  v.  Equitable  League 
Sup.  Ct.  77  Md.  483;  Qoodman  v. 
Jedidjah  Lodge  No.  7,  L  0.  of  B.  B. 
67  Md.  117.  If  the  ofBcers  of  a  cor- 
poration should  be  guilty  of  miscon- 
duct, fraud,  or  mismanagement,  a 
court  of  equity  has  full  power  to  re- 
strain and  enjoin  them.  But  it  will 
not  take  away  the  rights  of  the  share- 
holder either  by  dissolving  the  cor- 
poration or  placing  its  affairs  in  the 
hands  of  a  receiver.  Mason  v.  Equi- 
table League  Sup.  Ct.  sujjra;  Baltimore 
&  0.  R.  Co.  V.  Cannon,  73  Md.  498;  La 
Societe  Francaise  v.  15th  Judicial  Dist. 
Ct.  53  Cal.  493.  As  to  the  inefficient 
power  of  courts  of  equity  to  appoint 
receivers  in  the  absence  of  statutory 
authority,  see  Baker  v.  Louisiana 
Portable  B.  Co.  34  La.  Ann.  754  (criti- 
cised and  limited  in  35  La.  Ann.  193); 
French  v.  Oifford,  30  Iowa,  148; 
Hedges  v.  Pagnett,  3  Or.  77;  United 
States  Trust  Co.  v.  New  York.  W.  S. 
&  B.  R.  Co.  101  N.  T.  478. 

But  courts  have  power  to  appoint 
receivers  to  wind  up  the  affairs  of  in- 
solvent corporations,  if  there  is  no 
other  person  provided  by  law  to  effect 
such  liquidation,  whenever  necessary 
to  preserve  the  interests  of  all  con- 
cerned. Stark  V.  Burke,  5  La.  Ann. 
740;  Citizens'  Bank  v.  Levee  Steam 
Cotton  Press  Co.  7  La.  Ann.  286.  But 
see  Bake)'  v.  Louisiana  Portable  B.  Co. 
34  La.  Ann.  754. 

A  court  of  equity  has  power  to  ap- 
point a  receiver  of  a  corporation  with- 


out statutor}'  authority  {Ford  v.  Kaii- 
sas  City  &LS.L.R.CO.  52  Mo.  A  pp. 
439;  Thompson  v.  Oreeley,  107  Mo. 
577);  or  constitutional  authority. 
Baker  v.  Louisiana  Portable  R.  Co. 
34  La.  Ann. 754.  But  see  C'fw.  v.  Ortier 
of  Vesta,  156  Pa.  531. 

Casualty  insurance  companies  are 
not  within  N.  Y.  Laws  1892,  chap. 
690,  §  76,  providing  that  if  any  "such 
depositing  corporation"  shall  appear 
to  be  in  such  a  condition  as  to  render 
the  issuing  of  "additional  policies 
and  annuity  bonds  "  by  it  injurious,  a 
receiver  of  its  assets  may  be  appointed 
who  shall  lake  possession  thereof,  in- 
cluding the  securities  deposited  in  the 
insurance  department.  People  v. 
American  Steam  Boiler  Ins.  Co.  147 
N.  Y.  25. 

A  decree  adjudging  a  corporation 
guilty  of  usurping  franchises,  rights, 
and  privileges  other  than  those 
granted  by  its  charter,  does  not  dis- 
solve the  corporation  so  as  to  give  a 
court  jurisdiction  to  appoint  a  re- 
ceiver under  Cal.  Code  Civ.  Proc. 
§  565.  Yore  v.  San  Francisco  Super. 
Ct.  108  Cal.  431. 

^ Bangs  v.  Mcintosh,  23  Barb.  591; 
Davis  V.  United  States  Electric  Power 
&  L.  Co.  77  Md.  35;  Oakley  v.  Pater- 
son  Bank,  2  N.  J.  Eq.  173;  Re  Pyro- 
lusite  Manganese  Co.  29  Hun,  429; 
People  V.  Washington  Ice  Co.  18  Abb. 
Pr.  382;  Morgan  v.  New  York  &  A. 
R.  Co.  10  Paige,  290;  Rochester  v. 
Bronson,  41  How.  Pr.  78;  People  v. 
Mutual  Trust  Fund  L.  Asso.  21  Abb. 
N.  C.  279;  Lehigh  Coal  &  Nav.  Co.  v. 
Central  Railroad,  43  Hun,  546. 

As  a  general  rule  courts  have  no 
power  to  appoint  receivers  of  corpora- 


RECEIVERSHIP  OF  CORPORATIONS. 


347 


careful  to  see  that  the  statutes  are  strictly  followed  and  not  ex- 
tended beyond  their  terms,  they  also  require  the  allegations  of  tlie 
bill  or  petition,  or  the  affidavits  in  support  thereof,  to  be  specific 
and  definite  and  not  couched  in  general  terms/  The  decisions 
based  upon  statutes,  and  embodying  statutory  constructions  and 
applications,  are  not,  as  a  rule,  made  use  of  in  this  work  except 
where  they  are  of  general  importance  and  application,  a  very 
large  number  of  the  statutes  having  been  repealed  or  modified 
and  the  decisions  thereby  rendered  useless/ 

§  222.     Exercise  of  power  discretionary. 

The  power  to  appoint  receivers  is,  in  all  cases,  discretionary, 
and  has  been  held  to  be  especially  so  in  the  case  of  corporations. 
This  discretionary  power  is  peculiarly  appropriate  in  its  applica- 
tion to  receiverships  over  corporations ;  owing  to  the  fact  that  in 
this  class  of  cases  disputes  arise  over  the  management  of  corpora- 
tions, between   the   managing  authorities  and  the  shareholders 


tions  except  by  statutory  authority. 
La  Societe  Francaise  v.  15th  Judicial 
List.  Ct.  53  Cal.  495;  Waterhury  v. 
Merchants'  U.  Exp.  Co.  50  Earb.  157; 
Neall  V.  Hill.  IG  Cal.  145;  Belmont  v. 
Erie  R.  Co.  52  Barb.  637. 

^Rathhone  v.  Parkcn^hurg  Gas  Co. 
31  W.  Va.  798;  Fort  Payne  Furnace 
Co.  V.  Fort  Payne  Coal  &  I.  Co.  96 
Ala.  472;  Baker  v.  Backus,  33  111.  79. 

'  A  few  statutory  cases  having  more 
or  less  bearing  upon  the  enlarged 
equity  jurisdiction  over  the  appoint- 
ment of  receivers  of  corporations  are 
as  follows:  Oalwey  v.  United  States 
Steam  Sugar  Ref.  Co.  36  Barb.  286; 
Atty.  Gen.  v.  Bank  of  Columbia,  1 
Paige,  511;  Verxilanek  v.  Mercantile 
Ins.  Co.  2  Paige,  438;  Ward  v.  Sea 
Ins.  Co.  7  Paige,  294;  United  States 
Trust  Co.  V.  Mio  York,  W.  S.  c6  B.  R. 
Go.  85  Hun,  341;  King  v.  Barnes,  51 
Hun,  550;  Smith  v.  Danzig,  64  How, 
Pr.  320;  People,  Atty.  Gen.,  v.  Security 
L.  Ins.  Co.  71  N.  Y.  222;  United 
States  Trust  Co.  v.  New  York,  W.  S.  <& 
B.  R.  Co.  101  N.  Y.  478;  Olmsted  v. 


Rochester  &  P.  R.  Co.  106  N.  Y.  673; 
Warishoffer  v.  North  River  Const.  Co. 
6  N.  Y.  Civ.  Proc.  113;  Oakley  v. 
Pater  son  Bank,  2  N.  J.  Eq.  173;  Par- 
sons V.  Monroe  Mfg.  Co.  4  N.  J.  Eq. 
187;  Brundred  v.  Paterson  Mach.  Co. 
4  N.  J.  Eq.  294;  Eager  v.  Stevens,  6 
N.  J.  Eq.  374;  Nichols  Y.Perry  Patent 
Arms  Co.  11  N.  J.  Eq.  126;  American 
Ice  Mach.  Co.  v.  Paterson  Steam  Fire 
Engine  &  Mach.  Co.  22  N.  J.  Eq.  72; 
Van  Wagoner  v.  Paterson  Gaslight  Co, 
23  N.  J.  L.  292;  Baker  v.  Backus,  33 
111.  79;  Ilewett  v.  Adams,  54  Me.  206; 
Fay  V.  Erie  &  K.  R.  Bank,  Harr.  Ch. 
194;  Stark  v.  Burke,  5  La.  Ann.  740; 
Re  Jackson  Marine  Ins.  Co.  4  Sandf. 
Ch.  559;  Conro  v.  Gray,  4  How.  Pr. 
166;  St.  Louis  &  S.  Coal  &  Min.  Co. 
V.  Edwards,  103  111.  A12;Streit  v.  Citi- 
zens' F.  Ins.  Co.  29  N.  J.  Eq.  21;  Re 
Empire  City  Bank,  10  How.  Pr.  498. 
Statutes  are  enforced  with  caution 
and  strictly  construed.  Oakley  v, 
Paterson  Bank,  2  N.  J.  Eq.  173;  Bangs 
V.  Mcintosh,  23  Barb.  591;  Re  Pyrolu- 
site  Manganese  Co.  29  Hun,  429. 


348  RECEIVERSHIPS. 

interested  therein,  and  not  unfreqnently  attempts  are  made  to 
wrest  from  the  legally  constituted  authorities  the  j)ower  vested  in 
them  upon  grounds  untenable  in  matters  of  partnership,  or  other 
cases  similar  in  character.  Besides,  in  corporate  receiverships,  as 
a  rule,  the  interests  of  parties  are  exceedingly  varied  and  not  un- 
freqnently conflicting,  and  the  results  of  the  appointment  operate, 
usually,  in  the  complete  suspension  and,  in  the  end,  absolute  ex- 
tinction of  the  corporate  functions.  It  is  judicial  caution  which 
the  court  is  required  to  exercise  in  the  class  of  cases  rather  than 
judicial  discretion.  The  court  must  be  satisfied  from  all  the  cir- 
cumstances that  there  is  a  necessity  for  the  appointment,  and  this 
must  be  based  uj)on  a  well-grounded  apprehension  of  impending 
danger  established  by  proof,  and  be  coupled  with  further  proof 
that  the  plaintiff  making  the  application  has  either  a  title  to  a  lien 
upon  or  an  interest  in  the  property  over  which  a  receiver  is 
asked  to  be  placed.'  In  the  discretion  of  the  court  it  may,  as  a 
condition  to  the  appointment  of  a  receiver  of  railroad  property  in 
a  foreclosure  proceeding,  impose  terms  in  reference  to  the  pay- 
ment from  the  income,  during  the  receivership,  of  outstanding 
debts  for  labor,  supplies,  equipment,  or  permanent  improvement 
of  the  mortgaged  property  as  may,  under  the  circumstances  of  the 
particular  case,  appear  to  be  reasonable." 

'  McGeorge  v.  Big  Stone  Gap  Improv.  cause  of  present  conditions  and  well- 
Co.  57  Fed.  Rep.  262;  Union  Trust  founded  apprehensions  of  the  future; 
Co.  V.  St.  Louis,  I.  M.  &  8.  R.  Co.  4  and  that  in  the  case  of  a  going  con- 
Dill.  114;  American  Biscuit  &  Mfg.  cern  extraordinary  circumstances 
Co.  V.  Klotz,  44  Fed.  Rep.  721;  Sage  must  exist  to  justify  the  appointment. 
V.  Memphis  &  L.  R.  R.  Co.  125  U.  S.  Cf.  Watkins  v.  National  Bank,  51 
ZQ\,Z\l,.ed.%^4i;  Simmons  Hardware  Kan.  254;  American  Biscuit  &  Mfg. 
Co.  V.  Waibel,  1  S.  D.  488.  Lord  Eldon  Co.  v,  Klotz,  44  Fed.  Rep.  721 ;  Sim- 
in  Lloyd  v.  Passingham,  16  Ves.  Jr.  mans  Hardware  Co.  v.  Waibel,  1  S.  D, 
59,  said:  "The  court  interposes  by  AS>Q;  Baltimore  &  0.  R.  Co.  v.  Cannon, 
appointing  a  receiver  against  the  legal  72  Md.  493;  Mercantile  Trust  Co.  v. 
title  with  reluctance."  Ci.Verplankv.  .JElna  Iro^i  Works,  4  Ohio  C.  C.  579; 
Caines,  1  Johns.  Ch.  58;  Morrison  v.  Mays  v.  Rose,  Freem.  Ch.  (Miss.)  703; 
Buckner,  Hempst.  442;  Myersv.  Estell,  xjMcago  &  A.  Oil  &  Min.  Co.  v.  United 
48  Miss.  372.  StaUs  Petroleum  Co.  57  Pa.  83. 

In  Original  Vienna  Bakery,  C.  &  N.  *  Fosdick  v.  ScJtall,   99   U.   S.  235, 

Co.  V.  Heissler,  50  111.  App.  406,  it  is  25  L.  ed.  339;  Miltenberger  v.  Logans- 

held  that  receivers  are  not  appointed  port,  C.  &S,  W.  R.  Go.  106  U.  S.  286, 

as  a  punishment  for  past  dereliction,  27    L.    ed.   117;    Union  Trust  Co.  v. 

nor  because  of  past  dangers,  but  be-  Souther,  107  U.  S.  591,  27  L.  ed.  488; 


RECEIVERSHIP  OF  CORPORATIONS. 


349 


§  223.     Power  to  appoint,  limitation  of. 

The  limitation  of  the  power  of  courts  of  equity  to  appoint  re- 
ceivers over  corporations,  in  the  absence  of  statutory  authority,  is 
not  applicable  of  course  to  mortgage  foreclosure  cases,  or  proceed- 
in  o-s  under  creditors'  bills  and  supplementary  actions.  In  this 
class  of  actions  the  power  is  substantially  identical  with  that  exer- 
cised in  case  of  natural  persons.  The  limitation  of  power  as  ap- 
plied to  courts  of  equity  in  matters  of  receivership  over  corpora- 
tions lies  in  the  fact  that  the  dissolution  of  corporations  and  the 
forfeiture  of  their  franchises  are  essentially  legislative  functions,' 
and,  where  delegated  to  the  judicial  branch  of  government,  are 


Farmers'  Loan  &  T.  Co.  v.  Kansas  City, 
W.  &  N.  TF.  R.  Co.  53  Fed.  Rep.  182; 
Milwaukee  &  M.  R.  Co.  v.  Uoicard,  131 
U.  S.  Appx.  Ixxxi,  18  L.  ed.  252;  Sage 
V.  MempJds  &  L.  R.  R.  Co.  125  U.  S. 
361,  31  L.  ed.  694.  Mr.  Justice  Harlan 
in  the  last-named  case  says:  "Whether 
a  receiver  shall  be  appointed  is  always 
a  matter  of  discretion  to  be  exercised 
sparingly  and  with  great  caution  in 
the  case  of  quasi-public  corporations 
operating  a  public  highway,  and  al- 
ways with  reference  to  the  special  cir- 
cumstances of  each  case  as  it  arises." 
In  Fosdick  v.  Schall,  supra,  Mr. 
Chief  Justice  Waite  says:  "  But  if  he 
(the  plaintiff)  calls  upon  the  court  of 
chancery  to  put  forth  its  extraordinary 
powers  and  grant  him  purely  equita- 
ble relief  he  may,  with  propriety,  be 
required  to  submit  to  the  operation  of 
a  rule  which  always  applies  in  such 
cases,  and  do  equity  in  order  to  get 
equity.  The  apppointment  of  a  re- 
ceiver is  not  a  matter  of  strict  right. 
Such  an  application  always  calls  for 
the  exercise  of  judicial  discretion,  and 
the  chancellor  should  so  mould  his 
order  that,  while  favoring  one,  injus- 
tice is  not  done  to  another.  If  this 
cannot  be  accomplished  the  applica- 
tion should  ordinarily  be  denied." 
AVhile  the  doctrine  announced  in  this 
case  has  been  criticised,  and  perhaps 


justly  so  from  a  strictly  legal  stand- 
point, yet  in  its  application  to  railway 
receiverships,  if  not  too  broadly  ex- 
tended,it  is  to  be  sustained  on  equitable 
grounds. 

While  the  appointment  of  a  receiver 
is  discretionary,  a  receiver  will  not  be 
appointed  to  take  the  property  of  a 
corporation  and  its  management  out 
of  the  hands  of  its  board  of  directors 
if  full  relief  can  be  given  by  injunc- 
tion. United  Electric  Secur.  Co.  v. 
Louisiana  Electric  Light  Co.  68  Fed. 
Rep.  673. 

It  must  appear  that  loss  will  occur 
if  a  receiver  is  not  appointed.  Mc- 
George  v.  Big  Stone  Gap  Improv.  Co. 
57  Fed.  Rep.  262.  Cf.  as  to  discretion 
of  the  court,  Rider  v.  Bagley,  84  N. 
Y.  461;  Milwaukee  &  M.  R.  Co.  v. 
/Sow«e7-,69U.S.2Wall.510,17L.ed.900; 
Myers  v.  Esfell,  48  Miss.  372;  Lowell 
v.  Doe,  44  Minn.  144;  Cone  v.  Paute, 
12  Heisk.  506;  Sales  v.  Lusk,  60  Wis. 
490;  Jacobs  v.  Gihaon,  9  Neb.  380. 

The  appointment  of  a  receiver  of  an 
insolvent  railroad  corporation  pending 
an  action  to  foreclose  a  t  rust  deed  secur- 
ing bonds  is  within  the  discretion  of  the 
trial  court,  although  there  are  issues 
involved  affecting  the  validity  of  the 
bonds.  Childress  v.  State  Trust  Co. 
(Tex.  Civ.  App.)  32  S.  W.  330. 


350  RECEIVERSHIPS. 

lod2:;ed  with  the  conimon-law  courts  as  a  rule  to  be  enforced 
throng'h  coininon-law  actions.  Tlierefore,  until  a  forfeiture 
has  been  had  in  the  proper  forum,  courts  of  equity  are  ex 
ceedingly  slow  in  taking  from  the  corporate  authorities — the 
creations  of  legislative  will — the  property  of  the  corporation,  the 
management  of  its  business,  and  the  distribution  of  its  assets,  and 
thereby  accomplish  indirectly  that  which  the  court  could  not  do 
directly.  And  while  it  may  be  true  from  a  strictly  legal  stand- 
point that  the  appointment  of  a  receiver  over  a  corporation  does 
not  i2?so  facto  destroy  its  legal  entity  yet  its  vitality,  is  gone  and, 
for  all  practical  purposes,  thereafter  its  existence  is  only  in 
name. 

§  224.    Application,  by  whom  made. 

(a)  It  frequently  becomes  necessary  to  determine  by  whom  the 
application  shall  be  made.  Thus  in  an  action  by  certain  stockholders^ 
in  behalf  of  themselves  and  all  other  stockholders  not  joined  as  de- 
fendants, alleging  fraud  by  certain  officers  of  the  company  whereby 
the  corporation  has  been  damaged,  the  corporation  itself  being 
made  a  defendant,  the  following  rules  have  been  established :  (1) 
That  ordinarily,  at  law,  no  action  can  be  sustained  for  such  griev- 
ances as  misconduct  of  officers  except  by  the  corporation  itself 
in  its  name  and  by  its  authority ;  (2)  that  as  a  rule  the  same 
principles  apply  in  equity;  (3)  that  in  a  proceeding  in  equity,  to 
justify  a  departure  from  this  principle  and  permit  a  suit  by  stock- 
holders for  alleged  misconduct  of  officers  the  bill  must  show  that 
suitable  redress  cannot  be  attained  by  an  action  in  the  name  of  the 
corporation.  And  wliile  there  is  not  entire  unanimity  in  the  au- 
thorities as  to  the  efforts  necessary  to  be  made  to  induce  the  cor- 
poration to  act,  it  may  be  stated,  in  general,  that  where  the 
stockholder  has  no  other  control  over  the  corporate  business  than 
by  means  of  an  annual  election  of  officers,  such  officers  represent 
the  corporation  for  all  purposes,  and  a  refusal  by  them  to  take 
proper  action  for  the  protection  of  its  interests,  or  to  allow  the 
use  of  the  corporate  name  for  that  purj^ose,  ought  to  justify  a 
proceeding  by  the  stockholders  individually.  !No  formal  applica- 
tion need  be  alleged  and  shown  if  it  sufficiently  appears  that  such 
application  would  be  unavailing,  as  when  the  alleged  wrong  is  on 
the  part  of  the  directors.     In  such  a  case  the  application  would  be. 


RECEIVERSHIP  OF  CORPORATIONS. 


351 


an   idle  formality  and  equity  will  dispense  with   it.*     A  mere 
creditor  at  large  lias  no  power  to  Hie  a  bill  for  the  appointment 


^Brewery. Boston  Theatre Proprs.  104 
Mass.  378;  Qreavesv.  Gouge,  69  N.  Y. 
154;  Roman  v.Woolfolk,  98  Ala.  219; 
Merchants  &  P.  Line  v.  Waganer,  71 
Ala.  581;  O'Brien  v.  Chicago,  R.  I.  <& 
P.  R.  Co.  53  Barb.  568;  Tuscaloosa 
Mfg.  Co.  V.  Cox,  68  Ala.  71;  Dunphy 
V.  Traveller  Newspaper  Asso.  146  Mass. 
495;  Pratt  v.  Jewelt,  9  Gray,  34. 
After  a  full  and  elaborate  examination 
of  the  authorities  in  England  and  in 
this  country  Mr.  Justice  Miller,  in 
Hawes  v.  Contra  Costa  Water  Co. 
{"Hawes  v.  Oakland"),  104  U.  S.  450, 
26  L.  ed.  828,  lays  down  the  following 
propositions  as  established:  "  We  un- 
derstand that  doctrine  to  be  that  to 
enable  a  stockholder,  in  a  corporation, 
to  sustain  iu  a  court  of  equity  in  his 
own  name  a  suit  founded  on  a  right 
of  action  existing  in  the  corporation 
itself,  and  in  which  the  corporation 
itself  is  the  appropriate  plaintiff,  there 
must  exist  as  to  the  foundation  of  the 
Buit:  (1)  Some  action  or  threatened 
action  of  the  managing  board  of  di- 
rectors or  trustees  of  the  corporation 
which  is  beyond  the  power  conferred 
on  them  by  their  charter  or  some  other 
source  of  organization;  (2)  or  such  a 
fraudulent  transaction  completed  or 
contemplated  by  the  acting  managers 
in  connection  with  some  other  party, 
or  among  themselves,  or  with  other 
shareholders,  as  will  result  in  serious 
injury  to  the  corporation,  or  to  the  in- 
terest of  the  other  shareholders;  (3) 
or  where  the  board  of  directors,  or  a 
majority  of  them,  are  acting  for  their 
own  interest  in  a  manner  destructive 
of  the  corporation  itself,  or  of  the 
rights  of  the  other  shareholders;  (4) 
or  where  the  majority  of  the  share- 
holders themselves  are  oppressively 
and  illegally  pursuing  a  course  in  the 


name  of  the  corporation  which  is  in 
violation  of  the  right  of  the  other 
shareholders  and  which  can  only  be 
restrained  by  a  court  of  equity."  Cf. 
Supreme  Sitting,  0.  of  I.  II.  v. 
Baker,  134  Ind.  293,  20  L.  R.  A.  210; 
Brewer  v.  Boston  Theatre  Proprs.  104 
Mass.  378;  Gregory  v.  Patchett,  33 
Beav.  595;  March  v.  Eastern  R.  Co. 
40  N.  H.  567;  Ervin  v.  Oregon  R.  & 
Nav.  Co.  27  Fed.  Rep.  625;  Allen  v. 
Curtis,  2(i  Conn.  450;  Uerseyv.  Veazie, 
24  Me.  9;  Roman  v.  Woolfolk,  98  Ala, 
219. 

A  court  of  equity  may,  at  the  in- 
stance of  a  stockholder,  and  if  the 
company  itself  refuses  to  move,  law- 
fully entertain  a  bill  to  depose  or  to 
restrain  the  officers  or  directors  of  a 
corporation  when  it  appears  that  in 
their  capacity  as  agents  or  trustees  of 
the  stockholders  they  have  committed 
or  are  about  to  commit  acts  that  are 
tantamount  to  a  breach  of  trust, 
whether  such  acts  consist  of  fraudu- 
lent dealings  with  the  corporate  prop- 
erty or  funds,  or  whether  they  con- 
sist in  engaging  the  corporation  in 
enterprises  that  are  beyond  the  scope 
of  its  chartered  powers.  In  more 
general  phrase  it  is  sometimes  said 
that  a  court  of  chancery  may  grant 
equitable  relief  against  a  corporation 
at  the  suit  of  an  individual,  whenever 
a  sufficient  cause  of  relief  is  shown 
upon  ordinary  principles  of  equity 
jurisprudence.  Republican  Mountain 
Silver  Mines  v.  Brown,  58  Fed.  Rep. 
644,  24  L.  R.  A.  776;  Dodge  v.  Woolsey. 
59  U.  S.  18  How.  331,  15  L.  ed.  401; 
Zabriskie  v.  Cleveland,  C.  &  C.  R.  Co. 
64  U.  S.  23  How.  381,  16  L.  ed.  488; 
Peabody  v.  Flint,  6  Allen.  52;  March 
v.  Eastern  R.  Co.  40  N.  H.  548;  Rob- 
inson v.  Smith,  3  Paige,  22. 


352 


RECEIVERSHIPS. 


A  suit  by  members  of  an  unincorpo- 
rated mutual  association  for  a  receiver, 
etc.,  should  be  brought  against  the 
other  members,  not  against  the  execu- 
tive officers  alone.  Montgomery  v. 
Knox,  20  Fla.  373. 

In  New  York  a  receiver  of  the  prop- 
erty of  a  corporation  cannot  be  ap- 
pointed on  the  application  of  a  cred- 
itor at  large.  Lehigh  Coal  &  Js^av.  Co. 
V.  Central IUilroad,AZ'&\xii,bAQ.  But 
see,  in  the  case  of  a  stockholder, 
WoerisJioffer  v.  North  River  Cornst.  Co. 
99  N.  Y.  398. 

A  court  of  equity,  as  such,  in  the 
absence  of  statutory  authority,  has  no 
power  to  appoint  a  receiver  over  a 
corporation  at  the  suit  of  a  stock- 
holder. La  Societe  Francaise  v.  15th 
Judicial  Dist.  Ct.  53  Cal.  457;  JSieail  v. 
Mill,  16  Cal.  145. 

The  appointment  of  a  receiver  on 
.application  of  a  stockholder  will  not 
be  denied  on  the  ground  that  the  cor- 
poration has  ceased  to  exist  and  the 
property  is  held  by  joint  ownership, 
merely  because  the  shares  have  passed 
into  the  hands  of  a  less  number  of 
persons  than  the  law  requires  for 
stockholders,  and  the  offices  of  the 
company  have  become  vacant,  while 
an  administrator  of  the  only  other 
stockholder  has  taken  possession  of 
the  corporate  property.  Re  Belton,  47 
La.  Ann.  1614.  30  L.  R.  A.  648. 

The  court  will  not  appoint  a  re- 
ceiver on  the  application  of  a  stock- 
holder alleging  mismanagement, 
fraud,  and  collusion  for  the  reason 
that  in  effect  it  would  be  a  dissolution 
( Waterbury  v.  Merchants'  W.  Exp, 
Co.  50  Barb.  157);  except  where  the 
corporate  property  is  abandoned,  or 
where  there  is  no  one  to  take  charge 
of  its  affairs  {Lawrence  v.  Greenwich 
F.  Ins.  Co.  1  Paige,  587);  or  where  it 
had  committed  acts  ultra  vires 
\Leavitt  v.  Tates,  4  Edw.  Ch.  173);  or 
where  its  officers  have  committed  a 


breach  of  trust  {Evans  v.  Coventry,  5 
De  G.  M.  &  G.  911);  or  where  its 
franchises  are  abandoned  (Buck  v. 
Piedmont  &  A.  L.  Ins.  Co.  4  Fed. 
Rep.  849);  or  where  its  property  has 
been  mortgaged  and  there  is  a  default. 
United  States  Trust  Co.  v.  New  York, 
W.  8.  &  B.  R.  Co.  101  N.  Y.  478. 

In  a  creditor's  proceeding  where 
the  common-law  remedies  are  inade- 
quate, a  receiver  may  be  appointed. 
Covington  Draw  Bridge  Co.  v.  Shep- 
herd, 63  U.  S.  31  How.  113,  16  L.  ed. 
38;  Dambman  v.  Empire  Mill,  12 
Barb.  341;  Oalioey  v.  United  States 
Steam  Sugar  Ref.  Co.  13  Abb.  Pr.311; 
Adler  v.  Milwaukee  P.  B.  Mfg.  Co.  13 
Wis.  57;  Barclay  v.  Quick  Silver  Min. 
Co.  9  Abb.  Pr.  N.  S.  383;  Morgan  v. 
New  York  &  A.  R.  Co.  10  Paige.  290. 

As  a  rule  the  application  for  a  re- 
ceiver can  only  be  made  by  a  stock- 
holder or  creditor  who  has  an  interest 
in  the  distribution  of  the  assets,  in  the 
absence  of  a  statute.  Western  N.  C. 
R.  Co.  V.  Rollins,  83  N.  C.  533. 

It  cannot  be  made  by  one  who  has 
parted  wi-th  his  interest  in  the  stock. 
Smith  V.  Wells,  30  How.  Pr.  158;  Hill 
V.  Nautilus  Ins.  Co.  4  Sandf.  Ch.  577. 

In  the  absence  of  statutory  power 
the  state  can  have  no  interest  in  the 
appointment  of  a  receiver.  Havemeyer 
V.  San  Francisco  Super.  Ct.  84  Cal. 
327,  10  L.  R.  A.  637;  Herring  v.  New 
York,  L.  E.  &  W.  R.  Co.  105  N.  Y. 
340.  See  United  States  v.  Church  of 
Jesus  Christ  of  L.  D.  S.  5  Utah,  361. 

A  stockholder  of  a  corporation  is 
not  entitled  to  have  a  receiver  ap- 
pointed under  Tex.  Rev.  Civ.  Stat, 
art.  1461,  ^§  3,  4,  providing  for  such 
appointment  in  all  cases  in  which  re- 
ceivers have  been  previously  ap- 
pointed by  the  usages  of  courts  of 
equity,  where  his  complaint  does  not 
show  that  he  has  tried  to  induce  the 
directors  or  the  shareholders  as  a  body 
to  bring  the  action,  or  that  he  could 


RECEIVERSHIP  OF  CORPORATIONS. 


353 


of  a  receiver  of  a  domestic  or  foreign  corporation,'  but  a  stock- 
holder has  sucli  right."  In  nearly  all  the  states  the  statute  has 
provided  in  whose  name  the  application  shall  be  made,  and  the 
manner  of  proceeding. 

In  matters  relating  to  corporations  application  for  a  receiver 
may  also  be  made  :  (b)  by  a  surety  for  the  corporation ;  ^  (c)  by 
minority  stockholders." 


not  have  procured  them  to  do  so,  or 
that  it  was  not  leasouable  to  require 
him  to  do  so.  Neio  Birminghaju  Iron 
<&  L.  Co.  V.  Blevins  (Tex.  Civ.  App.) 
34  S.  W.  828. 

An  action  by  a  stockholder  of  a  cor- 
poration against  the  directors  or  offi- 
cers, for  the  appointment  of  a  re- 
ceiver, is  not  within  Tex.  Rev.  Civ. 
Stat.  art.  1461,  §  1,  authorizing  the 
appointment  of  a  receiver  in  suits  be- 
tween joint  owners  of  property  where 
it  appears  in  danger  of  being  lost,  as 
§§  '6,  4,  provide  specifically  as  to  the 
•circumstances  under  which  a  receiver 
may  be  appointed  for  a  corporation. 
New  Birmingham  Iron  &  L.  Co.  v. 
Mevins,  supra. 

A  receiver  may  be  appointed,  in  the 
discretion  of  ihe  court,  to  apportion 
the  fund  and  pay  it  over  to  the  proper 
parties,  in  an  action  by  a  stockholder 
of  a  corporation  to  recover  a  fund  in 
which  others  are  equally  interested. 
Fox  V.  Hale  &  N.  Silver  Min.  Co.  (No. 
1),  108  Cal.  475. 

A  receiver  of  a  corporation  will  not 
be  appointed  in  a  stockholder's  suit 
brought  at  the  instance  of  and  for  the 
benefit  of  a  third  person  who  seeks  to 
force  a  payment  from  the  corporation 
for  procuring  the  discontinuance  of 
the  proceeding.  C Connor  v.  Long 
Island  Traction  Co.  15  Misc.  501. 

'  Lehigh  Coal  &  Nav.  Co.  v.  Central 
Railroad,  43  Hun,  546. 

^Woerishoffer  v.  North  River  Const. 
Co.  99  N.  Y.  398.  Cf.  Central  R.  <fi 
Bkg.  Co.  V.  Farmers''  Loan  &  T.  Co. 
23 


56  Fed.  Rep.  357;  Re  Christian  Jensen 
Co.  128  N.  Y.  550. 

2  The  application  may  be  on  behalf 
of  a  surety  for  the  corporation  {Bar- 
bour V.  National  Exch.  Bank,  45  Ohio 
St.  133);  and  in  such  case  it  is  not 
necessary  that  the  surety  has  paid  the 
debt.  Adams,  Eq.  270;  1  Story,  Eq. 
Jur.  §  327;  2  Story,  Eq.  Jur.  §  849; 
Stump  V.  Rogers,  1  Ohio,  533;  McCon- 
nellv.  Scott,  15  Ohio,  401. 

"*  Or  on  behalf  of  a  minority  stock- 
holder, where  it  is  necessary  to  prevent 
fraud  and  material  injury,  or  destruc- 
tion. {Hugh  V.  McRae,  Chase,  Dec. 
466;  Cameron  v.  Havemeyer,  25  Abb. 
N.C.  438);  or  where  the  majority  neg- 
glect  to  elect  officers  and  the  franchises 
are  abandoned.  Lawrence  v.  Green- 
wich F.  Ins.  Co.  1  Paige,  587.  But  see 
Hinckley  v.  Pfister,  83  Wis.  64;  Strong 
V.  McCagg,  55  Wis.  624.  Minority 
stockholders  are  entitled  to  a  receiver 
pending  the  investigation  of  charges 
of  gross  fraud  of  the  majority  stock- 
holders. State,  Independent  Did.  Teleg. 
Co.  V.  Silver  Bow  County  2d  Judicial 
Dint.  Ct.  15  Mont.  324,  27  L.  R.  A. 
392.  But  see  Ranger  v.  Champion  Cot- 
ton-Press Co.  52  Fed.  Rep.  609. 

Where  directors  are  disposing  of 
the  property  of  a  corporation  as  a 
whole,  and  are  sustained  by  a  major- 
ity of  the  stockholders,  in  the  absence 
of  fraud  or  a  violation  of  the  charter, 
the  court  will  not  appoint  a  receiver 
on  the  application  of  a  minority  of 
the  stockholders.  Sewell  v.  Fa.'it  Cape 
May  Beach  Co.  50  N.  J.  Eq.  717.  And 


354 


RECEIVERSHIPS. 


(d)  by  the  defendant ; '  (e)  by  the  directors ; '  (f)  by  judgment 
creditors  ; '    (g)  but  not  by  the  corporation.* 


see  Chicago  &  S.  E.  R.  Co.  v.  Cnson, 
133  Ind.  49;  Ilyde  Park  Gas  Co.  v. 
Ke7-ber,  5  111.  App.  132. 

A  receiver  of  a  corporation  will  not 
be  appointed  at  the  instance  of  minor- 
ity stockholders  because  its  assets  are 
not  in  proportion  to  its  outstanding 
stock,  where  it  was  over-capitalized 
at  its  organization,  and  the  ratio  has 
not  materially  changed.  Lowe  v.  Pio- 
iieer  Threshing  Co.  70  Fed.  Rep.  646. 

'Or  on  the  application  of  the  de- 
fendant when  he  seeks  some  relief 
against  his  codefendant.  Henshaw  v. 
Wells,  9  Humph.  568.  See  co7itra, 
Leddell  v.  Starr,  19  N.  J.  Eq.  159;  Rob- 
inson V.  Hadley,  11  Beav.  614. 

*0r  on  the  application  of  the  di- 
rectors {McIUienny  v.  Bim,  80  Tex, 
1),  and  especially  so  where  the  statute 
empowers  others  so  to  do.  Mo.  Rev. 
Stat.  1889,  §  2513;  Havemeyer  v.  San 
Francisco  Super.  Ct.  84  Cal.  327. 

2  Or  on  the  application  of  a  judg- 
ment creditor,  or  one  having  a  lien 
upon  the  property  {Lehigh  Coal  & 
Nav.  Co.  v.  Central  R.  Co.  43  Hun, 
546),  but  not  in  behalf  of  a  general 
creditor  having  no  judgment  or  lien. 
McOoldrick  v.  Slevin,  43  Ind.  522;  May 
V.  Greenhill,  80  Ind.  124;  Adee  v.  Big- 
ler,  81  N.  Y.  349;  Bayaud  v.  Fellows, 
28  Barb.  451;  Hubbard  v.  Hubbard,  14 
Md.  356;  Rich  v.  Levy,  16  Md.  74; 
Johnson  v.  Farnum,  56  Ga.  144;  Dodge 
V.  Pyrolusite  Manganese  Co.  69  Ga. 
665;  Holdrege  v.  Qwynne,  18  N.  J.  Eq. 
26;  Bigelow  v.  Andress,  31  111.  322; 
Cahn  V.  Johnson  (Tex.  Civ.  App.)  33 
S.  W.  1000;  Virginia,  T.  &  C.  Steel  <& 
I.  Co.  v.  Wilder,  88  Va.  942.  But  see 
statute  in  Wisconsin.  Hurlbut  v.  Mar- 
shall, 82  Wis.  590. 

A  judgment  creditor,  after  execu- 
tion returned  unsatisfied,  may  have  a 


receiver  over  an  insolvent  corporation 
where  an  assessment  on  the  stockhold- 
ers is  necessary  to  pay  debts.  Cleve- 
land V.  Marine  Bank,  17  Wis.  545; 
Coleman  v.  White,  14  Wis.  700;  Adler 
V.  Milwaukee  Patent  Brick  Mfg.  Co.  13 
Wis.  63;  Ward  v.  Griswoldville  Mfg.  Co. 
16  Conn.  593;  Spear  v.  Grant,  16  Mass. 
9;  Wood  V.  Dummer,  3  Mason,  308; 
Bangs  v.  Mcintosh,  23  Barb.  591.  See 
effect  of  statute  in  such  case.  Van 
Glahn  v.  De  Rosset,  81  N.  C.  467. 

The  appointment  of  a  receiver  of  a 
corporation  at  the  instance  of  a  cred- 
itor, in  an  action  to  recover  on  a  debt, 
is  for  the  benefit  of  all  creditors,  and 
the  party  procuring  the  same  cannot 
have  him  discharged  against  the  pro- 
test of  a  nonsatisfied  creditor,  who 
might  be  damaged  by  a  discharge. 
Lenoir  v.  LinviUe  Improv.  Co.  117  N. 
C.  471. 

A  receiver  of  a  corporation  will  not 
be  appointed  in  an  action  by  an  unse- 
cured creditor  to  recover  money,  al- 
though there  is  manifest  danger  that 
the  property  may  be  lost  or  disposed 
of  before  he  can  obtain  an  execution. 
New  Birmingham  Iron  &  L.  Co.  v. 
Blevins  (Tex.  Civ.  App.)  34  S.  W.  828. 

*A  corporation  cannot  apply  to  be 
put  in  hands  of  a  receiver.  Kimball  v. 
Goodburn,  32  Mich.  10. 

But  the  corporation  itself  has  no 
authority  to  apply  for  a  receiver  and 
place  the  corporate  property  in  his 
custody.  Kimball  v.  Goodburn,  32 
Mich.  10;  Mcllhenny  v.  Biriz,  80  Tex. 
1;  Hugh  v.  McRae,  Chase,  Dec.  466;. 
Jones  X.  Bank  of  Leadviile,  10  Colo. 
464;  Atkins  v.  Wabash,  St.  L.  &  P.  R. 
Co.  29  Fed.  Rep.  161 ;  State  v.  Jack- 
sonville, P.  &  M.  R.  Co.  15  Fla.  201; 
Hinckley  v.  Pfister,  83  Wis.  64.  But  see 
Wabash,  St.  L.  &  P.  R.  Co.  v.  Central 


RECEIVERSHIP  OF  CORPORATIONS. 


355 


If  tlie  application  is  based  upon  a  statutory  cause  then  tlie 
requirements  of  such  statute  must  be  strictly  followed.  But  it  is 
not  necessary  in  other  cases  that  a  receiver  shall  be  prayed  for. 
It  is  sufficient  if  it  appear  by  affidavit  or  petition  that  a  receiver 
is  necessary.'  The  application  cannot  be  made  by  one  who  has 
parted  with  his  interest." 

§  225.     GIroimds  for  ai)poiiitment, 

A  receiver  of  a  corporation,  ujjon  proper  application  by  a 
proper  party,  may  be  appointed : — 

(a)  Where  for  any  statutory  cause  such  power  is  given,  as  in 
case  of  insolvency,  fraud,  misconduct  on  the  part  of  the  officers, 
directors,  or  corporate  managers,  etc' 


TnM  Co.  22  Fed.  Rep.  272,  28  Fed. 
Rep.  863,  23  Fed.  Rep.  513;  Central 
Trust  Co.  V.  Wabash,  St.  L  &  P.  R.  Co. 
29  Fed.  Rep.  618;  Quincy,  M.&  P.  R. 
Co.  V.  Hiajiphreys,  145  U.  S.  82,  36  L. 
ed.  682;  Slate,  Merriam,  v.  Ross,  122 
Mo.  435,  23  L.  R.  A.  534;  Hill  v.  West- 
em  &  A.  R.  Co.  86  Ga.  284;  American 
Biscuit  Mfg.  Co.  v.  Klotz,  44  Fed.  Rep 
721;  Re  Kittanning  Ins.  Co.  146  Pa 
102. 

The  president,  in  the  absence  of  au 
thority  from  the  directors  or  stock 
holders,  has  no  power  to  consent  to 
the  appointment.  Walters  v.  Anglo 
American  Mortg.  &  T.  Co.  50  Fed 
Rep.  316. 

See  valuable  article  upon  "New- 
Fashioned  Receiverships"  by  Mr.  D. 
H.  Chamberlain  in  Harvard  Law  Re- 
view, vol.  X.,  No.  3  (Nov.  1896). 

Nor  has  the  court  on  its  own  mo- 
tion power  to  appoint  in  the  absence 
of  a  prayer  for  that  purpose  in  the  bill 
or  answer.  Auguata  Ice  Mfg.  Co.  v. 
Gray,  60  Ga.  344. 

^Langdon  v.  Vermont  &  C.  R.  Co. 
54  Vt.  593;  Vermont  &  G.  R.  Co.  v. 
Vermont  C.  R.  Co.  50  Vt.  500;  Bow- 
man V.  Bell,  14  Sim.  392;  Commercial 
&  8.  Bank  v.   Corbett,  5  Sawy.  172; 


Merrill  v.  Elam,  2  Tcnn.  Ch.  513; 
Henshaw  v.  Wells,  9  Humph.  568; 
Ladd  V.  Harvey,  21  N.  H.  514. 

'^  Smith  V.  Wells,  20  How.  Pr.  158; 
Hill  \. Nautilus  Ins.  Co.  4  Sandf.  Ch. 
577. 

^Supreme  Sitting,  0.  of  I.  H.  v. 
Baker,  134  Ind.  293,  2  L.  R.  A.  210; 
Zieverink  v.  Kemper,  50  Ohio  St.  208; 
Bacon  y. Northwestern  Stove  Co.  5  Ohio 
C.  C.  289;  Mason  v.Westoby,  L.  R.  32 
Ch.  Div.  206  (But  .see  L.  R.  42  Ch. 
Div.  590);  First  Nat.  Bank  v.  United 
States  Encaustic  Tile  Co.  105  Ind. 
227;  Loaiza  v.  San  Francisco  Super. 
Ct.  85  Cal.  11,  9  L.  R.  A.  37;  Conro 
v.  Gray,  4  How.  Pr.  166;  Haywood  v. 
Lincoln  Lumber  Co.  64  Wis.  639; 
Wayne  Pike  Co.  v.  Ilammons,  129  Ind. 
368;  Warren  v. Fake,  49  How.  Pr.  430; 
Featherstone  v.  Cooke,  L.  R.  16  Eq. 
301;  Trade  Auxiliary  Co.  v.  Vickers, 
L.  R.  16  Eq.  303;  St.  Louis  &  S.  Coal 
&  Min.  Co.  V.  Edwards,  103  111.  472; 
Blatchford  v.  Ross,  54  Barb.  42;  Re 
The  Mart,  22  Abb.  N.  C.  227. 

Under  the  judicature  act  1873,  §25, 
chap.  8,  the  greatest  latitude  is  given 
for  the  appointment  of  a  receiver  in 
England.  It  authoriz^'s  the  appoint- 
ment whenever  the  court  is  of  the 


356 


RECER'ERSHIPS. 


opinion  that  it  would  be  "just  or  con- 
venient," or  just  and  convenient  as 
construed  by  the  court.  North  Lon- 
don R.  Co.  V.  Great  Northern  B.  Co.  L. 
R.  11  Q   B.  Div.  30. 

Under  §  25,  chap.  32,  Revised  Stat- 
utes of  Illinois,  it  was  held  that  the 
statute  was  the  sole  authority  for  de- 
creeing the  dissolution  of  a  corpora- 
tion and  appointing  a  receiver;  that 
there  was  no  equity  jurisdiction  for 
such  purpose.  One  of  the  causes  for 
dissolution  and  the  appointment  of  a 
receiver  specified  in  the  statute  was 
ceasing  to  do  business,  leaving  debts 
unpaid,  and  it  appeared  that  attach- 
ments were  levied  on  the  company 
property  and  the  ceasing  to  do  busi- 
ness was  a  necessary  result  of  the 
levies,  but  it  was  held  this  was  not 
sufficient  cause  for  dissolution  and  the 
appointment  of  a  receiver,  and  the 
order  of  appointment  was  void.  Peo- 
ple, Wright,  v.  Weirjley,  155  111.  401. 
Cf.  as  to  the  construction  of  the  &\.sA- 
\iie,WJteeler  v. Pullman  Iron  &  S.  Co. 
143  111.  197.  17  L.  R.  A.  818;  Hunt  v. 
Le  Grand  Roller  Skating  Rink  Co.  143 
111.  118.  If  the  appointment  is  defect- 
ive merely  the  order  is  only  voidable. 
State,  Hoffman,v.Scarritt,  128 Mo.  331. 

"While  the  order  might  have  been 
erroneous,  and  subject  to  reversal  on 
appeal,  it  cannot  be  collaterally  im- 
peached or  disregarded.  It  may  be 
that  the  showing  upon  the  application 
was  inadequate  under  the  law  and 
practice  of  the  court,  yet  the  court 
had  the  power  to  decide  that  question, 
and  whether  it  decided  rightly  or  not 
is  not  a  question  that  goes  to  the  juris- 
diction of  the  court  over  the  subject- 
matter."  Davis  V.  Shearer,  90  Wis. 
250;  Bangs  v.  Duckin field,  18  N.  Y. 
595 ;  Peck  v.  Beloit  School  List.  No.  4, 
21  Wis.  511;^ Aiti/.  Gen.  v.  Guardian 
.Mut.  L.  Ins.  Co.  77  N.  Y.  272;  Vermont 
&  C.  R.  Co.  V.  Vermont  C.  R.  Co.  46 
Vt.  795. 


In  Tore  v.  San  Francisco  Super.  Ct. 
(Cal.)  41  Pac.  411,  it  was  held  under 
Code  Civ.  Proc.  §  505,  that  where  the 
judgment  did  not  dissolve  the  corpora- 
tion, the  appointment  of  a  receiver 
was  void. 

Under  the  Wisconsin  Statutes  (g§ 
1968,  2787,  3241,  3247,  Sanb.  &  B. 
Ann.  Stat.  ^§  1908,  2787,  3341,  3247), 
where  a  corporation  is  dissolved  and 
a  receiver  appointed,  the  effect  of 
the  decree  is  to  vest  the  legal  title  in 
the  receiver.  American  Nat.  Bank  v. 
National  Ben.  <&  C.  Co.  70  Fed.  Rep. 
420. 

Under  the  Minnesota  Statutes  (as- 
signment law  of  1876,  insolvent  law 
of  1881,  Gen.  Stat.  1878,  chap.  76,  §  9) 
where  a  general  assignment  for  the 
benefit  of  creditors  has  been  made, 
creditors  are  not  as  a  matter  of  right 
entitled  to  a  receiver  to  supersede  the 
assignee  in  the  administration  of  the 
assets,  except  for  the  purpose  of  en- 
forcing stock  liability.  International 
Trust  Co,  V.  American  Loan  &  T.  Co. 
(Minn.)  65  N.  W.  78;  and  see  Com.  v. 
Order  of  Vesta,  156  Pa.  531.  It  is  also 
held  that  a  receiver  will  not  be  ap- 
pointed under  the  Minnesota  statutes 
in  the  suit  of  a  creditor  who  has  not 
exhausted  his  legal  remedies,  as  re- 
quired by  Gen.  Stat.  1878,  chap.  76, 
§  9,  Klee  v.  E.  II.  Steele  Co.  (Minn.) 
62  N.  W.  399.  Qucere,  where  it  is 
shown  that  such  remedies  would  be 
valueless. 

Under  the  Idaho  Statutes  (Rev.  Stat. 
g§  5185-5187),  authorizing  a  dissolu- 
tion of  a  corporation  upon  specific 
grounds,  a  corporation  may  be  dis- 
solved on  the  application  of  trustees 
and  stockholders  and  a  receiver  ap- 
pointed under  §  4329,  where  such  re- 
ceiver is  necessary.  Security  Sav.  & 
T.  Co.  V.  Piper  (Idaho)  40  Pac.  144. 

Under  the  bank  commissioners' 
act  of  1878  as  amended  in  1887,  it 
■was  held  that  the  appointment  of  a 


RECEiVERiSUIP  OF  CORPORATION'S. 


357 


receiver  under  the  provisions  of  the 
Code  of  Civil  Procedure  of  California, 
(g§  187,  564)  in  a  proceeding  instituted 
by  the  Attorney  General  under  §  11 
of  the  former  act  was  illegal,  the 
bark  commissioners'  act  being  silent 
as  to  the  procedure  lo  be  had.  The 
statute  authorizing  the  proceedings 
against  the  corporation  which  were 
taken  being  silent  as  to  the  appoint- 
ment of  a  receiver  it  cannot  be  supple- 
mented by  the  provisions  of  another 
statute.  Murray  v.  American  Surety 
Co.  2  Am.  &  Eng.  Corp.  Cas.  N.  S. 
350.  Cf.  Havemeyer  v.  San  Francisco 
8uper.Ct.Si  Cal.  327,  10  L.  R.  A.  627; 
People's  Home  Snv.  Bank  v. San  Fran- 
cisco Super,  a.  103  Cal.  27;  Slate  In- 
vest, d  Ins.  Co.  V.  San  Francisco 
Super.  Ct.  101  Cal.  135.  The  state 
having  no  interest  in  either  the  assets 
of  the  corporaiion  or  its  debts,  it  has 
done  its  whole  duty  when  it  has  se- 
cured a  dissolution  of  the  corpora- 
tion. Id.  See  also  People  y. San  Fran' 
Cisco  Super.  Ct.  100  Cal.  105;  Long  v. 
San  Francisco  Super.  Ct.  102  Cal.  449; 
People  v.  Buffalo  Stone  &  C.  Co.  131 
X.  Y.  140,  15  L.  R.  A.  240.  In  all 
special  statutory  proceedings  it  is  a 
rule  of  law  that  the  measure  of  the 
power  of  the  court  is  the  statute  under 
which  the  proceedings  are  had.  Mur- 
ray V.  American  Surety  Co.  2  Am. 
&  Eng.  Corp.  Cas.  N.  S.  350;  Smitli 
V.  Westerfield,  88  Cal.  374;  East  Ten- 
nessee, V.  &  G.  B.  Co.  V.  Southern 
Teleg.  Co.  112  U.  S.  306,  28  L.  ed. 
746.  If  the  statute  provides  a  method 
to  be  pursued,  the  action  of  the  court 
in  regard  thereto,  however  erroneous, 
will  be  conclusive  until  reversed  on 
appeal,  but  the  judgment  of  the  court 
where  unauthorized  by  the  statute  is 
wholly  void.  Dowell  v.  Applegate, 
152  U.  S.  327,  38  L.  ed.  463;  United 
States  V.  Walker,  109  U.  S.  258,  27  L. 
ed.  927;  Reynolds  v.  Stockton,  140  U. 
8,  2.54,  35  L.  ed.  464. 


Under  the  Indiana  Statute  (Rev.  Stat. 
1894,  §  3435)  which  requires  applica- 
tion for  a  receiver  to  be  made  within 
three  years  after  the  expiration  of  the 
charter,  it  was  held  that  an  applica- 
tion after  the  expiration  of  the  statu- 
tory period  should  be  refused.  Hat- 
field V.  Cummings,  140  Ind.  547.  But 
if  the  application  is  in  apt  time  the 
appointment  may  be  made  after- 
wards.    Id. 

In  Alabama  a  receiver  will  not  be 
appointed  over  a  corporation  on  be- 
half of  a  creditor,  who  also  owns  half 
of  the  stock  of  the  company,  alleging 
as  grounds  that  the  creditors  are 
pressing  for  payment,  judgments  ob- 
tained, and  liability  of  levies  immi- 
nent, likely  to  produce  dismember- 
ment of  the  company  and  its  business. 
Little  Warrior  Coal  Co.  y. Hooper  (Ala.) 
2  Am.  &  Eng.  Corp.  Cas.  N.  S.  365. 

Where  the  appointment  of  a  re- 
ceiver and  the  regulation  of  proceed- 
ings are  of  statutory  origin  the  statute 
must  be  strictly  complied  with.  Aity. 
Gen.  V.  Atlantic  Mut.  L.  Ins.  Co.  77 
N.  Y.  336;  Clianibeiiain  v.  Rochester 
Seamless  Paper  Vessel  Co.  7  Hun,  557; 
and  "Where  the  receiver  is  appointed 
by  the  Federal  court  he  shall  manage 
and  operate  according  to  the  require- 
ment of  the  valid  state  laws  where  the 
property  is  located.  Act  of  Congress, 
March  3,  1887,  §  2. 

A  statute  providing  for  the  appoint- 
ment of  a  receiver  in  behalf  of  a 
judgment  creditor  who  has  execution 
issued  and  returned  no  property 
found,  is  but  a  declaration  of  the  law 
as  administered  in  courts  of  equity 
before  its  passage.  Minkler  v.  United 
States  Sheep  Co.  4  N.  D.  507,  2  Am.  & 
Eng.  Corp.  Cas.  N.  S.  368;  Child  v. 
Brace,  4  Paige,  309;  Taylor  y.Bowkcr, 
111  U.  S   110,  28  L.  ed.  368. 

Under  the  Pennsylvania  act  of 
April  4,  1872,  relative  to  the  dissolu- 
tion of  corporations,  the  court  of  com- 


358 


RECEIVERSHIPS. 


(b)  Where  there  is  default  in  the  payment  of  an  indebted- 
ness, or  the  interest  thereon,  secured  by  mortgage  or  trust  deed, 
or  otlier  covenant  in  sucli  trust  deed.' 


mon  pleas  has  no  jurisdiction  to  ap- 
point receivers  where  none  of  the 
property  of  the  corporation  is  within 
the  county,  and  none  of  its  officers  are 
residents.  Com.  v.  Order  of  Vesta,  156 
Pa.  531. 

^Edicards  v.  Standard  Rolling  Stock 
Syndicate  [1893]  1  Ch.  574;  Wildyv. 
Mid  Hants  B.  Co.  16  Week.  Rep.  409; 
Makins  v.  Ibotson  [1891]  1  Ch.  133; 
State  Journal  Co.  v.  Commonwealth  Co. 
43  Kan.  93;  Fan  Benthuysen  v.  Central 
N.  E.  &  W.  B.  Co.  45  N.  Y.  S.  R.  16; 
Hall  V.  Astoria  Veneer  Mills  &  L.  Co.  5 
Ry.  &  Corp.  L.  J.  412;  Haugan  v.  Net- 
land,  51  Minn.  552;  Union  Mut.  L. 
Ins.  Co.  V.  Union  Mills  Plaster  Co.  37 
Fed.  Rep.  286,  3  L.  R.  A.  90;  Haas  v. 
CJncago  Bldg.  Soc.  89  111.  498;  Re 
Pound,  L.  R.  42  Ch.  Div.  402;  Lowell 
V.  Doe,  44  Minn.  144;  Stockman  v. 
Wallis,  30  N.  J.  Eq.  449;  Chetwood  v. 
Coffin.  30  N.  J.  Eq.  450;  Williams  v. 
Noland,  2  Tenn.  Ch.  151;  MaJion  v. 
Crothers,  28  N.  J.  Eq.  567;  Des  Moines 
Gas  Co.  V.  West,  44  Iowa,  23;  Wall 
Street  F.  Ins.  Co.  v.  Loud,  20  How. 
Pr.  95;  Kerchner  v.  Fairley,  80  N.  C. 
24;  Beecher  v.  Marquette  &  P.  Rolling 
Mills  Co.  40  Mich.  307;  Truman  v. 
Redgrave,  L.  R.  18  Ch.  Div.  547; 
Brassey  v.  Neio  York  dc  N.  E.  R.  Co. 
19  Fed.  Rep.  663;  Long  Dock  Co.  v. 
Mallery,  12  N.  J.  Eq.  431;  Strong  v. 
Carlyle  Press  [1893]  1  Ch.  268;  Amer- 
ican  Loan  &  T.  Co.  v.  Toledo,  C.  &  S. 
B.  Co.  29  Fed.  Rep.  416. 

A  receiver  and  manager  of  the  busi- 
ness of  a  corporation  may  be  ap- 
pointed in  an  action  by  debenture- 
holders  to  enforce  their  security, 
although  the  principal  is  not  due  and 
interest  is  not  in  arrear,  where  the 
company  consents,  and  there  is  evi- 


dence that  an  execution  has  been 
levied  by  a  judgment  creditor  upon  the 
property  embraced  in  the  trust  deed 
or  mortgage,  and  that  other  actions 
by  creditors  are  pending  against  the 
company.  Edwards  v.  Standard  Roll- 
ing Stock  Syndicate  [1893]  1  Ch.  574; 
Wildy  v.  Mid-Hants  R.  Co.  16  Week. 
Rep.  409;  Makins  v.  Ibotson  [1891]  1 
Ch.  133. 

In  Union  Trust  Co.  v.  St.  Louis, 
I  M.  &  S.  R.  Co.  4  Dill.  114,  re- 
ceivership  of  a  railroad  was  refused, 
although  the  company  had  defaulted 
in  the  payment  of  interest  on  mort- 
gage bonds,  and  had  refused  the  de- 
mand of  the  trustees  of  the  bondhold- 
ers to  be  put  in  possession,  where 
there  was  no  proof  that  loss  would 
result  to  bondholders  by  allowing  the 
company  to  continue  in  possession. 

If  the  mortgage  covers  the  income 
and  profits,  and  there  is  a  default  in 
the  payment  of  interest,  a  receiver 
may  be  appointed  without  proof  of 
insolvency  of  the  corporation,  or  in- 
adequacy of  the  security.  Allen  v. 
Dallas  &  W.  R.  Co.  3  Woods,  316; 
Wilmer  v.  Atlanta  &  B.  Air  Line  B. 
Co.  2  Woods,  409.  And  where  the 
income  is  pledged  and  the  mortgagor 
is  insolvent  on  foreclosure  a  receiver 
will  be  appointed  as  of  course.  Am- 
erican Bridge  Go.  v.  Heidelbach,  94  U. 
S.  798,  24  L.  ed.  144;  Des  Moines  Gas 
Co.  V.  West,  44  Iowa,  23;  Mercantile 
Trust  Co.  V.  Missouri,  E.  &  T.  B.  Co. 
36  Fed.  Rep.  221,  1  L.  R.  A.  397; 
Dow  V.  Mempld^  &  L.  B.  R.  Co.  20  Fed. 
Rep.  260. 

Insolvency  of  the  company  and  dan- 
ger from  executions  is  ground  for  a 
receiver.  Be  South  Carolina  B.  Co. 
[1878]    11   Chicago  Legal  News,    8; 


RECEIVERSHIP  OF  CORPOKATIONS. 


359 


(c)  Where  upon  application  of  a  stockholder  it  is  shown  that 
the  directors  and  officers  of  the  corporation  are  mismanaging  its 
affairs,  as  for  their  own  personal  advantage  and  gain.' 


Sage  v.  MempJiis  &  L.  B.  E.  Co.  135 
U.S.  861.  31  L.  ed.  694. 

So  also  where  the  company  Is  in- 
solvent, with  interest  in  arrears  and  in- 
sufficient security.  Keep  v .  MicJtigan  L. 
0.  E.  Co.  6  Chicago  Legal  News,  101; 
Lehman  v.  Tallahassee  Mfg.  Co.  64 
Ala.  567.  And  the  refusal  of  the  trus- 
tee to  take  possession  after  default  is 
also  a  ground.  Warner  v.  Rising 
Fawn  Iron  Co.  3  Woods,  514;  Wilmer 
V.  Atlanta  &  R.  Air  Line  R.  Co.  2 
Woods,  409;  Pennsylvania  Co.  for  Ins. 
on  Lives  v.  Jacksonville,  T.  &  W.  R. 
Co.  55  Fed.  Rep.  124.  But  mere  de- 
fault in  the  payment  of  corporate 
bonds  is  not  in  itself  ground  for  the 
appointment  of  a  receiver.  Williams 
V.  Robinson,  16  Conn.  517. 

A  receiver  will  not  be  appointed  a8 
a  matter  of  course,  or  as  a  matter  of 
right,  but  is  always  in  the  sound  ju- 
d'cial  discretion  of  the  court.  Fraud, 
incompetency,  preservation  of  the 
property,  or  some  other  sufficient  rea- 
son must  be  given.  Farmers'  Loan  & 
T.  Co.  V.  Kansas  City,  W.  &  N.  W.  E. 
Co.  53  Fed.  Rep.  183;  Blair  v.  St. 
Louis,  H.  &  K.  B.  Co.  20  Fed.  Rep. 
348.  Cf.  Cook,  Stock  &  Stock- 
holders, g  862. 

See  further  chapters  on  Receiver- 
ship in  Mortgage  Foreclosures  and 
Receivership  in  Railway  Corpora- 
tions. 

See  note  3,  page  355. 

'  Hayicood  v.  Lincoln  Lumber  Co.  64 
Wis.  639;  Supreme  Sitting,  0.  of  I. 
H.  V.  Baker,  134  Ind.  293.  2  L.  R.  A. 
210;  Stevens  v,  Davidson,  18  Gratt. 
819;  Conro  v.  Gray,  4  How.  Pr.  166; 
Warren  v.  Fake,  49  How.  Pr.  430; 
Blatchford  v,  Ross,  54  Barb.  42;  Evans 
V.   Coventry,  5   DeG.    M.   &   G.    911; 


Redmond  v.  Enfield  Mfg.  Co.  13  Abb. 
Pr.  N.  S.  332;  Wayne  Pike  Co.  v. 
Eammons,  129  Ind.  368;  Carter  v. 
Ford  Plate  Glass  Co.  85  Ind.  180; 
Eogers  v.  Lafayette  Agri.  Works,  52 
Ind.  296;  Port  v.  Eussell,  36  Ind.  60; 
Michoud  V.  Girod,  45  U.  S.  4  How. 
502,  11  L.  ed.  1076;  Cumberland  Coal 
&  I.  Co.  V.  Sherman,  30  Barb.  553; 
Eailway  Co.  v.  Blakie,  1  Macq.  461; 
Davis  V.  Memphis  City  E.  Co.  22  Fed. 
Rep.  883;  Sellers  v.  Phcenix  Iron  Co.  13 
Fed.  Rep.  20;  Hubbard  v.  New  York, 
N.  E.  &  W.  Invest.  Co.  14  Fed.  Rep. 
675;  Miner  v.  Belle  Isle  Ice  Co.  93 
Mich.  97,  17  L.  R.  A.  413 ;  Copeland 
V.  Johnson  Mfg.  Co.  47  Hun,  235; 
Currier  v.  New  York,  W.  S.  &  B.  E. 
Co.  35  Hun,  355;  Jackson  v.  McLean, 
36  Fed.  Rep.  213. 

A  receivership  of  a  corporation,  in 
an  action  to  prevent  mismanagement 
by  the  directors,  should  not  be  con- 
tinued where  the  corporation  is  not 
insolvent  and  the  offending  directors 
have  retired  from  office.  Halpin  v. 
Mutual  Brew.  Co.  91  Hun,  220. 

When  the  company  is  insolvent 
and  has  fraudulently  disposed  of  its 
properly,  the  appointment  is  proper. 
Nichols  V.  Perry  Patent  Arm  Co.  11 
N.  J.  Eq.  126;  Atty.  Gen.  v.  Bank  of 
Columbia,  1  Paige,  511;  Howard  v. 
Whitman,  29  Ind.  557. 

Irregular  acts  of  corporate  officers 
in  the  absence  of  frau(i  will  not  jus- 
tify the  appointment.  Hardee  v.  Sun- 
set Oil  Co.  56  Fed.  Rep.  51, 

A  receiver  will  not  be  appointed 
over  a  corporation  if  relief  from  mis- 
management can  be  had  by  injunc- 
tion. United  Electric  Secur.  Co.  v. 
Louisiana  Electric- Light  Co.  68  Fed. 
Rep.  673. 


3G0 


RECEIVERSHIPS. 


(d)  Where  the  corporation  is  insolvent  and  without  assets,  and 
the  officers  have  ceased  to  act.' 


In  Haywood  v.  Lincoln  Lumber  Co. 
64Wis.639,itisheld:(l)Thatthediiec- 
tors  of  the  corporation  are  trusteesof  all 
the  property  belonging  to  it  and  have 
no  right  to  secure  to  themselves  any 
preference  or  advantage.  Marr  \.Bank 
of  West  Tennessee,  4  Coldw.  471,  484; 
Koehler  v.  Black  Biver  Falls  Iron  Co. 
67  U.  S.  2  Black,  715,  17  L.  ed.  339; 
Curran  v.  Arkansas,  5G  U.  S.  15  How. 
306,  14  L.  ed.  706;  Richards  v.  New 
Hampshire  Ins.  Co.  43  N.  H.  263; 
Bradley  v.  Farwell,  Holmes,  433; 
Drury  v.  Milioankee  <&  S.  B.  Co.  74 
U.  S.  7  Wall.  299, 19  L.  ed.  40;  Paine 
V.  Lake  Erie  <fe  L.  B.  Co.  31  Ind.  353; 
Gaslight  Improv.  Co.  v.  Terrell,  L.  R. 
10  Eq.  Cas.  168;  Smith  v.  Lansing,  22 
N.  Y.  521;  Whiticell  v.  Wariier,  20 
Vt.  425;  Buell  v.  Buckingham,  16 
Iowa,  284;  Hopkins'  Appeal,  90  Pa. 
69.  (2)  Nor  to  take  a  mortgage  to 
themselves  for  their  own  benefit  to  the 
injury  of  others  in  equal  right.  Cor- 
bettv.  Woodward,  5  Sawy.  403;  Koeh- 
ler V.  Black  River  Falls  Iron  Co.  67  U. 
S.  2  Black,  715,  17  L.  ed.  339;  Hoyle 
v.  riattsburg  &  M.  R.  Co.  54  N.  Y. 
814;  European  &  N.  A.  B.  Co.  v. 
Poor,  59  Me.  277;  Butts  v.  Wood,  38 
Barb.  181;  Scott  v.  Depeysier,  1  Edw. 
Ch.  513;  Verplanck  v.  Mercantile  Ins. 
Co.  2  Paige,  438;  G7-eat  Luxembourg 
&  R.  Co.  v.  Magnay,  25  Beav.  586; 
Cook  V.  Berlin  Woolen  Mill  Co.  43 
Wis.  434;  Pickett  v.  School  Dist.  25 
Wis.  553;  Re  Taylor  Orphan  Asylum, 
36  Wis.  552. 

In  United  Electric  Sec^ir.  Co.  v. 
Louisiana  Electric  Light  Co.  68  Fed. 
Rep.  673,  it  is  held  that  a  court  will 
not  take  the  management  of  a  corpo- 
ration out  of  the  hands  of  its  directors 
on  the  ground  of  mismanagement  if 
full  relief  can  be  obtained  by  injunc- 
tion. 


Failure  to  elect  officers,  or  want  of 
sufficient  officers  occasioned  by  death, 
or  the  destruction  of  the  corporate 
property  by  fire  will  not  of  themselves 
work  a  dissolution.  But  where  there 
is  a  refusal  or  neglect  to  replace  the 
necessary  officers,  and  the  adminis- 
trator of  a  deceased  officer  takes  pos- 
session of  the  corporate  property,  a 
receiver  may  be  appointed.  Re  Bel- 
ton,  47  La.  Ann.  1614,  30  L.  R.  A. 
648. 

^Ford  V.  Kansas  City  &  I.  Short  Line 
R.  Co.  52  Mo.  App.  439. 

The  courts  in  New  York  have  no 
power  either  by  statute  or  under  their 
inherent  jurisdiction  as  courts  of  chan- 
cery, to  appoint  a  receiver  of  a  cor- 
poration upon  a  petition  showing  suf- 
ficient assets  to  meet  all  liabilities 
eventually,  but  that  some  of  the  cred- 
itors whose  claims  have  matured 
threaten  suit,  and  that  the  institution 
of  such  suits  would  be  prejudicial  to 
the  interests  of  creditors  whose  claims 
are  not  due.  Re  Atlas  Iron  Const.  Co. 
71  N.  Y.  S.  R;  801. 

The  appointment  of  a  temporary 
receiver  of  the  property  of  a  corpora- 
tion in  a  proceeding  for  its  voluntary 
dissolution,  under  N.  Y.  Code  Civ. 
Proc.  §  2423,  making  such  appoint- 
ment dependent  upon  the  insolvency 
of  the  corporation,  is  not  authorized,, 
where  the  schedule  of  the  assets  and 
liabilities,  verified  by  the  petitioners, 
shows  a  surplus  of  the  assets;  and  an 
injunction  against  creditors  is  likewise 
without  authority  upon  such  a  show- 
ing. Re  Hitchcock  Mfg.  Co.  1  App. 
Div.  164. 

A  creditor  who  obtains  the  property 
of  a  domestic  corporation  by  purchase 
under  execution  upon  a  judgment  re- 
covered in  another  state,  in  violation 
of  N.  Y.  Laws  1892,  chap.  688,  ren- 


RECEIViliRSHIP  OF  CORPORATIOJSS. 


361, 


(e)  Where  the  corporation  has  been  dissolved  and  it  is  neces- 
sary to  preserve  and  distribute  the  property  or  its  proceeds.' 

(f)  Wliere  the  charter  of  a  corporation  has  been  repealed  by  a. 
constitutional  provision.' 

(g)  Where  the  corporation  has  been  declared  bankrupt,  and 
the  purchaser  at  the  assignee's  sale  is  in  possession  receivino-  the 
income  which  the  mortgagee  is  entitled  to.^ 

(h)  Where  it  appears  that  the  holders  of  a  majority  of  the 
stock  of  a  corporation  neglect  to  elect  officers,  and  there  is  no  one- 


dering  invalid  any  judgment  suffered 
by  an  insolvent  corporation  with  in- 
tent to  prefer 'a  particular  creditor, 
■will  be  held  as  a  trustee  of  the  prop- 
erty in  favor  of  a  receiver  of  the  cor- 
poration, where  the  court  in  New 
York  has  acquired  jurisdiction  of  his 
person.  Olney  v.  Baird,  15  Misc. 
885. 

Mere  disagreement  between  the  di- 
rectors and  stockholders  as  to  the 
management  of  a  corporation,  in  the 
absence  of  fraud,  does  not  authorize 
the  appointment  of  a  receiver.  Little 
Warrior  Coal  Co.  v.  Hooper  (Ala.)  2 
Am.  &  Eng.  Corp.  Cas.  N.  S.  365. 

Where  the  insolvency  of  the  com- 
pany is  established  and  the  applica- 
tion is  by  a  creditor,  a  receiver  may 
be  appointed.  San  Antonio  &  O.  S. 
R.  Co.  v.  Davis,  (Tex.  Civ.  App.)  3 
Am.  &  Eng.  Corp.  Cas.  N.  S.  374. 

^Havemeyer  v.  San  Francisco  Super. 
Ct.  84  Cal.  337,  10  L.  R.  A.  627;  First 
Nat.  Bank  v.  United  States  Encaustic 
Tile  Co.  105  Ind.  227;  People,  Wrig7it, 
v.  Weigley,  155  111.  491;  Yore  v.  Sa7i 
Francisco  Super.  Gt.  108  Cal.  431; 
City  Water  Co.  v.  State,  88.  Tex.  600; 
See  further  Tf  a,  this  section;  and  2 
Am.  &  Eng.  Corp.  Cas.  N.  S.  240,  et 
seq. 

The  court  will  not  decree  a  dissolu- 
tion and  appoint  a  receiver  if  the  cor- 
poration is  not  a  defendant.     Graven- 


stine's  Appeal,  49  Pa.  310;  Micldes  v. 
Bochester  City  Bank,  11  Paige,  118. 

On  a  voluntary  dissolution  the  re- 
ceivemis  vested  with  the  corporate  in- 
terests except  the  power  to  do  busi- 
ness. Chicago  Mut.  L.  Indem.  Asso.  v. 
Hunt,  127  111.  257,  2  L.  R.  A.  549. 

The  schedule  of  assets  and  liabilities 
annexed  to  a  petition  for  the  volun- 
tary dissolution  of  a  corporation 
which  shows  a  surplus  of  assets  can- 
not be  amended  after  the  appointment 
of  a  receiver  which  is  authorized  only 
when  the  corporation  is  insolvent,  so 
as  to  show  a  deficiency  of  assets, 
under  K  Y.  Code  Civ.*Proc.  §  2427, 
providing  for  the  amendment  of  the 
schedules  before  final  order  by  the  in- 
sertion of  additional  items,  or  by  mak- 
ing the  statement  or  inventory  fuller 
and  in  greater  detail.  Re  Hitchcock 
Mfg.  Co.  1  App.  Div.  164. 

A  receiver  should  not  be  appointed 
in  proceedings  to  dissolve  a  corpora- 
tion, for  the  sole  purpose  of  prevent- 
ing a  creditor  from  resorting  to  the 
legal  process  against  it  to  which  he  is 
entitled.  Ward  v.  Segar,  60  III.  App. 
424. 

"^Putnam  v.Ruch,  54  Fed.  Rep.  216; 
Curran  v.  Arkansas,  56  U.  S.  15 
How.  304.  14  L.  ed.  705. 

'^KeUy  V.  Alabama  <k  (!.  R.  Co.  5S 
Ala.  -189.  Cf.  Ex  parte  Brown,  53 
Ala.  530; 


302 


RECEIVERSHIPS. 


authorized  to  conduct  the  affairs  of  the  corporation,  and  preserve 
the  corporate  property.' 

(i)  Where  a  judgment  has  been  rendered  against  the  corpora- 
tion and  it  is  necessary  to  collect  unpaid  subscriptions  to  the  capi- 
tal stock.* 

(j)  Where  the  majority  stockholders  are  clearly  violating  the 
chartered  rights  of  the  minority  and  putting  their  interests  in  im- 
minent danger.' 


^Lnicrence  v.  Oreenwich  F.  Ins.  Co. 
1  Paige,  587;  Conro  v.  Oray,  4  How. 
Pr.  166;  Willis  v.  Corlies,  2  Edw.  Ch. 
281;  Orphan  Asylum  v.  McCartee, 
Hopk.  Ch.  429;  Hand  v.  Dexter,  41 
Ga.  454;  Western  Div.  of  North  Caro- 
lina R.  Co.  V.  Drew,  3  Woods,  691; 
Sandford  v.  Sinclair,  8  Paige,  373; 
Conro  Y.Port  Henry  Iron  Co.  12  Barb. 
27;  Re  Belton,  47  La.  Ann.  1614,  30  L. 
R.'a.  648. 

^.Bailey  v.  Pittsburg  Coal  R.  Co.  189 
Pa.  213;  Lane's  Appeal,  105  Pa.  49; 
BeWs  Appeal,  115  Pa.  88. 

As  a  rule,  whatever  power  the  cor- 
poration had  to  collect  assessments 
passes  to  the  receiver  under  the  direc- 
tion and  control  of  the  court.  SJio- 
walter  v.  Laredo  Improv.  Co.  83  Tex. 
162;  Vanderwerken  v.  Glenn,  85  Va. 
9;  Howard  v.  Glenn,  85  Ga.  238; 
Eightower  v.  Thornton,  8  Ga.  486; 
Minnesota  Thresher  Mfg.  Co.  v.  Lang- 
don,  44  Minn.  37;  Merchants  Nat. 
Bank  Y.Nortliw ester n  Mfg.  &  Car  Co. 
48  Minn.  361;  Means'  Appeal,  85  Pa. 
75;  VanWagenenv.  Clark,  22  Hun, 
497;  Rankine  v.  Elliott,  16  N.  Y.  377; 
Sagory  v.  Dubois,  3  Sandf.  Ch.  466. 

^Hand  v.  Dexter,  41  Ga.  454.  In 
Stale  Journal  Co.  v.  Commonwealth  Co. 
43  Kan.  93,  a  corporation  was  embar- 
rassed by  debts,  and  dissensions  ex- 
isted between  its  officers  liltely  to  in- 
jure the  value  of  its  property,  a  re- 
ceiver was  appointed  on  the  applica- 
tion of  the  mortgagee. 

State,  Independent  Dist.  Teleg.  Co., 


V.  Silver  Bow  County  Second  Judicial 
Dist.  Ct.  15  Mont.  324,  27  L.  R.  A.  392; 
Re  Lewis's  Petition,  52  Kan.  660.  In 
this  case  the  court  say:." By  the  aver- 
ments of  the  petition  it  would  appear 
that  all  officers  of  the  corporation 
have  conspired  together  to  divert  its 
business  to  another  company  and  to 
absorb  its  earnings  and  assets  and  ap- 
propriate the  same  to  their  own  use. 
*  *  *  In  most  cases  of  this  charac- 
ter no  other  adequate  remedy  exists. 
The  appointment  of  a  receiver  is  not 
necessarily  a  proceeding  to  dissolve  a 
corporation,  nor  will  it  necessarily 
result  in  its  extinction.  The  prop- 
erty and  assets  of  the  corporation 
which  are  being  dissipated  and  fraudu- 
lently absorbed  will  be  preserved  and 
rightfully  applied  under  the  super- 
vision of  the  court  and  may  be  re- 
stored to  the  officers  of  the  corpora- 
tion when  there  has  been  a  change  of 
officers,  or  when  it  is  deemed  prudent 
and  safe  to  restore  the  property  and 
affairs  of  the  corporation  to  its  duly 
constituted  officers."  Cf.  First  Nat. 
Bank  v.  United  States  Encaustic  Tile 
Co.  105  Ind.  227;  Wayne  Pike  Co.  v. 
Hammons,  129  Ind.  368;  Supreme 
Sitting  0.  of  1.  H.  v.  Baker,  134  Ind. 
293,  20  L.  R.  A.  210;  Haywood  v. Lin 
coin  Lumber  Co.  64  Wis.  639;  Consoli- 
dated Tank  Line  Co.  v.  Kansas  City 
Varnish  Co.  43  Fed.  Rep.  204;  Miner 
v.  Belle  Isle  Ice  Co.  93  Mich.  97,  17  L. 
R.  A.  420. 
Minority  stockholders  may  secure 


RECEIVERSHIP  OF  CORPORATIONS. 


363 


(k)  Upon  the  application  of  judgment  creditors.' 

§  226.     When  not  appointed. 

Owing  to  the  fact  that  the  appointment  or  refusal  to  appoint  a 
receiver  in  all  cases  rests  in  the  sound  judicial  discretion  of  the 
court  under  all  the  circumstances  of  each  particular  case  it  is  im- 
possible to  lay  down  any  well-established  principles  under  which 
the  court,  will  refuse  to  lend  its  aid  and  refuse  to  appoint.  A  few 
general  principles,  however,  maj^  be  stated  that  have  received  the 
approval  of  courts  of  last  resort  that  may  serve,  to  a  greater  or 
less  extent,  as  guiding  principles. 

(a)  The  court  will  not  appoint  a  receiver  and  take  from  the 
directors  of  a  corporation  the  control  and  management  of  the  cor- 
porate business  except  in  proceedings  instituted  for  the  purpose 
of  dissolving  the  corporation  under  statutory  authority  therefor.^ 


the  appointment  pending  investiga- 
tion of  gross  fraud  by  tiie  majority 
stockholders.  State,  Independent  Dist. 
Teleg.  Co.,  v.  Silver  Bow  County 
Second  Judicial  Dist.  Ct.  15  Mont.  324, 
27  L.  R.  A.  392. 

'  A  judgment  creditor  who  has  had 
execution  returned  unsatistied  may 
file  a  bill  in  equity  and  have  the  cor- 
poration property  and  assets  applied 
in  his  favor.  Hervey  v.  IllinoiH  M. 
R.  Co.  28  Fed.  Rep.  169;  Union  Trust 
Co.  v.  Illinois  M.  R.  Co.  117  U.  S. 
434,  29  L.  ed.  963;  Sage  v.  Memphis 
&  L.  R.  R.  Co.  125  U.  S.  361,  31  L.  ed. 
694;  Palmer  v.  Clark,  4  Abb.  N.  C. 
25. 

In  England  judgment  creditors  can- 
not levy  an  execution  on  a  railroad, 
but  are  entitled  to  a  receiver  of  the 
income.  Re  Manchester  &  M.  B.  Co. 
L.  R.  14  Ch.  Div.  645. 

The  appointment  of  a  receiver  in 
behalf  of  a  creditor,  however,  must 
be  made  in  good  faith  and  not  for  the 
purpose  of  hindering  and  delaying 
other  creditors.  Re  Receivers  of  Phila- 
delphia &  R.  R.  Co.  14  Phila.  501; 
Howard  v.  La  Crosse  &  M.  R.  Co. 
Woolvv.  49. 


As  a  general  rule  the  right  under 
consideration  does  not  apply  to  a  gen- 
eral creditor.  Lehigh  Coal  tfc  Nav.  Co. 
V.  Central  R.  Co.  43  Hun,  546;  Pojid 
V.  Framingham  &  L.  R.  Co.  130  JMass. 
194.  But  see  Btlmont  Nail  Co.  v.  Co- 
lumbia Iron  &  S.  Co.  46  Fed.  Rep.  8; 
Avery  v.  Blees  Mfg.  Co.  27  N.  .1.  Eq. 
412;  Consolidated  Tank  Line  Co.  v. 
Kansas  City  Varnish  Co.  43  Fed.  Rep. 
204. 

^Port  Huron  &  O.  R.  Co.  v.  St. 
Clair  Circuit  Judge,  31  Mich.  456; 
Baker  v.  Louisiana  PortaUe  R.  Co.  34 
La.  Ann.  754;  French  v.  Gifford,  30 
Iowa,  148;  Hedges  v.  Paquett,  3  Or. 
77;  Bartlett  v.  Wed  Metropolitan  Tram- 
way Co.  [1893]  3  Ch.437. 

In  Supreme  Sitting,  0.  of  I.  H.  v. 
Baker,  134  Ind.  293,  20  L.  It.  A.  210,  it 
is  held  that  a  court  of  equity  has  no 
power  independently  of  statute  to  dis- 
solve an  insolvent  corporation  is  well 
settled.  The  authorities  seem  to  be 
universal  in  holding  this  doctrine. 
We  have  been  cited  to  no  authorities 
holding  a  contrary  doctrine  and  we 
have  been  unable  to  find  any  in  the 
search  we  have  made.  There  is  no  stat- 
ute in  this  stale  (Indiana)  authorizing  a 


3G4 


RECEIVERSHIPS. 


(b)  Mere  disagreement  between  tlie  parties  as  to  the  manage- 
ment of  the  corporate  business  furnishes  no  sufficient  ground  lor 
the  appointment ;"  nor, 


court  of  equity  todissolve  a  corporation 
on  such  a  i)roceediDg  as  the  one  at  bar 
brought  on  behalf  of  individual  stock- 
holders or  shareholders  as  the  appel- 
lees are  in  this  case.  Hence  the  ac- 
tion cannot  be  sustained  or  recorded 
as  one  having  for  its  object  the  disso- 
lution of  the  corporation  on  the 
ground  of  insolvency  or  being  in  im- 
minent danger  of  insolvency. 

In  Spelling,  Priv.  Corp.  §  1001,  it  is 
said:  "The  legislation  of  the  various 
states  providing  for  the  appointment 
of  receivers  of  insolvent  corporations 
is  based  upon  the  just  and  reasonable 
policy  of  protecting  those  who  would 
otherwise  be  without  adequate  rem- 
edy in  the  usual  course  of  legal  pro- 
ceedings in  case  of  the  insolvency  of 
the  corporation.  And  the  same  rea- 
sons exist  for  the  appointment 
whether  the  insolvency  has  been 
caused  by  the  misconduct  and  infidel- 
ity of  the  company's'  officers  or  from 
other  causes.  The  statutory  power  thus 
confirmed, with  a  few  exceptions,  does 
not  extend  to  authorize  the  court  to  dis- 
solve the  corporation.  *  *  *  The  court 
seeks  not  to  destroy  rights  but  to  pre- 
serve them  and  for  the  accomplish- 
ment of  this  end  the  annihilation  of 
the  franchise  is  unnecessary.  That 
duty  concerns  the  sovereign  and  where 
its  performance  becomes  necessary  the 
court  of  law  is  the  appropriate  tribu- 
nal." In  speaking  of  the  action  of  a 
court  of  equity  in  appointing  a  re- 
ceiver in  a  corporation  matter  the 
court  in  Supreme  Sitting,  0.  of  I.  H. 
V.  Baker,  supra,  further  said:  "A  court 
of  equity  should  not  ruthlessly  wrest 
from  the  legally  constituted  officers  of 
the  corporation  the  management  of  its 
affairs  and  the  property  of  the  corpo- 


ration and  turn  it  over  to  the  hands  of 
a  receiver.  ^Such  power  should  not 
be  exercised  by  a  court  of  equity  ex- 
cept with  due  care  and  in  a  case  where 
it  is  clearly  made  to  appear  that  it  is 
for  the  best  interest  of  the  parties  in- 
terested and  it  will  not  be  presumed 
that  a  court  of  equity  will  exercise 
such  power  except  where  the  exigen- 
cies of  the  case  clearly  warrant  it." 

^American  Loan  &  T.  Co.  v.  To- 
ledo, G.  &  S.  R.  Co.  29  Fed.  Rep.  416. 

A  receiver  should  not  be  appointed 
to  prevent  a  public  sale  of  the  assets 
of  the  corporation  to  satisfy  its  bonds 
where  the  proof  does  not  show  that 
those  in  the  management  of  the  corpo- 
ration are  acting  unfaithfully  or  are 
wasting  the  assets.  Ft.  Payne  Fur- 
'nace  Co.  v.  Ft.  Payne  Coal  &  I.  Co. 
96  Ala.  472.  Where  an  action  is 
to  prevent  the  illegal  consolidation 
of  two  railroad  companies  and  stock- 
holders in  violation  of  an  injunction 
elected  directors  of  the  new  company, 
there  are  no  grounds  for  the  appoint- 
ment of  a  receiver  for  either  company. 
Cleveland,  C.  C.  &  I.  R.  Go.  v.  Jewelt, 
37  Ohio  St.  649  (see  Revised  Statutes, 
§  3383);  Cincinnati,  S.  &  C.  R.  Co. 
V.  Sloan,  31  Ohio  St.  15;  Verplanckv. 
Mercantile  Ins.  Co.  2  Paige,  438. 

In  Stockton  v.  Central  R.  Co.  50  N. 
J.  Eq.  489,  it  is  held  that  where  it 
becomes  necessary  to  compel  obe- 
dience to  an  injunction  or  a  decree  the 
court  may  appoint  a  receiver  to  con- 
trol the  defendant  property.  The 
court  say  :"The  powerof  thecourt  toap- 
point  such  a  receiver  when  the  appoint- 
ment is  necessary  to  effectuate  its  de- 
cree has  not  been  disputed.  Such  power 
is  so  essential  at  times  to  the  efficient  ex- 
ercise of  the  court's  jurisdiction  that  it 


RECEIVERSHIP  OF  CORPORATIONS. 


365 


(c)  Where  on  application  of  minority  stockholders  it  appears 
that  reasonable  effort  has  not  been  made  to  secure  redress  through 
the  company  or  its  legally  constituted  authorities  ;'  nor 

(d)  Where  the  law  affords  an  adequate  remedy  ;'  nor 


has  become  too  well  established  either 
to  be  seriously  questioned  or  to  need 
citation  of  authority  to  support  it." 
In  the  above  case  it  was  represented 
that  a  scheme  existed  between  the  de- 
fendants to  restrict  and  prevent  com- 
petition in  the  production  and  sale  of 
coal,  a  staple  commodity  in  this  state, 
and  thereby  to  effect  an  increase  in 
the  price  thereof.  An  order  to  show 
cause  why  a  receiver  should  not  be 
appointed  was  issued  and  an  injunc- 
tion pending  such  order  was  granted, 
after  which  it  was  represented  to  the 
court  that  the  injunction  had  been 
disobeyed  by  the  companies  acting  in 
combination  with  each  other. 

In  Wanneker  v.  Hitchcock,  38  Fed. 
Rep.  383,  it  is  held  that  the  fact  that 
there  may  be  differences  of  opinion  or 
judgment  between  the  trustees  to 
whom  corporate  stock  is  devised  for 
the  use  of  others  as  to  the  policy  to  be 
pursued  by  the  corporation  and  the 
proper  persons  to  be  voted  for  as  di- 
rectors, does  not  make  a  case  where  a 
court  is  authorized  to  appoint  a  re- 
ceiver for  such  stock. 

In  Harmon  v.  Kentucky  Coal  I.  & 
D.  Co.  15  Ky.  L.  Rep.  12,  it  is  held 
that  a  receiver  will  not  be  appointed 
over  a  corporation  and  its  property 
taken  from  those  having  much  greater 
interest  therein  than  the  applicant 
where  no  disposition  is  shown  on  their 
part  to  deprive  the  applicant  of  any 
right  in  the  propertj'  and  where  the 
only  purposes  of  such  applicant  is  to 
ascertain  what  interest  he  has  now  in 
the  property  or  its  proceeds. 

It  is  held  in  Hardee  v.  Sumet  Oil 
Co.  56  Fed.  Rep.  51,  that  the  irregular 
action  by  the  directors  in  assessing 


and  advertising  for  sale  its  capital 
stock  and  the  careless  manner  of 
keeping  the  books  and  records  of  the 
company  and  illegal  action  in  voting 
itself  salaries  where  otherwise  the  cor- 
poration has  been  economically  man- 
aged, no  fraudulent  intention  or  pur- 
pose being  shown,  a  receiver  will  not 
be  appointed. 

^ Roman  v.  WooJfolk,  98  Ala.  219; 
Mack  V.  DeBardekb^ii  Coal  &  I.  Co.  90 
Ala.  396,  9  L.  R.  A.  650;  Merchants 
&  P.  Line  v.  Waganer,  71  Ala.  581; 
Graeaves  v.  Gouge,  69  N.  Y.  154; 
Breicer  v.  Boston  Theatre  Proprs.  104 
Mass.  378;  Haioes  v.  Contra  Cobta 
Water  Co.  ("  Hawes  y.  Oakland")  104 
U.  S.  450,  26  L.  ed.  828;  Fluker  v. 
Emporia  City  R.  Co.  48  Kan.  577; 
Bacon  v.  Irvine,  70  Cal.  221. 

The  policy  of  the  law  is  to  leave  the 
affairs  of  a  corporation  to  the  manage- 
ment and  control  of  its  own  chosen 
agencies  and  that  a  minority  of  the 
stockholders  will  not  be  permitted  to 
displace  corporate  authority  and  con- 
trol and  substitute  therefor  the  policy, 
management,  and  control  of  the  courts 
except  in  plain  cases  of  such  fraud  or 
maladministration  as  works  manifest 
oppression  or  wrong  to  them;  and  that 
before  calling  upon  the  court  to  take 
into  its  hands  the  administration  of 
its  corporate  affairs  it  must  be  made 
clearly  to  appear  not  only  that  such 
oppression  or  wrong  to  them  depends, 
but  that  every  reasonable  effort  haa 
been  made  to  secure  redress  and  pre- 
vention of  further  mischief  within  the 
company  itself.  Roman  v.  Woolfolk, 
98  Ala.  219. 

*  Preasley  v.  Lamb,  105  lud.  171. 


366  RECEIVERSHIPS. 

(e)  Where  the  application  is  based  upon  the  allej^ed  faihire  of 
the  operators  to  keep  a  raih'oad  in  suitable  repair,  and  the  oper- 
ating company  is  responsible  and  acknowledges  its  duty  and  is 
compelled  by  law  to  keep  the  road  in  repair  ;'  nor 

(f)  "Where  the  defendant  is  a  foreign  corporation  and  has  no 
property  in  the  state  ;^  nor 

(g)  Where  a  suit  is  pending  to  try  the  title  to  the  possession  of 
the  premises ;"  nor 

(h)  Where  in  case  of  foreclosure  of  a  mortgage  the  right  to 
foreclose  is  not  clear  and  undisputable  ;*  nor 

(i)  Where  there  is  no  showing  of  danger  or  loss  ;*  nor 

(j)  Where  there  will  be  no  proceeds  to  distribute  after  the  pay- 
ment of  the  mortgage  indebtedness  ;'  nor 

(k)  Where  the  claims  against  the  corporation  are  unascertained 
and  are  small  as  compared  with  the  value  of  its  property;'  nor 

(1)  Where  the  applicant  is  a  secured  creditor  and  he  seeks  to 
obtain  a  receiver  over  property  not  subject  to  the  litigation  f  nor 

(m)  Where  the  property  over  which  a  receiver  is  sought  is 
rightfully  in  the  possession  of  a  person  appointed  by  the  mort- 
gagees under  powers  contained  in  the  mortgage." 

§  227.     Fraud  as  ground  for  appointnieut. 

Fraud  and  collusion  on  the  part  of  the  officers  and  directors  of 
a  corporation  which  may  result  in  danger  of  the  loss  of  the  prop- 

'  Boston,  C.  &  M.  B.   Go.  v.  Boston  ^Pyles  v.  Itiverside  Furniture  Go.  80 

&  L.  Railroad,  65  N.  H.  393.  W.  Va.  123;  Mercantile  Invest.  &  Gen. 

"^Haarv.  Consolidated  Garson  River  T.  Go.  v.  River  Plate  Trust,  L.  &  A. 

Dredging  Go.  43  N.  Y.  S.  R.  1.  Co.  [1892]  2  Ch.  303. 

^Emerson's  &  Wall's  Appeal,  95  Pa.  ''Virginia  1\  &  G.  Steel  &  I.  Go.  v. 

258.  Wilder,  88  Va.  942. 

^American  Loan  &  T.  Go.  v.  Toledo,  The  court  will  not,  in  deference  to 

C.  &  8.  R.  Go.  29  Fed.  Rep.  416.  the  mere  technical  rights  of  a  very 

^'Houcldnv.  Turner,  89  Ga.  26;  Bal-  small  minority  of   bondholders  of   a 

timore  &  0.  R.  Go.  v.  Gannon,  72  Md.  railroad    corporation,    appoint   a   re- 

493;  Baltimore  <&  0.  Teleg.  Go.  v.  In-  ceiver,  where  it  appears  that  such  ac- 

terstate   Teleg.  Go.  54  Fed.  Rep.  50,  8  tion  would  imperil,  if  not  destroy,  the 

U.  S.  App.  340;  Watldns  v.  National  interests  of  others  whose  rights  are  en - 

Bank    of   Lawrence,    51     Kan.    254;  titled  to  equal  consideration.     Tysen 

Eincldey  v.  Bethen.  78  Me.  221;  Mc-  v.  Wabash  R.  Go.  8  Biss.  247. 

George  v.  Big  Stone  Gap  Improv.  Go.  *  Wormser  v.  Merchants'  Nat.  Bank, 

57  Fed.  Rep.  262.     The  appointment  49  Ark.   117;  Noyes  v.  Rich,  52  Me. 

is  discretionary  on  proof  of  insolv-  115. 

ency,  and  not  a  matter  of  right.     Id.  ^Re  Pound,  L.  R.  42  Ch.  Div.  402. 


RECEIVERSHIP  OF  CORPORATIONS.  367 

erty  of  such  corporation  constitute  sufficient  ground  for  the  inter- 
ference of  a  court  of  equity  and  the  appointment  of  a  receiver 
over  its  property  and  business.'  But  where  fraud  constitutes  the 
gravamen  of  the  charge  the  facts  which  constitute  the  alleo-ed 
fraud  must  set  out  specifically  and  clearly ;  the  court  will  not  act 
upon  general  allegations.^  Nor  will  the  fraud  of  the  majority  of 
the  directors  be  sufficient  to  warrant  the  interference  of  the  court 
in  the  appointment  of  a  receiver  if  plaintiff  has,  otherwise,  com- 
plete redress,  nor  will  a  mere  apprehension  that  such  frauds  may 
be  repeated  be  sufficient/  nor  will  relief  be  granted  if  the  plaintiff 
is  not  free  from  blame  in  the  matters  of  which  he  complains.* 

§  228.     Insolvency  as  gronnd  for  appointment. 

A  court  of  equity  has  no  inherent  power  as  such  to  appoint  a 
receiver  over  an  insolvent  corporation,  but  in  most  of  the  states 
in  this  country,  as  well  as  in  England,  statutory  powers  have  been 
granted  enabling  the  courts  to  interfere,  on  proper  application,  in 
the  matter  of  insolvent  corporations,  and  appoint  a  receiver  to 
take  charge  of  their  affairs,  wind  up  their  business  and  distribute 
their  assets  among  creditors,  shareholders,  or  those  entitled 
thereto ;  and  this  power,  in  some  cases,  has  been  extended  to  the 
end  of  dissolving  the  corporation  and  forfeiting  its  charter  privi- 
leges. As  a  rule  the  statute  prescribes  the  method  of  procedure, 
and  by  whom  the  application  shall  be  made,  sometimes  a  creditor 
and  sometimes  a  shareholder  being  authorized  to  put  the  machin- 
ery in  motion.     The  constitutionality  of  this  class  of  legislation 

^Ilayicood  v.  Lincoln  Lumber  Co.  64  &  S.  Coal  &  Min.  Co.  v.  Edimrds,  lOo 

Wis.  639;  Miner  v.  Belle  Isle  Ice  Co.  93  111.  472;  Consolidated  Tank  Line  Co.  v. 

Mich.  S7,  17  L.   R.  A.  412;  Davis  v.  Kansas  City  Varnish  Co.  43  Fed.  Rep. 

Memphis  City  R.  Co.  22  Fed.  Rep.  883;  208;  Towle  v.  American  Bldg.  L.  &  L 

Sellers  v.  Phcenix  Iron   Co.  13  Fed.  8oc.  60  Fed.  Rep.  131;  Buck  v.  Pied- 

Rep.  20;  Wayne  Pike  Co.  v.  Ilammons,  mont  &  A.  Life  Ins.  Co.  4  Fed.  Rep. 

129  Ind.  368;  Blutchford  v.   Ross,  -54  849. 

Barb.  42;  Hedges  v.  Paqnett,  3  Or.  77.  '^Fort   Payne  Furnace  Co.    v.   Fort 

Only  suck  directors  and   officers  as  Payne   Coal   &   I.   Co.   96   Ala.  472; 

participate  in   the  fraud  are  liable.  Briarfield  Iron  Works  Co.   v.  Foster, 

Metropolitan  ElcD.  R.  Co.  v.  Kneeland,  54  Ala.  622;  Oakley  v.  Paterson  Bank, 

120  N.  Y.  134,  8  L.   R.  A.  253;  Mer-  2  N.  J.  Eq.  173. 

rick  V.  Peru  Coal  Co.  61  111.  472;  IIol-  ^Laurel  Springs  Land  Co.  v.  Foug- 

land  V.  Lewiiiton  Falls  Bank,  52  Me.  eray,  50  N.  J.  Eq.  756. 

564;  Ellis  v.  Ward,  137  111.  509;  People  *IIyde  Park  Oas  Co.  v.  Kerber,  5  111, 

V.  Bruff,  9  Abb.  K  C.  153;  St.  Louis  App.  132. 


368 


RECEIVERSHIPS. 


is  not  to  be  called  in  question  either  by  the  corporation  itself,  or 
by  those  with  whom  it  has  contract  relations,  sin.co  in  the  one 
case,  by  its  condition  of  insolvency,  it  has  become  impossible  to 
further  carry  on  the  corporate  functions  with  which  it  has  been 
invested  by  the  lawmakinoj  power,  and  in  the  other  the  very 
purpose  of  such  legislation  is  the  preservation  of  the  rights  of 
those  having  contractual  relations  with  it  by  the  equitable  distri- 
bution of  its  assets  among  those  entitled  thereto.' 

The  insolvency  of  insurance  companies  and  the  proper  protec- 
tion of  their  creditors  by  the  due  distribution  of  their  assets  has 
been  the  subject  of  much  litigation,  and  is  now  usually  regulated 
bv  statutes.  Sometimes  these  statutes  confer  the  power  upon 
•  courts  to  dissolve  the  corporations  and  distribute  the  assets,  while 
in  other  instances  the  dissolution  is  effected  by  an  action  in  the 
name  of  the  state,  leaving  the  distribution  of  the  assets  and  the 
adjustment  of  the  rights  of  all  parties  to  courts  of  chancery,  the 
receiver  in  such  cases  being  an  imj^ortant  instrumentality." 


'By  an  act  of  the  legislature  the 
governor  of  Georgia  was  authorized 
to  appoint  a  fit  and  proper  person  to 
act  as  receiver  of  a  bank,  if  it  failed 
or  refused  to  redeem  its  notes  in 
specie,  or  if  the  notes  depreciated  to 
the  extent  of  10  per  cent  or  upwards. 
The  Bank  of  Macon,  it  appeared,  had 
failed  to  redeem  its  notes;  all  or  nearly 
all  its  stock  had  accumulated  in  the 
hands  of  one  individual,  and  he 
was  dead  and  insolvent,  from  which 
the  court  found  as  an  irresistible  con- 
clusion that  the  corporation  could 
never  be  revived  "by  any  power  short 
of  that  which  raised  up  Lazarus  from 
the  grave."  Under  this  state  of  facts 
the  governor  appointed  a  receiver  and 
it  was  contended:  (1)  That  the  ap- 
pointment of  a  receiver  was  a  judicial 
act,  and  not  legislative;  and  (2)  that 
the  appointment  of  a  receiver  under 
the  legislative  act  impaired  the  obli- 
gation of  contract  by  depriving  the 
-  corporation  of  the  power  to  sue. 

The  court  held  that  the  appoint- 


ment of  a  receiver  was  not  judicial  in 
that  it  did  not  determine  any  contro- 
versy, or  any  right  legal  or  equitable, 
and  that  his  duties  consisted  in  col- 
lecting, holding,  and  distributing  the 
assets  of  the  bank  for  the  benefit  of 
all  concerned;  also  that  the  obligation 
of  the  contract  was  not  impaired, 
among  other  reasons  because  the  stat- 
ute was  remedial  in  its  nature  and 
therefore  like  all  similar  statutes 
within  legislative  control.  Carey  v. 
Oilen,  9  Ga.  258. 

*As  instructive  cases  in  the  matter 
of  theadjuslment  of  therights  and  in- 
terests of  creditors  and  policy  holders, 
under  statutes  governing  the  dissolu- 
tion of  insurance  companies,  see^%. 
Oen.  V.  Guardian  Mut.  L.  Ins.  Co.  82 
N.  Y.  336;  Atty.  Oen.  v.  North  Amer- 
ica L.  Ins.  Go.  83  N.  Y.  172;  People, 
Atty.  Gen.,  v.  Security  L.  Ins.  Co.  71 
N.  Y.  222;  People,  Atty.  Gen.,  v.  Se- 
curity L.  Ins.  &  A.  Co.  79  N.  Y. 
267 ;  Atty.  Oen.  v.  North  Amei'ican  L. 
Ins.  Co.  80  N.  Y.  153;  Atty.  Qen.  v. 


KECEIVERSIIIP  OF  CORPORATIONS. 


3G9 


Insolvency  of  a  building  and  loan  association  coupled  with 
proof  of  mismanagement  and  fraud  on  the  part  of  its  officers,  is 
likewise  a  ground  for  the  appointment  of  a  receiver.' 

Where  insolvency  is  made  a  ground  for  the  appointment  of  a 
receiver  by  statute,  insolvency  in  such  case  becomes  a  jurisdic- 
tional fact  and  the  proof  must  be  clear  and  convincing.*  Insolv- 
ency being  established,  and  a  receiver  appointed,  the  administra- 
tion of  tlie  estate  must  of  necessity  be  left  largely  to  the  judgment 
and  discretion  of  the  court,  and  only  flagrant  injustice  and  error 
will  warrant  an  appellate  court  in  interfering  with  such  discretion,' 
and  the  court,  in  order  to  protect  the  receiver  in  his  possession, 
and  secure  the  rights  of  all  parties  in  interest,  may  make  all 
necessary  orders,  by  injunction  or  otherwise,  touching  the  deliv- 
ery, management,  or  disposition  of  the  corporate  property  and 
assets.* 


North  American  L.  Ins.  Co.  89  N.  Y. 
94;  Carr  v.  Hamilton,  129  U.  S.  253, 
32  L.  ed,  669;  McDonald  y.  Boss-Lewin, 
29  Hun,  87;  Tippecanoe  Twp.  v.  Man- 
love,  39  Ind.  249;  Embree  v.  Shideler, 
36  Ind.  433;  Lyeominrj  F.  Ins.  Co.  v. 
Wright,  55  Vt.  526;  Wardle  v.  Town- 
mnd,  75  Mich.  385,  4  L.  R.  A.  511. 
As  to  the  liability  of  members  of 
mutual  fire  insurance  companies  and 
the  enforcement  of  such  liability,  see 
Shaughnessy  v.  Rensselaer  Ins.  Co.  21 
Barb.  605;  Savage  v.  Medbury,  19  N. 
Y.  32;  Williams  v.  Babcock,  25  Barb. 
109;  Sands  v.  Sanders,  28  N.  Y.  416. 

A  receiver  pendente  lite  will  not  be 
appointed  for  a  mutual  fire  insurance 
-corporation  on  the  ground  that  it  is 
insolvent,  where  the  examiners  of  the 
insurance  department,  in  determining 
that  itsindebtedness  exceeded  its  assets 
by  |53,000,  omitted  to  credit  it  with 
$160,000  of  capital  stock  notes  au- 
thorized by  the  lawunder  which  it  was 
organized  and  doing  bu.'^iness.  People 
V.  Equitable  Mut.  F.  Ins.  Co.  1  App. 
Div.  93. 

The  ability  and  offer  of  a  mutual 
fire   insurance  company  pending  an 

24: 


action  to  dissolve  it,  to  restore  its 
capital  which  has  been  impaired  by 
some  of  its  officers  acting  without  au- 
thority, by  supplying  funds  to  any 
amount  directed  by  the  insurance 
department,  will  be  considered,  in  de- 
termining an  application  for  the  ap- 
pointment of  a  receiver  pendente  lite. 
People  v.  Equitable  Mut.  F.  Ins.  Co. 
supra. 

'  Toicle  V.  American  Bldg.  L.  &  I. 
Soc.  60  Fed.  Rep.  131. 

^Parsons  v.  Monroe  Mfg.  Co.  4  N.  J. 
Eq.  187;  Atlantic  Trust  Co.  v.  Con- 
solidated Elec.  Storage  Co.  49  N.  J. 
Eq.  403.  Where,  however,  the  conduct 
of  the  officers  of  a  corporation  are 
satisfactorily  established  as  fraudu- 
lent it  is  not  only  proper  but  it  is  the 
duty  of  the  court  to  wrest  from  such 
officers  the  management  of  the  com- 
pany and  place  the  company  in  the 
charge  of  a  receiver.  Nichols  v.  Pen-y 
Patent  Arm  Co.  11  N.  J.  Eq.  126; 
Atty.  Oen.  v.  Bank  of  Columbia,  1 
Paige,  511. 

'  Wilmington  Star  Min.  Co.  v.  Allen, 
95  111.  288. 

*  Morgan  v.  New  York  &  A.  R.   Co 


S70 


KECEIVERSHIPS. 


As  in  the  case  of  fraud  so  also  in  the  case  of  insolvency  the 
allegations  of  the  bill  or  petition  must  be  clear  and  explicit.  It 
is  not  sufficient  that  they  be  made  merely  upon  information  and 
belief,'  and  especially  so  where  the  allegations  are  denied."  Where 
the  statute  has  not  otherwise  provided,  the  great  weight  of  au- 
thority is  that  a  receiver  will  not  be  appointed  upon  the  petition 
of  the  corporation  itself,  even  upon  positive  averments  of  its  in- 


10  Paige,  290.  Where  a  receiver  is 
appointed  over  a  corporation  it  is  the 
duly  of  the  officers  and  managers  of 
the  company  to  deliver  its  assets  to 
the  receiver  and  a  refusal  on  their 
part  constitutes  contempt,  and  is  pun- 
ishable as  such  on  application  of  the 
receiver  or  parties  in  interest.  Young 
V.  Rollins,  90  N.  C.  125. 

An  injuuclion  will  be  granted  to 
restrain  a  director  of  a  corporation 
from  collecting  money  due  it  or  from 
paying  out  its  assets,  and  a  temporary 
receiver  vpill  be  appointed,  during  the 
pendency  of  an  action  against  liim 
under  N.  Y.  Code  Civ.  Proc.  §§  1781. 
1782,  for  mismanagement,  and  to  com- 
pel him  to  account,  vphere  it  is  ap- 
parent that  plaintiff  will  be  entitled  to 
part  of  the  relief  demanded,  and,  to 
make  the  judgment  effectual,  it  is  de- 
sirable, if  not  absolutely  necessary,  to 
preserve  the  existing  status.  Piza  v. 
Butler,  90  Hun,  254. 

'  In  Atlantic  Trust  Co.  v.  Consol- 
idated Elec.  Storage  Co.  49  N.  J.  Eq. 
402,  the  vice  chancellor  says:  "The 
exercise  of  this  power  to  its  full  ex- 
tent extinguishes  a  mere  manufactur- 
ing or  mercantile  corporation  com- 
pletely and  forever.  The  power  is  a 
strong  one.  Chancellor  Williamson 
in  Raicnsley  v.  Trenton  Mut.  L.  Ins. 
Co.  9  N.  J.  Eq.  95,  called  it  an  extraor- 
dinary power.  One  that  should  be 
exercised  with  great  caution,  and  only 
when  the  circumstances  of  the  case 
and  the  ends  of  justice  required  its 
exercise.     The  statute  makes  insolv- 


ency the  jurisdictional  fact.  The 
court  can  do  nothing — neither  issue 
an  injunction  nor  appoint  a  receiver 
— until  insolvency  is  tirst  established. 
That,  in  the  language  of  Governor 
Pennington,  is  the  foundation  of  the 
power  and  unless  it  is  satisfactorily 
made  out  the  court  has  no  jurisdic- 
tion. Oakley  v.  Paterson  Bank,  2  N. 
J.  Eq.  173,  176;  Parsons  v.  Monroe 
Mfg.  Co.  4  N.  J.  Eq.  187,  206;  Brun- 
dred  v.  Paterson  MacJi.  Co.  4  N.  J.  Eq. 
294,305.  Chancellor Halsteadexpressed 
substantially  the  same  view  in  Oood- 
heart  v.  Rariian  Min,  Co.  8  N.  J.  Eq. 
73, 77.  And  Mr.  Justice  Depue  in  pro- 
nouncing the  opinion  of  the  court  of 
errors  and  appeals  in  New  Foundland 
B.  Const.  Co.  v.  Bchack,  40  N.  J.  Eq. 
222,  226,  declared,  in  describing  what 
averments  a  bill  in  such  a  case  must 
contain,  that  it  was  not  sufficient  that 
the  bill  should  merely  allege  that  the 
corporation  had  become  insolvent  and 
had  suspended  its  business  for  want 
of  funds  to  carry  on  the  same,  but 
that  the  facts  and  circumstances  on 
which  the  complainant  relies  to  prove 
insolvency  must  be  set  out.  *  *  * 
The  proof  in  support  of  a  jurisdic- 
tional fact  must  always  be  clear  and 
convincing  for  the  court  derives  its 
power  from  the  fact,  and  hence,  until 
the  fact  is  shown  to  exist,  it  has  no 
power."  Cf.  Livingston  v.  Bank  of 
New  York,  5  Abb.  Pr.  338;  Vanderhilt 
V.  Central  R.  Co.  43  N.  J.  Eq.  669. 
*  Atty.  Gen.  v.  Bank  of  Columbia, 
1  Paige,  511. 


RECEIVERSHIP  OF  COHPORATIOl^fS.  371 

solvency,  some  of  the  cases  holding  that  the  appointment  is 
voidable  and  others  holding  the  appointment  to  be  absolutely 
void.'  Nor  will  a  receiver  of  a  corporation  be  appointed  upon  an 
ex  parte  application  for  the  reason  that  so  many  interests  may 
be  involved.  It  is  doubtful  if  the  court  should  act  in  any  case  of 
this  character  until  the  corporation  has  had  an  ojiportunity  to  be 
heard.^ 

§  229.    In  foreclosure  proceedings. 

The  rules  applicable  to  the  appointment  of  receivers,  and  their 
powers,  duties,  and  relations  in  the  matter  of  foreclosure  of 
mortgages  executed  by  corporations,  are  not  essentially  different 
from  those  in  ordinary  foreclosures,  and  that  subject  is  not 
enlarged  upon  in  this  connection.  The  same  is  also  true  in 
reference  to  receiverships  in  creditors'  proceedings,  based  upon 
creditors'  bills,  supplementary  proceedings,  and  proceediugs  in 
aid  of  executions.* 

§  230,    Effect  of  appointment. 

In  regard  to  the  effect  of  the  appointment,  of  a  receiver  over 
the  property  of  a  corporation  it  may  be  stated  as  general  propo- 
sitions : 

(a)  All  liens  existing  at  the  time  of  the  appointment  whether 
by  mortgage,  judgment,  or  otherwise,  upon  the  property  of  the 
corporation,  remain  unimpaired,  and  the  existing  rights  of  all 
parties,  so  far  as  the  corporate  assets  are  concerned,  remain  in 
^tatu  quo* 

^  Jones  V.    Bank    of   Leadville,    10  ^  Devoe    v,   Ithaca   &  0.   li.   Co.  5 

Colo.  464;  Kimball   v.    Goodburn,  33  Paige,  521. 

Mich.    10;    Hugh  v,    Mcliae,    Chase,  »  ggg  ctj^p.  x. 

Dec.  466;  Mcllheiiny  v.  Bim,  80  Tex.  *  Kneeland  v.  American  Loan  &  T. 

1;    Hinckley  v.   rfisU'>'<   83   Wis.    64;  Co.  136  U.  S.  89,  34  L.  e(i.  379;  Union 

State ^  Merriam,  v.  Boss,  122  Mo.  435,  Nat.  Bank  v.  Bank  of  Kansas  City, 

23  L.'  R.  A.  534;  La  Societe  Francaise  136  U.  S.  223,  34  L.  ed.  341;  Risk  v. 

V.  15th  Judicial  Dist.  Ct.  53  Cal.  495;  Kansas    Trust  &  Bkg.   Co.    58  Fed. 

Neallv.  Hill,  16  Cal.   145;  French  v.  Rep.  45;  Be  Home  Provident  Safety 

Gifford,   30  Iowa,  160;  Whitehead  v.  Fund  Asso.  129  N.  Y.  288;  Hubbard 

Wooten,  43  Miss.    523.       See  contra,  v.  Hamilton  Bunk,  7  Met.  340.  There 

Be Kittanning Ins.  Co.  liQFa..l02;a.nd  is  nothing   in   the  New  Jersey  "act 

Wabtcih,  St.  L.  &  P.  R.  Co.  v.  Central  to    prevent    frauds   by   Incorporaied 

Trust  Co.  22  Fed.  Rep.  272.  companies  "  which  interferes  with  the 


372 


RECEIVERSHIPS. 


(b)  As  to  the  possession,  however,  if  the  appointing  court  has 
jurisdiction,  and  the  receiver  has  qualilied  by  giving  the  requisite 
bond,  his  possession  will  be  protected  as  against  all  persons  whom- 
soever, the  property  being  regarded  as  in  custodia  legis.^ 

(c)  Nor  can  another  court  of  co-ordinate  jurisdiction  mtertere 
with  the  possession  of  the  receiver,  regulate  his  action,  or  remove 
him  from  his  position.' 


liens  that  exist  when  insolvency  oc- 
curs or  which  authorizes  the  receiver 
to  sell  otherwise  than  subject  to  them. 
Potts  V.  New  Jersey  Arms  &  0. 
Co.  17  N.  J.  Eq.  576.  Cf.  Bates  v. 
Wiggin,  37  Kan.  44.  The  receiver- 
ship in  no  manner  changes  the  terms 
of  existing  contracts.  Watson  v. 
PJicenix  Bank,  8  Met.  217.  As  to  the 
effect  of  receivership  upon  purchasers 
of  real  property  pending  the  litiga- 
tion, see  Neicman  v.  Chapman,  2 
Rand.  93. 

In  Kneeland  v.  American  Loan  &  T. 
Co.  supi'a,  the  court  say:  "The  ap- 
pointment of  a  receiver  vests  in  the 
court  no  absolute  control  over  the 
property  and  no  general  authority  to 
displace  vested  contract  liens."  See 
also  St.  Louis,  A.  &  T.  H.  R.  Go.  v. 
Cleveland,  C.  C.  &  I.  R.  Co.  125  U.  S. 
658,  673,  31  L.  ed.  832,  837.  Goods 
lawfully  seized  by  attachment  from 
a  court  of  law  will  not  be  ordered  by 
a  court  of  chancery  having  no  super- 
visory power  to  be  delivered  to  the 
receiver  in  the  absence  of  statutory 
powers.  Ford  v.  Judsonia  Mercantile 
Co.  52  Ark.  426,  6  L.  R.  A.  714. 

'  See  Chap.  lY;  also,  §  230;  also 
Hagedon  v.  Batik  of  Wisconsin,  1 
Pinney,  61.  As  a  general  rule  a  re- 
ceiver appointed  in  a  prior  suit  should 
not  be  displaced  by  the  appointment 
of  a  receiver  of  the  same  subject  mat- 
ter by  the  same  court  in  a  subsequent 
suit.  The  receivership  in  the  first 
^uit  should  be  extended  to  the  second, 
subject  to   the   legal    and    equitable 


claims  of  all  parties,  and  the  rights  of 
the  parties  in  each  suit  are  substan- 
tially the  same  as  if  different  persons 
had  been  appointed  at  the  several 
times  when  such  receiverships  were 
granted.  If,  however,  a  different  re- 
ceiver is  appointed,  then,  if  the  court 
has  jurisdiction  of  the  subject-matter 
and  parties,  and  is  the  same  court 
which  made  the  first  appointment, 
the  receiver  in  the  first  suit  must  de- 
liver to  the  receiver  appointed  in  the 
second.  State  v.  Jacksonville,  P.  & 
M.  R.  Co.  15  Fla.  201.  Cf.  Skinner 
V.  Maxwell,  68  N.  C.  400;  Walling  v. 
Miller,  108  N.  Y.  173;  Maynard 
V.  Bond,  67  Mo.  315;  Atty.  Oen.  v. 
Guardian  Mut.  L.  Ins.  Co.  77  N.  Y. 
272;  Blake  Crusher  Co.  v.  New  Haven, 
46  Conn,  473;  Van  Alsiym  v.  Cook, 
25  N.  Y.  489;  Morrill  v.  Noyes,  56  Me. 
458;  Rutter  v.  Tallis,  5  Sandf.  610; 
Columbian  Book  Co.  v.  Be  Golyer,  115 
Mass.  67;  Sercomb  v.  Catlin,  128  111. 
556;  Texas  Trunk  R.  Co.  v.  Lewis,  81 
Tex.  1;  Richards  v.  People,  81  111. 
551;  Peck  v.  Crane,  25  Vt.  146.  The 
court  has  power  to  compel  the  deliv- 
ery of  property  to  the  receiver.  Am- 
erican Const.  Co.  v.  Jacksonville,  T.  & 
E.  W.  R.  Co.  52  Fed.  Rep.  937;  Keokuk 
N.  L.  Packet  Co.  v.  Davidson,  13  Mo. 
App.  561 ;  Vermont  &  C.  R.  Co.  v.  Ver- 
mont C.  R.  Co.  46  Vt.  792.  See  Jacob- 
son  V.  Landolt,  73  Wis.  142. 

^  Young  v.  Montgomery  &  E.  R.  Co. 
2  "Woods,  606;  CMahoney  v.  Belmont, 
62  N.  Y.  133;  Gest  v.  New  Orleans,  St. 
L.  &  C.  R.  Co.  30  La.  Ann.  28;  Coey. 


RECEIVERSHIP  OF  CORPORATIONS. 


373 


(d)  Nor  will  the  court  permit  its  receiver,  without  its  leave,  to 
be  harrassed  and  interfered  with  by  litigation.' 

(e)  Nor  is  the  receiver  bound  to  carry  out  the  unexpired  leases 
of  the  person  or  corporation  over  whose  property  he  is  appointed." 

(f)  Nor  is  he  bound  by  the  contracts  of  his  predecessor,  unless 
he  adopts  them  as  his  own.' 


Columbus.  P.  <fc  /.  R.  Co.  10  Ohio  St. 
372;  Albany  City  Bank  v.  Schermer- 
Twrn,  9  Paige,  372;  Texas  Trunk  R. 
Co.  V.  Lewis,  81  Tex.  1;  Wis^call  v. 
Sampson,  55  U.  8.  14  How.  52,  14 
L.  ed.  323;  Storm  v.  Waddell,  2  Sandf. 
Ch.  494;  Columbian  Book  Co.  v.  De 
Oohjer,  115  Mags.  67;  Van  Alstyne  v. 
Cook,  25  N.  y.  489;  Skinner  v.  Max- 
well, 68  N.  C.  400;  Tuba  County  v. 
Adams,  7  Cal.  35;  Maynard  v.  Bond^ 

67  Mo.  315;  Robinson  v.  Atlantic  &  O. 
W.  R.  Co.  66  Pa.  160;  Stevenson  v. 
Palmer,  14  Colo.  565;  Hardy -v.  Tilton, 

68  Me.  195. 

'  Ellicott  V.  United  States  Ins.  Co.  7 
Gill,  307,  unless  the  purpose  of  the 
bill  is  merely  to  preserve  the  property 
and  not  make  a  distribution.  Leathers 
V.  Shipbuilders'  Bank,  40  Me.  386  (See 
statute).  When  the  action  is  to  dis- 
solve the  corporation  the  appointment 
suspends  the  right  of  action  of  credi- 
tors against  the  corporation  and  stock- 
holders. Minnesota  Thresher  Mfg. 
Co.  V.  Langdon,  44  Minn.  37;  Mer- 
chants' Nat.  Bank  v.  Northwestern 
Mfg.  &  Car  Co.  48  Minn.  361;  Atty. 
Gen.  v.  North  American  L.  Ins.  Co. 
6  Abb.  N.  C.  293.  See  City  Water 
Co.  V.  State,  88  Tex.  600;  Farmers' 
Loan  &  T.  Co.  v.  Toledo  &  8.  H.  R. 
Co.  43  Fed.  Rep.  223.  But  see  Allen 
V.  Central  R.  Co.  42  Iowa,  683;  Green 
v.  Walkill  Nat.  Bank,  7  Hun,  63. 

An  attachment  of  the  property  of 
an  insurance  company  after  the  filing 
of  a  bill  in  equity  against  it  under 
Mass.  Stat.  1894,  chap.  522,  §  7,  with 


a  prayer  for  an  injunction  against  its 
proceeding  with  business  and  for  the 
appointment  of  a  receiver  of  its 
property,  is  not  valid,  although  made 
before  any  receiver  is  actually  ap- 
pointed; but  on  a  subsequent  appoint- 
ment the  receiver's  rights  relate  back 
to  the  commencement  of  the  proceed- 
ings. Merrill  v.  Commonwealth  Mut.F. 
Co.  (Mass.)  44  N.  E.  144. 

The  court  appointing  a  receiver  of 
a  corporation  may  order  a  creditor 
living  within  the  jurisdiction  to  dis- 
miss garnishment  proceedings  insti- 
tuted by  him  against  debtors  of  the 
corporation  in  other  states,  and  upon 
his  failure  to  comply  therewith  punish 
him  for  contempt.  Besuden  v.  E. 
Besuden  Co.  3  Ohio  N.  P.  165. 

■^Ante,  %  36;  §  230,  If  e;  also,  Re 
New  Jersey  &  N.    T.   R.   Co.  29  N. 

J.  Eq.  67. 

*  Lehigh  Coal  &  Nav.  Co.  v.  Central 
R  Co.  38  N.  J.  Eq.  175,  41  N.  J.  Eq. 
167;  Kansas  P.  R.  Co.  v.  Bayles,  19 
Colo.  348;  Cf.  Com.  v.  Franklin  Ins. 
Co.  115  Mass.  278;  Ellis  v.  Boston,  H. 
&  E.  R.  Co.  107  Mass.  1;  Sotithern 
Exp.  Co.  v.  Western  N.  C.  R.  Co.  99 
U.  S.  191,  25  L.  ed.  319;  Dow  v. 
Memphis  &  L.  R.  R.  Co.  20  Fed.  Rep 
260.  The  New  Jersey  cases  fully 
sustain  the  proposition  announced  in 
the  text,  but  if  the  receiver  is  the  arm 
of  the  court  and,  in  good  faith,  makes 
a  contract,  the  doctrine  that  such 
contract  is  not  binding  on  his  succes- 
sor seems  to  be  inequitable  and  un 
just. 


374 


RECEIVERSHIPS. 


(g)  Nor  does  the  appointment  of  a  receiver  of  a  defunct  cor- 
poration revive  its  corporate  powers.' 

(h)  The  debtor's  dominion  or  control  over  the  property  which 
forms  the  subject-matter  of  litigation  and  which  is  specified  in 
the  order  at  once  ceases  and  becomes  vested  in  the  receiver.' 

(i).  Where  the  proceeding  is  a  statutory  one  instituted  to  dis- 
solve the  corporation,  and  to  wind  up  its  business,  and  a  judgment 
of  dissolution  is  pronounced,  and  a  receiver  appointed  to  col- 
lect and  distribute  the  assets  it  will  be  an  abatement  of  all  pend- 
ing actions  against  the  corporation.' 


'  Stark  V.  BuvTce,  5  La.  Ann.  740. 

*  See  ante. 

And  in  many  of  the  states  having 
statutes  authorizing  the  winding  up 
of  corporations  by  reason  of  insolv- 
ency, the  appointment  of  a  receiver 
operates  as  an  assignment  or  transfer 
ipso  facto  of  all  the  property  of  the 
corporation  to  such  receiver,  for  the 
purpose  of  distribution. 

It  displaces  the  officers  and  direct- 
ors from  the  possession  and  control. 
Rochester -v.  Bronson,  41  How.  Pr.  78. 

Where  a  receiver  is  appointed  by  a 
Federal  court,  and  afterward  a  suit  is 
brought  in  the  state  court  and  the 
charter  forfeited,  it  was  held  that  the 
appointment  did  not  dissolve  the  cor- 
poration; nor  was  its  existence  in  any 
way  affected  thereby;  and  suit  against 
the  corporation  might  be  prosecuted 
for  an  indebtedness  accruing  before 
the  appointment,  and  judgment  may 
be  rendered  against  it  and  enforced 
against  any  property  not  embraced  in 
the  receivership  or  that  it  might  there- 
after acquire.  City  Water  Co.  v.  State, 
88  Tex.  600;  Heath  v.  Missouri,  K.  C. 
&  T.  R.  Co.  83  Mo.  621;  St.  Louis,  A. 
&  T.  R.  Co.  v.  Whitaker,  68  Tex.  636. 

The  appointment  of  a  receiver  does 
not  dissolve  the  corporation.  Bank 
Comrs.  v.  Bank  of  Buffalo,  6  Paige, 
497;  Kincaid  v.  Dwinelle,  59  N.  Y. 
553;  Pringle  v.  Woolworth,  90  N.  Y. 


510;  Ohio  &  M.  R.  Co.  v.  Russell,  115 
111.  52;  Sleev.  Bloom,  19  Johns.  456. 

After  the  appointment  of  a  receiver 
a  creditor  cannot  sue  to  enforce  un- 
paid subscriptions  to  the  capital 
stock  of  an  insolvent  corporation. 
Big  Creek  Stone  Co.  v.  Seward  (Ind.) 
42  N.  E.  464;  Minnesota  Tliresher  Mfg. 
Co.  V.  Langdon,  44  Minn.  37;  Mer- 
chants' Nat.  Bank  v.  Northwestern 
Mfg.  <£■  Car  Go.  48  Minn.  361.  So  also 
the  appointment  suspends  all  right  of 
action  by  the  corporation,  unless  the 
statute  or  order  appointing  otherwise 
provides.  Milwaukee  Mut.  F.  Ins. 
Co.  V.  Sentinel  Co.  81  Wis.  207.  15 
L.  R.  A.  627;  San  Antonio  &  G.  8.  R. 
Co.  V.  Davis  (Tex.)  3  Am.  &  Eng. 
Corp.  Cas.  N.  S.  374. 

^McCulloch  V.  Norwood,  58  N.  Y. 
563;  Colorado  Nat.  Bank  v.  Scott,  19 
Abb.  N.  C.  348;  Davenport  v.  City 
Bank  of  Buffalo,  9  Paige,  12;  Leathers 
V.  Shipbuilders'  Bank,  40  Me.  386 
(see  Slat.);  Pendleton  v.  Russell,  144  U. 
S.  640,  36  L.  ed.  574.  But  the  fact  of 
the  appointment  of  a  receiver  alone 
does  not  effect  an  abatement  {Heath 
V.  Missouri,  K.  C.  &  T.  R.  Co.  83  Mo. 
617;  Toledo,  W.  &  W.  R.  Co.  v.  Beggs, 
85  111.  diQ;  Mercantile  Ins.  Co.  v.  Jaynes, 
87  111.  199),  though  the  means  of  en- 
forcing the  claims  after  judgment  may 
be  taken  away  {Ibid;  Texas  Trunk  R. 
Co.  v.  Lewis,  81  Tex.   1;  Skinner  v. 


RECEIVERSHIP  OF  CORPORATIONS. 


375 


§  231.     The  receiver's  relationship. 

The  receiver  of  a  corporation  occupies  a  three-fold  relationship. 

(a)  He  is  the  agent  of  the  court  from  which  he  receives  his 
appointment,  and  his  powers  and  duties  are  measured  by  the  or- 
der of  his  appointment  and  the  rules  and  practice  of  the  court 
making  such  order. 

(b)  He  is  also  the  trustee  of  the  corporation  creditors  and  share- 
holders in  respect  to  their  interests  in  the  property  and  assets  of 
the  corporation  and  their  respective  rights  to  participate  in  the 
distribution  thereof.' 

(c)  He  is  likewise  the  representative  of  the  corporation  in  re- 
spect to  the  title  to  the  corporate  property  and  the  right  to  sue 
and  defend  in  regard  thereto.  In  general  he  takes  the  rights  of 
the  corporation  such  as  could  be  asserted  in  its  own  name  and  on 
that  basis  only  can  he  litigate  for  the  benefit  of  creditors  and 
stockholders,  except  where  acts  have  been  committed  in  fraud  of 
the  rights  of  creditors,  such  acts  being  valid  as  to  the  corporation, 
but  invalid  as  to  the  receiver  in  his  representative  character.*     It 


Maxwell.  68  N.  C.  400;  Butter  v.  Tal- 
lis,  5  Saudf.  610;  Maynard  v.  Bond,  G7 
Mo.  315;  Gest  v.  New  Orleans,  St.  L. 
<fe  G.  B.  Co.  30  La.  Ana,  28),  until  the 
property  of  the  corporation  is  re- 
turned to  it.     Heath  v.  Missouri,  K.  G. 

6  T.  B.  Go.  supra.  No  doubt  the  court 
may  in  a  proper  case  enjoin  the  pros- 
ecution of  suits  against  the  corpora- 
tion. Atty.  Gen.  v.  Guardian  Mut. 
L.  Ins.  Co.  77  K  Y.  272. 

'  Mr.  Justice  Andrews,  in  Pittsburg 
Carbon  Go.  v.  McMiUin,  119  N.  Y.  46, 

7  L.  R.  A.  46,  says:  "The  general 
rule  is  well  established  that  a  receiver 
takes  the  title  of  the  corporation  or 
individual  whose  receiver  he  is,  and 
that  any  defense  which  would  have 
been  good  against  the  former  may  be 
asserted  against  the  latter.  But  there 
is  a  recognized  exception  which  per- 
mits a  receiver  of  an  insolvent  indi- 
vidual or  corporation  in  the  interest 
of  creditors  to  disathrm  dealings  of 
the  debtor  in  fraud  of  their  rights." 


Gillet  V.  Moody,  3  N.  Y.  479;  Porter 
Y.  Williams,  9  N.  Y.  142;  Curtis  v. 
Leavitt,  15  N.  Y.  9,  108;  Libby  v.  Bose- 
krans,  55  Barb.  202;  Alexander  v. 
BeJfe,  74  Mo.  495;  Atchison  v.  David- 
son, 2  Pinney,  48;  Morrill  v.  Noyes,  56 
Me.  458;  Brown  v.  Warner,  78  Tex. 
543,  11  L.  R.  A.  394;  Com.  v.  Frank- 
lin Ins.  Co.  115  Mass.  278;  Herrick  v. 
Miller,  123  Ind.  304. 

"^  See  last  note  above,  also,  Mande- 
ville  v.  Avery,  124  N.  Y.  376;  Pitts- 
burg Carbon  Co.  v.  McMillin,  119  N.  Y. 
46,  7  L.  R.  A.  AQ;Wright  v.  Nostrand, 
94  N.  Y.  31 ;  Atty.  Gen.  v.  Guardian 
Mut.  L.  Ins.  Co.  77  N.  Y.  212;Whit- 
ilesey  v.  Delaney,  73  N.  Y.  571 ;  Bost- 
wick  V.  Menck,  40  N.  Y.  383;  Zucker- 
man  v.  Brown,  33  N.  Y.  297;  Bate  v. 
Graham,  11  N.  Y.  237;  Manley  v.  Bas- 
siga,  13  Hun,  288;  Leavitt  v.  Tales,  4 
Edw.  Ch.  l'Si;Cha7nbe7iain\.  O'Brieri, 
46  Minn.  80;  Farmers'  Loan  &  T.  Co. 
V.  Mirmeajiolis  Engine  &  Mach.  Works, 
35   Minn.   543;  Walsh   v.   Byrnes,   39 


376 


RECEIVERSHIPS. 


should  be  observed  in  this  connection  that  where  the  receiver  is 
the  trustee  or  representative  of  the  creditors  his  I'ights  are  co- 
extensive only  with  the  rig-hts  of  such  creditors,  and  he  can  main- 
tain a  suit  in  their  behalf  to  the  extent  only  to  which,  but  for  the 
receivership,  they  might  maintain  such  action.'     This  principle 


Minn.  521  •,BlissY.  Doty,  36  Minn.  168; 
Weston  V.  Loylied,  30  Minn.  2'Z\;  Alex- 
ander V.  Relfe,  74  Mo.  495;  Hamlin  v. 
Wright,  23  Wis.  491;  Hill  v .  Western 
d;  A.  B.  Co.  86  Ga.  284;  Prescott  v. 
Pfeiffer,  57  Mich.  21.  In  many  of  the 
states  the  power  of  the  receiver  to  in- 
stitute and  carry  on  actions  to  set 
aside  fraudulent  conveyances  is  given 
by  statute.  The  doctrine  of  the  text, 
so  far  as  it  relates  to  the  receiver's 
right  to  avoid  the  fraudulent  acts  of 
the  debtor,  is  probably  supported 
by  the  weight  of  authority,  but  is 
strenuously  opposed  by  the  su- 
preme court  of  Illinois  in  JRepnblic  L. 
Ins.  Co.  V.  Swigert,  135  111.  150,  167, 
13  L.  R.  A.  328.  In  that  case  Mr. 
Justice  Baker,  after  an  exhaustive  re- 
view of  the  authorities  in  this  country 
and  in  England,  holds  that  a  receiver 
can  maintain  an  action  to  set  aside  a 
transaction  binding  on  the  person  or 
corporation  for  whom  he  is  receiver, 
only:  (1)  Where  the  receiver  by  force 
of  some  statute  can  act  for  the  cred- 
itors ;  (2)  where  the  act  complained 
of  was  ultra  vires  and  not  binding  on 
the  corporation;  (3)  where  the  re- 
ceiver was  appointed  in  a  proceeding 
prosecuted  by  creditors  at  whose  in- 
stance and  to  secure  whose  claims  he 
was  appointed  in  actions  supplemental 
to  execution;  (4)  where  the  receiver 
was  suing  for  property  or  assets  that 
belonged  to  the  debtor,  and  concludes 
in  the  following  language:  "We  think 
the  decided  weight  of  authority  sus- 
tains the  rule  in  respect  to  the  powers 
of  receivers,  where  there  has  been  no 
enlargement  of  their  powers  by  legis- 


lative enactment,  that  they  have  such 
rights  of  action  only  as  were  pos- 
sessed by  the  persons  or  corporations 
upon  whose  estates  they  administer. 
But  see  Haxtun  v.  BisJtop,  3  Wend. 
13 ;  Eastern  Bank  v.  Capron,  22  Conn. 
639. 

'  Young  v.  Clapp,  147  111.  176;  Rus- 
sell V.  Chicago  Trxist  &  Sav.  Bank,  139 
111.  538,  17  L.  R.  A.  345;  Goddard  v. 
Stiles,  90  N.  Y.  199;  Bostwick  v.  Menck, 
40  N.  Y.  383;  Storm  v.  Waddell,  2 
Sandf.  Ch.  494;  Corning  v.  White,  2 
Paige,  567;  Burrall  v.  Leslie,  6  Paige, 
567;  Safford  v.  Douglas,  4  Edw.  Ch. 
538;  Forier  v.  Williams,  9  N.  Y.  150; 
Banks  v.  Potter,  21  How.  Pr.  473; 
Howell  y.  Bijyley,  10  Paige,  43;  Cum- 
ming  v.Edgerton,  9  Bosw.  084;  De- 
troit First  Nat.  Bank  v.  Barnum  Wire 
dc  I.  Works,  60  Mich.  487;  King  v. 
Goodwin,  130111.  102;  Osgood  v.  Ogden, 
3  Abb.  App.  Dec.  425;  Zuckerman  v. 
Brown,  33  N.  Y.  297. 

A  receiver  of  a  corporation  stands 
in  the  places  of  the  corporation  itself, 
and  is  estopped  from  maintaining  any 
action  or  setting  up  any  defense  where 
the  corporation  would  have  been  es- 
topped. McLaren  v.  Milwaukee  First 
Nat.  Bank,  76  Wis.  259;  Lincoln  v. 
Fitch,  42  Me.  456;  Curtis  v.  Leavitt,  15 
N.  Y.  9,  290;  Cutting  v.  Damerel,  88 
N.  Y.  410;  Faricell  v.  Metcalf,  63  N. 
H.  276;  Hoar  v.  Harshow,  49  Wis.  379. 
If,  however,  he  represents  the  cred- 
itors, it  is  otherwise,  Huiskamp  v. 
Moline  Wagon  Co.  121  U.  S.  310,  30  L. 
ed.  971. 

Where  a  corporation  is  being  wound 
up  the  receiver  is  a  statutory  trublce 


RECEIVERSHIP  OF  CORPORATIONS.  377 

has  more  particular  application  to  supplemental  proceedings,  and 
proceedings  in  the  nature  of  creditors'  bills  wherein  the  receiver 
is  the  especial  representative  of  the  creditor  or  creditors  institut- 
ing the  proceeding. 

§  232.     The  receiver  as  manager, 

While  it  is  true  that  under  ordinary  circumstances  the  court 
will  decline  to  order  the  receiver  to  continue  the  business  of  the 
person  or  corporation  over  whose  property  he  is  appointed,. yet 
there  are  cases  in  which  it  is  not  only  proper  but  in  which  it  is 
the  duty  of  the  court  to  do  so.  This  is  especially  proper  wliere, 
as  in  the  case  of  quasi-public  corporations,  public  interests  are  tO' 
a  greater  or  less  extent  involved.  There  is  also  another  ground 
upon  which  tliis  exception  to  the  general  rule  is  sometimes  based 
as  where,  owing  to  the  peculiar  nature  of  the  corporate  business^ 
it  is  necessary  for  the  due  protection  of  the  interest  of  all  parties 
to  sell  the  corporate  property  and  franchises,  including  the  good- 
will as  a  going  concern.  Hence,  in  such  case,  it  is  not  only  ex- 
pedient but  a  judicial  duty  to  preserve,  in  the  meantime,  the  cor- 
porate property  and  business  intact.  True,  in  a  general  sense,  the 
court  should  not  assume  the  management  of  private  business  and 
interests  or  assume  the  functions  of  corporations,'  yet,  on  the  con- 
trary, it  will  not  wantonly  destroy  the  value  of  corporate  property 
in  which  many  interests  and  possibly  conflicting  interests  may  be 
involved,  and  where  the  owners  of  such  interests  may  be  wholly 
powerless  to  act  or  intercede  except  through  the  legally  consti- 
tuted corporate  authorities,  the  latter  frequently  being  the  parties 
whose  acts  justify  the  intervention  of  the  court.  There  is  prob- 
ably no  other  branch  of  the  law  of  receivership  requiring  the  ex- 

for  all  creditors  of  the  corporation,  the  receiver  occupies  a  position  of  in- 

Libby   V.   Rosekrans,    55    Barb.    202;  dilTorence  and  impartiality.    Uolbrook 

Atty.  Oen.  v.  North  American  L.  Ins.  v.  American  F.  Ins.  Co.  6  Paige,  220; 

Go.  82  N.  Y.  172;  Bockes  v.  llathorn,  People,  AUy.  Gen.,  v.  Security  L.  Ins. 

78  N.  Y.  222;  PitMurg  Carbon  Co.  v.  cfc  A.  Co.  79  N.  Y.  267;  lieVan  Allen, 

McMillin,  119  N.  Y.  46,  7  L.  R.  A.  46;  37  Barb.  230;  Detroit  Firxt  Nat.  Dank 

Whittlesey  v.  Belaney,  73  N.  Y.  571;  v.  Barnurn  Wire  &  I.    Co.  58  Mich. 

Stokes  V.  New  Jersey  Pottery  Co.  46  N.  315. 

J.  L.  237.  '  See  Lord   Thurlow's   remarks  in 

As  the   representative  of  the  cred-  Ex  parte  O'Beily,  1  Ves.  Jr.  112,  and 

itors,  In  their  relation  to  each  other  note  by  Mr.  Ilovenden,  p.  130. 


378 


RECEIVERSHIPS. 


ercise  of  greater  cantion  on  the  part  of  tlie  court  than  that  which 
relates  to  tlie  appointment  of  a  I'eceiver  over  corporations,  which 
have  not  been  judicially  declared  insolvent,  or  which  are  not 
■clearly  so/  The  court  has  sometime's  been  made  the  instrument 
of  desii^ning  plaintiffs  for  wresting  from  the  proper  and  legally 
constituted  corporate  authorities  the  management  of  the  corporate 
interests,  without  other  basis  than  the  ill  will,  or  disap]iointed 
ambition  of  the  moving  parties.  At  other  times  the  equitable 
powers  of  the  court  have  been  illegitimately  invoked  for  the  pur- 


•  See  memorial  of  the  state  of  South 
Carolina  to  Congress  in  28  Am.  L. 
Rev.  161.  In  Indiana  where  the  stat- 
ute (Rev.  Stat.  1881,  §  1222)  provides 
that  in  case  the  corporation  has  been 
dissolved,  or  is  insolvent,  or  is  in  im- 
minent danger  of  insolvency,  or  has 
forfeited  its  corporate  rights,  a  re- 
ceiver may  be  appointed,  it  has  been 
held  that  "a  court  of  equity  should 
not  ruthlessly  take  from  the  legally 
constituted  oflBcers  of  a  corporation 
the  management  of  its  affairs  and  the 
property  of  the  corporation  and  turn 
it  over  to  the  hands  of  a  receiver. 
Such  power  should  not  be  exercised 
by  a  court  of  equity  except  with  due 
care  and  in  a  case  where  it  is  clearly 
made  to  appear  that  it  is  for  the  best 
interest  of  the  parties  interested,  and 
it  will  not  be  presumed  that  a  court 
of  equity  will  exercise  such  power  ex- 
cept when  the  exigencies  of  the  case 
clearly  warrant  it;  and  we  think  un- 
der our  statute  the  court  has  such 
power  when  it  is  clearly  made  to  ap- 
pear that  the  exigencies  of  the  case 
demand  it."  Cf.  Supreme  Sitting, 
0.  of  I.  E.  V.  Baker,  134  Ind.  293,  20 
L.  R.  A.  210.  In  this  case  the  court 
6ay :  "It  would  seem  from  the  general 
scope  and  tenor  of  the  prayer  of  the 
complainant  in  this  case  that  the  relief 
souglit  by  appellees  was  a  dissolution 
of  the  corporation  on  the  grounds  of 
its   insolvency  and  general  misman- 


agement of  its  officers  and  the  ap- 
pointment of  a  receiver  to  wind  up  its 
affairs.  This  it  would  seem  is  what 
the  pleader  had  in  mind  when  he 
drafted  the  prayer  of  the  complaint. 
That  a  court  of  equity  has  no  power 
independently  of  statute  to  dissolve 
an  insolvent  corporation  is  well  set- 
tled. The  authorities  seem  to  be  uni- 
versal in  holding  this  doctrine.  *  *  * 
There  is  no  statute  in  this  state  au- 
thorizing a  court  of  equity  to  dissolve 
a  corporation  on  3Uch  a  proceeding 
as  the  one  at  bar  brought  on  behalf 
of  individual  stockholders  or  share- 
holders as  the  appellees  are  in  this 
case.  Hence  the  action  cannot  be 
sustained  or  regarded  as  one  having 
for  its  object  the  dissolution  of  the 
corporation  on  the  grounds  of  insolv- 
ency or  being  in  imminent  danger  of 
insolvency."  On  the  question  of  the 
power  of  the  court  in  the  above  case 
the  court  say:  "A  court  of  equity 
should  not  ruthlessly  wrest  from  the 
legally  constituted  officers  of  the  cor- 
poration the  management  of  its  affairs 
and  the  property  of  the  corporation 
and  turn  it  over  to  the  hands  of  a  re- 
ceiver. Such  power  should  not  be 
exercised  by  the  court  of  equity  ex- 
cept with  due  care  and  in  a  case  where 
it  is  clearly  made  to  appear  that  it  is 
for  the  best  interests  of  the  parties  in- 
terested." 


RECEIVEKSHIP  OF  CORPORATIONS. 


379 


pose  of  bridging  over  temporary  financial  embarrassments  of  the 
corporation  and  thus  the  court  is  made  the  unwilHng  instrument, 
through  its  receiver,  of  suspending,  for  the  time  being,  the  entire 
judicial  department  of  the  state  or  government,  as  to  such  corpo- 
ration. On  the  other  hand,  sometimes  zealous  and  unreasonably 
impatient  creditors,  for  inconsiderable  amounts,  are  willing  to 
utterly  ruin  and  sacrifice  the  property  and  business  interests  of 
corporations,  regardless  of  the  rights  of  other  creditors,  or  the 
23ublic  interests  subserved  by  such  corpoi-ations.  All  these  things 
make  it  imperative  on  the  part  of  the  court  to  exercise  the  great- 
est judicial  caution  in  the  appointment  of  receivers  over  corpora- 
tions, and  particularly  so  where  the  action  involves  the  manage- 
ment of  the  corporate  business.' 


'  As  a  matter  of  interest  in  this  con- 
nection it  will  be  observed  that  the 
English  Court  of  Chancery,  prior  to 
the  act  of  Parliament  known  as  the 
Railway  Companies  Act  of  1867,  was 
exceedingly  averse  to  appointing  a 
receiver  over  a  railway  corporation, 
and  placing  the  management  of  its 
affairs  in  hiS'hands,  basing  its  refusal 
upon  the  following  grounds: 

(1)  The  general  disinclination  of 
the  court  in  any  case  to  assume  the 
permanent  management  of  a  business 
or  undertaking. 

(2)  Where  Parliament  has  imposed 
upon  a  corporation  the  power  and 
duty  of  operating  a  public  highway 
in  the  interest  of  the  public,  and  the 
company  has  assumed  the  duties  of 
a  public  carrier  of  passengers  and 
goods,  the  judicial  branch  of  govern- 
ment should  well  hesitate  in  assum- 
ing the  duties  and  responsibilities 
lodged  by  the  lawmaking  power  in 
another  body  of  its  own  selection. 
The  corporation  being  wholly  unable 
to  delegate  or  transfer  the  powers  and 
duties  conferred  upon  it,  it  was 
thought  to  be  beyond  the  power  of 
the  court  to  transfer  to  itself  by  oper- 
ation of   law  the   powers  and  duties 


of  the  corporation,  to  be  performed 
through  the  instrumentality  of  its  re- 
ceiver and  agent.  Gardner  v.  Lon- 
don, C.  &  D.  R.  Co.  L.  R.  2  Ch.  Div. 
201. 

The  appointment  of  receivers  now, 
however,  is  regulated  by  act  of  Par- 
liament. See  38  and  39  Vict.  Chap. 
31. 

There  is  no  statutory  authority  in 
California  for  the  appointment  of  a 
receiver  to  manage  the  business  of  a 
corporation  pending  an  action  by 
a  private  person  to  determine  his 
rights  in  the  property  of  the  corpora- 
tion ;  and  without  such  authority  there 
is  no  jurisdiction  in  the  court  to  make 
such  an  appointment.  Fischer  v.  iSan 
Francisco  Super.  Ct.  110  Cal.  129. 

A  court  cannot,  in  the  absence  of 
statutory  authority,  appoint  a  receiver 
to  manage  the  business  of  a  corpora- 
tion pending  an  action.  Fischer  v. 
San  Francisco  Super.  Ct.  supj'a. 

As  to  the  general  power  and  duty 
of  the  court  to  authorize  its  receiver 
to  continue  business,  see  Vanderbilt  v. 
Central  B.  Co.  43  N.  J.  Eq.  669; 
Moran  v.  Lydecker,  27  Hun,  582; 
People  v.  Atlantic  Mut.  L.  Ins.  Co.  15 
Hun,  84;  Atty.  Gen.  v.  Atlantic  Mut, 


380 


RECEIVERSHIPS. 


§  233.     Receiver's  powers  and  duties. 

The  general  powers  and  duties  of  a  receiver  have  previously 
been  considered  and  only  in  so  far  as  such  powers  and  duties  relate 
to  the  administration  of  corporate  property  and  assets  will  they 
be  reconsidered  in  this  connectian.  As  it  must  frequently  happen 
in  receiverships  over  corporations  the  court  through  its  receiver 
is  required  to  take  upon  itself,  pending  litigation,  the  manage- 
ment of  the  corporate  business,  and  this  necessarily  results  in  en- 
larging the  power  of  the  receiver  beyond  the  requirements  in 
ordinary  receiverships  where  his  whole  duty  is  the  mere  custody 
and  safe-keeping  of  the  property  and  assets  until  the  final  order 
of  the  court. 

(a)  Power  to  borkow  money. 

A  receiver  under  the  direction  of  the  court  has  the  power  to 
borrow  money  to  be  expended  by  him  in  the  necessary  repairs  of 
the  corporate  property,'  such  as  a  railway,  under  his  control  and 


L.  Ins.  Co.  77  N.  Y.  336;  Stnith  v. 
New  York  Consol.  Stage  Co.  18  Abb. 
Pr.  420;  Barton  v.  Barbour,  104  U.  S. 
126,  26  L.  ed.  674;  Wallace  v.  Loomis, 
97  U.  S.  146,  24  L.  ed.  895;  FiscJier  v. 
Tuolumne  County  Super.  Ct.  98  Cal. 
67;  Enkridge  v.  Bushworth,  3  Colo.. 
App.  562. 

'  Greenwood  v.  Algesiras  B.  Co. 
[1894]  2  Ch.  205.  In  this  case  an  ac- 
tion was  brought  by  the  debenture 
holders  and  stockholders  to  foreclose, 
and  application  was  made  to  borrow 
£10,000  to  be  used  in  repairing  dam- 
ages to  the  railway  by  landslips  and 
other  expenses  necessary  to  keep  the 
line  open  for  traffic  and  to  avoid  a  for- 
feiture. In  Bank  of  Montreal  v.  Chi- 
cago, C.  &  W.  B.  Co.  48  Iowa,  518,  the 
order  went  so  far  as  to  authorize  the 
receiver  to  "put  those  portions  of  the 
said  lines  already  constructed,  or 
partly  constructed,  in  good  order  and 
condition,"  and  borrow  money  and 
issue  certificates  therefor.  It  was  held 
in  this  case  that  the  power  of  the  re- 
ceiver should  appear  in  express  terms 


or  possibly  by  necessary  implication, 
but  that  the  receiver  was  not  author- 
ized to  issue  certificates  for  labor  not 
performed  or  material  not  furnished. 

As  to  the  power  to  create  claims 
through  receivers  and  make  such 
claims  a  first  lien  in  precedence  of  a 
mortgage,  see  Wallace  v.  Loomis,  97  U. 
S.  146,  24  L.  ed.  895;  Miltenberger  v. 
Logansport,  C.  &  S.  W.  R.  Co.  106  U. 
S.  286,  309,  27  L.  ed.  117,  126.  Cf. 
Moran  v.  Lydecker,  27  Hun,  582; 
and  Stanton  v.  Alabama  &  C.  R.  Co.  2 
Woods,  506.  In  the  last  case  it  appears 
that  it  was  necessary  to  borrow  money 
to  preserve  the  road  and  complete  an 
inconsiderable  portion  of  the  road. 
Eoover  v.  Mont  Clair  &  O.  L.  R.  Co. 
29  N.  J.  Eq.  4;  Morison  v.  Morison,  7 
DeG.  M.  &  G.  214;  Bright  v.  Mrth, 
2  Phill.  216;  Jerome  v.  McCarter,  94 
U.  S.  734,  24  L.  ed.  136. 

The  receivers  of  the  property  of 
a  railroad  acting  under  an  order 
of  court,  giving  them  power  "to 
continue  in  the  possession  and  man- 
agement of    the   property,"  in  good 


RECEIVERSHIP  OF  CORPORATIONS.  381 

management,  and  to  make  the  sum  so  borrowed  a  first  lien  upon 
the  net  revenues  of  the  company,  and  its  property,  in  priority  to 
all  other  charges  or  liens.  In  such  case  there  must  be  an  emer- 
gency and  the  court  will  not  act  upon  slight  grounds.' 

(b)    To    PURCHASE    ROLLING    STOCK. 

The  jurisdiction  of  a  court  of  equity  having  possession  in  a 
foreclosure  action,  through  its  receiver,  of  the  property  of  a  rail- 
road company,  to  authorize  the  creation  of  debts  for  rolling  stock 
and  other  purposes,  when  in  its  opinion  it  is  necessary  so  to  do  to 
secure  the  continued  and  successful  operation  of  the  road  and  to 
charge  the  debts  so  created  as  a  first  lien  on  the  mortgaged  prop- 
erty, is  firmly  established,  though  formerly  a  subject  of  doubt." 

(c)    To    MAKE    NEEDFUL    REPAIRS. 

Where  a  railroad  is  in  the  hands  of  a  receiver  in  a  foreclosure 
proceeding  it  is  not  only  within  the  power  but  the  duty  of  a  re- 
ceiver to  make  necessary  crossings  over  a  railway  operated  by 
him.^     In  general  it  may  be  stated  that  the  receiver  has  power  to 

faith  borrowed  money  necessary  for  borrow  money  to  be  reimbursed  out 

its  proper  and  successful  management.  of  the  proceeds  of  sale  when  such  a 

It  was  held   that  the   claim  of  the  course  was  necessary.     Cf.  Kennedy 

lender  for  repayment  from  earnings  v.  St.  Paul  &  P.  R.  Co.  2  Dill.  448, 

of  the  road  while  in  the  receiver's  5  Dill.  519;  Hand  v.  Savannah  &  G. 

hands  was  superior  to  that  of  a  second-  R.  Co.  10  S.  C.  406;  Vilas  v.  Page,  106 

mortgage  bond    holder.        Ex  parte  N.  Y.  439. 

Carolina  Nat.  Bank,  18  S.  C.  289.  ^  Vilas  v.  Page,  106  N.  Y.  439,  451; 

'  The  court  in  Meyer  v.  Johnston,  53  Wallace  v.  Loomis,  97  U.  S.   146,  24 

Ala.   237,    337,    says;    "We  are  not  L.  ed.  895;  Union  Trust  Co.  v.  Illinois 

aware  of  any  principle  of  law  or  ele-  M.  R.    Co.   117  U.   S.  434,  29  L.  ed. 

ment  of  wise  policy  which  would  jus-  963;  Woodruff  v.  Erie  R.  Co.  93  N.  Y. 

tify  such  court  after  so  getting  pos-  609.     And  see  Railways,  post,  §  280. 

session  in   laying   aside  its    judicial  ^  Fort  Dodge  v.  Minneapolis  <&  St.  L. 

character    and     engaging,     however  R.  Co.  87  Iowa,  389;  Newton  v.  Chi- 

hopeful  the  scheme  in  the  contempla-  ago,  R.  I.  &  P.  R.  Co.  66  Iowa,  422; 

lion  of  unfinished  undertakings,  and  Oates  v.  Chicago,  St.  P.  &  K.  C.  R. 

in  raising  money  for  this  purpose,  as  Co.  82  Iowa,  528.     In  Fort  Dodge  v. 

the    parties    themselves    could    not,  Minneapolis   &  St.  L.   R.   Co.  supra, 

namely,  by  setting  up  liens  which  shall  mandamus  proceedings  were  sustained 

displace  other  and  older  liens  without  against  a  receiver  to  compel  the  maidng 

the  con.sent  of  the  persons  to  whom  of  necessary  repairs,  and  this  too  where 

they  belong."     The  court  recognized,  the  receiver  was  appointed  in  a  foreign 

however,  the  right  of  the  receiver  to  state.     See  Railways,  post,  §  280. 


3S2  RECEIVERSHIPS. 

make  tlie  ordinaiy  and  usual  repairs  to  the  premises  in  his  charge 
without  application  to  the  court  for  that  purpose,'  but  if  the  re- 
pairs are  extensive  or  out  of  the  ordinary  scope,  usual  and  cus- 
tomary, application  should  be  made  for  leave,  as  in  passing  the 
accounts  objection  may  be  made. 

(d)    To  COMPROMISE. 

The  receiver  of  an  insolvent  corporation  upon  application 
to  the  court  may  be  authorized  to  compromise  disputed  and 
doubtful  claims  against  the  com^Dany  by  the  allowance  of  so  much 
of  such  claims  as  he  may  deem  just  and  equitable,  if  such  com- 
promise is  deemed  expedient  and  for  the  best  interest  of  the  cred- 
itors and  shareholders."  And  generally  he  may  take  such  steps  in 
winding  up  an  insolvent  corporation  as  shall  be  necessary  to 
enable  him  to  secure  possession  of  the  assets  or  their  value.'  But 
the  receiver  of  a  national  bank  will  not  be  authorized  to  compro- 
mise the  liability  of  the  stockholders  of  such  bank  who  have 
fraudulently  j)ut  away  their  property  for  the  purpose  of  avoiding 
their  liability  as  stockholders  although  by  such  compromise  a  larger 
sum  can  be  realized  for  the  fund." 

(e)  To  SUE. 
The  right  of  a  receiver  to  sue  and  recover  is,  as  a  rule,  measured 
by  the  right  of  the  corporation,  over  whose  property  he  is  ap- 
pointed, to  maintain  an  action.  This  could  not  be  otherwise  for 
the  reason  that  the  appointment  does  not,  in  any  respect,  change 
the  contract  relations  of  the  parties  as  they  exist  at  the  time  of 

^Atty.   Gen,   v.  Vigor,   11  Ves.  Jr.  claims  for  and  against  a  bank  by  siir- 

563;    Blunt  v.    Clitherow,  6  Ves.  Jr.  rendering  all  the  remaining  assets  in 

799;  Thornhill  v.  ThornJdll,  14  Sim.  consideration  of  money  sufficient  to 

600;  Macartney  V.  Wahli,  Hayes,  29,  make  a  certain  dividend,  the  claims  in 

note.     But  see  Wyckoff  v.  Scofield,  103  favor  of  the  bank    appearing  to  be 

N.  Y.  630.  valid    and    enforceable    to    a    much 

*  Re  Croton  Ins.  Co.  8  Barb.  Ch.  642.  greater    amount    than  those  against 

*  State  v.  Commercial  &  Sav.  Bank,  it.  A  receiver  of  a  national  bank  on 
37  Neb.  174.  order  of  a  court  of  record  of  com- 

■^  Be    California    Nat.    Bank  Stock-  petent  jurisdiction  may  compound  all 

holders,  .53  Fed.  Rep.  38  (see  U.  S.  Rev.  bad  or  doubtful  debts.     U.  S.  Rev. 

Stat.  §  5234);    In  Re  St.  Albans  First  Stat.  §   5234.     See  Re  Piatt,   1  Ben. 

Nat.  LVjtjA;,  49  Fed.  Rep.  120,  it  is  held  534,    Kennedy  v.    Oibson,  75  U.  S.  8 

that  a  receiver  will  not  be  allowed  to  Wall.  498,  19  L.  ed.  476. 
accept    a    proposal   to    compromise 


IIECEIVEKSHIP  OF  CORPORATIONS. 


383- 


Bucli  appointment/     And  any  defense  available  to  a  defendant 
against  tlie  corporation  in  an  action   by  it  is  equally  available 


'  The  contract  relalions  remain  as 
before.  WilUams  v.  Babcock,  25  Barb. 
109.  The  receiver  stands  in  the 
position  of  the  corporation  with  no 
greater  rights;  he  cannot  impeach  or 
disalfirm  the  lawful  and  authorized 
acts  of  the  corporatipn.  Eyde  v. 
Lynde,  4  N.  Y.  387.  In  an  action  in- 
volving the  title  to  goods  purchased  by 
an  insolvent  the  receiver  of  such  in- 
solvent can  assert  no  better  claim  than 
the  insolvent  could.  Head  v.  Miller, 
45  Minn.  440.  He  cannot  recover 
property  sold  on  execution  before  his 
appointment.  Mcllrath  v.  Snure,  22 
Minn.  391.  The  same  defenses  avail- 
able to  a  stockholder  in  an  action  by 
the  company  are  available  to  him  in 
an  action  by  the  receiver.  Wardle  v. 
Hudson,  96  Mich.  432;  Vermont  &  G. 
R.  Co.  V.  Vermont  C.  B.  Co.  46  Vt, 
792;  Bangs  v.  Duckinfield,  18  N.  Y. 
697.  A  receiver  has  no  right  of 
action  on  an  official  bond  executed  by 
the  debtor  and  his  sureties.  Coffin  v. 
Bansdell,  110  Ind.  417;  Wallace  v. 
Milligan,  110  Ind.  498.  In  an  action 
by  a  receiver  of  a  bank  the  defendant 
may  set  up  the  fraudulent  represen- 
tations of  the  bank  and  want  of  con- 
sideration as  well  as  if  suit  had  been 
by  the  bank.  Litchjield  Bank  v.  Peck, 
29  Conn.  384.  The  insolvency  of  the 
company'  does  not  enable  the  receiver  to 
recover  under  circumstances  in  which 
the  company  could  not  have  main- 
tained a  suit,  nor  to  any  greater  amount. 
Savage  v.  Medbury,  19  N.  Y.  32.  The 
liability  of  a  stockholder  is  not  in- 
creased by  the  insolvency  of  the  com- 
pany and  the  appointment  of  a  re- 
ceiver. Shaughnensy  v.  Rensselaer 
Ins.  Co.  21  Barb.  605;  -Sw^  v.  Arm- 
strong, 146  U.  S.  499,  36  L.  ed.  1059. 
Cf.  Blount  v.  Windley,  95  U.  8.  173, 


24  L.  ed.  424;  Carr  v.  HamiHon.  12^ 
U.  S.  252.  32  L.  ed.  669;  Scammon  v. 
Kimball,  92  U.  S.  362,  23  L.  ed.  483; 
Venango  Nat.  Bank  v.  Taylor,  56  Pa. 
14;  Hade  v.  McVay,  31  Ohio  St.  231, 
A  receiver  appointed  over  a  corpora- 
tion succeeds  to  all  the  rights  of  the 
company,  and  he  alone  can  maintain 
an  action  for  the  enforcement  of  such 
rights.  Davis  v.  Ladoga  Creamery 
Co.  128  Ind.  222.  But  in  all  such  suits 
he  must  allege  authority  to  sue  from 
the  court  appointing  him.  Moriarity 
v.  Kent,  71  Ind.  601;  Harrall  v, 
Kent,  71  Ind.  602;  Herron  v.  Vance, 
17  Ind.  595;  Coope  v.  Bowles,  28  How. 
Pr.  10;  Keen  v.  Breckenridge,  96  Ind. 
69;  Wynn  v.  Lord  Newboroagh,  3  Bro. 
C.  C.  88;  Green  v.  Winter,  1  Johns.  Ch. 
60:  Ward  v.  Sicift,  6  Hare,  312;  Re 
Merritt,  5  Paige,  125;  Merritt  v.  Mer- 
ritt,  16  Wend.  405;  Davis  v.  Snead, 
33  Gratt.  705;  Sicaby  v.  Dickon,  5  Sim. 
629 ;  Battle  v.  Davis.  66  N.  C.252;  Screven 
V.  Clark,  48  G-a.  41 ;  Glenn  v.  Busey  (D. 
C.)  3  Cent.  Rep.  283,  note;  but  see 
Cox  V.  Volkert,  86  Mo.  505.  Under 
the  Bank  Act  (chap.  126)  a  receiver 
represents  not  only  the  corporation 
but  the  creditors,  and  may  therefore 
avoid  any  conveyance  to  which  the 
bank  is  a  party,  made  in  fraud  of 
creditors.  Hayes  v.  Kenyon,  7  R.  I, 
136.  A  receiver  has  a  right  to  recover 
for  a  conversion  of  goods  made  prior 
to  his  appointment.  2'erry  v.  Bam- 
berger, 14  Blatchf.  234.  By  authority 
of  law  the  receiver  acts  in  the  place 
of  the  directors,  but  no  title  to  prop- 
erty is  changed.  Willink  v.  Morris 
Canal  &  Bkg.  Co.  4  N.  J.  Eq.  377; 
VanWagoner  v.  Paterson  Gaslight  Co. 
23  N.  J.  L.  283;  Mitford  v.  Mitford,  9 
Ves.  Jr.  100;  Brownv . Heathcote ,  1  Atk. 
162;  Clason  v.  Morris,  10  Johns.  540; 


3S4 


RECEIVERSHIPS. 


against  a  receiver  in  an  action  bronglit  by  him."  He  may,  under 
the  direction  of  the  court,  sue  for  and  recover  any  money  due  the 
corporation  at  the  time  of  his  appointment,'  or  contract  obliga- 
tions existing  in  its  favor.  With  respect  to  the  right  of  the  re- 
ceiver to  maintain  an  action  against  the  stockholders  of  the 
corporation  to  recover  a  statutory  liability  in  favor  of  creditors, 
no  uniform  rule  can  be  established.  In  some  cases  the  receiver 
has  been  permitted  to  maintain  such  suits  in  his  official  capacity 
as  the  representative  of  the  creditors."     While  in  other  cases  such 


Murray  v.  Lylburn,  2  Johns.  Ch.  443; 
Moise  V.  Cfiapman,  24  Ga.  249;  Cox 
V.    Volkert,  86  Mo.  505. 

'  The  debtor  of  an  insolvent  corpo- 
ration has  the  same  equitable  right  of 
BetofE  against  a  claim  of  the  re- 
ceiver that  he  had  against  the  cor- 
poration, but  no  right  to  a  judgment 
against  the  receiver.  Van  Wagoner 
V.  Paterson  Oaslighi  Co.  23  N.  J.  L. 
•283;  Cumberland  Bank  v.  Harm,  18 
N.  J.  L.  222;  Ryally.  Larkin,  1  Wils. 
155.  Buller'sN.  P.  181;  McDoimld  v. 
Webster,  2  Mass.  498;  Colt  v.  Brown, 
12  Gray,  233.  The  remedy  of  set-oflf 
has  been  much  enlarged  in  equity. 
Thus  at  law  a  joint  demand  cannot 
be  set  off  against  a  general  one,  nor  a 
general  demand  against  a  joint  one; 
but  equity  adopts  a  different  rule 
■where,  on  account  of  the  insolvency 
of  one  of  the  parties,  the  other  is  in 
danger  of  losing  his  claim.  Generally 
equity  will  enforce  the  right  of  set-off. 
ArmMrong  v.  Warner,  49  Ohio  St.  376, 
17  L.  R.  A.  466;  Loui^  Snyders'  Sons 
Co.  V.  Armstrong,  37  Fed.  Rep.  18; 
Tardley  v.  Clothier,  49  Fed.  Rep.  337; 
State  Bank  at  New  Brunswick  v.  Bank 
of  New  Brunswick,  3  N.  J.  Eq.  266. 

*  Inasmuch  as  the  rights  of  the  cor- 
poration to  sue  are  suspended  during 
the  pendency  of  the  receivership,  the 
receiver  is  the  only  person  who  can 
sue  to  enforce  the  rights  of  the  cor- 
poration.    Davis  V.  Ladoga  Creamery 


Co.  128  Ind.  222.  He  must,  however, 
do  everything  which  the  corporation 
would  be  required  to  do  as  a  condition 
precedent  to  the  institution  of  a  suit. 
Hayes  v.  Kenyon,  7  R.  I.  136.  He 
has  authority  independent  of  the 
statute  to  sue  for  all  moneys  due  the 
company,  and  for  all  property  im- 
properly disposed  of  in  violation  of 
the  rights  of  either  creditors  or  stock- 
holders. Osgood  V.  Laytin,  48  Barb. 
463.  He  may  return  property  ob- 
tained by  the  corporation  on  con- 
ditional contracts  where  the  company 
has  become  unable  to  pay  its  current 
debts  in  the  ordinary  course  of  busi- 
ness, on  complying  with  the  terms  of 
the  contract.  Sunflower  Oil  Co.  v. 
Wilson,  142  U.  S.  313,  35  L.  ed.  1025. 

^  The  court,  in  Calkins  v.  Atkinson, 
2  Lans.  12,  held  that  a  receiver  of  an 
insolvent  corporation  may  maintain  a 
suit  in  equity  against  the  stockholders 
to  enforce  their  stock  liability  to  cred. 
itors,  and  may  restrain  the  creditors 
from  prosecuting  such  suits,  on  the 
authority  of  Story  v.  Furman,  25  N. 
Y.  214.  Such  suit  is  several  and  not 
joint.  Rankine  v.  Elliott,  16  N.  Y. 
377;  Aspinwall  v.  Torrance,  1  Lans. 
381.  See  contra,  Mathis  v.  Pridham, 
1  Tex.  Civ.  App.  58. 

Ib  Stephens  v.  Bernays,  41  Fed. 
Rep.  401,  it  was  held  that  the  receiver 
might  maintain  a  suit  for  stock  liabil- 
ity against  a  stockholder  of  a  national 


RECEIVERSHIP  OF  CORPORATIONS. 


385 


actions  are  prosecuted  by  the  creditors  themselves.'  When  a  re- 
ceiver has  been  appointed  in  a  suit  to  reach  concealed  assets  or 
misappropriated  property  suit  may  be  broui^ht  by  the  receiver, 
and  not  by  creditors  f    and  when  the  receiver  is  applied  for 


bank.  Schoonover  v.  Hinckley,  48 
Iowa,  82.  In  McDonald  v.  Ross- 
Lewin,  29  Hun,  87,  in  an  action  to 
dissolve  an  insurance  company,  it 
was  held  that  a  receiver  may  assess 
the  members  for  unassessed  losses 
and  bring  separate  actions  against 
each  member  to  recover  the  assess- 
ment. 

The  regularity,  propriety,  and  va- 
lidity of  the  appointment  of  a  re- 
ceiver of  an  insolvent  corporation 
under  Minn.  Gen.  Stat.  1894,  ^  5897, 
cannot  be  collaterally  attacked  in  a 
proceeding  by  him  to  enforce  the  col- 
lection of  a  call  on  unpaid  subscrip- 
tions. Bastirig  v.  Ankeny  (Minn.) 
6G  N.W.  266. 

'In  Wincock  v.  Turpin,  96  111.  135, 
suit  in  equity  was  brought  by  a  re- 
ceiver of  a  bank  and  a  depositor 
against  the  stockholders  of  a  savings 
bank  to  enforce  their  stock  liability 
and  to  restrain  individual  depositors 
from  prosecuting  suits  at  law,  and  it 
was  held  that  whenever  a  statute  cre- 
ates a  liability,  it  is  a  liability  at  law 
unless  equitable  jurisdiction  is  given 
by  the  statute,  and  where  the  statute 
makes  the  liability  to  depositors  they 
alone  may  sue,  and  the  receiver  has 
no  right.  The  court  says,  however: 
"  It  may  be  a  state  of  facts  might  ex- 
ist which  would  authorize  a  court  of 
equity  to  bring  before  it  all  the  stock- 
holders and  depositors  and  determine 
their  rights  and  adjust  equities, 
marshal  the  fund  and  distribute  it 
pro  rata."  As  to  the  remedy  being 
at  law,  see  Culver  v.  Third  Nat.  Batik, 
61  111.  528;  Corwith  v.  Culver,  69  111. 
503;  Tibballs  v.  Libby,  87  111.  142; 
25 


Arem  v.  Weir,  89  111.  25;  McCarthy  y. 
Lavawhe.  89  111.  270;  Fuller  v.  Led- 
den,  87  111.  310. 

And  in  Tibballs  v.  Libby,  and  Arem 
V.  Weir,  supra,  the  fact  that  a  receiver 
had  been  appointed,  it  was  held,  did 
not  change  the  rights  of  a  creditor  to 
sue  and  recover  stock  liability.  As 
to  equitable  jurisdiction  in  such  a 
case,  see  Eames  v.  Doris,  102  111.  350, 
where  it  is  held  that  if  the  liability 
constitutes  a  common  fund  for  the 
benefit  of  all  creditors,  then  a  suit  in 
equity  will  be  sustained,  on  the  au- 
thority of  Merchants'  Bank  v.  Steven- 
son, 5  Allen,  401;  Crease  v.  Babcock,  10 
Met.  532;  Briggs  v.  Penniman,  8  Cow. 
387;  Horner  v.  Henning,  93  U.  S.  228, 
23  L.  ed.  879;  Low  v.  Buchanan,  94 
111.  81;  Harpers.  Union  Mfg.  Co.  100 
111.  225.  In  some  cases  it  has  been 
held  that  the  liability  is  concurrent, 
by  suits  at  law  or  in  equity.  Bank  of 
Pmighkcepnie  v.  Ibbotson,  24  Wend. 
473;  Van  Hook  v.  Whitlock,  3  Paige, 
409;  Norris  v.  Johnson,  34  Md.  485; 
Perry  Y.  Turner,  55  Mo.  418;  Adfcins 
V.  Thornton,  19  Ga.  325. 

In  Wallace  v.  Milligan,  110  Ind.  498, 
it  was  held  that  the  individual  liabil- 
ity of  a  member  of  a  partnership  was 
not  a  firm  asset,  and  in  the  absence 
of  a  statute  a  receiver  of  the  firm  has 
no  right  to  enforce  such  liability;  that 
the  right  exists  alone  in  the  creditors. 
Cf.  Ilepublic  L.  Ins.  Co.  v.  Sivigert,  135 
111.  150,  12  L.  R.  A.  328;  Jacobson  v. 
Allen,  20  Blatchf.  525;  Farnsworth 
V.  Wood,  91  N.  Y.  308;  Cuykendall  v. 
Corning,  88  N.Y.  129. 

*  South  Bend  Toy  Mfg.  Co.  v.  Pierre 
Fire  &  M.  Ins.  Co.  4  B.  D.  173. 


380 


RECEIVE  KSHIPS. 


partly  by  reason  of  the  insolvency  of  the  corporation  he  may 
maintain  a  snnnnary  proceeding  entitled  in  the  original  action  to 
compel  otKcers  of  tlic  corporation  to  surrender  assets  which  they 
are  charged  with  concealing.'     He  may  institute  proceedings  to 


'  Brandt  v.  Allen,  76  Iowa,  50,  1  L. 
R.  A.  653. 

The  fact  that  the  property  of  a  cor- 
poration has  passed  into  Ihc  hands  of 
a  receiver  does  not  bar  or  abate  a  suit 
aj^aiust  the  corporation  to  recover  a 
demand  against  it.  He  can  be  made 
a  party  by  personal  application  tliere- 
for.  Mercantile  Ins.  Co.  v.  Jaynes,  87 
III.  199. 

The  provisions  of  the  New  York  Re- 
vised Statutes  authorizing  the  receiv- 
ers of  an  insolvent  corporation  to  sue 
for  and  recover  any  sum  due  upon  any 
share  of  capital  stock, is  a  cumulative 
remedy  merely.  Mann  v,  Carrie,  2 
Barb.  294. 

The  receivers  of  an  insolvent  corpo- 
ration may  maintain  an  action  against 
stockholders  and  creditors  of  the  com- 
pany to  recover  from  the  stockhold- 
ers a  dividend  declared  on  its  capital 
stock,  and  received  by  them,  where 
the  complaint  avers  that  such  divi- 
dend impaired  the  capital;  that  some 
of  the  defendants  as  creditors  are 
suing  stockholders  to  secure  from 
them  such  dividends;  and  that  the 
funds  so  misappropriated  are  required 
to  pay  the  debts  of  the  corporation. 
Osgood  V.  Laytin,  48  Barb.  463. 

A  receiver  of  a  railroad  is  as  much 
entitled  to  recover  moneys  due  upon 
contracts  made  with  the  railway  com- 
pany as  with  himself.  Sunflower  Oil 
Co.  V.  Wilson,  142  U.  S.  313,  35  L.  ed. 
1025. 

A  receiver  in  a  mortgage  foreclos- 
ure against  a  corporation  is  a  mere 
custodian  of  the  mortgaged  property 
and  other  property  of  the  corpora- 
lion.  Uarland  v.  Bankers  &  M.  Teleg. 
Co.  32  Fed.  Rep.  305. 


A  suit  in  equity  by  a  receiver  of 
an  insolvent  corporation  lies  against 
the  stockholders  and  creditors  of  the 
corporation,  for  an  accounting  of 
the  demands  due  to  the  creditors; 
to  ascertain  the  individual  liability  of 
any  of  the  stockholders;  to  compel 
payment  from  the  various  stockhold- 
ers of  such  sums  as  might  be  due 
from  ihem  towards  a  fund  for  the 
payment  of  the  creditors,  and  mean 
time  to  restrain  the  creditors  from 
bringing  separate  suits  on  the  individ- 
ual liability  of  the  stockholders.  All 
equities  may  be  settled  in  the  one 
action.  Calkins  v.  Atkinson,  2  Lans. 
12. 

A  receiver  of  an  insolvent  corpora- 
tion has  no  power  to  enforce  statutory 
liability  of  the  stockholders,  in  the 
absence  of  a  statute  so  authorizing 
him.  Wallace  v.  Milligan,  110  lud.  498. 

In  an  action  by  a  receiver  to  re- 
cover from  a  stockholder  an  assess- 
ment upon  his  unpaid  stock,  the  lat- 
ter cannot  set  up  as  a  defense  fraud 
in  procuring  the  appointment  of  the  re- 
ceiver, or  the  claim  that  the  corpora- 
tion is  not  indebted,  these  matters 
being  adjudicated  in  the  action  result- 
ing in  the  appointment  of  the  receiver, 
Schoonovcr  v.  Hinckley,  48  Iowa,  82. 

The  question  whether  the  receiver 
of  a  mutual  benefit  society  should 
have  special  leave  granted  to  bring 
an  action  against  any  of  its  officers, 
where  such  question  depends  upon 
facts  and  circumstances  not  suffi- 
ciently presented  in  his  report,  will 
be  left  to  the  determination  of  a  sin- 
gle justice  upon  special  application 
therefor,  and  will  not  be  determined 
on  a  bill  by  the  receiver  for  instruc- 


RECEIVERSHIP  OF  CORPORATIONS. 


387 


charr^e  officers  and  dii'cetors  for  a  breach  of  trust,'  and  may  im- 
peach the  fraudulent  conveyances  of  the  corporation,'  or  its  ultra 
vires  acts.* 

(f)    To    REDEEM. 

The  receiver  of  the  corporate  propert}'  which  has  heen  sold 
under  a  mortgage  foreclosure,  where  aright  of  redem])tion  exists, 
lias  a  right  to  redeem  from  such  sale  where  such  right  existed  in 
the  mortgagor,*  but  if  the  redemption  would  not  l)e  advantageous 
to  the  estate  he  probably  would  not  be  compelled  to  do  so.* 

(g)    To    PAY    TAXES. 

Owing  to  the  nature  of  the  ordinary  tax  lien,  and  the  interest 
of  the  public  in  the  payment  of  general  taxes,  the  receiver  has 


tions  as  to  the  distribution  of  the  cor- 
porate assets.  Fogg  v.  Supreme  Lodge, 
U.  0.  of  G.  L.  159  Mass.  9.  The 
dale  of  tiling  the  bill  fixes  the  rights 
of  parlies. 

In  an  action  by  a  receiver  against 
the  corporate  officers  to  recover  con- 
verted assets,  it  is  no  defense  that 
such  assets  are  not  needed  for  the 
payment  of  debts.  McCarty's  Appeal, 
110  Pa.  379. 

The  receiver  appointed  in  equity  to 
foreclose  a  mortgage  on  a  railroad 
cannot  maintain  a  suit  lo  recover 
earnings  of  the  road  before  his  ap- 
poinlraent.  Noyes  v.  Rich,  52  Me. 
115. 

'  The  receiver  in  his  official  position 
has  an  undoubted  right  to  institute 
proceedings  against  directors  and  offi- 
cers, for  losses  sustained  by  the  cor- 
poration, through  breaches  of  trust. 
Bank  oj  Niagara  v.  Johnaon,  8  Wend. 
645;  Buiterijcorth  v.  O'Brien.  39  Barb. 
192;  Hayes  v.  Kenyoa,  7  R.  I.  136; 
Gillet  V.  Phillipa,  13  N.  Y.  114;  lie 
National  Funds  Assur.  Co.  L.  R.  10 
Ch.  Div.  118. 

In  such  case  he  is  the  representa- 


tive of  all  the  creditors,  and  not  par- 
ticular creditors.  He  represents  cred- 
itors tit  universi  and  not  ut  singuli. 
Lacomhe  v.  Milliken,  36  La.  Ann.  367; 
Raymond  v.  Palmer,  35  La.  Ann.  276. 

»  Whittlesey  v.  Belaney,  73  N.Y.  571; 
Tackerman  v.  Brown,  33  N.  Y.  297; 
Atty.  Oen.  v.  Qiiardian  Mxt.  L.  Ins. 
Co.  77  N.  Y.  272;  Gillet  v.  Phillips, 
13  N.  Y,  114;  Bostwick  v.  Menck,  40 
N.  Y.  383;  McLaren  v.  Milwartkee 
First  Nat.  Bavk,  76  Wis.  491 ;  Uam- 
lin  V.  Wright,  23  Wis.  491;  Habenv. 
Harshaw,  49  Wis.  379;  Viles  v.  Bangs, 
36  Wis.  131;  Alexander  v.  Relfe,  74  Mo. 
495;  Weston  v.  Loyhed,  30  Minn.  221; 
Schmidlapp  v.  Carrie,  55  Miss.  597; 
Faricell  v.  Meteatf,  63  N.  H.  276;  Hurt 
V.  Clarke,  56  Ala.  19;  Iluiskanip  v. 
Moline  Wagon  Co.  121  U.  S.  310,  30 
L.  ed.  972. 

^Vail  V.  Hamilton,  85  N.  Y.  453. 

*Cnsserly  v.  WitherOee,  119  N.  Y. 
522;  Cliamherlain  v.  Greenleaf,  4  Abb. 
N.  C.  178. 

<>Re  Oak  Pits  Colliery  Co.  L.  R.  21 
Ch.  Div.  322;  Com.  v.  Franklin  Ins. 
Co.  115  Mass.  278. 


3S8 


RECEIVERSHIPS. 


power  and  it  is  his  duty  to  pay  the  taxes  on  the  receivership 
pro})erty.' 

(h)    To    LEASE. 

Independent  of  statutory  power,  or  express  authority  from  the 
court  a  receiver  has  no  power  to  lease  the  receivership  property.* 

(i)    To   MORTGAGE. 

Under  the  authority  and  direction  of  the  court  where  it  is 
necessary  to  preserve  the  receivership  property,  the  receiver  may 
mortgage  the  receivership  property.'  Pie  may  also  bori-ow  money 
under  Hke  circumstances  even  against  the  objection  of  the  lease- 
holders.* 

(j)    To    INVEST. 

The  ordinary  receiver  jx^ndente  lite  has  no  power  to  invest  or 
loan  the  receivership  funds,  and  the  exercise  of  such  power  is  a 
breach  of  trust.* 


i Hopkins  v.  Taylor,  87  111.  436; 
Union  Trust  Co.  v.  Illinois  M.  R.  Co. 
117  U.  S.  434,  29  L.  ed.  9G3;  Central 
Trust  Co.  V.  New  York  C.  &  N.  R.  Co. 
110  N.  Y.  850,  1  L.  R.  A.  260;  Pldla- 
delphia  &  R.  R.  Co.  v.  Co7n.  104  Pa. 
80.  But  see  as  to  taxes  assessed  upon 
the  shares  of  a  corporation,  Lion- 
berger  v.  Roicse,  43  Mo.  67;  Relfe  v. 
Columbia  L.  Ins.  Co.  11  Mo.  App. 
374. 

As  to  the  power  to  enforce  the  pay- 
ment of  a  franchise  tax  against  a  cor- 
poration in  the  hands  of  a  receiver, 
see  Com.  v.  Lancaster  Sav.  Bank.  123 
Mass.  493;  Georgia  v.  Atlantic  &  Q. 
R.  Co.  3  Woods,  434. 

^McMinnville  <£  M.  Railroad  v.  Hug- 
gins,  3  Baxt.  177;  Slate  v.  McMinnville 
&  M.  Railroad,  6  Lea,  369;  Chicago 
Deposit  V.  Co.  v.  McNulta,  153  U.  S. 
554,  38  L.  ed.  819. 

^Burroughs  v.  Oaither,  66  Md.  171; 
Raht  V.  Attrill,  106  N.  Y.  423. 

*Hanna  v.  State  Trust  Co.  70  Fed. 
Rep.  2,  2  Am.  &  Eng.  Corp.  Cas.  N. 
S.  448;  Raht  v.  Attrill,  106  N.  Y.  423. 
The  court  in  Re  Regent's  Canal  Iron- 


works Co.  L.  R.  3  Ch.  Div,  411,  427, 
say:  "There  must  be  something  ap- 
proaching a  demonstrable  necessity 
to  justify  an  infringement  of  the 
rights  of  the  mortgagees,"  It  re- 
quires a  strong  case  to  be  made  before 
the  court  will  disturb  contract  rights 
of  lietiholders  by  subordinating  such 
liens  to  liens  for  borrowed  money. 
Farmers'  Loan  tfc  T.  Co.  v.  Orape 
Creek  Coal  Co.  50  Fed.  Rep.  481,  16 
L.  R.  A.  603;  Laughlin  v.  United 
States  RolhngSlock  Co.  64  Fed.  Rep. 
25;  Fidelity  Ins.  T.  &  S.  D.  Co.  v. 
Roanoke  Iron  Co.  68  Fed.  Rep.  623; 
Snively  v.  Loomis  Coal  Co.  69  Fed. 
Rep.  204;  Hooper  v.  Central  Trust  Co. 
81  Md.  509.  Cf.  Wallace  v.  Loomis, 
97  U.  S.  146,  24  L.  ed.  895;  Fosdick  v. 
Schall,  99  U.  S.  235,  25  L.  ed.  339; 
Barton  v.  Barbour,  104  U.  S.  126,  26 
L.  ed.  674;  Miltenberger  v.  Logansport, 
C.  &  S.  W.  R.  Co.  106  U.  S.  286,  27 
L.  ed.  117;  Union  Trust  Co.  v.  Souther, 
107  U.  S.  591,  27  L.  ed.  488. 

''Utica  Ins.  Co.  v.  Lynch,  11  Paige, 
520.  But  see  Atty.  Gen.  v.  North 
American  L.  Ins.  Co.  89  N.  Y.  94. 


KECEIVEUSHIP  OF  CORPOR/VTIONS.  389 

(k)    To    CONTKACT. 

The  receiver,  being  authorized  by  the  court  in  the  general  or  a 
special  order,  lias  power  to  contract,  and  a  receiver  of  a  railroad 
company  who  is  made  manager  thereof  has  implied  power  to 
make  sucli  reasonable  contracts  as  are  necessary  to  the  proper 
management  of  the  trust.' 

(1)    To    SELL. 

A  sale  made  in  strict  conformity  to  the  terms  prescribed  by  the 
order  or  deci'ee  of  court  will  not,  as  a  general  rule,  be  set  aside  un- 
less it  plainly  appears  that  the  property  was  sold  for  an  inade- 
quate price,  or  unless  there  has  been  a  mistake  or  surprise  of 
some  kind,  or  an  omission  of  duty,  or  misconduct,  or  fraud  on  the 
part  of  the  receiver,  or  fraud  on  the  part  of  the  purchaser.  What 
will  be  sufficient  to  justify  the  court  in  refusing  confirmation  of 
a  sale  depends  on  the  facts  and  circumstances  of  each  particular 
case.*  The  purchaser  at  a  receiver's  sale  acquires  no  title  to  the 
property  until  the  sale  has  been  ratified  by  the  court.^  A  re- 
ceiver in  making  a  sale  retains  a  lien  on  the  property  for  any  un- 
paid balance  of  the  purchase  money.*  The  court  ma}^,  as  a  con- 
dition, order  the  property  to  be  sold  at  not  less  than  a  given  price.' 
There  is  no  warranty  of  title,  express  or  implied,  in  a  receiver's 
sale,  and  the  purchaser  takes  only  tiie  title  which  the  corporation 
had  to  the  property.  The  general  doctrine  applicable  to  trustees 
applies  to  receiverships  which  prevents  the  receiver  on  the 
grounds  of  public  policy  from  becoming  a  purchaser  at  his  own 
sale.* 

^Jourdan  v.  Long  Island  R.  Co.  6  N.  are  made  in  the  interests  of  all  parties 

Y.    S.    R.    89;    Central    Trugt  Co.  v.  concerned. 

Wabash,  St.  L.  dt  F.   R.  Co.  52  Fed.  *See  preceding  notes,  and  preceding 

Rep.  908.  case  as  lo  vvliat  constitutes  defective 

A  receiver  represents  and  stands  in  notice  of  sale  and  other  requisites  of 

the  place  of  the  corporation  and  can  such  notice.     Cf.  Atty.   Qen.  v.    Con- 

enforce  only  such  contracts  and  rights  tinentdl  L.  Ins.  Co.  94  N.  Y.  199. 

as    the    corporation     could    enforce.  ^Florida  v.  Anderson,  91  U.  S.  6G7, 

Greene  v.  Sprague  Mfg.  Co.  52  Conn.  23  L.  ed.  290;  State  v.  Jacksonville,  P. 

830;  Russell  v.  Bristol,  49  Conn.  251;  d;  M.  R.  Co.  16  Fla.  708. 

Coope  V.  Bowles,  42  Barb.  87.  ^Mcllhenny  v.  Bim,  80  Tex.  1. 

^Belfoi-d  V.  Mawcatty  (Md.;  2  Am.  &  ojeicett  v.    Miller,    10    N.    Y.    402; 

Eng.  Corp.  Cas.  N.  8.  477.     In  such  Ecrrick  v.  Miller,  123  Ind.  304;  Titker- 

cases  the  sales  are  made  by  the  court  ington  v.  Ilodge,  81  Ky.  2S6. 
through  the  receiver  as  its  agent  and 


390 


EECElVEllSlUrS. 


(m)       To  MAKE  ASSESSMENTS. 

The  court  may  make  an  assessment  after  the  appointment  of  a 
receiver  for  an  insolvent  mutual  tire  insurance  company,  and  or- 
der the  same  to  be  levied  upon  both  deposit  and  premium  notes 
for  the  proportionate  share  of  losses  and  expenses  which  occurred 
during  the  term  of  insurance,  and  such  assessments  may  cover 
interest,  possible  losses  by  reason  of  uncollectible  assessments,  and 
a  sutlicient  amount  to  compensate  the  receiver  and  pay  all  ex- 


penses. 

^  Davis  V.  Shearer,  90  Wis.  250; 
Davis  V.  Parclier,  82  Wis.  495 ;  Jones 
V.  Lisson,  6  Gray,  296;  Co7n.  v.  Mas- 
sachusetts Mut.  F.  Ins.  Co.  112  Mass. 
116;  Wardle  v.  Townsend,  75  Mich. 
385,  4  L.  R.  A.  511;  Savage  v.  Med- 
bury,  19  N,  Y.  34;  People's  Equitable 
Mut.  F.  Ins.  Co.  V.  Babbitt,  7  Allen, 
235;  Traderx'  Mut.  F.  Ins.  Co.  v. 
Stone,  9  Allen,  483;  Parker  v.  Stough- 
tonMill  Co.  91  Wis.  174. 

In  such  case  the  decree  making  the 
assessment  is  conclusive  on  the  mem- 
bers or  policy  holders  of  the  defunct 
company  unless  attacked  in  a  direct 
proceeding,  notwithstanding  they  are 
not  present  when  the  decree  is  ren- 
dered. Haukins  v.  Clean,  131  U.  S. 
319,  33  L.  ed.  185;  Lycoming  F.  Ins. 
Co.v.  Langley,  62  Md.  211;  Band. McJST. 
&  Co.  V.  Mutual  F.  Ins.  Co.,  Parker, 
58  111.  App.  528;  Parker  v.  Sloughton 
Mill  Co.  91  Wis.  174;  Great  Western 
Tdeg.  Co.  v.  Burnham,  79  Wis.  47. 

A  court  appointing  a  receiver  of  a 
mutual  insurance  company  exercises 
at  its  discretion  the  power  of  the  board 
of  directors  of  such  a  company,  as 
well  as  the  additional  authority  con- 
ferred by  statute.  Band,  McN.  tC  Co. 
V.  Mutual  F.  Ins.  Co.,  Parker,  58  111. 
App.  528. 

The  propriety  of  the  amount  of  an 
assessment  ordered  by  the  court  ap- 
pointing a  receiver  of  an  insolvent  in- 
surance corporation  cannot  be  ques- 


tioned, in  an  action  by  the  receiver  to 
collect  the  assessment.  Band,  McN.  & 
Co.v.  Mutual  F. Ins.  Co.,  Parker , supra. 

An  order  authorizing  a  receiver  of 
a  mutual  insurance  company  to  levy 
an  assessment  equal  in  amount  to  all 
other  assessments  theretofore  made 
does  not  include  penalties  on  other 
assessments,  but  is  limited  to  the 
amounts  of  the  assessments  them- 
selves. Capital  City  Mut.  F.  Ins.  Co. 
V.  Boggs,  172  Pa.  91. 

An  order  authorizing  a  receiver  of 
a  mutual  insurance  company,  ap- 
pointed on  the  relation  of  the  attor- 
ney general,  to  make  a  specified  as- 
sessment, is  conclusive  upon  a  policy 
holder  as  to  the  validity  and  the 
amount  of  the  assessment,  but  not  as 
to  the  liability  to  pay,  so  far  as  it  de- 
pends upon  matters  personal  to  him- 
self. Capital  City  Mut.  F.  Ins.  Co  v. 
Boggs,  supra. 

The  receiver  in  insolvency  of  a 
building  association  is  the  proper  per- 
son to  ascertain  the  amount  of  losses 
of  the  association,  and  make  an  assess- 
ment on  the  members  to  meet  the 
same.  Eversmann  v.  Schmitt,  53  Ohio 
St.  174,  29  L.  R.  A.  184. 

As  to  the  power  and  method  of 
making  assessments  in  mutual  fire 
insurance  matters,  see  Davis  v.  Shear- 
er, 90  Wis.  250. 

Where  the  assessment  is  based  on  a 
subscription  procured  by  fraudulent 


RECEIVERSHIP  OF  CORPORATIONS. 


391 


(n)     Duty  to  appeal. 

It  i^not  the  duty  of  a  receiver  of  an  insoU^ent  corporation  to 
take  an  appeal  in  the  interest  of  one  set  of  stuckhuiders  against 
the  interest  of  another  set  of  stockliolders.' 

§  234.    Liability  of  receiver. 

(a)    OiSr    HIS    CONTRACTS. 

The  contracts  of  a  receiver  are  in  all  cases  to  he  made  npon  the 
general  or  express  orders  of  the  court  and  are,  in  elfect,  the  con- 
tracts of  the  coui't  made  through  the  agency  of  the  receiver. 
TJiis  heing  the  case,  the  court  will  in  all  cases  see  that  these  con- 
tracts are  performed,  and  it  is  not  material  that  they  may  subse- 
quently appear  to  have  been  improvidently  made.^  He  is  also 
liable  for  the  loss  of  funds  placed  by  him  in  a  bank,  where  the 
bank  fails  during  the  period  of  deposit.^     It  would  seem,  how- 


representations, see  Howard  V.  Turner, 
155  Pa.  349. 

The  statute  of  limitations  does  not 
commence  to  run  until  an  assessment 
has  been  made.  Re  Slater  Mut.  F. 
Ins.  Co.  10  R.  I.  42;  Biyelow  v.  Libby, 
117  Mass.  359;  Smith  v.  Bell,  107  Pa. 
Sb2;Wardle  v.  Hudson,  96  Mich.  432. 

It  has  been  held  the  power  to  make 
an  assessment  of  this  nature  does  not 
depend  upon  an  order  of  court  but  up- 
on the  facts  forming  the  basis  of  the 
assessment.  The  court  sanctions  and 
directs  the  receiver  to  act  and  in  doing 
so  he  acts  in  a  ministerial  capacity. 
Downs  V.  Hammond,  47  Ind.  131; 
Manlove  v.  Burger,  38  Ind.  211;  Bangs 
V.  Duckinfield,  18  N.  Y.  592;  Sands  v. 
Sweet,  44  Barb.  108;  Thomas  v.Whal- 
Ion,  31  Barb.  112;  Wardle  v.  Towmend, 
75  Mich.  385,  4  L.  R.  A.  511.  Cf. 
Davis  V.  Par  elver,  82  Wis.  488. 

As  to  necessary  allegations  in  estab- 
lishing a  case  for  an  assessment,  see 
Williams  v.  Babcock,  25  Barb.  109; 
Jackson  v.  Roberts,  31  N.  Y.  304 ;  Sands 
V.  Sanders,  28  N.  Y.  416;  Bangs  v. 
Duokinfield,  18  N.  Y.  592. 


'  Strauss  v.  Carolina  Interstate  Bldg. 
&L.  Asso.  (N.  C.)  24  S.  E.  116. 

^Dow  V.  Memphis  &  L.  R.  R.  Co.  20 
Fed.  Rep.  260;  Re  United  States  Roll- 
ing-Stock  Co.  57  How.  Pr.  16;  Texas 
&  St.  L.  R.  Co.  V.  Rust,  17  Fed.  Rep. 
275.  A  receiver  of  a  railroad,  until 
the  contrary  is  shown,  will  be  pre- 
sumed to  have  authority  to  make  con- 
tracts granting  special  transportation 
rates.  Bayles  v.  Kansas  P.  R.  Co.  13 
Colo.  181,  5  L.  R.  A.  480. 

The  failure  to  obtain  an  order  of 
the  court  for  a  contract  by  a  receiver 
will  not  defeat  liability  on  the  con- 
tract, where  the  work  under  it  is  di- 
rected to  be  done  by  the  court  with- 
out any  formal  order,  and  the  validity 
of  a  claim  thereon  subsequently  de- 
clared by  the  court,  with  full  knowl- 
edge of  the  facts.  Oirard  L.  Ins.  A. 
&  T.  Co.  V.  Cooper,  162  U.  S.  529,  40 
L.  ed.  1062;  Wabash,  St.  L.  &  P.  R. 
Co.  V.  Central  Trust  Co.  22  Fed.  Rep. 
209;  Jay  v.  DeGroot,  2  Hun,  205. 

'^ Ricks  V.  Broyles,  78  Ga.  610;  State, 
OAlins,  V.  Qooch,  97  N.  C.  186.  See 
also  Knight  v.  Plymouth,  1  Dick.  120. 


392 


RECEIVERSHIPS. 


ever,  that  this  rule  is  too  harsh  where  the  receiver  exercises  care 
in  the  selection  of  a  bank  of  dej^osit.  In  the  very  nature  of 
tilings  a  receiver  is  not  supposed  to  liave  facilities  for  the  safe 
keepino"  of  the  funds  adequate  to  his  demands  in  many  cases 
Besides  it  woukl  not  be  in  accordance  with  the  ordinary  custom 
of  prudent  business  men.  In  all  cases  the  bank  should  be  desig- 
nated by  the  court,  that  the  receiver  may  have  proper  protection 
against  loss.  Money  deposited  with  a  corporation  in  trust  does 
not  pass  to  the  receiver  of  the  corporation,  and  he  does  not  be- 
come liable  therefor.' 


^Importers'  &  T.  Nat.  Bank  v.  Pet- 
ers, Vl'i  N.  Y.  272;  People  v.  American 
Loan  &  T.  Co.  2  App.  Div.  193; 
People  V.  Clfy  Bank,  96  N.  Y.  32; 
Arnot  V.  Bingham,  55  Hun,  553;  People 
V.  American  Loan  &  T.  Co.  37  N.  Y, 
Siipp.  780;  People  v.  Bank  of  Dans- 
ville,  39  Hun,  187;  Chase  v.  Petroleum 
Bank,  66  Pa.  169;  Kinsela  v.  Cataract 
City  Bank,  18  N.  J.  Eq.  159;  Peak  v. 
Ellicott,  30  Kan.  156;  Kinney  v.  Paine, 
68  Miss.  258.  The  trust  relationship 
must  be  established,  however.  Jones 
V.  KHbreth,ASi  Ohio  St.  401;  Anhcmer- 
Busch  Brew.  Asso.  v.  Morris,  36  Neb. 
31;  Griffin  v.  Chase,  36  Neb.  328; 
Kimball  v.  Oaffoi'd,  78  Iowa,  65. 

It  has  been  held,  however,  that 
where  a  trust  relationship  is  not  es- 
tablished between  the  claimant  and 
the  corporation, and  no  fraud  is  shown, 
the  property  or  its  proceeds  must  be 
traced  to  the  hands  of  the  receiver, 
and  if  this  is  not  done  the  simple  re- 
lation only  of  debtor  and  creditor  ex- 
ists. Atkinson  v.  Rochester  Printing 
Co.  114  N.  Y.  168;  People  v.  Me- 
chanics' &  T.  Sav.  Inst.  92  N.  Y.  7; 
People  V.  Merchants'  &  M.  Bank,  78 
N.  Y.  269;  Butler  v.  Sprague,  66  N. 
Y.  392;  Sherwood  v.  Milford  State 
Bank,  94  Mich.  78;  Re  North  River 
Bank,  60  Hun,  91 ;  New  York  Breioeries' 
Co.  V.  Uiggins,  79  Hun,  250;  Qrant  v. 


Walsli,  81  Hun,  449:  Moore  v.  Wil- 
liams, 62  IIuu,  55;  Akin  v.  Jones,  93 
Tcnu.  3r)3,  25  L.  R.  A.  523;  Commer- 
cial Nat.  Bank  v.  Armstrong,  148  U. 
S.  50,  37  L.  ed.  363;  Anhamer-Busch 
Brew.  Asso.  v.  Clayton,  56  Fed.  Rep. 
759;  Booth  v.  Wells,  42  Fed.  Rep.  11; 
Southern  Development  Co,  v.  Houston 
<fe  T.  C.  R.  Co.  27  Fed.  Rep.  344; 
First  Nat.  Bank  v.  Datis,  114  N.  C. 
343;  Commercial  &  F.  Nat.  Bank  v. 
Davis,  115  N.  C.  226;  McLain  v.  Wal- 
lace, 103  Ind,  562;  Freiberg  v.  Stod- 
dard, 161  Pa.  259;  Re  Lebanon  Trust 
&  8.  D.  Bank's  Assigned  Edate,  166 
Pa.  622;  Wilson  v.  Coburn,  35  Neb. 
530;  Billingsley  v.  Pollock,  69  Miss. 
759;  Louistille  Bkg.  Co.  v.  Paine,  67 
Miss.  678;  Otis  v.  Gross,  96  111.  612. 

The  ordinary  bank  depositor  is  a 
simple  contract  creditor.  People  v. 
St.  Nicholas  Bank,  77  Hun,  159;  People 
V.  Mechanics'  &  T.  Sav.  Inst.  92  N. 
Y.  7. 

The  character  of  the  depositor  does 
not  change  the  relationship  of  the 
parties,  as  where  the  court  makes  a 
deposit  {Otis  v.  Gross,  supra),  or  a  city 
or  county.  Multnomah  County  v. 
Oregon  Nat.  Bank,  61  Fed.  Rep.  912; 
Spokane  County  v.  Clark,  61  Fed. 
Rep.  538;  Re  Plankinton  Bank,  87 
Wis.  378. 


RECEIVERSHIP  OF  CORPOllxVTIONS. 


393 


(b)  For  rent. 

The  receiver  will  be  liable  for  the  rent  of  all  leasehold  pretnises 
taken  possession  of  and  retained  by  him,  but  he  has  an  election, 
as  we  have  elsewhere  seen,  whether  he  will  retain  such  premises 
and  pay  the  rents  according  to  the  covenants,  and  has  a  reason- 
able time  in  which  to  make  such  election.'  If  it  is  seen  that  the 
leasehold  is  benciicial  to  the  estate  the  court  may  properly  au- 
thorize the  receiver  to  retain  the  property.  On  the  contrarj^  if 
the  leasehold,  at  the  stipulated  rental,  is  not  beneficial  to  the  estate 
the  court  will  order  the  lessor  to  retake  his  property  unless  he  is 
willing  to  make  the  rentals  such  as  the  estate  can  afford  to  pay." 
If  the  receiver  retains  the  leased  property  he  is  bound  to  pay  the 


^Re  Oak  Pits  Colliery  Co.  L.  R.  21 
Ch.  Div.  822;  Re  Brown,  Bayley,  & 
Dixon,  L.  R.  18  Ch.  Div.  649;  People 
V.  Universal  L.  Ins.  Co.  30  Hun,  143; 
Woodruff  V.  Erie  B.  Co.  93  N.  Y.  609; 
Com.  V.  Franklin  Ins.  Co.  115  Mass. 
278.  See  Miltenherger  v.  Logansport, 
C.  <&  8.  W.  R.  Co.  106  U.  S.  28(5,  27 
L.  ed.  117;  Turner  v.  Lu/innapolis,  B. 
(&  W.  R.  Go.  8  Biss.  527;  Central  Trmt 
Co.  V.  Wabash,  St.  L.  &  P.  R.  Co.  46 
Fed.  Rep.  156;  Stockton  v.  Meclianics' 
&  L.  Sav.  Bank,  33  N.  J.  Eq.  163; 
Kneelarid  v.  American  Loan  &  T.  Co. 
136  U.  S.  89,  34  L.  ed.  379;  Quincy, 
M.  &  P.  R.  Co.  V.  Humphreys,  145  U. 
S.  83.  36  L.  ed.  632;  St.  Joseph  &  St. 
L.  R.  Co.  V.  Humphreys,  145  U.  S. 
105,  36  L.  ed.  640;  Qaither  v.  Stock- 
bridge,  67  Md.  223.  See  People  v.  Na- 
tional Trust  Co.  83  N.  Y.  283. 

Permission  of  a  receiver  for  the 
temporary  occupation  of  property 
lea.sed  to  the  corporation  will  not  con- 
stitute an  adoption  of  the  lease  by  the 
receiver  so  as  to  bind  the  assets  in  his 
hands.  Tradesman's  Pub.  Co.  v.  Knox- 
ville  Car-Wheel  Co.  95  Tenu.  634,  31 
L.  R.  A.  593. 

« Woodruff  V.  Erie  R.  Co.  93  N.  Y. 
609;  Frank  v.  New  York,  L.  E.  &  W. 
U.  Co.  123  N.  Y.  197;  Meyer  v.   West- 


ern Car  Co.  102  U.  S.  1,  26  L.  ed.  59; 
Brown  v.  Toledo,  P.  <&  W.  R.  Co.  35 
Fed.  Rep.  444;  Central  Trust  Co.  v. 
Wabash,  St.  L.  &  P.  R.  Co.  34  Fed. 
Rep.  259;  Farmers'  Loan  &  T.  Co.  v. 
Chicago  &  A.  R.  Co.  42  Fed.  Rep.  6; 
Farmers'  Loan  &  T.  Co.  v.  Northern 
P.  R.  Co.  58  Fed.  Rep.  257;  Thomas  v. 
Western  Car  Co.  149  U.  S.  96,  37  L. 
ed.  663;  Clyde  v.  Richmond  &  D.  R. 
Co.  -63  Fed.  Rep.  21.  See  Day  v. 
Postal  Teleg.  Co.  66  Md.  354 ;  People  v. 
Universal  L.  Ins.  Co.  80  Hun,  142; 
Dawson  Mfg.  Co.  v.  Brunswick  <6  A. 
R.  Co.  51  Ga.  136. 

Coe  v.  New  Jersey  M.  R.  Co.  27  N. 
J.  Eq.  37,  30  N.  J.  Eq.  21.  Where  a 
contract  of  an  insolvent  corporation 
is  not  of  such  nature  that  the  corpo- 
ration could  have  been  compelled  to 
specifically  perform  it  a  receiver  has 
a  right  to  terminate  it  where  it  is  to 
the  interest  of  creditors.  Scott  v. 
Rainer  Power  &  R.  Co.  13  Wash.  108. 
2  Am.  &  Eng.  Corp.  Cas.  N.  S. 
401. 

The  appointment  of  a  receiver  of  a 
corporation  at  the  instance  of  a  cred- 
itor does  not  release  it  from  a  contract 
for  the  employment,  at  a  ti.xed  price. 
of  otlicers  for  a  year,  beginning  at  Iho 
date  uix>D  which  the  receiver  was  ap- 


39i 


RECEIVERSHIPS. 


contract  rental  unless  otherwise  changed,  if  the  rentals  are  not 
exorbitant.' 

(c)  For  intkrest. 
A  receiver  will   be  liable  for  interest  npon  the  receivership 
fund  in  liis  hands  if  he   uses  the  same  for  his  own  personal 
benefit.'^ 

(d)    FOK   DEBTS    INCURRED. 

A  receiver  is  not  personally  liable  for  debts  or  damages  in- 
curred in  the  management  of  the  receivership  property,  but  only 


pointed.      Lenoir  v.  Linville  Imvrov. 
Co.  117  N.  C.  471. 

The  lessor  of  preaiisesto  a  bank  for 
a  specified  term  under  a  lease  aulhor- 
iziuti;  him  to  relet  the  premises  as 
agent  of  the  bank  if  they  become  va- 
cant daring  the  term  for  nonpayment 
of  rent  or  otherwise  may  recover  from 
a  receiver  in  insolvency  of  such  bank 
the  difiference  between  the  agreed  rent 
and  that  obtained  by  the  lessor  from 
one  to  -whom  he  relet  the  premises 
after  nonpayment  of  rent.  People  v. 
St.  Nicholas  Bank,  3  App.  Div.  544. 

Receivers  who  permit  work  on  a 
building  which  was  in  course  of 
erection  when  the  receivership  com- 
menced, to  continue  without  inter- 
ruption, may  be  liable  for  the  work  so 
done  according  to  the  terms  of  the 
contract  under  which  it  was  done. 
Oirard  L.  Ins.  A.  &  T.  Co.  v.  Cooper, 
162  U.  S.  529,  40  L.  ed.  1062. 

A  claim  presented  to  the  receiver 
of  an  insolvent  corporation  for  rent  of 
premises,  held  by  the  corporation  un- 
der a  lease  for  a  term  of  years,  ac- 
cruing after  the  insolvency  of  the  cor- 
poration, should  be  allowed,  and  paid 
pro  rata  with  claims  of  other  creditors. 
Chicago  Fire  Place  Co.  v.  Tait,  58  111. 
App.  293. 

A  lessor  of  a  banking  room  for  a 
term  of  years  to  a  national  bank  can 
recover  from  the  bank  or  its  receiver 


for  rent  due,  under  the  lease,  subse- 
quent to  the  insolvency  of  the  bank, 
and  after  the  receiver  has  abandoned 
the  leased  property.  Hartford  De- 
posit Co.  V.  Chemical  Nat.  Bunk.  58 
III.  App.  256;  Quincy,  M.  &  P.  R.  Co. 
V.  Humphreys.  145  U.  S.  82,  36  L.  ed. 
632.  But  see  Fidelity  Safe  Deposit  & 
T.  Co.  V.  Armstrong,  35  Fed.  Rep.  567; 
Deane  v.  Caldwell,  127  Mass.  242; 
United  States  v.  Kno.v,  111  U.  S.  784, 
28  L.  ed.  603. 

^Peoria  <fe  P.  JJ.  R.  Go.  v.  Chicago, 
P  &  8.  W.  R.  Co.  127  U.  S.  200,  32 
L.  ed.  110;  Thomas  v.  Peoria  cfe  R.  I. 
R.  Co.  36  Fed.  Rep.  SOS;  Brown  v. 
Toledo,  P.  (&  W.  R.  Co.  35  Fed.  Rep. 
444. 

^  Schwartz  v.  Keystone  Oil  Go.  153 
Pa.  283.  "It  was  error,  plainly,  to 
charge  the  receiver  interest,  as  he  is 
not  chargeable  with  it  as  of  course, 
but  only  under  special  circumstances, 
to  be  shown  by  him  who  would 
charge  him."  Crawford  v.  Fickey 
(W.  Va.)  2  Am.  &  Eng.  Corp.  Cas. 
N.  S.  417;  Richardson  v.  Hoyt,  60 
Iowa,  70;  Radford  v.  Folsom,  55  Iowa, 
276;  Daniel  v.  Wharton,  90  Va.  584; 
Darby  v.  GUligan,  37  W.  Va.  59; 
Atty.  Gen.  v.  North  American  L  Ins. 
Co.  89  N.  Y.  107;  Re  Com.  F.  Ins.  Co.  32 
Hun,  78:  Utica  Ins.  Go.  v.  Lynch,  11 
Paige,  520;  Hinckley  v.  Oilman,  C.  it 
S.  R.  Co.  100  U.  S.  153.  25  L.ed.  501. 


RECEIVERSHIP  OF  CORPORATIONS. 


^95 


for  personal  niiscoiidnct  or  neglect.'  He  lias  no  i-i)j:;lit,  however, 
to  make  unauthorized  contracts  and  therebj'  bind  tlie  trust,  and  if 
he  does  so  he  will  be  personally  liable.^ 

(e)  Personal  liability  for  torts. 
As  a  rule  the  receiver  is  not  personally  liable  for  the  injuries 
and  damages  caused  by  his  agents,  employees,  and  servants,  except 
where  the  wrong  can  be  imputed  to  him  personally,''  or  where  he 
commits  a  wrongful  act  outside  of  the  scope  of  his  authority,*  or 
beyond  the  jurisdiction  of  the  court  appointing  him.* 

(f)  Official  liability  for  torts  and  damages. 
The  receiver,  however,  is  liable,  in  his  ofhcial  capacity,  for 
damages  caused  by  the  negligence  of  his  agents  and  employees  in 
the  management  of  the  receivership  property."  The  scope  of 
liabiHty  of  the  receiver  in  such  case  is,  as  a  rule,  measured  by  the 
scope  of  the  liability  of  the  corporation  itself  under  similar  cir- 
cumstances.''    In  case  of  a  railroad,  while  the  receiver  is  exer- 


1  Texas  &  P.  R.  Co.  v.  Cox,  145  U.S. 
593,  36  L.  ed.  829;  McNulta  v.  Loch- 
ridge,  141  U.  S.  327,  35  L.  ed.  796; 
Dateii2)oit  v.  Alabama  &  C.  B.  Co.  3 
Woods,  519;  Re  Home  Provident 
Safely  Fund  Asso.  129  N.  Y.  288; 
Farmers  Loan  &  T.  Co.  v.  Central  R. 
Co.  3  McCrary,  181;  Vilas  v.  Page,  106 
N.Y.  439;  Hopkins  v.  Connel,  STenn. 
Cb.  333;  Cardot  v.  Barney,  63  N.  Y. 
281;  Davis  v.  Duncan,  19  Fed.  Rep. 
477;  Woodruff  V.  Jeweit,  37  Ilun,  205, 
115  N.  Y.  287;  Thompson  v.  Scott,  4 
Dill.  508;  Eddy  v.  Poicell,  49  Fed_. 
Rep.  814;  Vanderbilt  y.  Central  R.  Co. 
43  N.  J.  Eq.  669. 

'  Rogers  v.  Wendell,  54  Hun,  540; 
Ryan  v.  Rand,  20  Abb.  N.  C.  313. 
Cf.  New  V.  mcoll,  73  N.  Y.  127. 

*Meara  v.  Holbrook,  2  Ohio.  St.  137. 

*  Curran  v.  Craig.  23  Fed.  Rep.  101. 

»  Kain  v.  Smilfi,  80  N.  Y.  458. 

'  Little  V.  DuSKuberry,  46  N.  J.  L. 
614 ;  Cardot  v.  Barney,  63  N.  Y.  281 ; 
Lyman  v.  Central  Vermont  Li.  Co.  59 
Vt.  167;  Mcara  v.  Holbrook,  20  Oluo 


St.  137;  Davis  v.  Duncan,  19  Fed.  Rep. 
477;  Ericin  v.  Davenport,  9  Heisk.  45; 
Thornton  v.  Llighland  Ave.  R.  Co.  94 
Ala.  353;  Blumenthal  v.  Brainard,  38 
Vt.  402;  Newell  v.  Smith,  49  Vt.  255; 
Paige  v.  Smith,  99  Mass.  395;  Ryan  v. 
Hays,  63  Tex.  43. 

'  Central  Trust  Co.  v.  Sloan,  65 
Iowa,  655;  Sloan  v.  Central  Loioa  R. 
Co.  62  Iowa,  728;  Fidlerton  v.  Fordyce, 
121  Mo.  1;  Melendy  v.  Barbour,  78 
Va.  544;  Pope's  Case,  30  Fed.  Rep.  169; 
Winbourn's  Case,  30  Fed.  Rep.  167; 
Davis  V.  Duncan,  19  Fed.  Rep.  477; 
Ex  parte  Brown,  15  S.  C.  518;  Meara 
V.  Holbrook,  20  Ohio  St.  137;  Klein  v. 
Jetcett,  26  N.  J.  Eq.  474;  Cowdrey  v. 
Galveston,  H.  d  U.  R.  Co.  93  U.  B.  353, 
23  L.  ed.  950;  LAttlev.  Dusenberry,  46 
N.  J.  L.  614;  Llolbrook  Y .  American  F. 
Ins.  Co.  6  Paige,  320;  Brown  v.  Brown, 
71  Tex,  355;  Brown  v.  Wabash  R.  Co. 
90  111.  297.  But  see  Henderson  v. 
Walker,  55  Ga.  481;  Campbell  v.  Cook, 
86  'Wx.  630;  Turner  v.  Cross,  83  Tex. 
318,  15  L.  R.  A.  303;    Texas  &  P.  R. 


396  RECEIVERSHIPS. 

cising  the  franchises  of  the  company  and  operating  the  road  in 
his  official  capacity,  he  is  subject  to  the  same  rules  of  liability  as 
apply  to  the  company  itself  when  it  is  in  the  exercise  of  said 
franchises.' 

The  general  liability  of  the  receiver  in  his  official  capacity  for 
the  contracts  and  torts  of  a  corporation  which  antedate  the  re- 
ceiver's appointment  and  where  tlie  corporation  has  been  dis- 
solved, is  determined  in  various  ways  in  dififerent  courts,  according 
to  the  equities  and  priorities  of  the  claimants  and  the  practice  of 
the  courts.  As  the  receiver  cannot  be  compelled  to  complete  the 
contracts  of  the  corporation  it  follows  that  he,  in  his  official 
capacity,  cannot  be  made  liable  in  damages  for  nonfulfillment.* 

(g)  Extent  of  liability. 

As  a  rule,  the  receiver's  rights  and  liabilities  are  coextensive 
with  the  rights  and  liabilities  of  the  corporation  over  whose  prop- 
erty he  is  appointed,  except  where  the  corporation  has  committed 
acts  in  violation  of  law  and  in  fraud  of  creditors.  In  w^hich  case 
it  must  clearly  appear  that  he  has  a  right  to  act  in  behalf  of 
creditors  to  repudiate  the  acts  complained  of.* 

(li)  Liability  for  loss  in  management. 

A  receiver  is  not  liable  for  loss  in  the  management  of  business 
of  which  he  has  charge  as  receiver,  unless  the  loss  grows  out  of 

Co.  V.   Cox,  145  U.  S.  503,  36  L.  ed.  v.  We.tern  N.  C.  R.  Co.  99  U.  S.  191, 

829.  25  L.  ed.  319;  Brown  v.    Warner,  78 

•  McNulta    V.    Lockridge,    137    111.  Tex.  543,  11  L.  R.  A.  394. 

270;   McNulta  v.  Ensch,  134  111.  46.  ^ Rmyell  v.  Bristol.  49   Conn.    251; 

Proceedings  against  the  receiver  in  Greene  v.  Sprague  Mfg.  Co.  52  Conn, 

his  oflicial  capacity  for  the  wrongs  of  330;    Ci^ope  v.  Botcles,  43  Barb.   87; 

bis  employees,  are  in  the  nature  of  Tecger  v.  Wallace,  44  Pa.  294;  Man- 

proceedings  in  rem,  and  render  the  love  v.  Burger,  38  Ind.  211. 

property  in  bis  bands  liable  for  coin-  A  note  executed  by  a  corporation 

pensation.     Davis  v.  Duncan,  19  Fed.  to  one   wbo   bas   previously  given  a 

Rep.  477;  Farmers  Loan  <&  T.  Co.  v.  cbeck  drawn  to  tbe  individual  order 

Central  Railroad,  7  Fed.    Rep.  539;  of  iis  vice  president,  wbicb  bas  been 

Rogers  v.  Wheeler,  43  N.  Y.  598;  Bar-  used   by  tbe  corporation  for  its  own 

ter  V.  Wheeler,  49  N.  II   9.  purposes,  is  a  valid  claim  against  tbe 

'  People  V.  Olohe  Mut.  L.  Ins,  Co.  91  corporation  or  a  receiver  appointed  in 

T^.Y .11  A.;  Com.  V.  Franklin  L.  Ins.  Co.  proceedings  for  its  dissolution.    People 

l\5  ^l&ss.  218;  Ellis  V.  Boston.  H.  &  E.  y.  American  8.   B.  Ins.  Co.  3  App. 

R.  Co.  107  Mass.  1;  Southern  Exp.  Co.  Div.  504. 


RECEIVERSHIP  OF  CORPORATIONS.  397 

some  act  of  his  which  he  is  not  authorized  to  perform.*  "While 
it  is  a  subject  of  criticism,  jet  it  seems  that  a  receiver  may  sell 
receivership  property  to  a  company  of  which  he  is  the  manager 
at  the  highest  market  price,  and  not  be  required  to  account  for 
profits.'  But  he  will  not  be  permitted  to  speculate  in  the  stock 
of  the  corporation  over  which  he  is  appointed.' 

(1)  Liability  on  order  of  court. 

Where  the  court  makes  an  order  directing  the  receiver  to  pay 
a  fixed  sum  of  money  to  a  certain  person,  it  is  in  effect  a  personal 
judgment  upon  which  the  receiver  is  personally  liable.* 

§  235.  Suits  by  receiver  of  a  corporation. 

(a)  Generally. 
We  have  heretofore  considered  the  power  of  the  receiver  to 
institute  and  carry  on  suits  generally,'  and  briefly  in  this  con- 
nection revert  to  the  subject  in  connection  with  corporations.  A 
receiver  of  an  insolvent  corporation  succeeds  to  the  title,  prop- 
erty, effects,  and  rights  of  action,  when  so  invested  by  the 
statute  or  decree  of  court  appointing  him,  and  as  a  rule,  is  the 
proper  party  to  enforce  them  by  legal  proceedings.  When  the 
officers  of  a  corporation  fail  to  discharge  the  important  duties 
and  trusts  imposed  upon  them,  they  become  liable  for  the  corpo- 
rate losses  resulting  therefrom.'     Independent  of  statutory  power, 

^  Chandler  Y.  Cushing-Toung  Shingle  v.  Balis,  72  Mo.  439;   Bent  v.  Priest, 

Co.  13  Wash.  89.  86  Mo.  482;  Slaltery  v.  St.  Loxm  &  N. 

^  CJiandler  \.Cushing-Young Shingle  0.  Transp.  Cb.  91  Mo.  217;  Lonimlle 

Co.  13  Wash.  89.      He  cannot,  how-  City  Nat.  Bank  v.  Loving,  82  Ky.  370; 

ever,  internaeddle  in  questions  affect-  Badges  v .  New  England  Screw  Co.  1  R. 

ing  the  rights  of   parlies   in  the  dis-  I.  312;  Hayes  v   Kenyan,  7  R.  I.  136; 

position  of    property  in    his  hands.  Smith  v.  IJurd,  12  Met.  Sll;  Atty.  Gen. 

Hesing  v.  Atty.    Gen.    104    111.    292;  v. Ulica  Ins. Co.2  Hohns.Ch.mi;  Hun 

Blatchfoi'd  v.  Newberry,  100  111.  484.  v.  Gary,  82  N.  Y.  70;  Horn  Silver  Min. 

^  Olmstead  v.  Distilling  &  C.  F.  Co.  Co.  v.  Ryan,  42  Minn.  198;  Brouicer 

67  Fed.  Rep.  24,  2  Am.  &  Eug.  Corp.  v.  Hill,  1    Sandf.    629;   New   Orleans 

Cas.  N.  S.  392.  Gaslight  Co.  v.  Bennett,  6   La.  Ann. 

*  Crawford  v.  Fickey  (W.  Va.)  2  457;  Gindrat  v.  Dane,  4  Cliff.  260; 
Am.  &  Eng.  Corp.  Cas.  N.  S.  417;  Gaslight  &  Bkg.  Co.  v.  Hayncs,  7  La. 
Rickard  v.  Schley,  27  W.  Va.  617.  Ann.  114;    White  v.  Haight,  16  N.  Y. 

«Chap.  VI.  310;  Osgood  v.  Laytin,  48  Burb.  464; 

*  Thompson  v.  Greeley,  107  Mo.  577;  SJiavglmessy  v.  Rensselaer  Ins.  Co.  21 
Alexander  v.  Relfe,  74  Mo.  516;  Gill       Barb.   605;   Hyde  v.  lynde,  4  N.  Y. 


398 


RECEIVERSHIPS. 


the  receiver  is  autliorizcd  to  recover  for  property  illei^ally  dis- 
posed of  in  fraud  of  corporate  creditors.'  He  may  likewise  re- 
cover from  stockljolders  miearned  i)reminms  ille:;-a]ly  paid  tliein 
f  1-1  nil  tlic  capital  stock  when  the  cor])i)ration  was  insolvent.  Such 
a  suit  is  not  a  proceeding  to  eirforce  stock  lial)ilitj,  but  is  rather 
a  proceedin^^  to  recover  back  funds  wrongfully  paid  to  and  re- 
ceived by  the  stockholders.*  And  so  also  where  the  assets  of 
an  insolvent  corporation  are  unlawfully  transferred  to  its 
oflicers.' 


387;  Terry  v.  Bamberger,  14  Bliitcbf. 
234. 

In  Penn  Bank,  Wariier,  v.  Hopkins, 
111  Pa.  3^28,  a  suit  wjis  maintuined  by 
the  corporation  for  the  use  of  an  as- 
signee against  directors  for  misman- 
agement. 

'The  receiver  has  power,  independ- 
ent of  a  statute,  to  recover  money  due 
the  corporation,  and  for  property  il- 
legally disposed  of  in  violation  of  the 
rights  of  creditors.  Osgood  v.  Laytin, 
48  Barb.  463. 

A  receiver  may  prosecute  a  writ  of 
error  to  review  a  judgment  denying 
his  right  to  open  up  a  judgment 
against  the  corporation  over  which 
he  is  appointed.  Rust  v.  United 
Waterworks  Co.  70  Fed.  Rep.  129. 

Plaintiffs  in  an  injunction  suit  who 
give  a  bond  payable  to  the  defendant 
as  receiver  and  seek  to  enjoin  him  as 
receiver  from  collecting  money  due 
the  insolvent  estate  are  precluded  in 
an  action  by  the  receiver  on  the  bond 
from  raising  any  question  concern- 
ing his  appointment  or  qualification. 
Wason  V.  Frank  (Colo.  App.)  44  Pac. 
378. 

*The  receiver  may  also  maintain 
suit  in  equity  against  the  stockhold- 
ers to  recover  unearned  premiums 
paid  them  out  of  the  capital  of  the 
bank  when  no  net  profits  had  been 
earned,  and  when  in  fact  the  corpora- 
tion was  insolvent.     In  such  a  case, 


it  is  not  a  suit  to  enforce  the  individ- 
ual liability,  but  is  to  follow  and  re- 
cover a  part  of  the  capital  which  was 
wrongfully  paid  to  and  received  by 
the  stockholders.  Ilayden  v.  Thomp- 
son, 70  Fed.  Rep.  60,  2  Am.  &  Eng. 
Corp.  Cas.  N.  S.  511.  Cf.  Bailey  v. 
Moslier,  63  Fed.  Rep.  488;  First  Nat. 
Bank  v.  Colby,  88  U.  S.  21  Wall.  609, 
22  L.  ed.  687;  Hornor  v.  Eenning,  93 
U.  S.  228,  23  L.  ed.  879;  Stephens  v. 
Oversiok,  43  Fed.  Rep.  771;  National 
Exclh.  Bank  v.  Peters,  44  Fed.  Rep. 
13. 

^An  insolvent  corporation  practi- 
cally out  of  busiaess  cannot  transfer 
part  of  its  assets  to  creditors  who  are 
officers  of  the  company,  or  who  are 
intimately  connected  therewith,  and, 
such  a  conveyance  being  fraudulent, 
the  receiver  may  recover  the  prop- 
erty.   Smith  v.  Hopkins,  10  Wash.  77. 

The  receiver  of  an  insolvent  corpo- 
ration cannot  maintain  an  action  to 
set  aside  judgments  by  default  against 
the  corporation  for  debts  honestly 
due,  without  having  set  aside  a  pro- 
vision in  the  order  appointing  him, 
making  such  judgments  a  first  lien 
upon  all  the  money  and  assets  of  such 
corporation,  to  be  paid  in  full  before 
payment  of  any  other  creditors.  liidg- 
way  V.  Symons,  4  App.  Div.  98. 

It  is  unusual,  and  generally  im- 
proper, to  adjust  the  rights  of  parties 
in  the  order  of  appointment. 


RECEIVERSHIP  OF  CORPORATIOJS'S. 


ayy 


(b)  "When  he  mat  sue  in  his  own  name. 
A  receiver  may  maintain  suit  in  his  own  name,  (1)  wlien  the 
legal  title  to  the  corporate  assets  has  been  assigned  to  him ;'  (2) 
when  the  court  by  decree  has  so  empowered  him  ;"  (J)  or  when 
the  statute  so  provides.'  As  the  representative  of  the  stock- 
holders and  creditors  of  the  corporation  the  receiver  cannot 
maintain  a  suit  against  the  corporate  directors  which  the  corpora- 
tion itself  could  not  have  mniiitained  had  the  receiver  not  l)een 
appointed."  •  The  general  rule  is   that  a   receiver  cannot  bring 


'  St.  Louis  &  S.  Coal  &  M.  Co.  v. 
Sandoval  Goal  &  M.  Co.  Ill  III.  33; 
King  v.  Cults,  24  Wis.  627;  Teager  v. 
Wallace,  44  Pa.  294;  Ingersoll  v. 
Cooper,  5  Blackf.  426;  Oray  v.  Lewis, 
94  N.  C.  392;  Boyd  v.  Royal  Ins.  Co. 
Ill  N.  C.  372. 

A  receiver  by  virtue  of  bis  appoint- 
ment and  character  as  representative 
of  all  parties  interested  in  the  prop- 
erty is  a  quasi  assignee,  and  is  in- 
vested with  the  title  to  all  rights  of 
action  possessed  by  his  principal  at 
the  time  of  the  appointment,  to  such 
extent  at  least  as  will  enable  him  to 
sue  upon  them  in  his  official  char- 
acter. Hardin  v.  Sweeney  (Wash.) 
44  Pac.  138. 

The  receiver  of  an  insolvent  toll- 
road  company  ma}'  bring  in  his  own 
name  an  action  on  an  undertaliing  in 
an  injunction  against  him  and  the  in- 
solvent company  to  restrain  him  from 
collecting  the  toll  payable  to  him  as 
receiver,  although  the  bond  was  pay- 
able to  the  company  as  well  as  him- 
i-elf.  Wason  v.  Frank  (Colo.  App.)  44 
I'ac.  378. 

''Leonard  v.  Storrs,  31  Ala.  488; 
Wilkinson  v.  Rutherford,  49  N.  J.  L. 
241;  Davis  v.  Gray,  83  U.  S.  10  Wall. 
203,  21  L.  ed.  447;  Davis  v.  Ladoga 
Creamery  Co.  128  Ind.  222;  Wilson  v. 
Welsh,  157  Mass.  77;  Garver  v.  Kent, 
rO  Ind.  428;  Davis  v.  Talbot,  137  hid. 
235. 


He  has  power  to  file  a  bill  to  fore- 
close a  mortgage  given  to  the  corpo- 
ration {Cormer  v.  Bray,  83  Ala.  217); 
or  to  bring  suit  to  recover  possession 
of  real  estate  {Baker  v.  Cooper,  57 
Me.  388);  or  to  recover  subscription  to 
the  capital  stock  {Frank  v.  Morrison, 
58  Md.  423);  or  to  recover  on  a  note  to 
the  corporation.  ILtyes  v.  Brolzman, 
46  Md.  519. 

^  Miami  Exporting  Co.  v.  Gano,  13 
Ohio,  2G9;  Screven  v.  Clark,  48  Ga. 
41;  Battle  v.  Davis,  66  N.  C.  252; 
Re  nick  v.  Bank  of  West  Union,  13 
Ohio,  298;  Leonard  v.  Slorrs,  31  Ala. 
488;  Hardwick  v.  Hook,  8  Ga.  354; 
Ilelme  v.  Littlejolm,  12  La.  Ann.  298; 
Davenpoi't  v.  Buffalo  City  Bank,  9 
Paige,  15;  Hobart  v.  Bennett,  77  Me. 
401;  Baker  v.  Cooper,  57  Me.  388; 
Ilayden  v.  Thompson,  70  Fed.  Rep. 
60,  2  Am.  &  Eug.  Corp.  Cas.  N.  S. 
511;  Hornor  v.  Henning,  93  U.  S.  228, 
23  L.  ed.  879;  Stephens  v.  Overstolz,  43 
Fed.  Rep.  771;  National  Exch.  Bank 
v.  Peters,  44  Fed.  Rep.  13;  Garver  v. 
Kent,  70  Ind.  428;  Gray  v.  Lewis,  94 
N.  C.  392;  Davis  v.  Snead,  33  Gratt. 
705;  Gill  v.  Balis,  72  Mo.  424;  Man- 
love  V.  Burger,  38  Ind.  211;  Kennedy 
V.  Gibson,  75  U.  S.  8  AVali.  498, 
19  L.  ed.  476;  Mathis  v.  Pridhani,  1 
Te.x.  Civ.  App.  58. 

••The  receiver  of  a  hank  appointed 
in  proceedings  for  its  dissolution  can- 
not maintain  against  the  directors  any 


400 


RECEIVERSHIPS. 


suits  in  his  o^Yn  name,  in  the  absence  of  statutory  power,  unless 
tlie  legal  title  is  in  him,'  or  unless  the  decree  appointing  the  re- 
ceiver expressly  authorizes  him  so  to  do.  "The  tendency  seems  to 
be  in  the  direction  of  regarding  the  receiver  as  an  assignee  of  all 
rights  of  action  possessed  by  his  principal  at  the  date  of  appoint- 
ment, and  therefore  entitled  to  sue  upon  them  in  his  official  char- 
acter. The  refined  distinctions  at  one  time  so  tenaciously  adhered 
to  in  this  regard  have  been  relaxed  and  courts  are  disposed  to 
look  to  the  end  sought  by  the  proceeding  and  the  equitaljle 
modes  of  reaching  it  and  securing  redress  rather  than  the  tech- 
nical legal  aspects  of  the  parties.  '  It  would  seem  to  be  settled, 
however,  where  the  receiver  is  not  authorized  by  the  order  to  sue 
to  recover  the  property  of  the  corporation,  and  such  property  has 
not  been  assigned  to  him,  and  has  never  been  in  his  possession 
as  receiver,  he  must  bring  suit  in  the  name  of  the  corporation.' 


action  in  favor  of  tbe  stockholders  or 
creditors  which  the  bank  itself  could 
not  have  maintained  before  its  disso- 
lution. Biggins  v.  Tcfft,  4  App.  Div.62. 

^St.  Louis  &  S.  Coal  &  M.  Co.  v. 
Sandoval  Coal  <fc  M.  Co.  Ill  III.  32. 
As  to  authority  from  the  court  so  to 
do,  see  Leonard  v.  Starrs,  31  Ala.  488. 
Bui  see  IngersoU  v.  Cooper,  5  Blackf. 
426. 

'  Harland  v.  Banl-ers  &  M.  Teleg. 
Co.  33  Fed.  Rep.  199,  contra,  32 
Fed.  Rep.  305;  Manlove  v.  Burger,  38 
Iiid.  211.  But  in  suits  in  regard  to  real 
estate  he  must  obtain  title  in  order  to 
sue.  Dick  v.  Struthers,  25  Fed.  Rep. 
103.  For  an  act  of  conversion  occur- 
ring prior  to  the  appointment  of  a  re- 
ceiver in  a  partnership  case  the  suit 
must  be  in  the  name  of  the  firm.  Yeager 
V.  Wallace,  44  Pa.  294.  See  Wilson  v. 
Welch,  157  Mass.  77.  In  this  case  Mr. 
Chief  Justice  Field  says:  "Although 
the  practice  in  this  commonwealth 
has  not  been  uniform  (See  Farmers  & 
M.  Bank  v.  Jenks.  7  Met.  592;  Boot  & 
Shoe  Mfrs.  Mut.  F.  Ins.  Co.  v.  Melrose 
Orthodox  Cong.  Soc.  117  Mass.  199; 
Sohier  y.  Lamb,  184  Mass.  275;  and 


Parker  v.  Nickerson,  137  Mass.  487) 
we  consider  the  law  to  be  that  a  re- 
ceiver of  a  corporation  appointed  by  a 
court  of  equity  cannot  bring  suit  in 
his  own  name  to  recover  property  of 
the  corporation  which  has  never  been 
in  his  possession  unlessheisauthorized 
so  to  do  by  statute  or  by  the  decree  of 
a  court  competent  to  give  him  such 
authority,  or  unless  the  title  to  the 
property  has  been  conveyed  to  him. 
Courts  of  equity  cannot  transfer  the 
title  to  property  by  decree  unless  au- 
thorized by  statute  although  they  can 
compel  the  defendant  to  transfer  the 
title.  Wilson  v.  Martin-  Wilson  Au- 
tomatic Fire  Alarm  Co.  151  Mass.  515, 
8  L.  R.  A.  309." 

Cf.  Freeman  v,  WincTiesier,  10 
Smedes  &  M.  577;  Carver  v.  Kent,  70 
Ind.  428;  Moriarty  v.  Kent,  71  Ind. 
GOl;  Harrell  v.  Kent,  71  Ind.  602; 
Justice  V.  Kirlin,  17  Ind.  588;  Herron 
V.  Vance,  17  Ind.  595;  King  v.  Cutts, 
24  Wis.  627;  Teager  v.  Wallace,  44 
Pa.  294;  Newell  v.  Fisher,  24  Miss. 
392;  Wilson  v.  Allen,  6  Barb.  542.  But 
see  Alexander  v.  Relfe,  74  Mo.  495; 
Wray  v.  Jamison,  10  Humph.  186. 


RECEIVERSHIP  OF  CORPORATIONS. 


401 


Where  the  receiv^er  derives  his  authority  to  sue  from  the  court  he 
must  allen-e  sucli  authority.'  ^  Under  the  National  Banking  Act 
(13  Stat,  at  L.  99)  suits  nuiy  l^e  brought  by  the  receiver  in  his 
own  name,  or  in  tlie  name  of  tlie  corporation,'^  unless  the  case  is 
])ending  in  a  state  wlicre  the  common-law  pleading  prevails,  in 
which  case  the  suit  is  in  the  name  of  the  corporation.' 

A  receiver  appointed  under  a  statute  upon  the  dissolution  of  a 
corporation  is  regarded  as  in  the  nature  of  a  trustee  to  collect  and 
distribute  the  corporate  assets  and  may  sue  in  the  courts  of  an- 
other jurisdiction  upon  a  debt  due  the  corporation.* 


'  Wayne  Pike  Go.  v.  Slate,  134  Ind. 
G72;  AsheviUe  Div.  No.  15,  S.  of  T. 
V.  Asian,  93  N.  C.  578;  Miatni  Ex- 
porting  Co.  v.  Gano,  13  Ohio,  269. 

^  First  Nat.  Bavk  v.  National  Pah- 
quioque  Bank,  81  U.  S.  14  Wall.  383, 
20  L.  ed.  840;  Kennedy  v.- Gibson,  75 
U.  S.  8  Wall.  498,  19  L.  ed.  476. 

3  Glenn  v.  Marbury,  145  U.  S.  499, 
36  L.  ed.  790. 

In  general  the  receiver  is  authorized 
to  bring  all  suits  in  his  own  name 
where  it  is  required  for  the  attainment 
of  justice.  Iglehart  v.  Bierce,  36  111. 
136;  Lathrop  v.  Knaiyp,  27  Wis.  215; 
Hardwick  v.  Hook,  8  Ga.  354;  Helnie 
V.  Littlejohn,  12  La.  Ann.  298;  Hen 
ningv.  Raymond,^bMmn.  303;  Wray 
V.  Jamison,  10  Humph.  186;  Haxtun 
V.  Bishop,  3  Wend.  13. 

As  to  the  power  of  a  court  of  equity 
acting  under  its  general  equity  pow- 
ers only  to  give  authority  to  its  re- 
ceiver to  sue  in  his  own  name,  see 
Amy  v.  Manning,  149  Mass.  487;  Davis 
V.  Gray,  83  U.  S.  16  Wall.  203,  21  L. 
ed.  447;  Yeager  v.  Wallace,  44  Pa.  294; 
Be  Sacker,  L  R.  23  Q.  B.  Div.  179; 
Battle  v.  Davis,  66  N.  C.  252;  Wilson 
V.  Welch,  157  Mass.  77;  Thompson  v. 
Greeley,  107  Mo.  577. 

■•  Avery  v.  Boston  Safe-Deposit  &  T. 
Co.  TZ  Fed.  Rep.   700. 

A  receiver  appointed  under  a  state 
statute  providing  for  the  winding-up 
26 


of  the  affairs  of  a  corporation  under 
the  direction  of  a  reeeiver  to  be  ap- 
pointed by  the  court,  and  the  conver- 
sion of  its  property  into  money,  has 
the  same  title  and  power  of  control 
over  the  property  of  a  corporation  of 
the  state,  situated  in  another  state,  as 
over  that  in  the  stale  of  his  appoint- 
ment. American  Nat.  Bunk  v.  Na- 
tional Ben.  &  C.  Co.  70  Fed.  Rep.  420; 
Black  V.  Ore  Knob  Copper  Co.  115  N. 
C.  382. 

The  receiver  of  an  insolvent  cor- 
poration, appointed  under  Minn.  Gen. 
Stat.  1894,  §  5897,  may  maintain  an 
independent  action  to  enforce  the 
payment  of  a  call  on  unpaid  subscrip- 
tions made  by  the  board  of  directors 
according  to  the  by-laws  and  payable 
before  the  commencement  of  the  pro- 
ceedings resulting  in  his  appoint- 
ment. Basting  Y.Ankeny  (Minn.)  66 
N.  AV.  266. 

A  bill  by  receivers  of  an  insolvent 
corporation  against  a  stockholder  to 
enforce  his  liability  upon  his  sub- 
scription is  properly  filed  as  auxiliary 
or  ancillary  to  the  original  suit  ia 
which  such  receivers  were  appointed. 
Boss  Meehan  Brake  Shoe  Foundry  Co. 
v.  Southern  Malleable  Iron  Co.  72  Fed. 
Rep.  957. 

The  action  being  to  enforce  a  legal 
right  must  be  an  action  at  law.  Fire- 
man v.  Wiitchester,10  Smedes  &  M.  577. 


402  •  RECEIVERSHIPS. 

§  236.     To  recover  stock  subscriptions. 

There  is  not  entire  harmony  in  the  decisions  in  relation  to  the 
rin'ht  of  tlie  receiver  to  institute  and  prosecute  suits  to  enforce 
the  HahiHty  of  stockholders  for  unpaid  suhscriptions.  The  con- 
fusion is  prohahly  very  lar<^ely  ovviui^  to  tlie  dissimilar  statutes 
and  the  various  methods  of  construction  resorted  to  by  the  courts 
in  their  efforts  to  interpret  tlie  le<^islative  will  relative  to  insolvent 
corporations.  Another  element  of  discord  has  grown  out  of  the 
view  that  some  courts  have  entertained  that  a  receiver  was  the 
representative  of  the  corporation,  and  limited  in  the  exercise  of 
power  to  that  which  the  corporation  could  have  exercised  but  for 
the  receivership ;  while  other  courts  have  regarded  the  receiver 
as  more  particularly  the  representative  of  creditors  of  the  corj)o- 
ration,  and  therefore  exercising  powers,  in  some  instances,  which 
the  law  of  estoppel  would  prevent  the  corporation  from  exercis- 
ing. But  little  more  can  be  accomplished  in  this  connection  than 
by  stating,  as  precisely  as  possible,  the  general  trend  of  the  de- 
cisions, unmodiiied  or  influenced  by  statutory  effects. 

(a)  As  a  general  rule,  the  receiver  of  an  insolvent  corporation 
may,  in  a  proper  action,  recover  from  a  stockholder  the  unpaid 

An  action  under  Minn.  Gen.  Stat.  tion  at  law  against  defaulting  direct- 

1894,  §  5897,  to  sequester  corporate  ors.     Uiggins  v.  Tefft,  4  App.  Div.  62. 

assets  and   to  enforce  the  conslitu-  A  suit  may  be  maintained  in  equity 

tional  liability  of  the  stockholders  for  by  the  receiver  of  an   insolvent  na- 

corporate  debts,  does  not  per  se  super-  tional  bank  against  all  its  shareholders 

sede  a  general  prior  assignment  for  to  recover 'dividends  unlawfully  paid 

the  benefit  of  creditors;  and  the  plain-  to  them  out  of  the  capital  at  times 

tiff  therein  is  not  entitled  as  of  right  when  the  bank  earned  no  net  profits 

to  have  a  receiver  appointed  to  take  and  was  in  fact  insolvent,  as  the  num- 

Ihe  corporate  assets  from  the  posses-  erous  actions  at  law  against  the  sev- 

sion  of  the  prior  assignee.     Interna-  eral  stockholders  would  not  furnish 

tional  Trust  Co.  v.  American  Loan  &  as  efficient,  practical,  and  prompt  a 

T.  Co.  (Minn.)  G5  N.  W.  78,  Rev'd  on  remedy.      Hayden  v.    Thompson,    71 

other  grounds  on  Rehearing  in  65  N.  Fed.  Rep.  60. 

W.  632.  An  allegation  in  an  action  by  a  re- 

Inability  of  the  receiver  of  a  bank  ceiver.  that  plaintiff  was  duly  ap- 
appointed  in  proceedings  for  its  dis^-  pointed  and  qualified,  is  not  demur- 
solution  to  realize  more  than  60  per  rable  for  failure  to  show  the  facts  of 
cent  of  the  claims  of  the  creditors  of  his  appointment  and  qualification, 
the  bank  will  not  entitle  him  to  seek  Wason  v.  Frank  (Colo.  App  )  44  Pac. 
the  aid  of  a  court  of  equity  for  any  b78. 
relief  which  he  could  obtain  in  an  ac- 


RECEIVERSHIP  OF  CORPORA  TIO.NS. 


4ua 


balance  of  his  stock  subscription  to  tlie  extent  necessary  to  pay 
the  indebtedness  of  the  corporation,  sul)iect  only  to  such  limita- 
tions as  would  have  been  effective  a^i^ainst  the  directors  had  the 
receiver  not  been  appointed.' 

(b)  AVhere  this  ricyht  is  vested  in  the  receiver  it  is  to  the  ex- 
clusion of  the  right  of  individual  creditorb  to  prosecute  similar 
actions.' 


^Whittlesey  v.  Frantz,  74  N.  Y.  456; 
Phanix  Wdvehousing  Co.  v.  Badger,  67 
N.  Y.  294;  Dayton  v.  Borst,  31  N.  Y. 
4.35;  Ban/cine  v.  Elliott,  16  N.  Y.  377; 
Calkins  v.  Atkinson,  2  Lans.  13;  Saff- 
wy  V.  Dubois,  3  Sandf.  Ch.  46G;  Pcntz 
V.  Hmoley,  1  Barb.  Ch.  122 ;  Van  Wag - 
enenv.  Clark,  22  Hun,  497;  Mann  v. 
Fentz,  3  N.  Y.  415;  Buggies  v.  Brock, 

6  Hun,  164;  Tucker  v.  Oilman,  45 
Hun,  193;  Billings  v.  Bobinson,2S  Hun, 
122;  Dean  v.  Biggs,  25  Hun,  122;  Dor- 
ris  V.  French,  4  Hun,  292;  Nathan  v. 
Wdtlock,  9  Paige,  152;  Farmers  &  M. 
Bank  v.Jenks,  7  Met.  592;  Howard  v. 
Glenn,  85  Ga.  238;  Tohey  v.  Rmi<eU,  9 
R.  I.  58;  Gaslight  &Bkg.  Go.  v.  Haynes, 

7  La.  Ann.  114;  Neic  Orleans  Gaslight 
Co.  V.  Bennett,  6  La.  Ann.  457;  Stark 
V.  Burke,  5  La.  Ann.  740;  Ucwett  v. 
Adams,  54  Me.  206;  Frank  v.  Morri- 
son, 58  Md.  423;  Stillman  v.  Dougherty, 
44  Md.  380.  The  receiver  as  an  offi- 
cer of  court  may  make  calls  for  the 
amount  due.  Hall  v.  United  States 
Ins.  Co.  5  Gill,  484;  Lewis  v.  Bobert- 
son,  13  Smedes  &  M.  558;  Clarke  v. 
Thomas,  34  Ohio  St.  46;  Black  v.  Ore 
Knob  Copper  Co.  115  N.  C.  382;  Sho- 
waiter  v.  Laredo  Improv.  Co.  83  Tex. 
162;  Stewart  v.  Lay,  45  Iowa,  604; 
Sc/wonover  v.  Hinckley,  48  Iowa,  82; 
Big  Creek  Stone  Co.  v.  Seward  (Ind.) 
43  N.  E.  464;  Great  Western  Teleg.  Co. 
V.  Gray,  123  111.  630;  Lamar  Ins.  Co. 
V.  Gulick,  103  111.  41;  Chandler  v. 
Brown,  77  III.  333.  See  Republic  L. 
Ins.  Co.  V.  Swigert,  135  III.  150,  12  L. 
R.  A.  328;  Merchants'  Nat.  Bank  v. 
Northwestern  Mfg.  &  Car  Co.  48  Minn. 


361;  Basting  v.  Anlceny  (Minn.)  66  N. 
W.  266;  Minnesota  Thresher  Mfg.  Co. 
V.  Langdon,  44  Minn.  37;  Elderkin  v. 
Peterson,  8  Wash.  674;  Shomalter  v. 
Laredo  Improv.  Co.  83  Tex.  163;  F^^vi- 
derwerken  v.  Glenn,  85  Va.  0;Lathrop 
v.Knapp,  27  AVis.  214,  37  Wi.s.  307; 
Ri^ss  Meehan  Brake  Shoe  Foundry  Co. 
V.  Southern  Malleable  Iron  Co.  72  Fed. 
Rep.  957;  Means'  Appeal,  85  Pa.  75. 

Under  the  Railway  Companies  Act 
of  1867  in  England  a  receiver  has  no 
power  to  collect  the  unpaid  subscrip- 
tions. Re  Birmingham  &  L.  J.  R.  Co. 
L.  R.  18  Ch.  Div.  155. 

A  stockholder  who  has  paid  his  sub- 
scription has  a  right  to  insist  that 
those  who  have  not  paid  shall  be  com- 
pelled by  the  receiver  to  do  so.  Na- 
than V.  Whitlock,  9  Paige,  152,  and  the 
court  has  power  to  equalize  the  pay- 
ments among  the  stockholders.  Day- 
ton V.  Borst,  31  N.  Y.  435;  Clarke  v. 
Thomas,  34  Ohio  St.  46. 

'  Minnesota  Thresher  Mfg.  Co.  v. 
Langdon,  44  Minn.  37;  Merchants'  Nat. 
Bank  v.  Northwestern  Mfg.  &  Car  Co. 
48  Minn.  361. 

A  creditor  of  a  corporation  cannot 
maintain  an  action  to  recover  sub- 
scriptions from  stockholders,  where  a 
receiver  of  the  corporation  has  been 
appointed,  and  it  does  not  appear  that 
he  has  refused  to  bring  the  action. 
Big  Creek  Stone  Co.  v.  Seward (ImX.)  43 
N.  E.  464.  But  see  Lexington  Life,  F. 
&  M.  Ins.  Co.  V.  Page,  17  B.  Mon,  413, 
as  to  right  of  a  corporation  to  sue 
where  a  receiver  has  been  appointed. 


404 


RECEIVERSHIPS. 


(c)  He  may  enforce  this  lial)ility  reg:ar(lless  of  collusive  and 
fraudulent  attempts  on  the  part  of  the  oilicers  and  stocl  holders 
to  evade  liability.' 

(d)  lie  may  enforce  such  stock  lial)ility,  it  would  seem,  only  to 
the  extent  necessary  to  pay  the  debts.^ 

(e)  The  right  of  the  receiver  to  enforce  stock  liability  is  based 
upon  the  condition  that  the  court  has  previously  determined  the 
amount  of  the  corporate  indebtedness  and  fixed  the  liability  of 
each  share  of  stock,  and  these  are  necessary  allegations  in  the 
petition." 


'  Nathan  v.  Wldtlock,  9  Paige,  152; 
S(igoi-y  V.  Dubois,  3  Sandf.  Ch.  460; 
Farker  v.  Nicker  noii,  1 87  Mass.  487 ;  Saw- 
yer V.  Hoag,  84  U.  S.  17  Wall.  610,  21 
L.  ed.  731.  See  contra,  RepuhUcL.  Ins. 
Co.  V.  Swicjert.  135  111.  150,  12  L.  R. 
A.  32S;Wi>ilers  v.  Armstrong,  37  Fed. 
Rep.  508;  Ptscataqua,  F.  &  M.Ins.  Go. 
V.  mil,  60  Me.  178;  Putnam  v.  New 
Albany  <&  S.  C.  J.  B.  Co.  {"Burke  v. 
Smith"),  83  U.  S.  16  Wall.  395,  21  L. 
ed.  3G3;  Carlwright  v.  Dickinson,  88 
Tenn.  476,  7  L.  R,  A.  706,  but  in  such 
case  the  question  of  good  faith  is  aa 
important  element.  Nettles  v.  Marco, 
33  S.  C.  47. 

In  Missouri,  an  assignee  for  the  ben- 
eOt  of  creditors  on  a  bill  in  chancery 
filed  by  him  may  compel  the  directors 
of  an  insolvent  corporation  to  make 
an  assessment  payable  to  him.  Lion- 
herger  v.  Broadway  Sav.  Bank,  10  Mo. 
App.  499.  Thereceiver  has  no  power 
to  collect  where  no  call  has  been 
made.  Hannah  v.  Moherly  Bank,  67 
Mo.  678. 

In  Iowa,  it  is  held  that  an  indivi- 
dual stockholder  cannot,  in  a  com- 
mon-law proceeding,  be  compelled  to 
pay  his  subscription  until  a  general 
call  is  made,  showing  a  necessity  for 
an  assessment.  Chandler  v.  Keith,  42 
Iowa,  99. 

Statutory  liability  is  not  an  asset 
and  not  enforceable  by  the  receiver. 


Farnsworth  v.  Wood,  91  N.  Y.  308. 
Cf.,  as  to  assignee,  Bouton  v.  Dement, 
123  111.  142. 

The  receiver  of  an  insolvent  corpo- 
ration may  sue  in  a  foreign  jurisdic- 
tion to  recover  stock  subscriptions. 
3fann  v.  Cooke,  20  Conn.  178;  Mc- 
Do/iovg?i  V,  Phelps,  15  How.  Pr.  372; 
Seymour  v.  Sturges,  26  N.  Y.  134. 

But  he  has  no  power  to  compromise 
unpaid  subscriptions.  Chandler  v. 
Brown,  77  111.  333. 

s  Bowton  V.  Dement,  123  111.  142. 

*  Chandler  v.  Keith,  42  Iowa,  99; 
American  Ins.  Co.  v.  Schmidt,  19  Iowa, 
502;  Mills  V.  Scott,  99  U.  S.  25,  25  L. 
ed.  294;  Scovill  v.  Thayer,  105  U.  S. 
143,  26  L.  ed.  908;  Vanderwerken  v. 
Glenn,  85  Va.  9;  Glenn  v.  Williams, 
60  Md.  93;  Glenn  v.  Semj)le,  80  Ala. 
159;  Liggett  v.  Glenn,  51  Fed.  Rep. 
381. 

An  action  at  common  law  upon  a 
subscription  must  be  in  the  name  of 
the  corporation.  Glenn  v.  Marbury, 
145  U.  S.  499,  36  L.  ed.  790  (Assign- 
ment). 

In  Indiana  a  creditor  of  a  corpora- 
tion can  collect  his  debt  from  unpaid 
subscriptions  only  through  the  re- 
ceiver. Wheeler  "7.  Thayer,  121  Ind.  64. 

To  collect  a  stock  liability  the  re- 
ceiver may  proceed  at  law  or  la 
equity.  Stanton  v.  Wilkeson,  8  Ben, 
357;  Morrow  v.  San  Francisco  Super. 


RECEIVERSHIP  OF  CORPORATIONS. 


405 


(f)  The  liability  of  a  stoclcliolder  upon  his  stock  subscription 
can  be  determined  only  in  a  suit  by  the  receiver  for  that  purpose 
and  not  in  the  ori«;iual  action  in  which  the  receiver  is  appointed.' 
Where  the  suit  is  brought  by  the  receiver  an  allegation  that  he 
was  duly  appointed  and  qualified,  without  showing  the  facts 
relating  to  his  appointment,  is  sufficient.' 


Ct.  64  Cal.  383;  Borland  v.  Haven,  37 
Fed.  Rep.  394;  Potter  v.  Dear,  95  Cal. 
578;  Baines  v.  Babcock,  95  Cal.  581; 
Baines  v.  Story  (Cal.)  30  Pac.  777; 
Cuher  v.  Third  Nat.  Bank,  64  111. 
528. 

In  Illinois  the  action  is  at  law. 
Thompson  v.  Meisser,  108  111.  359; 
Schalucky  v.  Field,  124111.  G17;  Mcia^er 
V.  Tkomjison,  9  111.  App.  368;  Buch- 
anan V.  Meisser,  105  111.  638;  AreJiz  v. 
Weir,  89  111.  25;  McCarthy  v.  Lavonehs, 
89  111.  270;  Fuller  v.  Ledden,  87  111. 
310;  TibbalU  v.  Libhy,  87  111.  142; 
Corwithy.  Culver,  69  111.  502;  Wincock 
V.  Turpin,  96  111.  135. 

If,  however,  the  liability  is  to  the 
creditors  as  a  class  the  remedy  is  in 
equity.  Ilornor  v.  Eenning,  93  U.  S. 
228,  23  L.  ed.  879;  Harper  v.  Union 
Mfg.  Co.  100  111.  225;  Rounds  v.  Mc- 
Cormick,  114  111.  252;  Young  v.  Far- 
well,  139  111.  32*1;  Low  v.  Buchanan, 
94  111.  76;  Qmenan  v.  Palmer,  117  111. 
619;  Fames  v.  JJoiis,  102  111.  350; 
Hickling  v.  Wilson,  104  111.  54. 

In  Illinois  the  courts  refuse  permis- 
sion to  pro-secute  a  suit  in  equity  by 
creditors  of  a  nonresident  corpora- 
tion against  Illinois  stockholders. 
Young  v.  Farucll.  139  111.  326.  And 
the  same  rule  prevails  in  Massachu- 
Betta.  New  Haven  Horse  Nail  Co.  v. 
Linden  Spring  Co.  142  Mass.  349. 

In  Iowa  it  is  held  that  the  court  in 
an  interlocutory  proceeding  has  no 
right  to  make  an  assessment  against 
stockholders  for  unpaid  stock  in  a 
proceeding  for  the  appointment  of  a 
receiver,  in  the  absence  of  an  allega- 


tion that  the  stockholders  are  too 
numerous  to  be  made  parties.  Lajnar 
Ins.  Co.  V.  Hildreth,  55  Iowa,  248. 
See  also  Chandler  v.  Broion,  11  111. 
333;  Chandler  v.  Dore,  84  111.  275. 

There  must  be  a  deficiency  in  the 
assets  first  established  in  Maine  be- 
fore a  proceeding  is  instituted  by  the 
receiver  to  recover  a  stock  liability. 
Hetceit  v.  Adams,  54  Me.  206.  As  to 
the  practice  in  Missouri,  see  Hannah, 
v.  Moberly  Bank,  67  Mo.  678. 

In  an  action  against  an  insolvent 
corporation  where  an  order  is  made 
directing  the  receiver  to  institute  pro- 
ceedings against  stockholders  for 
unpaid  subscriptions,  it  is  held  that 
the  liability  of  the  stockholders  will 
not  be  determined  in  such  proceeding, 
but  only  in  a  proceeding  by  the  re- 
ceiver against  the  stockholder.  Black 
V.  Ore  Knob  Coj^rer  Co.  115  N.  C.  382. 

See  T[  f  following  and  note  1. 

'  Showalter  v.  Laredo  Improv.  Co.  83 
Tex.  162. 

«  Edee  v.  Strunk,  35  Neb  307; 
Springs  v.  Boicery  Nat.  Bank,  63  Ilun, 
505;  Bangs  v.  Mcintosh,  23  Barb.  591. 
But  see  Stewart  v.  Bcebe,  28  Barb.  34. 

Inasmuch  as  a  stockholder  is  a 
creditor  it  has  been  supposed  that  the 
amount  due  him  may  be  set-off  against 
his  subscription,  but  this  is  not  true, 
for  the  reason  that  the  capital  stock 
is  a  trust  fund  for  the  payment  of 
creditors  and  liability  thereon  is  not 
subject  to  set-off.  Williams  v.  Trap- 
hagan,  38  N.  J.  Eq.  57;  Scovill  v. 
Thayer,  105  U.  S.  143,  26  L.  ed.  968; 
Sawyer  v.  Hoag,  84  U.  S.   17   Wall. 


406 


RECEIVERSHIPS. 


§  237.     To  avoid  frjiuduleiit  transfers. 

It  is  the  settled  doctrine  that  a  receiver  of  an  insolvent  corpo- 
ration represents  not  only  the  corporation  but  also  its  creditors 
and  stockholders  and  that  in  his  character  as  trustee  for  the  latter 
he  may  disaffirm  and  maintain  an  action  as  receiver  to  set  aside 
illei;al  and  fraudulent  transfers  of  the  property  of  the  corporation 
made  by  its  agents  and  officers,  or  to  recover  its  securities  in- 
vested or  misaiiplied.  Such  right  is  vested  in  the  receiver  upon 
his  appointment.  The  decree  dissolving  a  corporation  and  for  the 
distribution  of  its  assets  is  a  decree  in  the  nature  of  a  judgment 
for  all  the  creditors,'     The  law  upon  this  subject  is  not  entirely 


610,  21  L.  ed.  731;  Bnin  v.  Clinton 
Loan  Asi^o.  112  N.  C.  248;  A'pplelon  v. 
I'urnbull  84  Me.  72. 

'  Aity.  Gen.  v.  Guardian  3fut.  L. 
Ins.  Co.  77  N.  Y.  272,  la  this  case 
the  decree  dissolved  the  corporation 
and  vested  in  the  receiver  all  its  prop- 
erty, assets,  and  effects  for  the  pur- 
pose of  distribution  among  the  cred- 
itors and  other  persons  interested  in 
the  fund  under  the  direction  of  the 
court  and  the  provisions  of  the  statute 
relative  to  insolvent  corporations. 

In  Be  Globe  Ins.  Co.  6  Paige,  103, 
the  court  say:  "It  is  the  settled  doc- 
trine that  the  receiver  of  an  insolvent 
corporation  represents  not  only  the 
corporation  but  also  creditors  and 
stockholders,  and  that  in  his  char- 
acter as  trustee  for  the  latter  he  may 
disafhrm  and  maintain  an  action  as 
receiver  to  set  aside  illegal  or  fraud- 
ulent transfers  of  the  property  of  the 
corporation  made  by  its  agents  or 
oflicers,  or  to  recover  its  funds  or  se- 
curities invested  or  misapplied."  Gil- 
let  V.  Moody,  3  N.  Y.  471);  Talmage 
v.  Pell,  7  N.  Y.  328;  Whittlesey  v. 
Delaney,  73  N.  Y.  571  (fraudulent 
judgment);  Vail  v.  Hamilton,  85  N. 
Y.  453. 

In  Illinois  it  is  held  that  a  general 
assignment  for  the  benefit  of  creditors 
does  not  pass  to  the  assignee  any  in- 


terest in  property  before  that  fraud- 
ulently transferred  by  the  assignor 
nor  any  right  to  impeach  or  set  aside 
.such  fraudulent  transfer — such  right 
belonging  to  the  creditors  alone. 
Bouton  V.  Dement,  123  111.  142.  This 
case  is  based  upon  Brownell  v.  Curtis, 
10  Paige.  210;  Leach  v.  Kelsey,  7  Barb. 
460;  Extabrook  v.  Messernmith,  18  Wis. 
545;  Flower  v.  Cornis7i,  25  Minn.  473; 
Lund  V.  Skanes  Eaukilda  Bank,  96  111. 
181. 

A  receiver  of  a  corporation  who 
represents  the  creditors  as  well  as  the 
corporation  is  not  estopped  to  claim 
that  a  transfer  of  the  property  of  the 
corporation  by  its  president  was 
fraudulent.  Nevitt  v.  First  Nat. 
Bank,  91  Hun,  43. 

The  great  weight  of  authority  is, 
however,  in  favor  of  the  right  of  the 
assignee  to  impeach  fraudulent  con- 
veyances. See  Pillsbury  v.  Kingon, 
33  N.  J.  Eq.  287,  and  cases  there  cited, 
and  note  with  additional  cases.  Cf. 
Germantown  Pa.ss.  R.  Co.  v.  Fitter,  60 
Pa.  124;  Eppright  v.  Nicker  son,  78 
Mo.  482;  Shockley  v.  Fisher,  75  Mo. 
498;  Ueineman  v.  Hart;  55  Mich.  64. 

The  law  of  Illinois  applicable  to  as- 
signees is  applied  to  receiverships  in 
insurance  corporations  in  Republic  L. 
Ins.  Co.  V.  Swigert,  135111.  150,  12  L. 
R.  A.  328,  where  it  is  held  that  it  is 


RECEIVERSHIP  OF  CORPORATIONS. 


i07 


harmonious,  some  of  the  cases  holding  that  the  property  of  a  cor- 
poration fraudulently  transferred  before  the  receivers  appoint- 
ment can  only  be  reached  by  an  action  by  the  corporation  itself.' 
He  is  authorized  to  bring  suit  to  recover  dividends  illegally  paid 
to  the  stockholders  of  an  insolvent  corporation,  as  shown  in  the 
followino;  section. 


not  a  power  inherent  in  a  court  of 
chancery  and  not  in  accordance  with 
the  course  of  procedure  and  practice 
which  ordinarily  obtains  in  equity  for 
the  court  to  cloth  its  receiver  with 
power  to  seize  and  enforce  a  property 
right  which  belongs  only  to  parlies 
who  are  not  before  the  court  and  are 
not  asking  its  assistance.  For  the 
purpose  of  litigation  the  receiver  takes 
only  the  rights  ot  the  corporation  such 
as  can  be  asserted  in  the  name  of  the 
corporation  itself.  Upon  this  basis 
only  can  the  receiver  litigate  for  the 
benefit  of  either  shareholders  or  cred- 
itors. 

It  is  held  in  Great  Western  Teleg.  Co. 
V.  Gray,  122  111.  630,  an  action  by  the 
corporation  for  the  use  of  the  receiver, 
that  a  court  of  equity  has  jurisdiction 
to  appoint  a  receiver  where  the  board 
of  directors  were  guilty  of  mismanHge- 
ment  and  malfeasance  and  order  him 
in  the  corporate  name  to  collect  un- 
paid subscriptions.  Cf.  Rtpuhlic  L. 
Tn».  Co.  V.  Sioigert,  135  111.  150,  12 
L.  R.  A.  328. 

'  The  cases  holding  that  an  assignee 
or  receiver  may  impeach  the  fraud- 
ulent conveyances  of  his  principal  are 
as  follows  :  Freelaud  v.  Freeland,  102 
]\Iass.  475;  Lynde  v.  McGregor,  13 
Allen,  172;  Blakev.  Sawin,  10  Allen, 
840;  GMs  v.  T/iayer,  6  Cush.  30; 
Kiibovine  v.  Fay,  29  Ohio  St.  204; 
Uallowell  V.  Bnyliss,  10  Ohio  St.  537; 
Waters  v.  Daahiell,  1  Md.  455;  Rich 
nrd«  V.  JVew  Hampshire  Ins.  Co.  43  N. 
H.  263;  Hhipman  v.  ^Lna  Ins.  Co.  29 
Coun.  245;  Siniflv.  lltompson,  9  Conn. 


63;  Palmer  v.  Thayer,  28  Conn.  237; 
Simpson  v.  War?  en,  55  Me.  18;  Eu- 
ropean &  N.  A.  R.  Co.  V.  Poor,  59 
Me.  277;  Utaton  v.  Piltman,  11  GraU. 
99;  C lough  V.  Thompson,  7  Gralt.  20; 
Doyle  V.  Peckham,  9  R.  I.  21;  Hayes 
V.  Kemjon,  7  R.  I.  142;  Moncure  v. 
Hanson,  15  Pa.  385;  I'ams  v.  Bullitt, 
35  Pa.  008;  Slunehridgev.  Perkins.  141 
N.  Y.  1;  Atkinson  v.  Rochester  Print- 
ing Co.  114  N.  Y.  168;  Vail  v.  Hamil- 
ton, 85  N.  Y.  453;  Atty.  Gen.  v. 
Guardian  Mut.  L.  Ins.  Co.  77  N.  Y. 
272;  Southard  v.  Benner,  72  N.  Y. 
424;  Hoyle  v.  Plattshurg  &  M.  R.  Co. 
54  N.  Y.  314;  McMahon  v.  Allen,  35 
N.  Y.  403;  Robinson  v.  Bank  of  At- 
tica, 21  N.  Y.  406;  Bromcer  v.  Har- 
heck,  9  N.  Y.  589;  Bayard  v.  Hoffman, 
4  .Johns.  Ch.  450;  Rudd  v.  Robinson,  54 
Hun,3;)9;  Kingsleyv.  First  Nat.  Bank, 
31  Uun,  329;  Nathan  v.  Whitlock,  9 
Paige,  152;  Leavitt  v.  De  Launay,  4 
Sandf.  Ch.  281;  Batcher  v.  Harrison, 
4  Barn.  &  Ad.  129;  Doe,  Grimsby, 
V.  Ball,  11  Mees.  &  W.  531;  Norcutt  v. 
Dodd,  1  Craig  &  Ph.  100;  Holmes  v. 
Penney,  3  Kay  &  J.  90;  Graham  But- 
ton Co.  V.  Spielman,  50  N.  ,J.  Eq.  120; 
Pillsbury  v.  Kingon,  33  N.  J.  E(i.  287; 
Stewart  v.  Lehigh  Valley  R.  Go.  38  N.  J. 
L.  505;  Farmers'  Loan  &  T.  Co.  v. 
Minneapolis  Engine  &  Mach  Works, 
35  Minn.  543;  Paine  v.  Lake  Erie 
&  L.  R.  Co.  31  lud.  353;  State  v. 
State  Bank.  40  Neb.  192;  Wardell 
V.  Union  P.  li.  Co.  103  U.  S.  651,  26 
L.  ed.  509;  Drury  v.  Mihoaukee  <&  S. 
R.  Co.  74  U.  S.  7  Wall.  299,  19  L.  ed. 
4);  Bradley  v.  Converse,  4  ClilT.  375; 


408 


RECEIVERSHIPS. 


§  238.     To  recover  illegal  dividemls. 

The  receiver  has  the  right  to  sue  for  and  recover  bade  in  the 
interest  of  creditors  dividends  paid  out  bj  the  otHcers  from  tlie 
capital  stock.'     Dissenting  stockholders  have  a  right  to  prevent 


Cumberland  Coal  &  I.  Co.  v.  Pariah,  43 
Jld.  598;  Kitchen  v.  St.  Louis,  K.  G. 
&  N.  li.  Co.  69  ]\Ii>.  224;  Chouteau  v. 
^^/^/),70Mo.  290;  Mar.'ihallv.  Farmers' 
&  M.  Snv.  Bank.  85  Va.  676,  3  L.  R. 
A.  534;  Flint  &  P.  M.  R.  Co.  v.  Dewey, 
14  Mich.  477;  llayiDOod  v.  Lincoln 
Lumber  Co.  64  Wis.  639;  Commercial 
Nat.  Bank  v.  Burch,  141  111.  519; 
Alexander  v.  Relfe,  74  Mo.  495;  Thomp- 
son V.  Greeley,  107  Mo.  577. 

Cases  holding  the  contrary  are  as 
follows:  Eatubrook  v.  Mexsersmith,  18 
Wis.  545;  Flower  V.  Corninh,  25  Minn. 
473;  Sere^.  Pilot,  10  U.  S.  6  Crunch. 
332,  3  L.  ed.  240;  Leach  y.  Kelsfy.  7 
Barb.  466;  Brownell  v.  Curtis,  10 
Paige,  210;  Browning  v.  Hart,  6  Barb. 
91;  Maiders  v.  Culver,  1  Duv.  164; 
Bouton  V.  Dement,  123  111.  142.  And 
see  Republic  L.  Ins.  Co.  v.  Swigert,  135 
III.  150,  12  L.  R.  A.  328. 

The  receiver  of  an  insolvent  corpo- 
ration cannot  maintain  an  action  to 
have  an  insurance  policy  on  the  life 
of  one  of  the  stockholders  and  di- 
rectors made  payable  to  another  stock- 
holder, and  assigned  for  a  valuable 
consideration  to  other  persons,  ad- 
judged to  belong  to  the  assets  of  the 
corporation  on  the  ground  that  the 
premiums  were  paid  from  the  corpo- 
rate funds,  where  such  payment  was 
made  with  the  knowledge  and  consent 
of  all  the  stockholders  at  a  time  when 
there  were  no  corporate  debts.  Little 
V.  Garabrant,  90  Hun,  404. 

'In  Minnesota  Thresher  Mfg.  Co.  v. 
iMngdon,  44  Minn.  37,  it  is  lield  that 
the  adjudication  of  insolvency,  and 
the  appointment  of  a  receiver  are  in 
the  nature  of  a  sequestration  of  the 
corporate  property  having  the  effect 


of  an  attachment  or  execution  in  be- 
half of  all  creditors.  In  such  case  the 
receiver  has  in  substance  the  same 
powers  as  an  assignee  in  bankruptcy, 
or  a  receiver  upon  a  creditor's  bill  or 
proceedings  supplementary  to  execu- 
tion, and  he  succeeds  to  the  rights  of 
the  creditors  as  well  as  the  insolvent 
corporation  and  has  the  power  to  en- 
force the  rights  which  the  creditors, 
but  for  the  proceedings,  might  have 
enforced  in  their  own  behalf.  Fai'm- 
ers'  Loan  &  T.  Co.  v.  Minneapolis  En- 
gine Much.  Works,  35  Minn.  543. 
"Among  the  rights  which  pass  to  the 
receiver  as  the  representative  of  the 
creditors  is  the  right  to  recover  prop- 
erty conveyed  by  the  corporation  in 
fraud  of  its  creditors,  or  capital  with- 
drawn and  refunded  to  the  stockhold- 
ers without  provision  for  full  payment 
of  the  corporate  debts.  This  right  of 
the  receiver  does  not  depend  upon 
any  express  statute  granting  it  but 
rests  upon  the  general  equitable  doc- 
trine that  the  capital  of  a  corporation 
is  a  trust  fund  for  the  benefit  of  its 
creditors,  and  those  to  whom  it  has 
been  refunded  are  trustees  for  their 
benefit." 

Hay  den  v.  Thompson,  71  Fed.  Rep. 
60,  3  Am.  &  Eng.  Corp.Cas.  N.  S.  511. 
In  such  case,  where  the  corporation 
is  an  insolvent  bank,  an  order  of 
the  comptroller  is  not  necessary. 
And  a  suit  in  equity  is  proper,  inas- 
much as  the  numerous  common  law 
actions  would  not  furnish  as  efficient, 
practical,  and  prompt  a  remedy. 
This  kind  of  an  action  does  not  rest 
upon  any  statute  or  act  of  Congress, 
but  upon  a  fundamental  principle  of 
equity.     Id. 


RECEIVERSHIP  OF  CORPORATIONS. 


409 


the  payment  of  unearned  d'vidends,  or  the  diversion  of  the  corpo- 
i-ate  capital,  or  to  compel  its  restoration,'  and  creditors  or  a  re- 
ceiver or  liquidator  have  a  similar  right.''  The  power  of  the  re- 
ceiver in  this  class  of  actions  is  usually  based  upon  the  fact  (a) 
that  the  statute  invests  him  with  such  power,  or  (b)  that  the  act 
complained  of  was  ultra  vires  and  therefore  voidable  by  the  cor- 
poration itself,  or  (c)  the  proceeding  in  which  the  receiver  is  ap- 
pointed is  a  creditor's  proceeding  in  which  the  receiver  is  tlie 
representative  of  the  creditors  and  can  therefore  institute  and 
prosecute  such  proceedings  as  they  might  have  maintained,  or  (d) 
where  the  receiver  is  seeking  to  recover  assets  or  property  be- 
lontrine:  to  the  debtor.' 


^Minnesota  TJiresher  Mfg.  Co.  v. 
Langdon,  44  Miuii.  37;  Bloxam  v. 
Metropolitan  R.  Co.  L.  R.  3  Ch.  App. 
337;  Holme.H  v.  New  Castle-upon-Tyne 
Ahbntoir  Co.  L.  R.  1  Ch.  Div.  082; 
Guinness  v.  Land  Corp.  of  Ireland,  L. 
R.  22  Ch.  Div.  349;  Carlisle  v.  Soutli- 
eastern  R.  Co.  1  Macn.  &  G.  689;  Salis- 
bury V.  Metropolitan  R.  Co.  38  L.  J. 
Ch.  249. 

^Stringer's  Case,  L.  R.  4  Ch.  475; 
Ranee's  Case,  L.  R.  6  Ch.  104;  Re 
National  Funds  Asf^ur.  Soc.  L.  R.  10 
Ch.  Div.  118;  Re  Alexandra  Palace  Go. 
L.  R.  21  Ch.  Div.  149. 

But  the  receiver  cannot  transfer,  as 
an  asset,  the  right  to  attack  such  trans- 
fers. Morris  v.  Morris,  5  Mich.  171; 
Brush  V.  Sweet,  38  Mich.  574;  McMas- 
(ers  V.  Campbell,  41  Mich.  513;  Dick- 
inson V.  Seaver,  44  Mich.  624;  Prvsser 
V.  Edmonds,  1  Younge  &  C.  481; 
Milwaukee  &  M.  R.  Co.  v.  Milwaukee 
<&  W.  R.  Co.  20  Wis.  175;  Vose  v. 
Grant,  15  Mass.  505;  Mann  v.  Fair- 
child,  2  Keyes,  106. 

The  receiver  of  a  national  bank 
may  bring  suit  to  recover  dividends 
illegally  paid  to  stockholders  when 
the  bank  was  insolvent.  Uayden  v. 
Thompson,  71  Fed.  Rep.  60,  2  Am.  & 
Eug.  Corp.  Cas.  N.  y.  511.    And  this 


without  an  express  order  of  the  comp 
troller.     Id. 

Cf.  Osgood  V.  Ijayton,  3  Abb.  App. 
Dec.  418;  Hill  v.  ^' ester n  &  A.  R.  Co. 
80  Ga.  284;  Porter  v.  Sabin,  149  U.  S. 
473,  37  L.  ed.  815;  Gill  v.  Balis,  72 
Mo.  424. 

^Republic  L.  Ins.  Co.  v.  Swigert,  135 
111.  150,  12  L.  R.  A.  328;  Fairbanks  v. 
Farwell,  141  111.  354. 

Gottlieb  V.  Miller,  154  111.  44.  In 
this  case  it  is  held  that  a  receiver  could 
not  attack  a  fraudulent  act  where  his 
principal  could  not  have  done  so. 

In  Republic  L.  Ins.  Co.  v.  Swigert, 
supra,  the  question  involved  was 
whether  the  receiver  in  his  ofllcial  ca- 
pacity could  maintain  a  suit  to  recover 
from  stockholders  where,  pursuant  to 
a  resolution  of  the  board  of  directors, 
the  stockholders  surrendered  their 
slock  and  new  stock  was  issued  in  lieu 
thereof  in  amounts  equal  in  par  value 
to  the  cash  payments  made  upon  the 
original  stock,  and  it  was  held  the  re- 
ceiver could  not  recover.  The  de- 
cision is  based  upon  the  doctrine  that 
the  powers  of  the  receiver  are  in  this 
respect  coextensive  only  with  the 
powers  of  the  corporation.  The  court 
does  not  seem  to  have  given  duo 
weight  to  the  purpose  for  which  tho 


410 


RECEIVERSHIPS. 


§  239.     Loavo  of  court  to  sue  required. 

It  is  necessary  tliat  a  receiver  before  bringing  suit  obtain  leave 
of  court  anthoi'izing  suit,  eitber  g-eiieral  or  speciaL'  If  tbe  nature 
of  tbe  case  is  sucb  as  to  require  it,  it  may  be  expedient  to  give 
tlie  receiver  sucb  general  power  in  tbe  order  of  appointinent,  and 
thus  avoid  tbe  necessity  of  several  applications  therefor.     If, 


receiver  was  appointed  under  the  pro- 
visions of  the  statute  in  question,  i.  e., 
the  dissolution  of  the  corporation  and 
the  marslialiiig  and  distribution  of  its 
assets  among  those  entitled  thereto. 
In  such  case  it  would  seem  that  the 
receiver  is  pre-eminently  the  repre- 
sentative of  creiiitors,  as  much  so  at 
least  as  the  receiver  in  a  creditor's 
proceeding,  where  the  court  tacitly 
admits  the  receiver  to  be  possessed  of 
such  power.  At  any  rate  the  deci- 
sion cannot  be  reconciled  with  the  fol- 
lowing cases: 

"The  receiver  unites  in  himself  the 
right  of  the  trust  combination  and 
also  the  right  of  creditors,  and  that  he 
may  assert  a  claim  as  the  representa- 
tive of  creditors  which  he  might  be 
unable  to  assert  as  a  representative  of 
the  combination  merely.  The  general 
rule  is  well  established  that  a  receiver 
takes  the  title  of  the  corporation  or 
the  individual  whose  receiver  he  is 
and  that  any  defense  which  would 
have  been  good  against  the  former 
may  be  asserted  against  the  latter. 
But  there  is  a  recognized  exception 
which  permits  a  receiver  of  an  insolv- 
ent individual  or  corporation  in  the 
interest  of  creditors  to  disaffirm  deal- 
ings of  the  debtor,  in  fraud  of  their 
rights."  Pittsburg  Carbon  Co.  v.  Me- 
Millin,  119  N.  Y.  46,  7  L.  R.  A.  46; 
Qillet  V.  Moody,  3  N.  Y.  479;  Porter 
V.  Williams,  9  N.  Y.  142;  Curtis  v. 
Leavitt,  15  N.  Y.  108;  Alexander  v. 
Relfe,  74  Mo.  495.  Cf.  Stephens 
V.  Perrine,  148  N.  Y.  476;  Mandeville 
V.  Avei-y,  124  N.  Y.  385. 


'  Batik  V.  Davifs,  66  N.  C.  252;  King 
V.  Cattn,  24  Wis.  627;  Screven  v.  Clark, 
48  Ga.  41. 

Cf.  Helme  v.  Littlejohn,  12  La.  Ann. 
298. 

If  the  receiver  sues  to  recover  on  a 
contract  made  with  him  directly,  or 
to  recover  damages  for  injury  to  prop- 
erty in  his  possession,  leave  of  court 
is  not  required.  Singerly  v.  Fox,  75 
Pa.  112;  Ponder  v.  Catterson.  127  Ind. 
434;  Wilson  v.  Weich,  157  Mass.  77; 
Farnsworth  v.  Western  U.  Teleg.  Co.  6 
N.Y.  Supp.  735. 

A  receiver  is  not  required  to  obtain 
leave  of  the  court  appointing  him  to 
bring  suit  on  an  undertaking  in  in- 
junction after  procuring  under  au- 
thority of  the  court  a  judgment  dis- 
solving such  injunction.  Wason  v. 
Frank  (Colo.  App.)  44  Pac.  378. 

A  receiver  of  an  estate  who  brings 
a  suit  against  certain  legatees  to  grat- 
ify his  dislike  of  them,  without  prop- 
erly informing  his  counsel  of  the  facts 
of  the  case,  cannot  recover  the  cost 
from  the  estate.  Henry  v.  Henry,  103 
Ala.  582. 

A  receiver  of  a  bank  appointed  in 
proceedings  for  its  dissolution  who  ob- 
tains leave  of  court  to  bring  an  action 
against  defaulting  directors  does  not 
entitle  him  to  bring  such  action  in  a 
court  of  equity,  where  he  would  other- 
wise be  required  to  bring  the  action 
at  law.  Biggins  v.  Tefft,  4  App.  Div? 
63. 

Cf.  Grant  v.  Davenport,  18  Iowa, 
181. 


RECElVERtSHIP  OF  CORPORATIONS.  411 

however,  the  suit  is  likely  to  be  protracted  and  expensive,  special 
leave  shoiild  be  asked  and  obtained.  A  receiver  beino-  simply 
an  officer  of  the  court,  his  own  protection  requires  that  liis  action 
in  regard  to  litigation  should  have  the  sanction  of  the  court. 
Besides,  at  law,  the  party  having  the  legal  right  to  sue  must  do 
so,  and  where  the  receiver  resorts  to  a  court  to  assert  the  rights 
of  another,  he  must  show,  as  a  part  of  his  right  to  recover,  his 
authority  for  so  doing.'  Like  the  general  powers  of  a  receiver, 
his  power  to  sue  must  be,  to  some  extent,  governed  by  the  nature 
of  the  proceeding."  If  the  receiver  is  empowered  by  statute  to 
sue,  he  need  not  obtain  special  leave  of  court  to  sue,^  and  may 
sue  in  a  foreign  jurisdiction.''  It  is  essential,  where  the  receiver 
sues  in  his  own  name,  that  he  allege  in  a  traversable  form  his 
authority  to  maintain  suit.^ 

In  relation  to  rights  of  a  receiver  to  sue  in  the  United  States 
courts,  where  the  question  of  citizenship  is  involved,  the  citizen- 
ship of  the  receiver  and  not  that  of  the  corporation  governs.* 

§  240.     Suits  hj  foreign  receiver  of  corporation. 

"We  have  already  examined  the  question  of  the  rights  and  pow- 
ers of  a  foreign  receiver  to  sue  in  a  foreign  jurisdiction,'  and  only 
revert  to  the  subject  in  so  far  as  receivers  of  corporations  are 
concerned.  While  it  is  impossible  to  harmonize  the  cases  bear- 
ing upon  the  question  of  the  right  of  a  foreign  receiver  to  sue  in 
a  state  other  than  that  in  which  he  is  appointed,  the  weight  of 
authority  seems  to  establish  the  following  propositions : 

(a)  Where  proceedings  are  instituted  for  the  purpose  of  dis- 

^  Screten  v.  Clark,  48  Ga.  41;  Banys  But  see  White  v.  Joy,  13  N.  Y.  83; 

7.  Mcintosh,  23  Barb.  591;  Stewart  y.  Steirart  v.  Beebe,  28  Barb.   34;   llefje- 

Beebe.  28  Barb.  34.  wixck  v.  Hlven,  140  N.  Y.  414;  Hock- 

«  WeM  V.  Firnt  Nat.  Bank,  lOG  N.  well  v.  Merwin,  45   N.  Y.  166,  as  to 

C.   1;    Gray  V.  Lewis,  94  N.   C.   393;  what  is  pufflcieiit  allegation. 

Everett  v.  State,  McKaig,  28  Md.  190.  He  should  show  that  he  has  qiuili- 

*  Miller  v.  McKemie,  29  N.  J.  Eq.  fied  by  giving  bond.  lle<iewisch  v. 
291;  QUI  V.  Balis,  72  Mo.  424;  Ken-  Silven,  140  N.Y.  414.  Unless  he  sues 
7iedy  V.  Gibson,  75  U.  S.  8  Wall.  498,  by  order  of  court.  Boyd  v.  Royal 
19  L.  ed.  476.  Ins.  Co.  Ill  N.  C.  372. 

*  Terry  v.  Bamberger,  44  Conn.  558.  *  Brisenden  v.  Chamberlain,  53  Fed. 
'•Springs  v.  Bowery  Nat.  Bank,  63        Rep.  307;  Amory  v.  Amory,  95  U.  8. 

Hun,  505;  Bangs  v.  Mcintosh,  23  Barb.        186.  24  L.  ed.  428;  Davies  v.  Lathrup, 
591;  Gillett  v.  Fairchild,  4  Deuio,  80;        12  Fed.  Rep.  353,  854. 
Edee  v.  Slrunk,  35  Neb.  307.  '  g  71. 


412 


RECEIVERSHIPS. 


solvini;  a  cr>r[ior;iti()n  in  the  state  of  its  creation,  and  a  receiver  is 
appointed  tlierennder,  })nrsnant  to  the  provisions  of  the  statute, 
the  property  and  assets  of  the  corporation  pass  to  and  become 
vested  in  the  receiver,  and  are  in  custodia  legis,  for  the  purpose 
of  collection  and  distribution,  and  there  is  nothinii;  hi  the  statutes 
of  the  state  in  contravention  of  the  laws  or  public  policy  of  the 
state  where  suit  is  brouo-ht,  and  the  citizens  of  the  latter  are  not 
interested  in  the  suit,  such  forei^^n  receiver  may  maintain  an  ac- 
tion and  will  be  sustained  in  the  proceediuij;-.' 

(b)  Where  a  receiver  has  been  appointed  by  a  court  of  compe- 
tent jurisdiction  of  another  state,  a  creditor  of  that  state  who  is 
bound  by  its  decree  appointing  a  receiver,  cannot,  as  against  the 
receiver,  by  attachment  or  execution,  recover  the  assets  of  the 
corporation  in  another  state.'' 

(c)  Where  a  receiver  appointed  in  one  state  is  vested  with 
the  title  to  property  in  another  state,  he  may,  in  an  action  in  the 
latter  state,  assert  his  right  to  the  possession,  if  such  right  is  not 
in  conflict  with  the  rights  of  citizens  of  the  latter  state,  nor 
against  the' public  policy  of  its  laws.' 


'  Oilman  v.  KetcJtam,  84  Wis.  60,  23 
L.  R.  A.  52;  Reynolds  v.  Adden,  loG 
U.  S.  353,  34  L.  ed.  362;  Puike}-  v. 
Stoughton  Mill  Co.  91  Wis.  174. 

A  foreign  receiver  of  a  foreign  cor- 
poration invested  with  practical  own- 
ership of  the  assets  of  the  corporation 
may  maintain  an  action  against  a  resi- 
dent of  Wisconsin  upon  a  note  pay- 
able to  the  corporation.  I'urkcr  v. 
Stoughton  Mill  Co.  supra. 

A  receiver  appointed  by  a  state 
court  of  the  property  of  an  insolvent 
corporation,  may  be  permitted  by  a 
Federal  court  in  another.state  to  de- 
feud  an  action  there  brought  against 
the  corporation.  Rust  v.  United 
Waterworks  Co.  70  Fed.  Rop.  129. 

^  Baghy  v.  Atlantic,  M.  &  0.  R.  Co. 
86  Pa.  291;  Bacon  v.  Home,  123  Pa. 
452,  2  L.  R.  A.  355;  Re  Waite,  99  N. 
Y.  433;  Phelps  v.  McCann,  123  N.  Y. 
041;  Toi-onto  Qen.  Trust  Co.  v.  Chi- 
cago, B.  &  Q.  R.  Co.   123  N.  Y.  37; 


Woodicard  v.  Brooks,  128  111.  222,  3 
L.  R.  A.  702. 

The  receiver  occupies  the  same  po- 
sition as  an  assignee  for  the  benefit  of 
creditors.  Parsons  v.  Charter  Oak  L. 
Ins.  Co.  31  Fed.  Rep.  305;  Life  Asso. 
of  Ameiica  v.  Bundle  ("  Relfe  v.  Run- 
die")  103  U.  S.  222.  26  L.  ed.  337; 
Wtlliams  V.  Hintermcister,  26  Fed. 
Rep.  889. 

^  Rogers  v.  Haines,  96  Ala.  586; 
Boidware  v.  Davis,  90  Ala.  207,  9 
L.  R.  A.  601;  Oilman  v.  Ketcham,  84 
Wis.  60,  23  L.  R.  A.  52;  Uihernia 
Nat.  Bank  v.  Lacombe,  84  N.  Y.  367; 
Lycoming  Fire  Ins.  Co.  v.  Wright,  55 
Vt.  526;  Kain  v.  Smith,  80  N.  Y.  458; 
Folger  v.  Columbian  Ins.  Co.  99  Mass. 
267;  Day  v.  Postal  Teleg.  Co.  06  Md. 
354;  Moseby  v.  Biirrow,  52  Tex.  396; 
Stale  Bank  v.  First  Nat.  Bank,  34  N. 
J.  Eq.  450;  National  Trust  Co.  v.  Mil- 
ler, 33  N.  J.  Eq.  155.  But  see  Farmers 
&  M.  Ins.   Co.  V.  Needles,  52  Mo.  17; 


RECEIVERSHIP  OF  CCRPO RATIONS. 


41& 


(d)  Wliere  the  receiver  has  rie^htfullv  obtained  possession  of 
property  situate  within  the  jurisdiction  of  his  appointment,  and 
takes  it  to  a  foreign  jurisdiction,  in  the  rig-htful  performance  of 
his  duty,  and  while  there  his  possession  is  interfered  with  hy 
creditors  of  the  debtor  residing  in  tlie  latter  state,  the  receiver 
will  be  protected.' 


Merchants'  Nat.  Bank  v,  McLeod,  38 
Ohio  St.  174. 

A  foreign  receiver  cannot  maintain 
a  suit  in  Wisconsin  to  set  aside  an 
alleged  fraudulent  conveyance  made 
to  a  citizen  of  that  state.  Filkim  v. 
Nunnemaclier ,  81  Wis.  91.  But  a 
foreign  assignment  was  sustained  in 
that  state  in  favor  of  an  assignee 
where  attachment  proceedings  were 
commenced  by  citizens  of  a  state 
other  than  Wisconsin  and  Michigan 
(residence  of  assignor  and  assignee). 
Cook  V.  Van  Horn,  81  Wis.  291.  But 
see  Rhawn  v.  Pearce,  110  111.  350. 

For  a  full  collection  of  cases  relative 
to  the  rights  of  resident  and  non- 
resident creditors  in  assignment  and 
receivership  matters,  see  note  to  Long 
V.  Forrest,  150  Pa.  413,  23  L.  R.  A.  33. 

Mr.  Justice  Magruder  in  Holbrooke . 
Ford,  153  111.  633,  says:  "Where  the 
controversy  is  between  a  foreign  re- 
ceiver, assignee,  or  trustee  and  an 
attaching  creditor  who  resides  in  the 
state  where  the  attachment  proceed- 
ing is  instituted,  the  courts  of  the 
latter  state  will  protect  its  own  citi- 
zen." Cf.  Ileyer  v,  Alexander,  108 
111.  385;  Rhawn  v.  Pearce,  110  111. 
350. 

In  May  v.  First  Nat.  Bank,  122  111. 
551,  a  New  York  firm  made  an  assign- 
ment for  the  benefit  of  creditors, 
executed  in  conformity  with  the  Illi- 
nois statute  for  the  conveyance  of 
real  estate  and  conveying  land  in 
Cook  county,  Illinois,  and  recorded 
in  the  recorder's  office  of  that  county 
on  July  28, 1884.  On  August  22, 1884, 


a  bank  in  Massachusetts  commenced 
an  attachment  suit  against  said  firm 
in  Cook  county  and  levied  the  writ 
upon  said  land;  the  assignee  inter- 
pleaded and  set  up  the  deed  of  assign- 
ment, and  it  was  held  that  the  deed 
of  assignment  was  valid  as  against 
the  Massachusetts  creditor,  it  not 
being  in  contravention  of  the  Illinois 
laws  or  public  policy.  The  contest 
was  solely  between  an  assignee  in  a 
voluntary  assignment  executed  by  a 
nonresident  debtor  and  a  foreign 
attaching  creditor.  To  the  same 
effect  are  Juilliard  v.  May,  130  III. 
87,  and  Woodward  v.  Brooks,  128  111. 
223,  3  L.  R.  A.  703.  But  see  Townsend 
V.  Co.ve,  151  111.  (j2,  where  a  different 
rule  is  applied  to  a  foreign  statutory 
assignment. 

'  A  foreign  receiver  of  a  corpora- 
tion cannot  enforce  a  claim  against  a 
resident  debtor  to  the  prejudice  of  do- 
mestic creditors  or  a  nonresident 
creditor  who  has  obtained  judgment. 
Stockhridge  v.  Beckwith,  1  Del.  Ch.  73, 
2  Am.  &  Eug.  Corp.  Cas.  N.  S.  554. 

A  foreign  receiver  will  not  be  per- 
mitted to  maintain  a  suit  against 
assets  of  an  insolvent  debtor  in  Illinois 
as  against  an  Illinois  creditor,  but 
this  restriction  does  not  apply  to  a  re- 
ceiver of  such  corporation  appointed 
in  this  state,  even  though  the  receiver 
is  appointed  on  application  of  a 
foreign  creditor.  Holbrook  v.  Ford, 
153  111.  633. 

A  bill  will  not  lie  in  favor  of  a 
foreign  receiver  to  restrain  the  levy- 
ing   of    execution    under   judgments 


414 


RECEIVERSH1P6. 


(e)  A  forcii^n  receiver  of  a  niutnal  insurance  company  may 
maintain  in  a  foreign  state  a  suit  ar:;ainst  a  member  of  such  com- 
pany to  recover  an  assessment  uj)on  a  premium  note  forming 
part  of  the  assets  of  the  company  in  the  hands  of  the  receiver 
when  tlie  assessment  was  made.' 

(f)  A  receiver  suing  in  a  foreign  state  must  allege  and  siiow 
that  the  corporation  has  been  dissolved,  or  is  otherwise  disabled 
from  bringing  suit,  or  that  the  ofHccrs  of  the  corporation  at  the 
time  or  prior  to  the  connncneing  of  suit  either  negligently  or  wil- 
ful Iv  failed  or  refused  to  protect  the  corpoi-ate  assets.  The  au- 
thority must  be  alleged  in  traversable  form,  and  be  proved  on  the 
trial.' 


against  the  corpor.ition  recovered  in 
the  state  on  money  in  the  hands  of  a 
debtor  of  the  corporation  within  the 
state.  Stockbridge  v.  Beckwith,  1  Del. 
Ch.  72. 

The  domestic  creditors  of  an  in- 
solvent foreign  corporation  are  en- 
titled to  payment  from  property  of 
the  corporation  located  in  the  state, 
before  turning  over  such  property  to 
a  foreign  receiver  of  the  corporation. 
Corn  Exch.  Bank  v.  Rockicell,  58  111. 
App.  506. 

A  foreign  creditor  will  not  be  per- 
mitted to  assign  his  claim  to  a  resident 
creditor  for  the  purpose  of  gaining 
the  advantages  of  a  resident  creditor. 
State  Bank  v.  First  Nat.  Bank,  34  N. 
J.  Eq.  450. 

A  receiver  obtaining  a  judgment 
against  a  debtor  in  the  jurisdiction  of 
his  appointment  may  sue  on  such 
judgment  in  a  foreign  state,  but  he 
does  so  as  a  judgment  creditor  and 
not  as  a  receiver.  Wilkinson  v.  Culver, 
25  Fed.  Rep.  639. 

3  Chicago,  M.  &  St.  P.  B.  Co.  v.  Keo- 
knkN.  L.  Packet  Co.  108  III.  317;  Cam- 
mell  V.  Seicell,  5  Hurlst.  &  N.  728; 
Clark  V.  Connecticut  Peat  Co.  35  Conn. 
303;  Pond  v.  Cooke,  45  Conn.  126; 
Taylor    v.    Boardman,    25    Vt.    581; 


Crapo  V.  Fell?/,  83  U.  S.  16  Wall.  610, 
21  L..  ed.  430;  Waters  v.  Barton,  1 
Coldw.  450.  See  contra,  Humphreys 
V.  Hopkins,  81  Cal.  551,  6  L.  K.  A. 
792.  But  it  has  been  held  that  a 
foreign  receiver  cannot  recover  prop- 
erty he  never  had  possession  of  at  any 
time.  Commercial  Nat.  Bank  v. 
Mothertcell  Iron  &  8.  Co.  95  Tenn.  172, 
29  L.  R.  A.  164. 

'  Parker  v.  Stoitghton  Mill  Co.  91 
Wis.  174.  In  such  case  the  decree  by 
which  the  assessment  is  made  is  con- 
clusive on  the  members  of  the  com- 
pany, unless  attacked  in  a  direct  pro- 
ceeding, notwithstanding  they  were 
not  present  when  the  decree  was  ren- 
dered. Hawkins  v.  Glenn,  131  U.  8. 
319,  33  L.  ed.  181;  Lycoming  F.  Ins. 
Co.  V.  Langley,  62  Md,  311;  Band, 
McN.  &  Co.  V.  Mutual  F.  Ins.  Co., 
Parker,  58  111.  App.  528. 

'  Such  a  decree  is  not  open  to  col- 
lateral attack.  Origgs  v.  Becker,  87 
Wis.  213.  But  see  Great  Western  Teleg. 
Co.  V.  Burnham,  79  Wis.  47.  In  a 
proceeding  by  a  receiver  in  a  foreign 
state  to  recover  an  assessment  it  must 
be  shown  that  he  has  authority  to 
bring  the  action,  either  by  the  order 
of  appointment  or  by  the  statutes  of 
the  state  where  he  is  appointed,  or 


RECEIVERSHIP  OF  CORPORATIONS. 


415 


§  241.     Collateral  attack  of  receiver. 

Where  a  receiver  bi-in<rs  suit  as  receiver  of  a  corporation 
ai^ainst  one  of  its  debtors  the  validity  of  his  appointment  cannot 
be  attacked  by  the  dul)tor  in  such  proceeding.  It  is  a  collateral 
attack  and  while  the  order  might  have  been  erroneous,  and  sub- 
ject to  reversal  on  appeal  it  cannot  be  impeached  or  disregarded 
in  such  proceeding.  The  application  may  be  inadequate  under 
the  law  and  practice  of  the  court,  yet  if  the  court  has  power  to 
decide  the  question  involved,  in  other  words  has  jurisdiction  of 
the  subject-matter,  it  is  immaterial  whether  the  decision  is  correct 
or  incorrect.  It  is  not  a  question  that  goes  to  the  jurisdiction  of  the 
court.'  But  the  rule  is  otherwise  if  the  decree  appointing  the  re- 
ceiver is  void.  A  void  decree  is  void  in  every  proceeding  where- 
ever  invoked,  but  a  voidable  decree  is  valid  and  binding  every- 
where until  set  aside  in  a  proper  proceeding  for  that  purpose.' 


that  the  assets  had  been  assigned  to 
him.  Swing  v.  White  River  Lumber 
Co.  91  Wis.  517. 

Edee  v.  Strunk,  85  Neb.  307; 
Springs  V.  Bowery  Nat.  Bank,  63  Hun, 
505;  Bangs  v.  Mcintosh,  23  Barb.  591; 
Rockwell  V.  Merwin,  45  N.  Y.  166; 
Griesel  v.  Schmal,  55  Ind.  475.  Where 
the  receiver  has  general  power  con- 
ferred upon  him  to  sue  he  may  do  so 
In  a  foreign  jurisdiction,  that  is  to 
say,  the  power  is  not  limited  to  tlie 
jurisdiction  of  the  court  where  he  is 
appointed.  Merchants'  Nat.  Bank  v. 
McLeod,  38  Ohio  St.  174.  Neitber  is 
the  power  confined  to  state  courts  in 
which  the  appointment  is  made,  but 
extends  to  Federal  courts  as  well. 
Chambers  v.McDougal,  43  Fed .  Rep.694. 

Wavi»  V.  Shearer,  90  Wis.  250;  Peck 
V.  Beloit  School  Dist.  No.  4.  21  Wis. 
528;  Ally.  Gen.  v.  Guardian  Mut.  L. 
Ins.  Co.  11  N.  Y.  272;  Bangs  v.  Buck- 
infield,  18  N.  Y.  595;  Vermont  &  G. 
R.  Co.  V.  Vermont  G.  R.  Co.  40  Vt. 
795;  Tolman  v.  Jones,  114  III.  155.  A 
writ  of  prf)hil)ition  will  not  lie  to  pre- 
vent the  examination  of  a  charge  of 
contempt  In    a  pending    proceeding 


merely  on  the  ground  that  the  petition 
in  the  proceeding  does  not  stale  a 
cause  of  action,  or  is  otherwise  defect- 
ive. State,  Hoffman,  v.  Scarritt,  128 
Mo.  331.  And  see  Toi'e  v.  San  Fran- 
cisco Super.  Ct.  108  Cal.  431. 

•'People  V.  Weigley,  155  111.  491.  In 
this  cas-e  on  the  application  of  a  stock- 
holder a  receiver  was  appointed  over 
the  property  of  a  corporation,  and 
subsequently  an  execution  was  levied 
on  a  portion  of  the  corporate  prop- 
erty. A  rule  was  entered  against  the 
judgment  creditors  and  their  attor- 
neys to  show  cause  why  they  should 
not  be  attached  for  contempt  of  court, 
and  after  answer  they  were  found 
guilty  and  sentenced  to  jail.  The 
court  held  that  there  was  not  sullicient 
ground  for  the  dissolution  of  the  cor- 
poration and  appointment  of  a  receiver, 
and  the  appointment  "was  void,  and 
therefore  no  contempt  committed. 
"  Having  no  general  equity  powers 
in  tlie  case  and  the  bill  wholly  failing 
to  bring  it  within  the  provisions  of 
§  25,  the  superior  court  exceeded 
its  jurisdiction  in  making  the  order 
which    appellees    are    charged    with 


416  RECEIVERSHIPS. 

A  receiver  cannot  maintain  a  suit  in  tlie  jurisdiction  of  his  ap- 
pointment a<;'ainst  the  purchaser  of  the  real  estate  of  the  corpora- 
tion which  is  hicated  in  another  jurisdiction,  for  tlie  purj)ose  of 
determinini;  the  title  thereto.'  U])on  the  same  principle  he  can- 
not avoid  liens  acquired  by  creditors  after  his  appointment  upon 
property  located  in  a  foreig'n  jurisdiction,  if  the  liens  are  acquired 
in  accordance  with  the  laws  and  policy  of  the  state  where  ac- 
quired.' 

Where  the  receiver  has  obtained  leave  to  sue  he  is  not  to  be 
restrained  from  prosecuting  his  suit  by  injunction  from  another 
court,  or  by  making  him  a  party  to  another  suit  and  there  enjoin- 
ing him.  The  proper  place  to  restrain  him  is  by  application  to 
the  court  appointing  him.' 

§  242.    Keceiver's  possession. 

The  possession  of  the  receiver  of  a  corporation  is  not  materially 
different  from  the  possession  of  the  ordinary  receiver.  It  has 
already  been  observed  that  his  possession  will  be  zealously  pro- 
tected from  interference  from  whatsoever  source.*  The  pro[»erty 
being  in  custodia  legis  cannot  be  levied  on  or  taken  on  legal  pro- 
cess issued  from  another  court,  and  any  one  knowingly  violating 
such  right  of  possession  will  be  guilty  of  contempt  and  nuiy  be 
punished  therefor.^     And  it  is  immaterial  that  the  property  may 

violating  and  tbiat  order  must  there-  0.  &  T.  P.  B.  Co.  62  Fed.  Rep.  803; 

fore  be  held  void."  lie  Wabash  B.  Co.  24  Fed.  Rep.  217. 

^Simpkins  v.  Siuith  &  P.   Gold  Co.  ^Taylor  v.    Oilleun,    23    Tex.    508; 

50  How.  Pr.  56;  Union  CaWe  Co.  v.  Abbej/  v .  International  <&  (?.  iV.  B.  Co. 

International  Trust  Co.  149  Mass.  492.  5  Tex.  Civ.  App.  261;  Ally.  Gen.  v. 

''City  Ins.  Co.  v.  Commercial  Bank,  Continental  L.  Ins.   Co.  28  Hun,  360, 

68  111.  348;  Diinlop  v.  Paferson  F.  Ins.  93  N.  Y.  630;  Noe  v.  Gibson,  7  Paige, 

Co.  12  Hun,  627,  Alfirined  in  74  N.  Y.  513;  Albany  City  Bank  v.  Schenner- 

145.  horn,  9  Paige,  372;  Fidelity  Trust  & 

'^Winfield  v.   Bacon,  24  Barb.   154;  8.  V.    Co.   v.  Mobile  Street  B.   Co.  53 

Van  Bensselaer  v.  Emery,  9  How.  Pr.  Fed.  Rep.  687;  Jackson  v.  Lahee,  114 

138.  111.  287;  Bichards  v.  People,  81  111.  551 ; 

^Chap.  IV.      See    also    Cohimbian  Watkins  v.  3Iinnesota  Thresher  Mfg. 

Book  Co.  V.  Be  Golyer,  115  Mass.  67;  Co.  41  Minn.  150;    Hazelrigg  v.  Bro- 

Gest  v.  Neto  Orleans.  St.  L.  &  C.  B.  navgh,  78  Ky.  62;  Hagedon  v.  Bank  of 

Co.  30  La.  Kun.  2'^;  Spinning  y.  Ohio  Wisconsin,    1    Pinney,  61;    Smith  v. 

.L.  Ins.  &  T.  Co.  2  Disney,  368;  Atty.  New  York   Consol.  Stage  Co.  18  Abb. 

Gen.  V.  Guardian  Mut.  L.  Ins.  Co  77  Pr.  419;   McGowan  v.  Myers,  66  Iowa, 

N.  Y.  272;  Thomas    f.  ■Jincinr^au,  N.  99;   Maynard  v.  Bond,  67   Mo.  315; 


RECEIVERSHIP  O^  CORPORATIONS. 


417 


be  beyond  the  jurisdiction  of  the  court,  provided  the  court  has 
jurisdiction  of  the  person  of  the  one  interfering  with  the  posses- 
sion.' The  court  may  also  restrain  litigation  or  proceedings 
against  its  receiver  or  the  coi'poration  over  whose  property  he  is 
appointed/     The  general  rule,  however,  is  that  the  failure  to  ob- 


Field  V.  Jones,  11  Ga.  413;  Steele  v. 
Sturges,  5  Abb.  Pr.  442;  Columhian 
Book  Co.  V.  De  Oolyer,  115  Mass.  67; 
Noyes  V.  Bich,  52  Me.  115;  Bell  v.  Chi- 
cago, St.  L.  &  N.  0.  R.  Co.  34  La. 
Ann.  785;  East  Tennessee,  V.  &  G.  R. 
Co.  V.  Atlantic  &  F.  R.  Co.  49  Fed. 
Rep.  608,  15  L.  R.  A.  109;  Robinson 
V.  Atlantic  &  G.  W.  R.  Co.  66  Pa.  160; 
Re  Sclaiyler's  Steam  Tow  Boat  Co.  136 
N.  Y.  169,  20  L.  R.  A.  391;  Skiniier 
V.  Maxwell,  68  N.  C.  400. 

As  we  have  seen  elsewhere  the  receiv- 
er's title  or  right  to  possession  relates  to 
the  date  of  the  order  (Chap.  IV.),  and 
not  to  the  date  of  filing  the  receiver's 
bond.  See  also  Maynard  v.  Bond,  67 
Mo.  315;  Anglo  Italian  Bank  v.  Davies, 
L.  R.  9  Ch.  Div.  275;  Ex  pa)ie  Evans, 
L.  R.  13  Ch.  Div.  252;  Steele  v.  Sturges, 
5  Abb.  Pr.  442;  Rutter  v.  I'allis,  5 
Sandf.  610;  Re  Berry,  26  Barb.  55. 
But  see,  as  to  rule  in  Virginia,  Frayser 
V.  Richmond  &  A.  R.  Co.  81  Va.  388. 

It  should  be  noticed  in  this  connec- 
tion that  frequently  by  statute  the 
receiver  is  vested  with  the  title  to  the 
corporate  property,  iliddlesex  County 
Freeholders  v.  State  Bank,  29  N.  J. 
Eq.  268;  3  N.  Y.  Rev.  Slat.  461, 
§  41 ;  Verplanck  v.  Mercantile  Ins.  Co. 
2  Paige,  438;  American  Nat.  Bank  v. 
National  Ben.  &  C.  Co.  70  Fed.  Rep. 
420;  Security  Sav.  &  T.  Co.  v.  Piper 
(Idaho)  40  Pac.  141;  People  v.  Weigley, 
155  111.  491. 

Even  where  a  lien  exists  on  prop- 
erty at  the  time  of  the  appointment 
the  holder  of  such  lien  has  no  ri^ht  to 
interfere  with  the  receiver's  pos.session 
without  leave  of  court  and  cannot  dis 
27 


pose  of  the  property  and  convey  * 
good  title.  Bugger  v.  Collins,  69  Ala. 
324;  Edwards  v.  Norton,  55  Tex.  410; 
Wiswall  V.  Sampson,  55  U.  S.  14  How. 
52,  14  L.  ed.  322;  Hills  v.  Parker,  111 
Mass.  510;  Ellis  v.  Vernon  Ice,  L.  & 
W.  Co.  86  Tex.  109. 

But  see  as  to  a  different  rule  in  the 
matter  of  real  property,  Re  Loos,  50 
Hun,  67. 

Land  in  the  hands  of  a  receiver  can- 
not be  leased  by  a  party  to  the  suit  so 
as  to  confer  any  rights  on  the  lessee. 
Thornton  v.  Waslungton  Sav.  Bank, 
76  Va.  432. 

'  Ilolbrook  V.  Ford,  153  111.  633.  27 
L.  R.  A.  324;  Serconib  v.  Catlin,  128 
111.  556;  Chufee  v.  Quidnick  Co.  13  R. 
I.  442;  Langford  v.  Langfurd,  5  L.  J. 
Ch.  N.  S.  LO;Vermont  &  C.  R.  Co.  v. 
Vermont  C.  B.  Co.  40  Vt.  792;  Schin- 
delholz  V.  Cullum,  55  Fed.  Rep.  885. 

*  Atty.  Gen.  v.  Guardian  Mut.  L. 
Ins.  Co.  77  N.  Y.  273;  Rs  Christian 
Jensen  Co.  128  N.  Y.  b5^;Wilkinson 
V.  North  River  Const.  Co.  66  How.  Pr. 
433;  Phcenix  Foundry  &  Mach.  Co.  v. 
North  River  Const.  Co.  33  Hun,  156; 
Walton  V.  Grand  Belt  Copper  Co.  56 
Hun,  211;  Keen  v.  Breckenridge,  96 
Ind.  69;  De  Graffenried  v.  Brunswick 
&  A.  R.  Co.  57  Ga.  22;  Melendy  v. 
Barbour,  78  Va.  544;  Jones  v.  Browse, 
32  W.  Va.  444;  Burk  v.  Muskegon 
Mach.  &  F.  Co.  98  Mich.  614;  Steel 
Brick  Siding  Co.  v.  Muskegon  Mach. 
&  F.  Co.  98  Mich.  %\fi;Vandcrbilt  v. 
Central  R.  Co.  43  N.  J.  Eq.  609;  Pabja 
v.  Jewett,  32  N.  J.  Eq.  302;  Meredith 
Village  Sav.  Bank  v.  Simpson,  22  Kan. 
AlA:-,  Parker  v  Browning,  8  Paige,  388. 


418 


RECEIVERSHIPS. 


tain  leave  to  sue  the  receiver  is  not  a  jurisdictional  fact,  but  the 
party  may  be  liable  for  contempt.' 


But  see  Woerishoffer  v.  North  River 
Const.  Co.  99  N.  Y.  398.  There  is 
not  entire  harmony  in  the  authorilies 
on  this  subject.  It  has  been  held  that 
■where  there  is  no  attempt  in  the  cora- 
monlaw  suit  to  interfere  with  the  re- 
ceiver's possession,  but  the  purpose  of 
the  suit  being  simply  to  establish  the 
amount  due,  he  may  be  sued  without 
leave  of  court,  there  being  no  restrain- 
ing order  against  suits,  the  question 
of  leave  of  court  not  being  a  jurisdic- 
tional fact.    See  following  note. 

'  Mr.  Justice  IMagruder,  in  Mul- 
cahey  v.  Stratiss,  151  111.  70  (80),  says: 
"While  it  is  true  that  it  is  a  contempt 
of  the  appointing  court  to  make  its 
receiver  a  parly  defendant  to  a  suit 
without  leave  first  obtained  for  that 
purpose,  it  does  not  necessarily  fol- 
low that  the  court  in  which  suit  is 
brought  is  without  jurisdiction.  The 
appointing  court  may  protect  its  offi- 
cer either  by  punishing  the  party 
bringing  the  suit  for  contempt,  or  by 
enjoining  him  from  bringing  suit. 
But  the  failure  to  obtain  leave  is  no 
bar  to  the  jurisdiction  of  the  court  in 
which  the  suit  is  brought.  This  is 
certainly  true  in  all  cases  where  there 


is  no  attempt  to  interfere  with  the 
actual  possession  of  the  property  held 
by  the  receiver." 

T©  the  same  effect  are  the  follow- 
ing cases:  Hills  v.  Parker,  111  Mass. 
508;  S<]fford  v.  People,  85  111.  558; 
BhmienHial  v.  Brainard,  38  Vt.  407; 
liirslifeld  v.  Kalischer,  81  Hun,  606; 
Camp  V.  Barney,  4  Hun,  373;  Chau- 
iauqtte  County  Bank  v.  RisJey,  19  N. 
Y.  309;  Allen  v.  Central  R.  Co.  42 
Iowa,  683;  Lyman  v.  CentralVermont 
R.  Co.  59  Vt.  167;  Kinney  v.  Crocker, 
18  Wis.  75;  St.  Joseph  &  D.  C.  R.  Co. 
V.  Smith,  19  Kan.  325;  Phelan  v.  Oane- 
bin,  5  Colo.  14;  Angel  v.  Smith,  9  Ves. 
Jr.  335;  Randfieldv.  Randfield,  3  DeG. 
F.  &  J.  766.  See  contra,  Wiswall  v. 
Sampson,  55  U.  S.  14  How.  53,  14  L. 
ed.  323;  Barton  v.  Barbour,  104  U.  S. 
126,  26  L.  ed.  674;  Thomjmn  \.  Scott, 
4  Dill.  508. 

But  where  it  is  necessary  to  obtain 
leave  to  sue  the  receiver,  and  leave  is 
not  obtained,  the  receiver  may  waive 
such  want  of  leave  by  appearance. 
Elkhart  Car  Works  v.  Ellis,  113  Ind. 
215;  Ohio  &  M.  R.  Co.  v.  Nickless,  71 
Ind.  271;  Hubbell  v.  Dana,  9  How. 
Pr.  424. 


CHAPTER  XIIL 

RECEIVERSHIP  OF  NATIONAL  BANKS. 

§252.    Appointment  and   power  un-  (g)  Improperly  certifying  check, 

(ler  Act  of  Congress.  (h)  Nonpayment  of   circulating 

(a)  Provisions  of  National  Bank-  notes. 

ing  Act.  (i)  Dissolution  of    corporation 

(b)  Powers  of  comptroller  under.  and  forfeiture. 

(c)  Jurisdiction  of  courts.  (j)  Failure    to    pay    judgment 
§  253.  Power  of   comptroller   to   ap-  for  thirty  days. 

point.  (k)  When  it  has  become  insol- 

(a)  Failure  to  keep  stock  at  min-  vent. 

imum  required.  §  254.  Power  of  receiver  of  national 

(b)  Failure    to    keep    surplus  banks. 

good.  §  255.    Receiver's     title.       National 

(c)  Failure     to     keep    reserve  banks. 

good.  §  256.  Receiver's  liability. 

(d)  Failure  to  keep  place  for  re-       §  257.  Suits  by  receiver. 

demption  of  notes.  §  258.  Liability  of  stockholders. 

(e)  Holding   its   stock   over  for  (a)  Liability. 

six  months  as  security.  (b)  Defense.) 

(f)  Failure  to  pay   for  stock—       §  259.  Illegal  preferences. 

impairment  of.  §  260.  Liability  of  directors. 

§  252.     Appointment  and  power  nnder  Act  of  Congress. 

(a)  Under  the  provisions  of  the  National  Banking  Act  of  Jane 
3,  ISGtt,  and  its  substantial  re-enactment  in  §  5234  of  the  Re- 
vised Statutes  of  the  United  States,  power  is  conferred  upon  the 
comptroller  of  the  currency  to  appoint  a  receiver  over  a  national 
bank  "  on  becontino;  satisfied,  as  specified  in  §§  5226  and  5227, 
that  any  association  has  refused  to  pay  its  circtdatini;  notes, 
as  therein  mentioned,  and  is  in  default."  It  is  f  urtlicr  provided 
that  the  receiver,  on  givinoj  bond  and  security,  "  shall  take  pos- 
session of  tlie  l)Ooks,  records,  and  assets  of  every  description  of 
such  association, collect  all  debts,  dues,  and  claims  belonging  to  it, 
and  upon  order  of  a  court  of  record  of  competent  jtirisdiction 
may  sell  or  compound  all  bad  or  doul)tfid  debts,  and  on  a  like 
order  may  sell  all  the  real  ami  personal  [)ro[)erty  of  such  associa- 
tion on  such  terms  as  the  court  shall  direct;  and  may,  il  neces- 
sary to  pay  the  debts  of  such  association,  enforce  the  individual 
liability  of  the  stockholders.     Such   receiver  shall   [);iy  over  all 

419 


420  RECEIVERSHIPS. 

money  so  made  to  tlie  treasurer  of  the  United  States,  subject  to 
the  order  of  the  coni])tr()ller,  and  also  make  report  to  the  comp- 
troller of  all  his  acts  and  proceedinf>;s."  While  provision  is  thus 
made  for  the  appointment  of  a  receiver  by  the  comptroller  of  the 
currency,  upon  certain  contingencies,  yet  it  must  not  be  supposed 
that  the  statute  in  question  devests  courts  of  equity  in  proper 
cases  of  their  jurisdiction  to  appoint  receivers. 

See  also  in  this  connection  Act  of  Congress  of  June  30,  1S76. 

Section  2  of  Act  of  June  30,  1876,  provides  that  when  any 
national  banking  association  shall  have  gone  into  liquidation, 
under  the  provisions  of  §  5220,  Kev.  Stat.,  the  individual  liability 
of  the  shareholders,  provided  for  by  §  5151,  may  be  enforced  l)y 
any  creditor  of  snch  association  by  a  bill  in  equity,  in  the  nature 
of  a  creditor's  bill,  brought  by  such  creditor  on  behalf  of  himself 
and  of  all  other  creditors  of  the  association,  against  the  share- 
holders tliereof,  in  any  court  of  the  United  States  having  oi-iginal 
jurisdiction  in  equity  for  the  district  in  which  the  association  may 
have  been  located  or  established. 

Section  3  of  the  same  act  provides  that  whenever  any  associa- 
tion shall  have  been  or  shall  be  placed  in  the  hands  of  a  receiver, 
as  provided  in  §  5234:  and  other  sections  of  the  Revised  Statutes, 
and  when,  as  provided  in  §  523G,  the  comptroller  shall  have  paid 
to  each  and  every  creditor  of  such  association,  not  including 
shareholders  who  are  creditors  of  such  association,  whose  claim 
or  claims  as  such  creditor  shall  have  been  approved  or  allowed, 
as  therein  prescribed,  the  full  amount  of  such  claims  and  all  ex- 
penses of  the  receivership,  and  the  redemption  of  the  circulating 
notes  of  such  association  shall  have  been  provided  for  by  deposit- 
ing, etc.,  the  comptroller  shall  call  a  meeting  of  the  shareholders,  on 
notice  prescribed,  and  when  a  bond  shall  be  presented,  conditioned 
for  the  payment  in  full  of  all  claims  thereafter  presented  and 
allowed,  the  comptroller  and  receiver  shall  transfer  and  deli\''er 
to  the  stockholders'  agent  selected  the  undivided  and  uncollected 
assets  and  property  of  the  association,  then  on  hand,  and  execute 
a  deed  or  assignment  therefor,  which  shall  discharge  the  comp- 
troller and  receiver  from  all  liability  to  the  association,  share- 
holders, and  creditors  thereof. 

Section  1  of  Act  of  March  29,  1886,  provides  that  the  receiver 
of  a  national  bank  may  purchase  the  equities  of  the  bank  in  cer- 


RECEIVERSHIP  OF  NATIONAL  BANKS.  421 

tain  property  specified,  and  pay  for  the  same  in  the  manner 
prescribed. 

Under  Act  of  Coni^-ress  of  August  3,  ISSS,  the  receiver  or  man- 
ager of  any  property,  appointed  by  any  court  of  the  United 
States,  may  be  sued  in  respect  of  any  act  or  transaction  of  his  in 
carrying  on  the  business  connected  with  such  property  witliout 
leave  of  court,  Init  such  suit  shall  be  subject  to  the  general  equity 
jurisdiction  of  the  court  in  which  the  receiver  or  manage.r  was 
appointed,  so  far  as  the  same  shall  be  necessary  to  the  ends  of 
justice. 

See  also  Act  of  August  3,  1892,  as  to  powers  of  receiver.  By 
this  act  it  is  provided  tliat  on  the  continuation  of  a  receiver,  as 
provided,  he  shall  proceed  with  the  .execution  of  his  trust,  and 
shall  sell,  dispose  of,  or  otherwise  collect  the  assets  of  the  associa- 
tion, and  shall  possess  all  the  powers  and  authority,  and  be  sub- 
ject to  all  duties  and  liabilities  originally  conferred  or  imposed 
upon  him  by  his  appointment  as  such  receiver,  so  far  as  the  same 
remains  applicable. 

(b)  The  power  conferred  on  the  comptroller  to  appoint  a  re- 
ceiver over  a  national  bank  is  not  exclusive.  In  cases  not  within 
the  purview  of  the  statute  a  receiver  may  be  appointed  by  a  court 
of  competent  jurisdiction,  the  same  as  in  proceedings  against  any 
other  corporation.'  In  a  suit  by  a  minority  stockholder,  a  re- 
ceiver may  be  appointed  where  it  is  shown  that  the  baidc  is 
insolvent  and  its  affairs  are  being  mismanaged  to  the  injury  of 
creditors  and  stockholders.^     The  application    for   the  aj^point- 

'  In   Irona  v.   Manufacturers'  Nat.  ^  Where  a  national  bank  is  insolvent 

Bank,  6  Biss.  301,  it  is  held  tliat  the  and  in  process  of  liquidation,  and  its 

power  conferred  by  the  banking  act  affairs  are  being  greatly  mismanaged 

upon  the  comptroller  of  the  currency  by  its  managing  agents,  to  the  injury 

to  wind  up  the  affairs  of  a  national  of   creditors    and    stockholders,    and 

bank   in   certain    contingencies   does  some  creditors  and  stockholders  are 

not  exclude  the  authority  of  a  compe-  being  favored  to  the  injury  of  others, 

tent  tribunal  to  appoint  a  receiver  in  a  receiver  may  be  appointed  at  the  in- 

either  case.     In  cases  not  within  the  stance  of  one  of  the  stockholders  not 

special  province  of   the  banking  act  favored.     Elwood  v.  First  Nat.  Bank, 

a   national   bank   may  be   proceeded  41  Kan.  475. 

against  in  the  same  manner  as  any  As  to  when  a  receiver  will  be  ap- 

other  debtor  or  corporation.     Wright  pointed  over  a  national  bank  in  pro- 

v.  Merchants'  Nat.  Bank,  \¥\\\i\).b(iS\  cess  of   liquidation,   see    Watkins  v. 

Merchants'  &  P.  N<tt.  Bank  v.  Masonic  National  Bank,  51  Kan.  254. 

Hall,  63  Ga.  549,  G5  Qa.  603.  A  court  of  equity  has  power  to  ap- 


422 


RECEIVERSHIPS. 


ment,  as  in  other  crises,  must  clearly  sliow  danger  or  loss  to  the 
plaintilT,  and  that  the  propriety  is  reasonahly  free  from  doubt.' 
The  a})pointnient,  however,  will  not  be  void  by  reason  of  defects 
in  the  petition  wliich  may  be  cured  by  amendment."  The  effect 
of  the  appointment  will  not  be  to  dissolve  the  corporation,  nor 
does  the  bank  lose  its  corporate  existence  thereby/     Under  the 


point  a  receiver  of  a  stale  banking 
corporation  on  the  petition  of  a  stock- 
holder, under  Iowa  Code,  i^  2903,  pro- 
viding that  on  the  petition  of  either 
parly  lo  a  civil  action,  wherein  he 
shows  that  he  has  a  probable  rii;ht  to 
or  interest  in  any  property  which  is 
the  subject  of  controversy,  and  that 
such  property  or  its  rents  or  profits 
are  in  danger  of  being  lost  or  maleri- 
ally  injured,  a  receiver  may  be  ap- 
pointed. Diclcej-son  v.  Cass  County 
.Ban/fc(Iowa)64N.\V.  395. 

And  see  also  Irons  v.  Ma7ivfacturers'' 
Nat.  Bank,  6  Biss.  301. 

Until  the  comptroller  acts  the  court 
may  appoint.  Wright  v.  Merchants'' 
Nat.  Bank,  1  Flipp.  583. 

'  In  Watkins  v.  National  Bank,  51 
Kan.  254,  it  is  held  that  before  a  court 
shall  take  the  property  and  business 
of  a  liquidating  bank  from  the  control 
of  the  directors  on  the  application  of 
a  stockholder,  it  must  appear  that  the 
danger  of  loss  or  injury  to  the  rights 
of  the  plaintiff  are  clearly  proved 
and  the  necessity  and  right  for  the 
appointment  free  from  reasonable 
doubt. 

'  The  appointment  of  a  receiver  of 
a  state  bank  on  the  application  of  a 
stockholder,  which  the  court  had 
jurisdiction  to  grant,  is  not  void  be- 
cause of  defects  in  the  petition  which 
can  be  cured  by  amendment.  Dicker- 
son  V.  Cass  County  Bank  (Iowa)  64  N. 
W.  395. 

^The  appointment  of  a  receiver  for 
a  national  bank  does  not  amount  to  a 
dissolution  of  the  corporation  such  as 


will  prevent  the  rendition  of  a  judg- 
ment agiiinst  it.  Chemical  Nat.  Bank 
V.  Hartford  Deposit  Co.  161  U.  S.  1,  40 
L.  ed.  595;  Rosenblatt  v.  JoJmsion,  104 
U.  S.  462,  26  L.  ed.  832. 

The  appointment  of  a  receiver  of  a 
bank,  in  proceedings  instituted  by  the 
altorne}^  general  under  the  California 
bank  commissioners'  act  to  enjoin  an 
insolvent  bank  from  transacting  fur- 
ther business,  is  not  authorized  by  such 
act  providing  that  the  commissioners 
may  be  authorized  to  take  such  pro- 
ceedings against  the  bank  as  may  be 
decided  by  its  creditors,  nor  by  the 
general  authority  of  the  California 
Code  in  relation  to  the  appointment 
of  receivers.  Murray  v.  American 
Surety  Co.  70  Fed.  Rep.  341. 

In  First  Nat.  Bank  v.  National  PaJi- 
quioque  Bank,  81  U.  S.  14  Wall.  383,  20 
L.  ed.  840,  it  was  held  that  a  national 
bank  may  be  sued  in  any  state, 
county,  or  municipal  court  in  the 
county  or  city  in  which  it  is  located, 
which  has  jurisdiction  in  similar 
cases.  The  act  of  the  comptroller 
of  currency  in  appointing  a  receiver 
does  not  work  its  complete  dissolu- 
tion, but  the  bank,  as  a  legal  entity, 
continues  to  exist  and  may  still  be 
sued  and  sue,  where  it  is  necessary 
that  the  corporate  name  shall  be  used 
in  closing  up  the  business. 

In  New  York  Security  Bank  v.  Com- 
monwealth Nat.  Bank,  2  Hun,  287,  it  is 
held  that  where  a  receiver  of  a  bank 
has  been  appointed  under  the  National 
Currency  Act  the  bank  still  continues 
to  exist  and  a  suit  is  properly  instituted 


RECEIVERSHIP  OF  NATIONAL  BANKS. 


423 


Act  of  1S7G,  when  a  cause  exists  for  the  appointment  of  a  re- 
ceiver, the  comptroller,  after  due  examination  of  the  bank's 
affairs,  appoints  a  receiv^er  who  shall  proceed  to  close  up  such 
association,  and  enforce  the  personal  liability  of  the  stockholders, 
as  provided  in  §  5234  of  the  Revised  Statutes.  A  certificate  of 
the  receiver's  appointment  from  the  comptroller  is  satisfactory 
evidence  of  the  appointment.' 

(c)  Inasmuch  as  a  receiver  of  a  national  bank  appointed  by  the 
comptroller  of  the  currency  is  an  ofhcer  of  the  United  States  the 
Federal  courts  have  jurisdiction  of  an  action  in  his  name  irre- 
spective of  the  amount  involved  or  the  cpiestion  of  citizenship," 


against  it  and  the  defense  is  made  by 
it. 

In  Turner  v.  First  Nat.  Bank,  26 
Iowa,  562,  it  was  held,  in  a  proceed- 
ing for  the  adjudication  of  a  claim 
against  a  national  bank  that  has  sus- 
pended, that  a  bank  and  receiver  may 
both  be  sued  jointly. 

In  Oreen  v.  WaJkill  Nat.  Bank,  7 
Hun,  63,  it  was  held  that  the  appoint- 
ment of  a  receiver  of  a  national  bank 
did  not  dissolve  a  corporation  and 
that  a  suit  might  be  brought  against 
both  the  bank  and  the  receiver,  fol- 
lowing the  decision  in  National  Pah- 
quioque  Bank  v.  Bethel  First  Nat. 
Bank,  36  Conn.  325,  81  U.  S.  14  Wall, 
3«3,  20  L.  ed.  840. 

In  Central  Nat.  Bank  v.  Connecticut 
Mat.  L.  Ins.  Co.  104  U.  S.  54,  26  L. 
ed.  693,  it  is  held  that  a  national  bank 
in  voluntary  liquidation  under  the 
statute  is  not  thereby  dissolved  as  a 
corporation  and  may  sue  and  be  sued 
by  name  for  the  purpose  of  winding 
up  its  business. 

Cf.  National  Pahquioque  Bank  v. 
Bethel  First  Nat.  Bank,  36  Conn.  325; 
Turner  v.  First  Nat.  Bank,  26  Iowa, 
563. 

The  receiver  is  an  officer  of  the 
United  States.  Piatt  v.  BeacJi,  2  Ben. 
303;  Kennedy  v.  Gibson,  75  U.  S.  8 
Wall.  4'J8,  I'J  L.  ed.  476. 


In  Gibson  v.  Peters,  150  U.  S.  342, 
37  L.  ed.  1104,  it  was  held  that  a  re- 
ceiver of  a  national  bank  is  an  officer 
and  agent  of  the  United  States  within 
the  meaning  of  those  terms  as  used  in 
Rev.  Stat.  §  380,  providing  that  all 
suits  and  proceedings  arising  out  of 
the  provisions  of  the  law  governing 
national  banking  associations  in  which 
the  United  States  or  any  of  its  officers 
or  agents  are  parties,  shall  be  con- 
ducted by  the  district  attorneys  of  the 
several  districts  under  the  supervision 
of  the  solicitor  of  the  treasury. 

'  Piatt  v.  Crawford,  8  Abb.  Pr.  N. 
8.  297;  Piatt  v.  Beebe,  57  N.  Y.  339; 
Ta/pley  v.  Martin,  116  Mass,  275; 
Thatcher  v.  West  River  Nat.  Bank,  19 
Mich.  196. 

""  24  Stat.  atL.  552,  chap.  373,  ^  1,  pro- 
vides: "The  circuit  courts  of  the 
United  States  shall  have  original  cog- 
nizance, concurrent  with  iJie  courts  of 
the  several  slates,  of  all  suits  of  a  civil 
nature  at  common  law  or  in  equity 
where  the  matter  exceeds,  exclusive  of 
costs,  the  sum  or  value  of  $2,000,  and 
arising  under  the  Constitution  and 
laws  of  the  United  States."  Slate 
courts  have  concurrent  jurisdiction 
with  the  Federal  courts  in  an  action 
brought  by  a  receiver.  Thompson  v, 
Bchloeizel,  2  S.  D.  395.  In  Cadle  v. 
Tract/,   11    Blutchf.    101,  a  suit  by  a 


424 


RECEIVERSHIPS. 


Under  the  statute  as  it  formerl}^  existed  tlie  United  States  district 
courts  were  oiven  the  exchisive  jurisdiction  in  all  suits  by  and 
against  national  banks,  but  under  tlie  present  statute  the  receiver 
may  maintain  an  action  in  the  state  courts.'     When  a  receiver 


resitlont  of  Kentucky  ajrainst  a  bank 
incoriiorated  under  Ibe  National  Bank, 
ing  Act  and  resident  in  Alabama,  was 
brought  by  attachment  in  the  supreme 
court  of  New  York  to  recover  a  debt 
due  from  the  bank  to  him,  and  it  was 
held  there  was  no  jurisdiction  on  the 
ground  that  the  New  York  court  could 
not  acquire  jurisdiction,  at  least  in 
inmtum,  of  a  suit  against  a  corporation 
created  under  the  National  Banking 
Act.  Cf.  Manufacturers'  Nat.  Bank 
V.  Baack,  8  Blatchf.  137.  In  Ilemlee  v, 
Connecticut  &  P.  R.  R.  Co.  23  Blatchf. 
453,  it  was  held  that  where  a  receiver 
of  a  national  bank  appointed  b}'  the 
complroller  has  in  his  possession 
bonds  pledged  to  the  bank  to  secure  a 
debt,  and  has  obtained  from  court  an 
order  for  their  sale,  and  a  corporation, 
a  citizen  of  the  state  of  Vermont,  has 
brought  suit  in  Canada  against  the 
receiver  to  recover  the  bonds,  the 
Federal  Court  has  jurisdiction  of  a 
bill  filed  by  the  receiver  against  the 
corporation  to  enjoin  it  from  fuither 
prosecuting  the  Canadian  suit,  and 
that  such  jurisdiction  is  not  taken 
away  by  §  4  of  the  Act  of  July 
12,  1882  (22  Stat,  at  L.  162).  Cf. 
Frelivnhuynen  v.  Baldioin,  12  Fed. 
Rep.  395;  Price  \.  Abbott,  17  Fed.  Rep. 
506;  Piatt  v.  Beach,  2  Ben.  303;  Arm- 
strong  v.  Trautman,  36  Fed.  Rep.  275. 

'  Wanhington  Nat.  Bank  v.  Eckels,  57 
Fed.  Rep.  870. 

In  Richmond  v.  Irons,  121  U.  S.  27, 
30  L.  ed.  804,  it  was  held  that  before 
the  act  of  June  30,  1870,  a  court  of 
equity  had  no  jurisdiction  of  a  suit  to 
prevent  or  redress  maladministration 
or  fraud  against  creditors  in  the  vol- 


untary liquidation  of  such  a  bank, 
whether  contemplated  or  executed, and 
that  a  suit  brought  by  one  creditor 
must  necessarily  be  for  the  benefit  of 
all;  that  it  was  the  intention  of  Con- 
gress by  the  act  mentioned  to  provide 
ample  and  elTective  remedies  in  all  the 
specific  cases  for  the  protection  of  the 
public  and  the  payment  of  creditors, 
by  the  application  of  the  assets  of  the 
bank  and  the  enforcement  of  the  lia- 
bility of  stockholders.  The  applica- 
tion of  the  assets  of  the  bank  and  en- 
forcing the  liability  of  the  stock- 
holders, however  otherwise  distinct, 
are  by  the  statutes  made  connecting 
parts  of  the  whole  series  of  transactions 
which  constitute  the  liquidation  of  the 
affairs  of  the  bank. 

In  First  Nat.  Bank  v.  Morgan,  132 
U.  S.  141,  33  L.  ed.  282,  it  is  held  that 
the  exemption  of  national  banks  from 
suits  in  state  courts  in  counties  other 
than  the  county  or  state  in  which  the 
association  was  located  under  the  act 
of  February  18,  1875,  was  a  personal 
privilege  which  could  be  waived  by 
appearing  to  such  suit. 

In  Whittemore  v.  Amoskeag  Nat. 
Bank,  134  U.  S.  527,  33  L.  ed.  1002, 
it  was  held  that  an  action  against  a 
national  bank  in  a  circuit  court  of  the 
United  Slates  where  all  the  parties  are 
citizens  of  the  district  in  which  the 
bank  is  situated,  and  the  action  is  not 
under  §  5209  or  §  5239  of  the  Revised 
Statutes,  the  circuit  court  has  no  juris- 
diction. 

See  U.  S.  Rev.  Stat.  §  503;  Act  of 
1882,  July  12;  Act  of  1887,  March  3; 
Thompson  v.  Schaetzel,  2  S.  D.  395; 
Cadle  V.  Tracy,  11  Blatchf.  101;   Ken- 


RECEIVERSHIP  OP  NATIONAL  BANKS. 


425 


has  been  appointed  by  the  comptroller  a  conrt  of  e(piltj  has  no 
power  to  interfere  with  or  control  the  administration  of  such 
comptroller,  in  respect  to  the  winding-up  of  the  atfairs  of  the 
bank.' 

§  253.     Power  of  Comptroller  to  appoint. 

The  jurisdiction  to  appoint  receivers  of  national  banks  is  vested 
in  the  comptroller  of  the  currency  in  the  following  cases :  (a) 
for  failure  to  keep  its  stock  at  minimum  ;  (b)  for  not  keeping  its 
surplus  good ;  (c)  for  not  keeping  its  I'eserve  good ;  (d)  for  not 
keeping  a  place  selected  for  tlie  redemption  of  its  notes ;  (e)  for 
holding  its  stock  over  six  months ;  (f)  for  failure  to  pay  up  for 
its  capital  stock,  and  permitting  the  same  to  become  impaired ; 
(g)  for  improperly  certifying  a  check  ;  (h)  for  nonpayment  of  its 
circulating  notes  ;  (i)  where  the  bank  has  been  dissolved  and  its 
franchises  forfeited;  (j)  for  a  failure  to  pay  a  judgment  against  it 
for  a  period  of  thirty  days;  (k)  when  it  has  become  insolvent.' 

While  the  power  vested  in  the  comptroller  is  discretionary  it 
is  at  the  same  time  final.^ 


nedy  v.  Qibnon,  75  U.  S.  8  Wall.  498, 
19  L.  ed.  476.  Cf.  Oernvmia  Nat. 
Bank  v.  Cane,  99  U.  S.  G28,  25  L.  ed. 
448;  Stanton  v.  Wilkeson,  8  Ben.  357; 
Peters  v.  Foster,  56  Hun,  607. 

'  VanA7iiwerpv.  Hulburd,  7Blatchf. 
426. 

'See  U.  S.  Rev.  Stat,  gg  5141,  5151. 
5191.  5195.  5201,  5205,  i^208,  5234- 
5237. 

In  Price  v.  Abbott,  17  Fed.  Rep.  506, 
it  is  held  that  the  appointment  of  a  re- 
ceiver by  the  comptroller  as  provided 
by  law  is  to  be  presumed  to  be  made 
with  the  concurrence  and  approval  of 
the  Secretary  of  the  Treasury. 

In  an  action  by  the  receiver  of  an 
insolvent  national  bank  an  allegation 
that  on  a  day  named  the  comptroller 
of  the  currency  appointed  the  plaintiff 
receiver  of  the  bank  in  accordance 
with  the  provisions  of  the  Act  of  Con- 
gress (referring  to  it),  and  the  plaintiff 
has  taken  possession  of  the  assets  in- 


cluding the  demand  in  suit,  is  in  sub- 
stance a  sufficient  allegation  of  ap- 
pointment. Piutt  V.  Crawford,  SA-hh. 
Pr.  N.  S.  297. 

3  In  Cadle  v.  Baker,  87  U.  S.  20  Wall. 
650,  22  L.  ed.  448,  it  is  held  that  the 
appointment  of  a  receiver  cannot  be 
inquired  into  so  far  as  its  legality  is 
concerned  by  a  debtor  of  the  national 
bank  in  a  suit  by  the  receiver.  The 
appointment  of  the  receiver  by  the 
comptroller  is  conclusive  until  set 
aside  by  an  application  of  the  bank. 
To  the  same  effect  is  Case  v.  Mar- 
cJtand,  23  La.  Ann.  60. 

In  riatt  V.  Beebc,  57  N.  Y.  339,  it 
was  held  that  acerliflrateof  the  comp- 
troller of  the  currency,  approved  and 
concurred  in  by  the  Secretary  of  the 
Treasury,  reciting  the  existence  of  all 
the  facts  of  which  the  former  is  re- 
quired by  the  National  Currency  Act 
(13  Stat,  at  L.  99,  t^  50)  to  be  satisfied 
to  authorize  him  to  appoint  a  receiver 


426 


RECEIVERSHIPS. 


§  254.     Power  of  receiver  of  national  banks. 

The  power  of  a  receiver  appointed  by  the  comptroller  over  a 
national  bank  is  measured  by  the  terms  of  the  statute,  and  such 
powers  as  are  incident  to  the  due  and  proper  performance  by  him 
of  the  functions  of  his  office.'  His  power,  under  the  direction  of 
the  comptroller,  is  express  as  to  the  collection  of  all  debts,  dues, 
and  claims  belongin^^  to  the  bank,  and  under  the  orders  of  a  court 
of  competent  jurisdiction  he  may  sell  or  compound  all  bad  or 
doubtful  debts,  and  sell  all  the  real  and  personal  property  of  the 
bank  on  such  terms  as  the  court  shall  direct,  and  may  enforce  the 
individual  lial)ility  of  the  stockholders  when  necessary  to  do  so  in 
order  to  pay  the  debts,  such  action  being  in  his  own  name  and 
against  the  stockholders  individually.''     In  the  latter  proceeding, 


of  a  national  bank  under  the  provisions 
of  that  act,  is  sufficient  evidence  of  the 
validity  of  the  appointment  in  an  ac- 
tion by  the  receiver. 

'  "It  is  for  the  comptroller  to  de- 
cide when  it  is  necessary  to  institute 
proceedings  against  the  stockholders 
to  enforce  their  personal  liability,  and 
wliether  the  whole  or  a  part,  and  if 
only  a  part,  how  much  shall  be 
collected.  These  questions  are  re- 
ferred to  his  judgment  and  discretion 
and  his  determination  is  conclusive. 
The  stockholders  cannot  controvert 
it.  It  is  not  to  be  questioned  in  the 
litigation  that  may  ensue.  He  may 
make  it  at  such  time  as  he  may  deem 
proper  and  upon  such  data  as  shall 
be  satisfactory  to  him.  This  action 
on  his  part  is  indispensable  whenever 
the  personal  liability  of  the  stock- 
holders is  sought  to  be  enforced  and 
must  precede  the  institution  of  the 
suit  b}'  the  receiver.  The  fact  must 
be  distinctly  averred  in  all  such 
cases  and  if  put  in  issue  must  be 
proved."  Kennedy  v.  Gibaon,  75  U.  S. 
8  Wall.  498,  U)  L.  ed.  476;  Adams  v. 
Johnson  {" Bowden  v.  Johnson")  107 
U.  S.  251,  27  L.  ed.  386;  Plait  v. 
Crawford,  8  Abb.  Pr.  N.  S.  297.     A 


receiver  appointed  by  the  comptroller 
is  an  agent  of  the  United  States,  and 
is  limited  in  his  functions  by  the  ob- 
ject of  the  receivership,  and  the 
duties  which  it  involves.  He  cannot 
sell  the  property  of  the  bank  in  the 
absence  of  an  order  of  a  court  of 
competent  jurisdiction,  or  on  terms 
in  conflict  with  such  order.  He  can- 
not by  an  executory  contract  change 
the  estate  of  the  bank  unless  author- 
ized so  to  do  under  the  provisions  of 
the  statute  and  the  order  of  court. 
And  persons  dealing  with  a  receiver 
are  bound  to  take  notice  of  his 
authority  to  act,  and  contract  with 
him  at  their  peril.  Ellis  v.  Little,  27 
Kan.  707. 

A  receiver  of  a  national  bank  has 
power,  in  the  absence  of  any  direc- 
tion by  the  comptroller  to  the  con- 
trary, to  agree  with  a  creditor  before 
the  debt  is  barred  to  waive  the  statute 
of  limitations  in  order  to  induce  the 
creditor  not  to  bring  suit.  Bridges  v. 
Stephens  (Mo.)  34  S.  W.  555. 

•^  See  U.  S.  Rev.  Stat.  §  5234;  also, 
Adams  v.  Johnson  ("  Bowden  v.  John- 
son") 107  U.  S.  251,  27  L.  ed.  386; 
Kennedy  v.  Gibson,  75  U.  S,  8  Wall. 
498,  19  L.  ed.  476. 


RECEIVERSHIP  OF  NATIONAL  BANKS. 


427 


however,   the  direction   of   the   compti'oller  is  a  necessary  pre- 
requisite, and  his  action  is  conchisive,'     A  receiver  has  power  to 


In  Ellis  V.  Little,  27  Kan.  707,  a  re- 
ceiver appointed  by  the  comptroller 
of  cuireucy  was  held  to  be  the  agent 
of  the  United  States,  and  is  limited  as 
to  his  functions  by  the  object  of  the 
receivership  and  the  duties  it  involves. 
Such  a  receiver,  upon  the  order  of  a 
court  of  record  of  competent  juris- 
diction, may  sell  or  compound  all 
bad  or  doubtful  debts,  and  on  a  like 
order  may  sell  all  the  real  estate  and 
personal  property  on  such  terms  as 
the  court  shall  direct;  but  he  cannot 
sell  the  properly  of  the  bank  in  the 
absence  of  such  an  order,  or  upon 
terms  in  conflict  with  the  direction  of 
the  order.  He  cannot,  as  such  re- 
ceiver, charge  the  estate  of  the  bank 
■with  his  executory  contract  unless 
authorized  so  to  do  under  the  pro- 
visions of  the  National  Banking  Act 
and  the  order  of  a  court  of  competent 
jurisdiction  obtained  under  the  terms 
of  the  act.  A  receiver  directed  by  a 
court  to  sell  the  assets  of  a  bank  "on 
such  terms  and  in  such  manner  as  in 
his  judgment  shall  be  for  the  best  in- 
terest of  the  creditors  and  all  in- 
terested in  the  bank  and  its  assets,"  is 
not  empowered  thereby  to  exchange, 
barter,  or  trade  the  property  of  the 
bank  for  other  or  different  property. 
Persons  dealing  with  the  receiver  of 
a  national  bank  in  his  official  capacity 
are  bound  in  law  to  take  knowledge 
of  his  authority  to  act,  and  where  he 
acts  in  excess  of  his  authority,  the 
persons  with  whom  he  deals  contract 
at  their  peril,  and  the  estate  of  the 
bank  cannot  be  charged  for  the  de- 
fault or  inability  of  the  receiver  to 
perform  the  contract. 

In  Barrett  v.  Ilenrietta  Nat.  Bank., 
78  Tex.  222,  it  is  held  that  the  law 
regulating    the    appointment    of    re- 


ceivers of  the  properly  of  national 
banks  and  declaring  their  powers  and 
duties  does  not  recognize  the  exist- 
ence of  power  in  the  receiver  to  con- 
tract with  an  attorney  regarding  a 
mortgage  held  by  the  bank  and  give 
the  attorney  a  portion  of  the  property 
or  money  realized. 

'  Kennedy  v,  Gibson,  75  U.  S.  8 
Wall.  498.  19  L.  ed.  476;  Strong  v. 
Southworth,  8  Ben.  331.  In  Harceyv. 
Lord,  11  Biss.  144,  it  is  held  that 
where  a  bill  in  the  nature  of  a  credi- 
tor's bill  has  been  filed  under  the  pro- 
visions of  the  national  banking  law 
against  the  shareholders  of  a  bank  to 
enforce  their  liability,  a  suit  at  law  by 
a  receiver  appointed  by  the  comp- 
troller cannot  be  maintained  against 
an  individual  shareholder  to  enforce 
the  same  liability,  while  the  former 
suit  is  pending.  In  this  case  the 
power  of  the  comptroller  to  appoint  a 
receiver  to  wind  up  a  national  bank 
where  a  receiver  has  been  appointed 
by  the  court  in  a  creditor's  proceed- 
ing and  steps  taken  to  enforce  share- 
holders' liability,  is  discussed.  See 
also  Case  v.  Marchand,  23  La.  Ann.  GO. 

As  to  the  power  of  the  comptroller 
of  the  currency,  see  Case  v.  Small,  4 
Woods,  78.  10  Fed.  Rep.  722. 

In  Van  Antwerp  v.  IluUmrd,  8 
Blatchf.  282,  on  a  demurrer  iuterpo.'^ed 
by  the  receiver  it  was  held  that  the 
bonds  deposited  by  the  bank  wilh  the 
treasurer  were  to  be  held  e.\;clu.sively 
for  the  purpose  of  securing  the  circu- 
lating notes,  and  it  is  only  the  moneys 
paid  over  by  the  receiver  under  the 
50th  .section  which  are  subject  to  a 
dividend.  There  is  no  provision  in 
the  act  authorizing  the  treasurer  to 
di.'-pose  of  the  residue  or  surplus  pro- 
ceeds of  such  bonds  in  payment  of 


428 


RECEIVERSHIPS. 


disaffirm  an  unlawful  act  of  the  bank,'  and  he  may  remove  all 
liens  by  attachment  which  are  desij^ned  to  give  preference  to 
creditors  in  violation  of  the  statute,'^  and  in  behalf  of  creditors 
and  stockholders  may  sustain  an  action  ai;-ainst  the  bank  directors 
for  a  misappHeation  of  the  funds  of  the  baidc,  or  the  loss  thereof 
through  neghgence.^     But  the  receiver  is  not  the  representative 


the  debts  of  the  bauk  or  ollierwise. 
The  residuary  interest  of  the  bank  in 
the  securities  as  pledged  is  a  part  of 
the  assets  of  the  bank,  the  same  as 
though  such  securities  had  been 
pledged  to  a  private  person  as  col- 
lateral security  for  the  payment  of  an 
ordinary  comniercial  debt,  and  a 
properly  appointed  receiveras.  the  rep- 
resentative of  the  banli,  has  the  right 
to  demand  and  receive  the  prop- 
erty so  pledged  as  an  asset  of  the 
banlc  in  the  one  case  the  same  as  the 
other. 

In  Ellis  V.  Little,  27  Kan.  707,  it 
was  held  that  the  receiver  is  the 
agent  of  the  United  States  and  is  lim- 
ited as  to  his  function  by  the  object 
of  the  receiver  and  the  duties  which 
it  involves.  Such  a  receiver,  under 
the  order  of  the  court  of  competent 
jurisdiction,  may  sell  or  compound 
all  bad  or  doubtful  debts  and  may 
sell  all  the  real  and  personal  property 
on  such  terms  as  the  court  shall  direct, 
but  cannot  do  so  without  an  order  of 
court.  He  cannot  charge  the  estate 
by  his  executory  contract  unless  au- 
thorized so  to  do  by  the  Banking  Act 
and  the  order  of  court  under  the 
terms  of  the  act. 

In  Casey  v.  La  SocietS  de  Credit 
Mohilier,  2  Woods,  77.  it  is  held  that 
the  receiver  holds  only  the  estate 
and  title  of  the  bank  in  the  assets,  but 
has  no  greater  rights  in  enforcing 
iheir  collection  than  the  bank  itself 
w'ould  have  had.  Neither  the  bank 
nor  its  receiver  could  recover  posses- 
sion    of     the     negotiable     securities 


pledged  by  the  bank  for  advances  to 
it  on  the  ground  that  the  pledge  was 
ineffecual  for  want  of  indorsement  of 
the  securities,  while  at  the  same  time 
holding  on  to  the  assets  to  secure  re- 
payment of  which  the  pledge  was 
given. 

'  Johnston  v.  CJinrlottesnlle  Nat. 
Bank,  3  Hughes,  657;  L>oicd  v.  Ste- 
pbenson,  105  N.  C.  4G7;  National 
Sccur.  Banlc  v.  Butler,  129  U.  S.  223, 
32  L.  ed.  6S2;  Weber  v.  Spokane  Nat. 
Bank,  50  Fed.  Rep.  735;  Winters  v. 
Armstrong,  37  Fed.  Rep.  508;  New 
Albany  v.  Burke,  78  U.  S.  11  Wall. 
9(),  20  L.  ed.  155;  Curranw.  Arkansas, 
50  U.  S.  15  How.  304,  14  L.  ed.  705; 
Put)iam  V.  New  Albany  &  8.  C.  J.  B. 
Co.  {"Burke  v.  Smith")  83  U.  S.  16 
Wall.  390,  21  L.  ed.  361. 

2  First  Nat.  Baiik  v.  Colby,  88  U.  S. 
21  Wall.  609,  22  L.  ed.  687.  Cf.  Tracy 
V.  First  Nat.  Bank,  37  N.  Y.  523; 
Woodward  v.  Ellsworth,  4  Colo.  580; 
Harvey  v.  Allen,  16  Blatchf.  29; 
Roberts  v.  Uill,  23  Blatchf.  312;  Cadle 
V.  Tracy,  11  Blatchf.  101. 

In  Armstrong  v.  Scott,  36  Fed.  Rep. 
63,  it  was  held  that  U.  S.  Rev.  Stat. 
§  5242,  makes  any  payment  of  money 
by  an  insolvent  national  banli  to 
shareholders  or  creditors  with  a  pur- 
pose of  preferring  such  shareholder 
or  creditor,  or  for  the  purpose  of 
evading  the  disposition  of  assets,  as 
required  by  statute,  absolutely  null 
and  void.  Cf.  National  Seeur.  Bank 
V.  Butler,  129  U.  S.  223,  32  L.  ed.  682; 
U.  S.  Rev.  Stat.  §  5242. 

8  Movius  V.  Lee,  24  Blatchf.  291. 


RECEIVERSHIP  OF  NATIONAL  BANKS. 


429 


of  tlic  2joveriiniGnt  in  the  sense  of  having  power  to  sultjcet  it  to 
th(i  jurisdiction  of  the  courts.' 

§  255.     Receiver's  title.     National  banks. 

The  receiver's  title  to  the  property  and  assets  of  a  national 
bank  is,  in  the  main,  similar  to  that  of  other  receivei'ships,  and,as 
a  rule,  he  succeeds  to  the  title  of  the  bank,  and  takes  its  property 
and  assets  in  precisely  the  condition  it  is  in  at  the  time  of  his  ap- 
pointment, subject  to  all  then  existing  liens  thereon,  or  rights 
therein.^     His   powers,  however,  are   much    more  limited    than 


'  In  Case  v.  IVrrell,  78  U.  S.  11 
Wall.  199,  20  L.  ed.  134,  it  is  held 
that  the  receiver  of  a  natioual  bank, 
where  operations  have  been  suspended 
by  the  comptroller  of  the  currency 
for  causes  specified  in  the  Nalioua! 
Currency  Act,  in  no  sense  represents 
the  government  and  has  no  power  to 
subject  the  government  to  the  juris- 
diction of  the  courts.  Neillier  has 
the  comptroller  such  power. 

"The  receiver  derives  no  title  to 
funds  held  by  the  bank  in  trust. 
Welles  V.  Stout,  38  Fed.  Rep.  807. 
Nor  to  properly  in  the  custody  of  the 
bank  which  it  does  not  own.  Corn 
Kxch.  Bank  v.  Blye,  101  N.  Y.  303. 
Personal  projierly  of  an  insolvent  na- 
tiontil  bank  in  the  hands  of  a  receiver 
appointed  pursuant  to  U.  S.  Rev.  Stat. 
§  5234,  remains  exempt  from  taxation 
under  state  laws.  liose/iblatt  v.  John- 
ston, 104  U.  S.  4G2,  26  L.  ed.  832. 
This  is  because  tlie  corporate  capacity 
of  the  bank  does  not  cease  on  the  ap- 
pointment of  a  receiver.  First  Nat. 
Bank  v.  National  Pahquioque  Bank, 
81  U.  S.  14  Wall.  383,  20  L.  ed.  840; 
Kennedy  v.  Gibson,  75  U.  S.  8  Wall. 
498,  19  L.  ed.  47G;  National  Bank  v. 
Kennedy,  84  U.  S.  17  Wall.  19,  21  L. 
ed.  554.  The  right  of  set-oil  exists 
ir  favor  of  a  defendant  against 
whom  a  receiver  is  i)roceeding  to 
make   a  debt  due   from  him   to   the 


bank.  Armsfronr/ v.  TF«?'«er,  49  Ohio 
St.  37G,  17  L.  R.  A.  466.  The  closing 
of  a  bank  by  order  of  the  examiner, 
the  appointment  of  a  receiver,  and  its 
dissolution  by  decree  of  a  circuit  court 
necessarily  transfers  the  assets  of  the 
bank  to  the  receiver.  The  receiver 
takes  the  assets  in  trust  for  creditors 
and  in  the  absence  of  a  statute  to  the 
contrary  subject  to  all  claims  and  de- 
fenses that  might  have  been  inter- 
posed against  the  insolvent  coipora- 
tion.  The  ordinary  equity  rule  of 
set-off  in  case  of  insolvency  is  that 
where  the  mutual  obligations  have 
grown  out  of  the  same  transaction, 
iiLSolvency  on  the  one  hand  justifies 
the  set-oil  of  the  debt  due  on  the  other, 
and  this  rule  applies  to  insolvent  na- 
tifjnal  banks.  iScoit  v.  Armstrong,  146 
U.  S.  499,  36  L.  ed.  1059. 

In  Scott  V.  Artmtronn,  146  U.  S.  499, 
36  L.  ed.  1059,  it  is  held  that  llie  closing 
of  a  national  bank  by  order  of  the  ex- 
aminer, the  appointment  of  a  receiver, 
and  its  dissolution  by  decree  of  the 
circuit  court,  necessarily  transfer  the 
assets  of  the  bank  to  the  receiver  who 
holds  the  assets  in  trust  for  the  cred- 
itors, and  in  the  ab.sence  of  a  statute 
to  the  contrary,  subject  to  all  claims 
and  defenses  that  might  liavc  been  in- 
terpf)sed  against  tlie  insolvent  corpo- 
ration. 


430 


RECEIVERSHIPS. 


tliose  applicable  to  rcceivcrsliips  of  corporations  generally,  and 
are  confined,  as  a  rule,  to  the  conversion  of  the  property  into  cash, 
and  the  collection  of  its  assets,  and  placing  them  in  the  United 
States  Treasury.*  Neither  has  he  power  to  make  contracts  exec- 
utory in  their  nature,  except  where  he  has  statutory  authority 
tlierefor  and  under  the  sanction  of  a  court  of  competent  jurisdic- 
tion." He,  of  course,  derives  no  title  to  property  of  a  third  per- 
son or  corporation  that  comes  to  his  possession  along  with  other 
property  belonging  to  the  bank.'  Neither  does  he  obtain  title  to 
the  bonds  which  are  deposited  with  the  Treasurer  of  the  United 
States  as  security  for  the  redemption  of  its  circulating  notes.* 
Property  held  by  the  bank  in  trust,  or  which  is  impressed  with  a 
trust  relationship  does  not  pass  to  the  receiver  subject  to  general 
distribution  among  creditors.^     But  in  such  case  the  cestui  que 


^ Ellis  V.  Little,  27  Kan.  707. 

^ Ellis  V.  LiWe,  27  Kan.  707;  Barrett 
V.  Henrietta  Nat.  Bank,  78  Tex.  222. 

3  In  Corn  Exch.  Ba:ik  v.  Bli/e,  101 
N.  Y.  303,  a  party  claiming  title  to 
property  in  the  possession  of  the  re- 
ceiver of  an  insolvent  national  bank, 
vphich  came  to  his  possession  with 
other  property  belonging  to  the  bank, 
it  was  held  that,  on  the  refusal  of  the 
receiver  to  deliver  possession,  the 
claimant  could  maintain  an  action  of 
replevin  therefor,  such  proceeding  not 
being  prohibited  by  U.  S.  Rev.  Stat. 
g  5242.  Nor  will  the  custody  of  the 
receiver  of  such  property  be  protected 
by  injunction. 

*  Where  bonds  are  deposited  with 
the  Treasurer  of  the  United  States  as 
security  for  redemption  of  its  circu- 
lating notes  under  the  general  Bank- 
ing Act  of  June  3,  1884,  they  are  not 
liable  for  the  payment  of  indebtedness 
to  the  general  creditors  of  an  insolv- 
ent bank;  that  the  receiver  of  a  bank 
had  no  control  over  the  bonds  as  re- 
ceiver. The  residuary  interest  of  the 
bank  in  the  bonds  was  part  of  the 
assets  of  the  bank,  however,  which 
the  receiver  was  entitled  to.  Van 
Antwerp  v.  Eulburd,  8  Blatchf.  282. 


The  court  has  no  jurisdiction  to  en- 
tertain a  suit  in  equity  brought  by  a 
private  person  to  interfere  with  or 
control  the  administration  of  the  du- 
ties of  the  comptroller  of  the  currency 
and  of  the  Treasurer  of  the  United 
States  with  respect  to  bonds  deposited 
with  the  Treasurer  to  secure  the  re- 
demption of  circulating  notes.  Van 
Antwerp  v.  Hulburd,  7  Blatchf.  42(5. 

*In  Central  Nat.  Bank  v.  Connecticut 
Mut.  L.  Ins.  Co.  104  U.  S.  54,  26  L. 
ed.  693,  it  is  held  that,  as  long  as  trust 
properly  can  be  traced  and  followed, 
the  property  into  which  it  has  been 
converted  remains  subject  to  the  trust 
and  if  a  person  mixes  trust  funds  with 
his  own,  the  whole  will  be  treated  as 
trust  property,  except  so  far  as  the 
holder  may  be  able  to  distinguish 
what  is  his.  This  doctrine  applies  to 
moneys  deposited  in  a  bank  and 
to  the  debt  thereby  created,  as  well  as 
to  other  property. 

In  Pliiladelpliia  Nat.  Bank  v.  Dowd, 
38  Fed.  Rep.  172,  2  L.  R.  A.  480. 
paper  was  sent  to  a  bank  for  collection 
and  immediately  returned  to  the  plain- 
tiff; the  paper  was  collected  and  the 
proceeds  mingled  with  other  motitys 
of    the   bank   instead  of    being  for- 


RECEIVERSHIP  OF  NATIONAL  BANKS. 


431 


warded  to  the  plaintifif.  The  bill 
asked  to  have  the  balance  due  plain- 
tiff paid  in  full  on  the  ground  that  the 
bank,  by  receiving  the  paper  for  col- 
lection and  immediately  returning  it, 
became  a  trustee  and  that  either  its 
entire  property  or  the  money  in  its 
vaults  became  impressed  with  the 
trust.  Held,  that  if  the  mingling  of 
the  funds  was  a  breach  of  trust  it  was 
a  conversion  and  plaintiff  became  a 
simple  contract  creditor  with  no  pref- 
erence, and  it  was  immaterial  whether 
or  not  the  bank  stood  in  a  fiduciary 
capacity  to  the  plaintiff,  as  the  facts 
showed  that  the  money  collected  could 
not  be  traced  into  any  specific  invest- 
ment or  fund,  but  had  been  undis- 
tinguishably  mingled  with  the  general 
assets. 

The  assets  of  a  bank  in  the  hands  of 
its  receivers  are  impressed  with  a  trust 
in  favor  of  a  city  whose  moneys  were 
deposited  in  such  bank  to  the  knowl- 
edge of  the  latter's  officers,  who  min- 
gled it  with  the  money  of  the  bank, 
where  assets  purchased  with  such 
money  have  come  to  the  hands  of  the 
receiver.  Spokane  v.  FirdNat.  Bank, 
68  Fed.  Rep.  982. 

A  county  has  no  lien  upon  or  pri- 
ority in  the  funds  in  the  hands  of  a 
receiver  of  a  national  bank,  for  pub- 
lic funds  deposited  in  the  bank  by  its 
officers,  unless  the  same  money,  or 
assets  or  property  procured  by  its  use, 
eomes  into  the  hands  of  the  receiver, 
although  the  estate  of  the  bank  has 
received  the  benefits  of  the  money,  and 
its  assets  may  have  been  tliereby  in- 
creased. Spokane  County  v.  First  Nat. 
Bank,  68  Fed.  Kep.  979. 

The  owner  of  a  note  sent  for  collec- 
tion to  a  bank  with  which  the  maker 
deposits  suflicient  to  meet  the  note, 
which  is  thereupon  canceled  by  the 
bank  and  returned  to  the  maker  and 
charged  to  his  account,  may  collect 
the  amount  thereof  from  the  receiver 


of  the  bank  who  is  appointed  before 
the  presentation  of  a  draft  given  by 
such  bank  for  the  amount  of  the  note, 
whore  the  amount  so  deposited  has 
not  been  drawn  out.  People  v.  Mer- 
chantn'  Ba7ik,  92  Hun,  159. 

In  Crar/ie  v.  Uadlcy,  99  N.  Y.  131, 
it  appeared  that  the  plaintiff  depos- 
ited, in  the  usual  course  of  business, 
drafts  with  the  national  bank  which 
were  credited  to  the  plaintiff  on  the 
books.  The  bank  was  at  the  time  ir- 
retrievably insolvent  and  its  drafts 
had  gone  to  protest  the  day  before,  of 
which  the  president  of  the  bank,  hav- 
ing control  thereof,  had  full  knowl- 
edge, and  presumably  its  other  officers 
and  agents.  Tlie  bank  kept  open  un- 
til the  usual  hour  of  closing  on  the 
day  of  deposit  and  did  not  open  its 
doors  thereafter,  but  went  into  the 
hands  of  a  receiver.  In  an  action  to 
recover  the  deposit  it  was  held  that 
permitting  the  plaintiffs  to  make  it  in 
reliance  upon  the  supposed  insolvency 
of  the  bank  a  gross  fraud  was  prac 
tised  upon  the  plaintiff  and  he  was 
entitled  to  reclaim  the  drafts  or  their 
proceeds.  This  doctrine  was  not  in 
contravention  of  U.  S.  Rev.  Slat. 
§§  5234,  5242,  in  reference  to  pref- 
erential payments,  the  plaintiff's  pro- 
ceeding being  simply  to  reclaim  his 
own  property.  Neither  the  receiver 
nor  any  creditor  had  any  equity  in  the 
property. 

In  Burton  v.  Biirley,  9  Biss.  253, 
where  the  president  of  a  national  bank 
instructed  its  correspondent  to  charge 
up  against  it  the  amount  of  a  private 
note  which  the  latter  held  against  the 
president  in  payment  of  said  note,  and 
this  was  done  and  account  rendered 
showing  the  transaction  which  was 
accepted  by  the  first  bank,  it  was  held 
that  the  bank  was  estopped  from  de- 
nying the  correctness  of  the  charge 
and  that  a  receiver  of  the  bank  suhse- 
qucntly  appointed   had  no  power  to 


432 


REUEIVERSIIIPS. 


t7^ust  must  be  able  to  trace  his  propci-ty  or  money  into  tlie  re- 
ceiver's hands  subject  to  identification.'  The  property  beini^  in 
Gustodia  legis  cannot  be  levied  on,  but  the  judgment  must  be  cer- 
tified to  the  comptroller  as  other  indebtedness.'' 

§  256.    Receiver's  lijibility. 

The  liability  of  a  receiver  of  a  national  bank  is  measured  to 
some  extent  by  the  general  scope  of  his  powers  and  duties.  His 
liability  is  confined  to  the  prc^per  care  and  custody  of  the  prop- 
erty intrusted  to  him,  and  the  collection  and  accounting  for  the 
receivership  funds,  and,  his  office  being  statutory,  his  acts  must  be 
governed  l:)y  the  terms  and  limitations  embraced  in  the  statute 
and  such  directions  and  control  as  the  court  may  exercise.  The 
statutory  bank  receiver  is  not  charged  with  the  distribution  of 
the  receivership  assets,  such  distribution  l)eing  nnder  the  dn-ec- 
tion  of  the  comptroller  under  §  5234  of  the  Revised  Statutes.' 
As  a  general  rule  the  receiver  is  not  liable  for  interest  on  the 
claims  against  the  bank,''  unless  the  assets  are  more  than  sufficient 


disaffirm  the  transaction  whicli  bad 
tatien  place. 

'  In  First  Nat.  Bank  v.  Armstrong, 
36  Fed.  Rep.  59,  a  draft  was  sent  to  a 
banli  specially  indorsed  for  collection 
and  was  paid  by  the  drawee  by  check, 
which  the  bank  collected  through  the 
clearing  house.  A  memorandum  was 
placed  on  the  bank's  cash  to  indicate 
that  the  proceeds  of  the  draft  were  the 
properly  of  the  sender.  The  bank 
closed  the  next  morning  and  the  re- 
ceiver credited  such  proceeds  to  the 
sender  of  the  draft  on  the  books  of 
the  bank.  It  was  held  that  it  could 
not  be  traced  and  identified.  •  Cf. 
Commercial  Nat.  Bank  v.  Armstrong, 
39  Fed.  Rep.  684;  First  Nat.  Bank  v. 
Armstrong.,  43  Fed.  Rep.  193. 

In  Illinois  Trust  &  Sav.  Bank  v. 
First  Nat.  Bank,  15  Fed.  Rep.  85S,  it 
was  held  that  the  cestui  que  trust  can- 
not follow  his  fund  in  the  hands  of  an 
assignee  in  bankruptcy,  or  of  an  ex- 
ecutor of  such  trustee,  and  is  a  gen- 
eral creditor,  unless  he  can  identify 


his  fund.  The  right  to  follow  the 
trust  fund  ceases  when  the  means  of 
ascertainment  and  identification  fail, 
as  where  it  is  turned  into  money  and 
mixed  in  a  general  mass  of  property 
of  the  same  description. 

"^Eastern  Nat.  Bank  v.  Vermont  Nat. 
Bank,  23  Fed.  Rep.  186. 

^A  receiver  of  a  national  bank  ap- 
pointed by  the  comptroller  is  not  ac- 
countable in  equity  to  the  owner  of 
real  estate  for  rents  thereof  received 
by  him  as  such  receiver,  and  paid  by 
him  into  the  treasury  of  the  United 
Stales  subject  to  the  disposition  of  the 
comptroller  under  U.  S.  Rev.  Stat. 
§^  5334.  Hiiz  V.  Jenks,  123  U.  S.  297, 
31  L.  ed.  156. 

^  In  Chemical  Nat.  Bank  v.  Bailey, 
13  Blatchf.  480,  the  national  bank  had 
been  declared  in  default  by  the  comp- 
troller, and  a  receiver  appointed,  and  a 
sufficient  fund  was  realized  from  its 
assets  to  pay  all  claims  against  it  and 
leave  a  surplus.  It  was  held  that  the 
comptroller  ought  to  allow  interest  on 


RECEIVERSHIP  OF  NATIONAL  BANKS. 


433 


to  pay  the  principal,  nor  for  rents  collected  by  him  and  paid 
over  to  the  Treasurer  of  the  United  States.' 

§  257.    Suits  by  receiver. 

It  is  a  part  of  the  official  duty  of  a  national  bank  receiver  to 
collect  the  assets  of  the  bank,  specific  authority  being  given  him 
for  that  purpose,  and  he  is  not  required  to  obtain  an  order  of  the 
comptroller  authorizing  such  action.  This  power,  however,  does 
not  extend  to  and  embrace  suits  against  stockholders  to  recover 
stock  liability,  they  not  being  debtors  in  contemplation  of  the 
statute."     The  courts  in  which  national  banks  may  sue  and  be 


the  claims  during  the  period  of  the 
admiuistration  before  turning  the 
surplus  over  to  the  stockholders.  In 
such  case  action  of  assumpsit  will  not 
lie  against  the  receiver  or  the  comp- 
troller, but  is  brought  against  the 
bank.  Payne  v.  Gardiner,  29  N.  T. 
146. 

Id.  National  Bank  v.  Mechanics'  Nat. 
Bank,  94  U.  S.  437,  24  L.  ed,  176,  a 
depositor  of  a  national  bank,  which 
had  suspended  payment  and  a  receiver 
been  appointed,  was  held  to  be  enti- 
tled to  interest  upon  his  deposit  from 
the  date  of  his  demand.  United 
States  V.  Knox,  111  U.  S.  784,  28  L. 
ed.  603. 

The  mere  appointment  of  a  tem- 
porary receiver  of  a  bank  pending  an 
action  for  its  dissolution  does  not  raise 
such  an  inference  of  its  insolvency  as 
to  make  the  bank  liable  for  interest 
from  the  time  of  such  appointment 
on  a  noninterest-bearing  deposit  for 
which  no  demand  has  been  made. 
Sickles  V.  Herold,  149  N.  Y.  332,  Mod- 
ifying 15  Misc.  116. 

A  receiver  of  a  bank  cannot  be  re- 
quired to  pay  interest  upon  a  deposit 
which  did  not  bear  interest,  from  the 
time  of  an  application  to  set  up  such 
deposit  as  a  counterclaim  to  a  demand 
against  the  depositor,  where  he  has 
earned  no  interest  while  the  money 
28 


remained  in  his  hands.  Sickles  v. 
Htrold,  15  Misc.  116,  Modified  in  149 
N.  Y.  332. 

'  In  Hitz  v.  Jenks,  123  U.  S.  297,  31 
L.  ed.  156,  it  was  held  that  a  receiver 
of  a  national  bank  appointed  by  the 
comptroller  of  the  currency  was  not 
accountable  in  equity  to  the  owner  of 
real  estate  for  rents  received  by  him 
as  such  receiver  and  paid  by  him  into 
the  treasury  of  the  United  Stales  sub- 
ject to  the  disposition  of  the  comp- 
troller under  U.  S.  Rev.  Stat.  §  5234. 
Accruing  rents  collected  and  paid  into 
court  by  a  receiver  appointed  on  a 
bill  in  equity  against  the  mortgagor 
and  a  second  mortgagee  to  enforce 
the  first  mortgage,  which  appears  to 
have  been  satisfied  and  discharged,  be- 
longs to  the  second  mortgagee  so  far 
as  the  land  is  insutficient  to  pay  his 
debt. 

*  A  receiver  of  a  national  bank,  ap- 
pointed by  the  comptroller  under  the 
national  banking  act  may  sue  for  de- 
mand due  such  bank  in  his  own  name, 
or  in  the  name  of  the  bank.  He  is  not 
required  to  get  an  order  of  the  comp- 
troller for  such  purpose.  It  is  a  part 
of  his  official  duty  to  collect  the  as- 
sets. National  Bank  v.  Kennedy,  84 
U.  S.  17  Wall.  19,  21  L.  ed.  554;  First 
Nat.  Bank  v.  National  Pahquioque 
Bank,  81  U.  S.  14  Wall.  383,  20  L.  ed. 


434 


RECEIVERSHIPS. 


sued  are  regulated  by  statute,*  but  the  provisions  of  the  statute 


840.  This  is  not  the  rule  in  regard  to 
suits  against  stockholders  who  are  not 
ordinary  debtors  in  contemplation  of 
the  statute.     Id. 

Persons  sued  by  a  receiver  appointed 
by  the  comptroller  under  the  National 
Banking  Act  cannot  inquire  into  the 
regularity  of  his  appointment.  Cadle 
Y.Bakcr,S7  U.  S.  20  Wall.650.  22 L.  ed. 
448.  Such  receiver  is  presumed  to  be 
appointed  with  the  approval  of  the 
Secretary  of  the  Treasury  within  the 
meaning  of  §  2,  art.  2  of  the  Consti- 
tution {Price  V.  Abbott,  17  Fed.  Rep. 
506),  and  he  may  sue  in  any  circuit 
court  of  the  United  States  regardless 
of  citizenship  or  the  amount  involved 
under  U.  S.  Rev.  Stat.  §  629,  cl.  3  {Arm- 
strong  v.  Ettlesohn,  36  Fed.  Rep.  209; 
Piatt  V.  Beach,  2  Ben.  303),  and  in  the 
supreme  court  of  the  state  of  New 
York.  Piatt  v.  Crawford,  8  Abb.  Pr. 
N.  S.  297. 

In  Kennedy  v.  Gibson,  75  U.  S.  8 
Wall.  498,  19  L.  ed.  476,  it  was  held 
upon  a  bill  filed  under  §  50  of  the  Na- 
tional Banking  Act  of  1864  by  a  re- 
ceiver against  the  stockholders  where 
the  bank  had  failed  to  pay  its  notes 
that  it  was  indispensable  that  action 
on  the  part  of  the  comptroller  of  the 
currency  touching  the  personal  lia- 
bility of  the  stockholders  should  pre- 
cede the  institution  of  any  suit  by  the 
receiver,  and  this  fact  must  be  averred 
in  the  bill. 

As  to  the  collection  of  indebtedness 
due  the  bank,  see  BrincTcerhoff  v.  Bost- 
wick,  88  N.  Y.  52;  Ackerman  v.  Eal- 
sey,  37  N.  J.  Eq.  356. 

'  In  Petri  v.  Commercial  Nat.  Bank, 
142  U.  S.  644,  35  L.  ed.  1144,  it  is  held 
that  national  banks  may  sue  and  be 
sued,  complain  and  defend  in  any 
court  of  law  and  equity  as  fully  as 
natural  persons.     Under  the  National 


Banking  Act  of  1863,  it  was  provided 
that  suits  by  and  against  national 
banks  organized  thereunder  might  be 
brought  in  any  circuit,  district,  or  ter- 
ritorial court  of  the  United  States  held 
within  the  district  in  which  such  as- 
sociation may  be  established,  and  by 
the  act  of  June  3,  1864,  there  was 
added  to  this  statute  "or  in  any  state, 
county,  or  municipal  court  in  the 
county  or  city  in  which  said  associa- 
tion is  located,  having  jurisdiction  in 
similar  cases."  Both  of  these  provi- 
sions were  carried  into  U.  S.  Rev. 
Stat.  §  5198,  by  the  Amendatory  Act 
of  February  18,  1875.  chap.  80  (18 
Stat,  at  L.  316,  320).  Mr.  Chief  Jus- 
tice Fuller,  after  a  review  of  the  sev- 
eral acts  of  Congress  and  their  rela- 
tion to  national  banks,  says:  "Suits 
by  or  against  national  banks  might 
therefore  be  brought  or  removed  on 
the  ground  of  diverse  citizenship,  or 
of  subject-matter,  since,  as  they  were 
created  by  Congress  and  could  acquire 
no  right,  make  no  contract,  and  bring 
no  suit  which  was  not  authorized  by 
a  law  of  the  United  States,  a  suit  by 
or  against  them  was  necessarily  a  suit 
arising  under  the  law  of  the  United 
States."  See  Osborn  v.  Bank  of 
United  States,  22  U.  S.  9  Wheat.  738, 
823,  6  L.  ed.  204,  224;  Leather  Mfrs. 
Nat.  Bank  v.  Cooper,  120  U.  S.  778, 
781,  30  L.  ed.  816,  818;  Union  P.  R. 
Co.  V.  Myers  {"Pacific  R.  Removal 
Cases"),  115  U.  S.  1,  29  L.  ed.  319. 

Prior  to  July  12,  1882,  suits  might 
be  brought  by  or  against  national 
banks  in  the  circuit  courts  of  the 
United  States  in  the  district  where 
the  banks  were  located,  but  by  the 
act  of  that  date  it  was  provided  that 
"the  jurisdiction  for  suits  hereafter 
brought  by  or  against  any  association 
established  under  any  law  providing 


RECEIVERSHIP  OF  NATIONAL  BANKS. 


435 


do  not,  in  all  matters  of  jurisdiction,  extend  to  receivers.* 
Neither  is  the  power  of  the  receiv-er  to  sue  confined  exclusively 
to  the  causes  of  action  provided  for  by  statute,"  and  while  he  may 


for  national  banking  associations,  ex- 
cept suits  between  thera  and  the 
United  States,  or  its  officers  and  agents 
shall  be  the  sanae  as,  and  not  other 
than,  the  jurisdiction  for  suits  by  or 
against  banks  not  organized  under  any 
law  of  the  United  States,  which  do  or 
might  do  banking  business  where 
such  national  banking  associations 
may  be  doing  business  when  such 
suits  may  be  begun."  22  Stat,  at  L. 
162,  163,  chap.  290,  §  4.  Whittemore 
V.  Amoskeag  Nat.  Bank,  134  U.  S. 
527,  33  L.  ed.  1002. 

The  national  banking  association 
organized  under  the  United  States 
statute  can  be  sued  in  a  state  court 
only  in  the  county  or  city  in  which 
the  association  is  established.  Crocker 
V.  Marine  Nat.  Bank,  101  Mass.  240, 
but  see  Cadle  v.  Tracy,  11  Blatchf. 
101. 

'  The  receivers  of  national  banks,  as 
such,  have  not  the  privilege  in  all 
cases  of  being  sued  in  the  United 
States  courts  and  cannot  remove  such 
cases  against  thera  from  state  courts  to 
the  United  States  courts.  The  court 
in  Bird  v.  Cockrem,  2  Woods,  32,  say, 
"  I  am  not  aware  of  any  such  preroga- 
tive which  a  receiver  of  a  bank  has 
over  other  persons." 

In  Petri  v.  Commercial  Nat.  Bank, 
142  U.  S.  644,  35  L.  ed.  1144,  it  is 
held  that  a  national  bank  located  in 
one  state  may  bring  suit  against  a  citi- 
zen of  another  state  in  the  circuit 
court  of  the  United  States  for  the  dis- 
trict wherein  the  defendant  resides  by 
reason  alone  of  diverse  citizenship. 

Prior  to  the  Act  of  Congress  of 
July  12,  1882,  the  circuit  court  had 
concurrent  jurLsdiction  with  the  dis- 
trict court  without  regard  to  the 
amount    involved.     Frelinghuyncn  v. 


Baldwin,  12  Fed.  Rep.  395;  Price  v. 
Abbott,  17  Fed.  Rep.  506;  Armstrong  v. 
Mtlesohn,  36  Fed.  Rep.  209;  Armstrong 
V.  Trautman,  36  Fed.  Rep.  275;  Piatt 
V.  Beach,  2  Ben.  303;  Stantonv.  Wilke- 
aon,  8  Ben.  357;  National  Bank  w .  Ken- 
nedy, 84  U.  S.  17  Wall.  19,  21  L.  ed. 
554;  Kennedy  v.  Gibson,  75  U.  S.  8 
Wall.  498.  19  L.  ed.  476. 

Under  the  Act  of  July  12,  1882, 
suits  by  or  against  a  national  bank, 
except  suits  between  them  and  the 
United  States  or  its  officers  and  agents, 
"  shall  be  the  same  as  and  not  other 
than  the  jurisdiction  for  suits  by  or 
against  banks  not  organized  under 
any  law  of  the  United  States,  which 
do  or  might  do  a  banking  business 
where  such  national  banking  associa- 
tion may  be  doing  business  when  such 
suits  may  be  begun."  See  also  Act  of 
August  13,  1888.  But  the  citizenship 
of  the  bank  does  not  determine  the 
citizenship  of  the  receiver.  Hendee  v. 
Connecticut  &  PR.  Co. 26  Fed. Rep. 677. 

^A  suit  by  a  receiver  of  a  national 
bank  to  recover  back  dividends  paid 
out  of  capital  is  one  to  recover  di- 
verted trust  funds,  resting  upon  no 
statute  or  act  of  Congress,  but  upon  a 
fundamental  principle  of  equity,  and 
may  be  maintained,  notwithstanding 
the  remedies  provided  by  the  National 
Banking  Act  as  to  the  individual  lia- 
bility of  stockholders.  Ilayden  v. 
Thompson,  71  Fed.  Rep.  60. 

A  request  by  some  of  the  creditors 
of  a  bank  that  the  receiver  appointed 
in  proceedings  for  its  dissolution  shall 
bring  an  action  against  defaulting 
directors  furnishes  no  additional  rea- 
son for  bringing  the  action  in  a  court 
of  equity.  JJiggina  v.  Tefft,  4  App. 
Div.  62. 


436 


RECEIVERSHIPS. 


611  c  in  the  United  States  courts,  he  is  not  confined  to  them,  but 
may  properly  sue  in  the  courts  of  the  state.      He  has  power  to 


'  In  National  Bank  v.  Eemiedy,  84 
U.  S.  17  Wall.  19,  21  L.  ed.  554,  it  is 
held  that  a  receiver  of  a  national  bank 
appointed  by  tlie  comptroller  of  the 
currency  under  the  50th  section  of  the 
National  Banking  Act,  may  sue  for 
demands  due  the  bank,  in  his  own 
name  as  receiver,  or  in  the  name  of 
the  bank,  and  is  not  obliged  to  get  an 
order  from  the  comptroller  for  such 
purpose.  Kennedy  v.  Gibson,  75  U.  S. 
8  Wall.  506,  19  L.  ed.  479;  First  Nat. 
Bank  v.  National  Pahquioque  Bank,  81 
U.  S.  14  Wall.  383,  20  L.  ed.  840. 

A  suit  by  a  receiver  to  collect  in- 
debtedness due  his  insolvent  bank  may 
be  brought  properly  in  a  state  court. 
Piatt  v.  Crawford,  8  Abb.  Pr.  N.  S. 
297.  To  the  same  effect  are  Case  v, 
Berwin,  22  La.  Ann.  321 ;  Brinckerhoff 
V.  Bostwick,  88  N.  Y.  52;  Ackermany. 
Halsey,  37  N.  J.  Eq.  356.  In  this  case 
it  WHS  held  that  where  a  receiver  of  an 
insolvent  bank  refuses  to  bring  suit,  a 
creditor  and  stockholder  may,  for  the 
benefit  of  himself  and  for  such  other 
creditors  and  stockholders  as  elect  to 
join,  maintain  a  suit  against  the 
president  and  directors  for  gross  offi- 
cial neglect  and  mismanagement, 
whereby  the  bank  was  ruined. 

Receivers  of  national  banking  asso- 
ciations as  such  have  not  the  privilege 
in  all  cases  of  being  sued  in  the  United 
States  courts  and  cannot  remove  such 
cases  against  them  from  the  state 
courts  to  the  United  States  courts. 
Bird  V.  Cockrem,  2  Woods,  32. 

In  Hendee  v.  Connecticut  &  P.  R.  R. 
Co.  23  Blatchf.  453,  it  was  held  that 
where  a  receiver  of  a  national  bank 
appointed  by  the  comptroller  has  pos- 
session of  bonds  pledged  to  the  bank 
for  a  debt  and  has  obtained  an  order 
for  the  sale    thereof    and  a    suit  is 


brought  in  a  foreign  country  against 
the  receiver  to  recover  the  bonds,  such 
suit  may  be  restrained  on  a  bill  filed 
by  the  receiver.  Cf.  Piatt  v.  Beach,  2 
Ben.  303. 

In  Tardley  v.  Dickson,  47  Fed.  Rep. 
835,  a  receiver  of  a  national  bank 
brought  suit  in  the  circuit  court  to  re- 
cover an  indebtedness  due  the  bank 
without  regard  to  the  amount  in- 
volved. 

A  receiver  of  an  insolvent  national 
bank  is,  in  the  execution  of  its  duties, 
an  agent  and  ofiicer  of  the  United 
States,  and  actions  brought  by  him  to 
recover  assessments  upon  stockholders 
for  the  payment  of  debts  of  the  bank 
are  suits  at  the  common  law  brought 
by  an  ofiicer  of  the  United  States  un- 
der the  authority  of  an  Act  of  Con- 
gress, of  which  cases  the  circuit  court 
has  concurrent  jurisdiction  with  the 
district  court,  without  regard  to  the 
amount  sued  for.  Price  v.  Abbott,  17 
Fed.  Rep.  506. 

In Frelinglii/ysenv.  Baldwin,  12 Fed. 
Rep.  395,  it  is  held  that  a  receiver  of  a 
national  bank  is  an  ofllcer  of  the 
United  States,  and  as  such  may  sue  in 
the  Federal  courts  in  the  district  in 
which  the  bank  is  located. 

The  appointment  of  a  receiver  does 
not  relieve  the  bank  from  a  suit  against 
it.  First  Nat.  Bank  v.  National  Pah- 
quioque Bank,  81  U.  S.  14  Wall.  493, 
20  L.  ed.  843. 

In  Movius  V,  Lee,  24  Blatchf.  291,  it 
is  held  that  a  receiver  of  a  national 
bank  has  power  to  enforce  against  its 
directors  individual  claims  for  losses 
incurred  through  the  nonperformance 
and  the  negligent  performance  of  their 
duties  in  the  district  court  of  the 
United  States. 

In  Stephens    v.    Bernays,  41    Fed. 


RECEIVERSHIP  OF  NATIONAL  BANKS. 


437 


maintain  suits  against  the  bank  directors  for  an  abuse  of  the  trust 
imposed  in  them  as  officials  of  the  bank,  such  as  waste  and  loss  of 
the  bank  assets.'  A  bank  having  gone  into  voluntary  liquidation 
may  be  sued.'' 

§  258.     Liability  of  stockholders. 

(a)  The  power  is  vested  in  the  comptroller  of  the  currency,  in 
a  proceeding  to  wind  up  an  insolvent  national  bank,  to  determine 
when  a  deficiency  exists,  and  the  propriety  of  enforcing  the  in- 
dividual liability  of  stockholders,  and  to  what  extent  it  is  neces- 
sary to  enforce  such  liability,  and  his  determination  in  the  matter 
is  conclusive  upon  the  stockholders.'     His  action  is  a  condition 


Rep.  401,  it  is  held  that  district  courts 
have  jurisdiction  of  an  action  to  en- 
force the  liability  of  a  stockholder  of 
an  insolvent  national  bank  under  U. 
S.  Rev.  Stat.  §  563,  subs.  4.  This 
jurisdiction  is  not  taken  away  by  Act 
of  July  12,  1882,  §  4,  and  Act  of 
August  13,  1888.  §  4,  See  also 
Stephens  v.  Bernnys,  44  Fed.  Rep. 
642;  StepTiens  v.  Bernays,  119 Mo.  143. 

^Briggs  v.  Spaulding,  141  U.  S.  132, 
35  L.  ed.  663;  Movius  v.  Lee,  24 
Blatchf.  291. 

^Ordicay  v.  Central  Nat.  Bank,  47 
Md.  217;  First  Nat.  Bank  v.  National 
Pahquioque  Bank,  81  U.  S.  14  Wall. 
383,  20  L.  ed.  840. 

^ Adams  v.  Johnson  ("Bowden  v. 
Johnson"),  107  U.  S.  251,  27  L.  ed. 
386;  Young  v.  Wempe,  46  Fed.  Rep. 
354. 

The  assessment  of  the  comptroller 
was  held  to  be  conclusive  upon  the 
stockholders  in  United  States  v.  Knox, 
102  U.  8.  422,  26  L.  ed.  216. 

In  Peters  v.  Foster,  56  Hun,  607,  the 
levying  of  an  assessment  by  the 
comptroller  was  held  to  be  conclu- 
sive upon  the  debtors  and  stock- 
holders. See  also  SProng  v.  South- 
worth,  8  Ben.  331;  Kennedy  y.  Gibson, 
75  U.  S.  8  Wall.  498,  19  L.  ed.  476; 


Stanton  v.  Wilkeson,  8  Ben.  359;  Piatt 
V.  Beebe,  57  N.  Y.  339. 

In  Keyser  v.  Hitz,  133  U.  S.  138,  33 
L.  ed.  531,  a  certificate  signed  by  the 
deputy  comptroller  of  the  currency  as 
"  acting  comptroller  of  the  currency," 
is  held  to  be  a  sufficient  certificate 
within  the  requirements  of  U.  S. 
Rev.  Stat.  §  5154. 

In  United  States  v.  Knox,  102  U.  S. 
422,  26  L.  ed.  316,  the  comptroller 
assessed  against  several  shareholders 
a  suflicient  jiercentage  upon  the  par 
value  of  the  stock,  and  it  was  held 
that  he  had  no  power  to  direct  a  fur- 
ther assessment  to  supply  a  deficiency 
caused  by  the  inability  of  the  receiver 
to  enforce  the  payment  from  insolvent 
shareholders  or  those  beyond  his  jur- 
isdiction. The  liability  of  stockhold- 
ers is  several  and  is  effected  by  the 
failure  of  other  shareholders  to  pay. 

In  Dams  v.  Weed,  44  Conn.  569,  it 
was  held  that  by  the  Act  of  Congress 
all  stockholders  of  national  banks  are 
liable  to  assessment  in  case  of  insolv- 
ency of  such  bank  to  the  extent  of 
the  par  value  of  their  stock  in  addi- 
tion to  the  amount  invested  in  such 
stock,  but  persons  holding  stock  as 
executors,  administrators,  and  trus- 
tees are  not  to  be  personally  subject 


438 


RECEIVERSHIPS. 


precedent  to  the  institution  of  a  suit  hy  the  receiver.'  The  re- 
ceiver of  an  insolvent  national  bank  may  bring  suit  at  law  if  he 
seeks  to  recover  the  whole  liability,  or  in  equity  if  a  portion  is 
sought  to  be  recovered.*     The  defendant  stockholder,  as  a  rule,  is 


to  any  liability  of  stockholders,  the 
liability  only  attaching  to  the  property 
in  their  hands. 

In  Casey  v.  Oalli,  94  U.  S.  673,  24 
L.  ed.  168,  the  amount  assessed 
against  the  stockholder  was  held  to 
bear  interest  from  the  date  of  the 
order.  See  also  Adams  v.  Johnson 
{"  Boicden  v.  Jo?inso7i"),  107  U.  S. 
251,  27  L.  ed.  386. 

A  shareholder  who  is  liable  for  the 
debts  of  the  bank  is  liable  for  interest 
on  them  to  the  extent  to  which  the 
bank  would  have  been  liable,  not  in 
excess,  however,  of  the  maximum 
liability  fixed  by  the  statute.  Rich- 
mond V.  Irons,  121  U.  S.  27,  30  L,  ed. 
864. 

The  decision  of  the  United  States 
comptroller  as  to  the  necessity  for 
and  the  amount  of  an  assessment 
upon  the  stockholders  of  a  national 
bank  is  conclusive,  and  cannot  be 
questioned  in  an  action  by  the  re- 
ceiver of  the  bank  upon  the  assess- 
ment. O'Connor  v.  Witherby,  111 
Cal.  533. 

In  Pauly  v.  State  Loan  dk  T.  Go.  56 
Fed.  Rep.  430,  a  corporation  holding 
shares  of  stock  of  a  national  bank  as 
collateral  security  for  a  loan  and 
carried  on  the  books  of  the  bank  as  a 
pledgee  of  the  stock,  is  not  subject,  on 
the  bank's  insolvency,  to  the  statutory 
liability  of  a  stockholder. 

'  Casey  v.  Qalli,  94  U.  S.  673,  24 
L.  ed.  168;  Qermania  Nat.  Bank  v. 
Case,  99  U.  S.  628,  25  L.  ed.  448; 
Kennedy  v.  Gibson,  75  U.  S.  8  Wall. 
498,  19  L.  ed.  476;  Bichmond  v.  Irons, 
121  U.  S.  27,  30  L.  ed.  864;  Strong  v. 
Southworth,  8  Ben.  331. 


A  letter  from  the  comptroller  ad- 
dressed to  the  receiver  directing  suit 
to  be  brought  to  enforce  personal  lia- 
bility of  the  stockholders  is  sufficient 
evidence  of  his  authority.  Adams  v. 
Johnson  C  Bowden  v.  Johnson"),  107 
U.  S.  251,  27  L.  ed.  386;  Gatch  v. 
Fitch,  34  Fed.  Rep.  566. 

In  Young  v.  Wempe,  46  Fed.  Rep. 
354,  it  is  held  that  the  only  thing 
necessary  to  allege  as  to  authority  is 
that  the  comptroller  determined  that 
the  assessment  was  necessary  and 
levied  it.  Since  an  assessment  is  con- 
clusive against  the  stockholders,  the 
assessment  may  be  collected  in  an 
action  at  law. 

Assessments  by  the  comptroller 
were  sustained  in  the  following  cases: 

Thayer  v.  Butler,  141  U.  S.  234,  35 
L.  ed.  711;  Butler  v.  Eaton,  141  U.  S. 
240,  35  L.  ed.  713;  AspinwaU  v.  But- 
ler, 133  U.  S.  595,  33  L.  ed.  779; 
Adams  v.  Johnson  ("  Bowden  v.  John- 
son ").  107  U.  S.  251,  27  L.  ed.  386; 
Casey  v.  Oalli,  94  U.  S.  673,  24  L.  ed. 
168;  Kennedy  v.  Gibson,  75  U.  S.  8 
Wall.  498,  19  L.  ed.  476;  Peters  v. 
Foster,  56  Hun,  607. 

»  Casey  v.  Galli,  94  U.  S.  673,  24 
L.  ed.  168;  Adams  v.  Johnson  ("  Bow- 
den v.  Johnson"),  107  U.  S.  251,  27 
L.  ed.  386. 

A  suit  may  be  brought  under  the 
National  Bank  Act  by  the  receiver  in 
law  or  equity  to  recover  from  stock- 
holders their  stock  liability  by  the 
receiver.  Kennedy  v.  Gibson,  75 
U   S.  8  Wall.  498,  19  L.  ed.  476. 

In  Peters  v.  Foster,  56  Hun,  607,  it 
is  held  that  a  receiver  of  a  national 
bank  of  another  state   appoiuied  by 


RECEIVERSHIP  OF  NATIONAL  BA^KS. 


439 


entitled  to  an  equitable  set-off,  in  an  action  brought  against  him 
to  enforce  his  stock  liability,  where  the  obligations  are  mutual, 
growing  out  of  the  same  transaction,  and  the  bank  is  insolvent.' 


the  comptroller  will  not  be  treated  by 
the  courts  of  the  state  of  New  York 
as  a  foreign  receiver,  but  he  can  sue 
therein  to  recover  an  assessment 
levied  upon  the  shareholders  of  the 
bank. 

In  Harvey  v.  Lord,  11  Biss.  144,  a 
bill  in  the  nature  of  a  creditor's  bill 
•was  filed  under  the  provisions  of  a 
national  banking  law  to  enforce  a 
shareholder's  liability,  and  it  was 
held  that  the  suit  could  not  be  main- 
tained against  an  individual  share- 
holder while  the  creditor's  bill  was 
still  pending. 

Upon  a  bill  filed,  under  §  50, 
by  a  receiver  against  the  transferrer 
and  transferree  to  enforce  liability 
will  lie  where  it  is  for  discovery  as 
well  as  relief,  the  transfer  being  good 
between  the  partie.*,  and  only  voidable 
at  the  election  of  the  complainant. 
Adams  v.  Johnson  ("  Boicden  v.  John- 
son"), 107  U.  S.  251,  27  L.  ed.  386. 

'  In  Scott  v.  Armstrong,  146  U.  8. 
499,  36  L.  ed.  1059,  it  is  held  that  a 
receiver  of  an  insolvent  national  bank 
on  the  dissolution  of  the  bank  takes 
the  assets  in  trust  for  creditors,  and  in 
the  absence  of  a  statute  to  the  con- 
trary, subject  to  all  claims  and  de- 
fenses that  might  have  been  interposed 
against  the  insolvent  corporation. 
The  ordinary  equity  rule  of  set-off  in 
case  of  insolvency  is  that  where  the 
mutual  obligations  have  grown  out  of 
the  same  transaction,  insolvency  on 
the  one  hand  justifies  the  set-off  of  the 
debt  due  on  the  other;  and  there  is 
nothing  in  the  statutes  relating  to  na- 
tional banks  which  prevents  the  ap- 
plication of  that  rule  to  the  receiver  of 
an  insolvent  national  bank.  Thus 
where  a  customer  of  a  national  bank, 


who,  in  good  faith,  borrows  money 
of  the  bank,  gives  his  note  therefore 
due  at  a  future  day  and  deposits  the 
amount  borrowed  to  be  drawn  against 
any  balance  applied  to  the  payment  of 
the  note  when  due,  has  an  equitable 
but  not  a  legal  right,  in  case  of  the  in- 
solvency and  dissolution  of  the  bank 
and  the  appointment  of  a  receiver  be- 
fore the  maturity  of  the  note,  to  have 
the  balance  of  his  credit  at  the  time  of 
the  insolvency  applied  to  the  payment 
of  his  indebtedness  on  the  note. 

In  Yardley  v.  Clothier,  49  Fed.  Rep. 
337,  it  was  held  that  a  depositor  in  an 
insolvent  bank,  who  had  indorsed  a 
note  that  was  subsequently  discounted 
by  the  bank,  in  a  suit  by  the  bank  to 
recover  the  amount  of  the  note,  that  he 
could  set  off  his  deposit  against  this 
amount  when  the  note  matured  after 
the  insolvency  of  the  bank.  This  case 
is  at  variance  with  Armstrong  v.  Scott, 
36  Fed.  Rep.  63,  and  Stephens  v. 
Schuchmann,  33  Mo.  App.  338. 

Cf.  Jordan  v.  Sharlock,  84  Pa.  366; 
Skiles  v.  Houston,  110  Pa.  254;  Balbach 
V.  Frelinghuysen,  15  Fed.  Rep.  675. 

The  right  of  setoff  may  be  waived. 
United  States  Bimg  Mfg.  Co.  v.  Armr- 
strong,  34  Fed.  Rep.  94. 

In  Armstrong  v.  Warner,  49  Ohio  St. 
376,  17  L.  R.  A.  466,  it  is  held  that 
when  the  holder  of  a  claim  not  yet 
due,  arising  upon  contract,  becomes 
insolvent  and  transfers  the  same  be- 
fore maturity  and  the  debtor  at  the 
time  of  the  transfer  holds  a  similar 
claim  then  due  against  tiie  assignor, 
his  right  of  set-off  is  preserved  against 
the  assignee  when  the  hitter's  cause  of 
action  arises.  Equity  will  in  general 
enforce  the  right  of  set-off  by  decree- 
ing the  compensation  of  mutual  de- 


440 


RECEIVERSHIPS. 


Suits  of  this  cliaracter  are  properly  bronglit  in  the  district  court.' 
It  is  unnecessary  that  a  person  shall  have  a  certiticate  in  order  to 


manrls  so  far  as  they  equal  each  other, 
where  ihey  have  grown  out  of  the 
same  or  connected  transactions,  or  the 
one  has  formed  in  whole  or  in  part 
the  consideration  of  the  other,  and  the 
party  against  whom  the  setoff  is  as- 
serted is  insolvent.  This  principle  is 
applied  under  U.  S.  Rev.  Stat,  t^  5242, 
to  an  insolvent  national  bank  on  the 
ground  that  the  allowance  of  such  a 
set-off  is  not  the  creation  of  a  prefer- 
ence by  the  bank,  but  an  ascertain- 
ment merely  of  the  just  amount  due 
on  the  debtor's  obligation  and  is  en- 
forceable against  a  receiver  of  the 
bank. 

In  Louis  Snyder's  Sons  v.  Armstrong, 
37  Fed.  Rep.  18,  the  same  principle 
was  adhered  to. 

In  Eirig  v.  Armstrong,  50  Ohio  St. 
222,  it  is  held  that  where  a  person  is 
entitled  to  share  in  the  distribution  of 
a  trust  fund  and  is  also  indebted  to 
the  fund  and  is  insolvent,  his  indebted- 
ness may,  in  equity,  be  set  off  against 
bis  distributive  share;  and  such  right 
of  set-off  will  not  be  defeated  by  the 
assignment  of  the  claim,  though  made 
before  the  amount  of  his  indebtedness 
or  distributive  share  is  ascertained. 

See  also  Barbour  v.  National  Exch. 
Bank,  50  Ohio  St.  90,  20  L.  R.  A.  192; 
Hughitt  V.  Hayes,  136  N.  Y.  163. 

In  Hohart  v.  Gould,  8  Fed.  Rep.  57, 
it  was  held  that  a  stockholder  of  an  in- 
solvent bank  who  happened  to  be  one 
of  the  creditors  could  not  cancel  or 
diminish  the  assessment  made  under 
the  provisions  of  U.  S.  Rev.  Stat. 
g  5151,  by  off-setting  his  individual 
claim  against  such  liability. 

In  Hade  v.  McVay,  31  Ohio  St.  231, 
set-off  was  allowed  in  an  action 
brought  by  a  receiver  of  an  insolvent 
national  bank. 


In  Welles  v.  Stout,  38  Fed.  Rep.  807, 
an  action  was  brought  by  the  receiver 
of  an  insolvent  national  bank  to  re- 
cover of  a  stockholder  an  assessment 
on  his  shares.  Set-off  was  allowed 
under  the  peculiar  circumstances  of 
the  case. 

In  Stephens  v.  ScMchmann,  32  Mo. 
App.  333,  a  suit  was  brought  by  the 
receiver  of  an  insolvent  national  bank 
against  the  indorser  of  a  promissory 
note  and  it  was  held  that  the  defend- 
ant could  not  defend  by  a  claim  of 
off-set  for  moneys  deposited  by  him  in 
the  bank.  The  receiver  in  such  case 
succeeds  to  the  rights  of  the  bank 
existing  at  the  time  it  goes  into  liquida- 
tion. A  claim  in  favor  of  the  bank 
which  first  matures  in  the  hands  of 
the  receiver  cannot  be  subjected  by 
way  of  set-off  to  a  claim  which  existed 
against  it  before  the  receiver's  rights 
accrued. 

Cf.  Jordan  v.  National  Shoe  &  L. 
Bank,  74  N.  T.  467;  American  Bank 
v.  Wall,  56  Me.  167;  Miller  v.  Franklin 
Bank,  1  Paige,  444;  Colt  v.  Brown,  12 
Gray,  233;  Hade  v.  McVay,  31  Ohio 
St.  231;  Fry  v.  Evans,  8  Wend.  530; 
Merritt  v.  Seaman,  6  N.  T.  168; 
Scammon  v.  Kimball,  92  U.  S.  362,  23 
L.  ed.  483;  Blount  v.  Windley,  95  U. 
S.  173,  24  L.  ed.  424;  Carr  v.  Hamil. 
ton,  129  U.  S.  252,  32  L.  ed.  669. 

^  Motius  v.  Lee,  24  Blatchf.  291; 
Step7ieji8  v.  Bernays,  41  Fed.  Rep.  401, 
44  Fed.  Rep.  642. 

State  courts  have  jurisdiction  to  en- 
tertain such  an  action  and  the  act  of 
the  comptroller  in  levying  the  assess- 
ment is  conclusive  upon  debtors  and 
stockholders;  that  the  receiver  is  the 
proper  person  to  sue  is  held  in  Stanton 
v.  Wilkeson,  8  Ben.  359. 


RECEIVERSHIP  OF  NATIONAL  BANKS. 


441 


constitute  him  a  stockholder.'  The  liability  of  a  stockholder  may 
be  enforced  against  his  executors  and  administrators,"  and  also 
ao;ainst  married  women.' 


'  In  Pacific  Nat.  Bank  v.  Eaton,  141 
U.  S.  227,  35  L.  ed.  702,  it  is  held  that 
a  subscription  to  the  stock  in  a  na- 
tional bank  and  payment  in  full  of  the 
subscription  and  the  entry  of  the  sub- 
scriber's name  on  the  books  as  a  stock, 
holder  constitutes  the  subscriber  a 
shareholder  without  taking  out  the 
certificate.  See  also  Thayew.  Butler, 
141  U.  8.  234,  35  L.  ed.  711. 

In  Stephens  v.  Follett,  43  Fed.  Rep. 
842,  it  is  held  that  one  who  subscribes 
and  pays  for  a  specified  number  of 
shares  of  a  proposed  increase  of  the 
capital  stock  of  a  national  bank, which 
increase  in  fact  is  never  issued,  and  to 
■whom  the  bank  officials  transfer  in- 
stead the  old  stock  of  the  bank  with- 
out the  knowledge  of  the  purchaser, 
or  without  his  consent,  is  not  a  share- 
holder within  the  meaning  of  the  stat- 
ute imposing  individual  liability  on 
shareholders  for  the  debts  of  the  bank. 
The  fact  of  such  subscriber  receiving 
dividends  on  the  old  shares  does  not 
estop  him  from  denying  his  liability. 

«In  WickMm  v.  Hull,  60  Fed.  Rep. 
326,  it  is  held  that  the  estate  of  a  de- 
ceased owner  of  national  bank  stock 
is  liable  to  an  assessment  levied 
against  his  executors  where  the  bank 
fails  after  the  death  of  the  stock- 
holder. In  this  case  an  action  was 
brought  against  the  executors  of  an 
estate  to  establish  its  liability  for  an 
assessment,  the  estate  at  the  time  be- 
ing in  the  possession  of  an  Iowa  pro- 
bate court  for  purposes  of  administra- 
tion. The  defendant  set  up  the 
limitation  of  the  Iowa  Code,  §  2421, 
in  regard  to  the  settlement  of  estates, 
and  it  was  held  that  the  proper  prac- 
tice in  such  cases  was  to  present  the 
claim  established  in  the  Fedeial  court 


for  allowance  in  the  probate  proceed- 
ings. 

In  Richmond  v.  Irons,  121  U.  S.  27, 
30  L.  ed.  864.  it  is  held  that  the  statu- 
tory liability  of  a  shareholder  in  a  na- 
tional bank  for  the  debts  of  the  cor- 
poration survives  against  his  personal 
representatives.  And  that  the  stock- 
holder's  liability  continues  under  the 
statute  until  his  stock  is  actually  trans- 
ferred upon  the  books  of  the  bank,  or 
until  the  certificate  has  been  delivered 
to  the  bank  with  power  of  attorney 
authorizing  the  transfer  and  a  request 
made  at  the  time  of  the  transaction  to 
have  the  transfer  made. 

See  also  Mills  v.  Butler,  118  U.  S. 
655,  80  L.  ed.  266. 

3  In  Bundy  v.  Cocke,  128  U.  S.  185, 
32  L.  ed.  396,  a  bill  in  equity  was  filed 
in  Kentucky  by  the  receiver  of  a 
national  bank  located  in  Arkansas 
against  a  married  woman  and  her 
husband,  who  were  alleged  to  be 
citizens  of  Kentucky,  to  enforce 
against  the  separate  property  of  the 
wife  an  assessment  of  the  comptroller 
of  50  per  cent  on  the  par  value  of  the 
stock  as  an  individual  liability,  it  ap- 
pearing that  the  shares  of  the  stock 
still  remained  in  the  name  of  the  wife 
upon  the  books  of  the  bank  and  that 
she  possessed  enough  property  in  her 
own  right  to  pay  the  assessment,  and 
it  was  held  that  the  bill  was  sustain- 
able as  a  bill  in  equity. 

Married  women  are  held  liable  as 
stockholders  for  assessments,  in  Win- 
ters V.  Sowles,  38  Fed.  Rep.  700;  Key- 
ser  V.  nitz,  133  U.  S.  138,  33  L.  ed. 
531;  Re  First  Nat.  Bank,  49  Fed, 
Rep.  120;  Rohinsuu  v.  Turreidiiie,  59 
Fed.  Rep.  504. 


442 


RECEIVERSHIPS. 


As  to  tlie  liability  of  stockholders,  §  5205  provides  that 
every  association  which  shall  have  failed  to  pay  up  its  capital 
stock,  as  required  by  law,  and  every  association  whose  capital 
stock  shall  have  become  impaired  by  losses  or  otherwise  shall 
within  three  months  after  receiving  notice  thereof  from  the 
comptroller  of  the  currency,  pay  the  deticiency  in  the  capital 
stock  by  assessment  upon  the  stoekholders  pro  rata  for  the  amount 
held  by  each,  and  in  default  of  payment  a  receiver  shall  be 
appointed."      Prior  to  1876  the  receiver  was  the  only  person  to 


'In  Mills  V.  Builer,  118  U.  S.  655, 
80  L.  ed.  266,  shares  of  the  capital 
Block  of  a  national  bank  were  sold  by 
an  auctioneer  at  public  auction  and 
•were  bid  off  by  B  who  paid  the  auc- 
tioneer for  them  and  received  a  cer- 
titicate  of  stock  with  power  of  attor- 
ney for  transfer  executed  blank.  The 
auctioneer  paid  the  money  to  the 
former  owner  of  the  stock.  No  for- 
mal transfer  was  made  upon  the  books 
of  the  bank.  Shortly  after  the  trans- 
action, the  bank  became  insolvent  and 
went  into  the  hands  of  the  receiver, 
who  made  assessments  against  the 
stockholders  under  the  provisions  of 
U.  S.  Rev.  Stat.  §  5205,  to  pay  the 
deficiency  of  the  capital.  A  suit 
was  instituted  by  the  receiver  against 
the  former  owner  of  the  stock,  and  it 
was  held  that  his  responsibility  ceased 
upon  the  surrender  of  the  certificate 
to  the  bank  and  the  delivery  to  its 
president  of  a  power  of  attorney  suf- 
ficient to  effect  and  intended  to  effect, 
as  the  president  knew,  a  transfer  of 
the  stock  on  the  books. 

In  Hayes  v.  Shoemaker,  39  Fed. 
Rep.  319,  it  was  held  that  where  a 
shareholder  makes  a  bona  fide  sale  of 
his  stock  and  goes  with  the  purchaser 
to  the  bank,  indorses  his  certificate 
and  delivers  it  to  the  cashier  of  the 
bank  with  directions  to  make  the 
transfer  on  the  books,  he  is  thereby 
discharged  from  liability  and  is  not 


liable,  though  the  cashier  fail  to  make 
the  transfer,  upon  the  subsequent  sus- 
pension of  the  bank  for  an  assessment 
made  by  the  comptroller.  Suit  was 
brought  in  this  case  by  the  receiver. 

In  Johnson  v.  Laflin,  5  Dill.  65,  103 
U.  S.  800,  26  L.  ed.  532,  it  was  held 
that  a  shareholder  had  a  right  to  make 
an  actual,  bona  fide  sale  and  transfer 
of  his  shares  to  any  person  capable  in 
law  of  taking  and  holding  the  same 
and  of  assuming  the  assignor's  liabil- 
ity in  respect  thereto;  and  that,  in  the 
absence  of  fraud,  this  right  is  not  sub- 
ject to  veto  by  the  directors  or  other 
shareholders.  When  such  a  transfer 
is  made  and  entered  on  the  books  the 
assignor  ceases  to  be  a  shareholder 
and  is  free  from  all  liability  thereon. 
As  between  the  seller  and  purchaser 
of  shares  the  sale  is  complete  when 
the  certificate  of  shares  is  duly  assigned 
with  power  to  transfer  the  same  on 
the  books  of  the  bank  and  payment 
therefor  is  received  by  the  seller. 

A  receiver  of  an  insolvent  national 
bank  is  the  only  party  who  can  main- 
tain a  suit  in  behalf  of  the  creditors 
to  set  aside  a  fraudulent  transfer  of 
stock  to  an  irresponsible  person,  and 
enforce  the  individual  liability  of  the 
transferrer.  Stuart  v.  Hayden,  72  Fed. 
Rep.  402. 

In  Turner  v.  First  Nat.  Bank,  26 
Iowa,  562,  it  was  held  that  under  the 
National  Currency  Act  assets  in  the 


RECEIVERSHIP  OF  NATIONAL  BANKS. 


443 


sue  and  recover  stock  liability ;'  but  by  the  act  of  June  30  of  that 
year  the  power  was  conferred  upon  creditors  of  the  bank,  in  the 
following  provision : 

"  That  when  any  national  banking  association  shall  have  gone 
into  liquidation  under  the  provisions  of  U.  S.  Eev.  Stat,  §  5220,  the 
individual  liability  of  the  shareholders  provided  for  in  §  5151 
may  be  enforced  by  any  creditor  of  such  association  by  bill  in 
equity,  in  the  nature  of  a  creditor's  bill,  brought  by  such  creditor 
on  behalf  of  himself  and  of  all  other  creditors  of  the  association 
against  the  shareholders  thereof  in  any  court  of  the  United  States 
having  original  jurisdiction  in  equity  for  the  district  in  which 
the  association  may  have  been  located  or  established,' 

(b)  In  an  action  by  the  receiver  of  a  national  bank  to  recover 
from  a  stockholder  his  stock  liability,  it  may  be  shown  by  the 
latter  in  defense  of  the  action  (1)  that  the  stock  was  transferred 
to  him  without  his  knowledge  or  consent,  and  not  subsequently 
ratified ;'  or  (2)  that  the  claim  is  barred  by  the  statute  of  limitations ;' 


hands  of  a  receiver  which  has  failed, 
■when  reduced  to  money,  must  be 
ratably  divided  and  appropriated  to 
the  payment  of  all  legal  liabilities  of 
the  association,  whether  such  liabili- 
ties are  debts  technically  so  called,  or 
the  result  from  nonfeasance  or  mal- 
feasance of  the  association. 

'That  the  receiver  may  sue  to  re- 
cover stock  liability,  see  Richmond  v. 
Irons,  121  U.  S.  37,  30  L.  ed.  864;  De- 
lano V.  Butler,  118  U,  S,  634,  30  L,  ed. 
260;  Casey  v.  Galli,  94  U.  S.  673,  24 
L.  ed.  168;  Kennedy  v.  Gibson,  115  U. 
S.  8  Wall.  498,  19  L.  ed.  476;  Welles 
V.  Stout,  38  Fed.  Rep.  807;  Welles  v. 
Larrabee,  36  Fed.  Rep.  866,  2  L.  R.  A. 
471;  Butler  v.  Aspinwall,  33  Fed.  Rep. 
217;  Witters  v.  Sowles,  32  Fed,  Rep. 
130,  767;  Price  v,  Whitney,  28  Fed, 
Rep.  297;  Irons  v.  Manufacturers* 
Nat.  Bank,  17  Fed.  Rep.  308;  Price 
V.  Abhott,  17  Fed.  Rep.  506;  Jlobart  v, 
Johnson,  8  Fed.  Rep.  493;  Case  v. 
Small,  4  Woods,  78. 

The  Act  of   1876   provides   that  a 


creditor  may  file  a  bill  in  equity  to 
enforce  stock  liability. 

« Act  of  June  30,  1876(19  Stat,  at 
L.  63). 

A  creditor  not  presenting  his  claim 
is  not  entitled  to  share  in  the  distribu- 
tion. Richmond  v.  Irons,  121  U.  S. 
27,  30  L.  ed.  864;  Irons  v.  Manufact- 
urers' Nat.  Bank,  27  Fed.  Rep.  591. 

2  It  appeared  that  stock  was  trans- 
ferred to  a  person  without  the  knowl- 
edge of  such  person  or  consent,  and 
it  was  held  that  such  transfer  did  not 
make  the  transferree  liable  as  a  share- 
holder in  the  association  in  the  ab- 
sence of  an  approval  or  acquiesence 
in  such  transfer,  or  other  ratification 
thereof,  such  as  an  acceptance  of 
benefits,  etc.  Keyfter  v,  Uitz,  133  U.  S, 
138,  33  L.  ed.  531, 

*  In  Butler  v.  Poole,  44  Fed.  Rep, 
586,  in  an  action  by  a  receiver  of  a 
national  bank  against  stockholders 
for  assessments  on  stock  the  statute 
of  limitations  was  properly  plead- 
able. 


444 


RECEIVERSHIPS. 


or  (3)  a  former  recovery  in  a  state  court  for  tlie  same   liabiL 
ity.- 

A  stockholder  when  sned  on  his  subscription  is  estopped  from 
denying  the  validity  or  existence  of  the  corporation ; '  nor  does  a 
colorable  transfer  of  his  stock  relieve  him ; '  nor  payments  made 
under  a  mistake  of  fact.* 


>  In  Butler  v.  Eaton,  141  U.  S.  240, 
35  L,  ed.  713,  a  receiver  of  a  national 
bank  brought  suit  in  the  circuit  court 
to  recover  the  amount  of  an  unpaid 
subscription.  The  defendant  set  up 
a  judgment  in  the  state  court  on  the 
same  issue  decided  in  her  favor  as  an 
estoppel,  VFhich  defense  was  sus- 
tained. 

Rights  of  stockholders  cannot  be 
affected  by  the  acts  of  the  president 
of  a  bank  after  it  has  gone  into  liqui- 
dation. Schrader  v.  Manufacturers' 
Nat.  Bank,  133  U.  S.  67,  33  L.  ed. 
564;  Moss  v.  McCullovgh,  5  Hill,  131; 
Miller  V.  Wdte,  50  N.  Y.  137;  Mc- 
Mahon  v.  Maey,  51  N.  Y.  155;  Trippe 
V.  Huncheon,  82  Ind.  307. 

The  expenses  of  a  receivership  of  a 
national  bank  appointed  in  a  credit- 
or's suit  contesting  a  voluntary 
liquidation  of  the  bank  cannot  be 
charged  upon  the  stockholders  as 
part  of  their  statutory  liability,  but 
must  be  paid  by  the  creditors  who 
instituted  the  proceeding.  Richmond 
V.  Irons,  121  U.  S.  27,  30  L.  ed.  864. 

«  In  Casey  v.  Galli,  94  U.  S.  673,  24 
L.  ed.  168,  it  was  held  that  where  a 
receiver  was  ordered  to  collect  an 
amount  equal  to  the  full  par  value  of 
the  stock  the  suit  might  be  brought 
at  law.  In  such  case  the  stockholder 
is  estopped  from  denying  the  exist- 
ence or  validity  of  the  corporation. 

^In  Davis Y.  Stevens,  17Blatchf.  259, 
a  purchaser  of  stock  in  a  national 
bank,  to  conceal  his  ownership  and 
avoid  liability,  caused  it  to  be  trans- 
ferred to  another  person  pecuniarily 


irresponsible,  but  it  was  held  that  so 
long  as  he  remains  the  actual  owner 
he  is  a  shareholder  within  the  mean- 
ing of  the  act  of  June  3,  1864.  Such 
colorable  transfer  is  void.  Oermania 
Nat.  Bank  v.  Case,  99  U.  S.  628,  25 
L.  ed.  448.  See  also  Adams  v.  Jolin- 
son  {"Bowden  v.  Johnson"),  107  U.  S. 
251,  27  L.  ed.  386. 

In  Oermania  Nat.  Bank  v.  Case, 
supra,  a  party,  by  way  of  pledge  or 
collateral  security  for  a  loan  of 
money,  accepted  the  stock  of  a 
national  bank,  which  he  caused  to  be 
transferred  to  himself  on  its  books, 
and  it  was  held  that  by  so  doing  he 
immediately  became  liable  as  a  stock- 
holder and  could  not  relieve  himself 
from  such  liability  by  making  a 
colorable  transfer  of  such  stock.  The 
order  of  the  comptroller  prescribing 
to  what  extent  the  individual  liability 
of  stockholders  shall  be  enforced  is 
conclusive. 

*  In  Delano  v.  Butler,  118  U.  S.  634, 
30  L.  ed.  260,  the  comptroller  ap- 
pointed a  receiver  of  an  insolvent 
national  bank  and  also  made  an 
assessment  on  the  shareholders  of 
100  per  cent  on  the  stock.  The 
shareholder  declining  to  pay,  the  re- 
ceiver brought  an  action  at  law 
against  him  for  the  assessment  on 
sixty  shares  of  stock  standing  in  his 
own  name.  The  shareholder  there- 
upon filed  a  bill  in  equity  to  restrain 
the  prosecution  of  the  action,  claim- 
ing that  he  was  not  liable  for  the  full 
assessment  by  reason  of  an  increase 
in    the    capital    stock     without    the 


RECEIVERSHIP  OF  NATIONAL  BANKS. 


4i5 


The  receiver's  right  of  recovery  is  limited  to  the  right  of  the 
corporation  had  no  receiver  been  appointed.* 

§  259.    Illegal  preferences. 

Section  5242  of  the  United  States  Kevised  Statutes  renders  in- 
vaHd  as  preferential  all  transfers  of  notes,  bonds,  bills  of  exchange, 
or  other  evidence  of  debt,  deposits  to  its  credit,  mortgages,  sureties 
on  real  estate,  judgments  or  decrees  in  its  favor,  deposits  of  money, 
bullion,  or  other  valuable  thing  for  its  use,  or  for  the  use  of  any  of 


knowledge  on  the  part  of  the  stock- 
holder of  a  deficiency  existing,  and  it 
was  held  that  the  shareholder  having 
received  the  certificates  for  the  in- 
creased stock  was  liable,  and  that  he 
was  not  entitled  to  a  credit  upon  the 
assessment  by  reason  of  payments 
having  been  made  by  him  on  a  mis- 
apprehension, such  payments  not 
being  under  such  mistake  as  a  court 
of  equity  would  relieve  him  from. 

In  Holt  V.  Thomas,  105  Cal.  273,  a 
stockholder  appeared  on  the  books  to 
be  the  owner  of  sixty  shares,  fifty  of 
which  he  claimed  to  have  sold  to 
another  person,  and  on  suit  being 
brought  against  him  it  was  held  that 
the  stockholder  could  not,  after  hav- 
ing voluntarily  paid  a  percentage  on 
the  assessment  of  the  sixty  shares 
upon  demand  of  the  receiver,  recover 
back  money  paid  on  the  fifty  shares 
on  the  ground  of  a  mistake  of  fact 
upon  ascertaining  that  a  surplus  re- 
mained after  other  stockholders  had 
paid  their  assessment.  The  payment 
was  voluntarily  made  with  knowledge 
of  the  facts  and  could  not  be  recovered 
back. 

In  Germania  Nat.  Bank  v.  Case,  99 
U.  S.  628,  25  L.  ed.  448,  it  was  held 
that  a  shareholder  was  estopped  from 
denying  his  position  as  such  stock- 
holder of  the  bank  under  the  circum- 
stances of  the  case. 

'  In  Winters  v.  Armstrong,  37  Fed. 
Rep.  508,  it  is  held  that  in  an  action 


by  the  receiver  of  a  national  bank  to 
enforce  subscriptions  to  the  proposed 
increase  of  its  capital  stock,  an  alle- 
gation that  the  bank,  subsequent  to  the 
defendant's  subscription,  and  with 
their  knowledge,  represented  to  the 
public  by  means  of  circulars,  etc., 
that  its  capital  stock  had  been  so  in- 
creased and  that  defendants  allowed 
their  names  to  remain  as  subscribers 
to  the  increased  stock,  but  without 
alleging  that  the  public  gave  the 
credit  to  the  bank  on  the  faith  that 
defendants  were  part  owners  of  the 
increased  stock,  or  that  they  allowed 
themselves  to  be  held  out  as  actual 
stockholders,  does  not  show  that  they 
are  estopped  to  plead  the  failure  of 
the  bank  to  comply  with  the  statu- 
tory requirements  in  perfecting  such 
increase.  The  receiver  stands  in  the 
shoes  of  the  bank  and  can  assert  no 
right  against  the  subscribers  which 
the  bank  could  not  have  asserted.  A 
subscriber  who  has  made  payments 
on  a  subscription  to  the  proposed  in- 
crease, believing  that  the  recjuire- 
ments  would  be  complied  with,  is 
entitled  to  have  the  amount  thereof 
allowed  as  a  claim  against  the  assets 
of  the  bank  in  the  receiver's  hands. 

In  Cutting  v.  Damerel,  88  N.  Y. 
410,  it  is  held  that  the  receiver  in 
actions  by  him  occupied  no  better 
position  and  had  no  bt-tler  right  tliau 
the  corporation  over  whoso  property 
he  was  appointed. 


446 


RECEIVERSHIPS. 


its  shareholders  or  creditors,  all  payments  of  money  to  either 
after  the  commission  of  an  act  of  insolvency,  or  in  contemplation 
thereof,  made  with  a  view  to  prevent  the  application  of  its  assets 
in  the  manner  prescribed  by  the  act,  or  made  with  a  view  to  the 
preference  of  one  creditor  to  another,  except  in  the  payment  of 
its  circulating  notes.'     The  transfer  in  contemplation  of  the  act 


•  An  insolvent  national  bank  after 
insolvency  has  no  right  to  prefer  a 
creditor  in  violation  of  U.  S.  Rev. 
Stat.  §  5242,  if  such  preference  is  in 
contemplation  of  insolvency.  And 
in  such  case  want  of  knowledge  on 
the  part  of  the  corporation  receiving 
such  preference  is  immaterial.  JSa- 
tional  Security  Bank  v.  Butler,  129  U. 
S.  223,  32  L.  ed.  682. 

In  National  Security  Bank  v.  But- 
ler, supra,  suit  was  brought  by  the  re- 
ceiver of  a  national  bank  against  an- 
other national  bank  to  recover  from 
the  latter  certain  moneys  alleged  to 
have  been  paid  to  the  latter  and  held 
by  it  as  a  preferred  creditor  in  viola- 
tion of  U.  S.  Rev.  Stat.  §  5242.  It 
was  held  that  the  transfer  of  the  se- 
curities, if  made  in  contemplation  of 
insolvency,  was  fraudulent  under  the 
statute,  although  there  was  no  such 
intention  on  the  part  of  the  security 
bank  in  receiving  the  transfer,  and 
although  there  was  no  knowledge  or 
Buspicion  at  that  time  on  the  part 
of  the  security  bank  that  the  Pacific 
Bank  was  insolvent,  or  contemplated 
insolvency,  or  was  not  doing  business, 
or  that  its  directors  had  voted  to  close 
it,  or  that  application  was  to  be  made 
for  a  receiver. 

Insolvency  is  such  a  condition  of 
affairs  that  the  bank  is  unable  to  meet 
Its  obligations  as  they  mature  in  the 
usual  course  of  business.  An  act  of 
insolvency  takes  place  when  a  bank 
has  actually  failed  to  meet  some  of 
its  obligations.  Roberts  v.  Hill,  24 
Fed.  Rep.  571;  Market  Nat.  Bank  v. 
Pacific  Nat.  Bank,  30  Hun,  50. 


It  is  in  contemplation  of  insolvency 
when  it  becomes  reasonably  apparent 
to  its  officers  that  it  will  presently  be 
unable  to  meet  its  obligations,  and 
will  be  obliged  to  suspend  its  ordi- 
nary operations.  Id.  If  the  bank  is 
in  contemplation  of  insolvency  it  ia 
not  necessary  that  the  party  to  whom 
the  transfer  is  made  should  be  aware 
of  it.  Case  v.  Citizens'  Bank,  2  Woods, 
23;  Iron  v.  Manufacturers'  Nat.  Bank, 
6  Biss.  301.  An  execution  returned 
nulla  bona  is  evidence  of  insolvency. 
Wlieelock  v.  Kosi,  77  111.  296.  Cf .  Ro- 
berts v.  Hill,  24  Fed.  Rep.  571 ;  Arm- 
strong V.  CJiemical  Nat.  Bank,  41  Fed. 
Rep.  23i;  Wager  v.  Hall,  83  U.  S.  16 
Wall.  584,  21  L,  ed.  504;  Casey  v.  La 
Societe  de  Credit  Mdbilkr,  2  Woods,  77. 

The  intent  to  give  a  preference  is 
presumed  when  the  bank  officers  know 
of  its  insolvency,  and,  therefore, 
know  it  cannot  pay  all  its  creditors  in 
full.  RoberU  v.  Hill,  24  Fed.  Rep. 
571,  Overruling  Roberts  v.  Hill,  83 
Fed.  Rep.  311.  See  also  National 
Security  Bank  v.  Price,  22  Fed.  Rep. 
697;  Case  v.  Citizens'  Bank,  2  Woods, 
28,  100  U.  S.  446,  25  L.  ed.  G95;  Sato- 
yer  v.  Tur'pin,  2  Low.  Dec.  29. 

In  Davis  v.  Elmira  Sav.  Bank,  161 
U.  S.  275,  40  L.  ed.  700,  it  is  held 
that  §  130  of  chapter  689  of  the 
laws  of  the  state  of  New  York  of 
1892,  providing  for  the  payment  by 
the  receiver  of  an  insolvent  bank,  in 
the  first  place,  of  the  deposits  in  its 
bank  by  savings  banks  when  applied 
to  an  insolvent  national  bank,  is  in 
conflict  with  §  5236  of  the  Revised 
Statutes  of  the  United  States,  directing 


RECEIVERSHIP  OF  NATIONAL  BANKS. 


UT 


wliicli  is  rendered  void  must  be  with  a  view  of  giving  a  prefer- 
ence, and  not  the  giving  of  security  for  an  actual  loan,'  made  in 


the  comptroller  of  the  currency  to 
make  ralable  dividends  of  the  money 
paid  over  to  him  by  such  receiver 
on  all  claims  proved  to  his  satis- 
faction or  adjudicated  in  a  court  of 
competent  jurisdiction,  and  is  there- 
fore void  when  applied  to  a  national 
bank,  and  is  a  preference  prohibited 
by  the  National  Banking  Act.  This 
case  reverses  the  case  of  Ehnira  Sav. 
Bank  v.  Davis,  143  N.  Y.  590,  25  L. 
R.  A.  546,  and  also  same  case  in  73 
Hun,  357.  See  also  Venango  Nat. 
Bank  v.  Taylor,  56  Pa.  14. 

'  In  Re  Armstrojig,  41  Fed.  Rep.  381, 
it  was  held  that  U.  S.  Rev.  Stat. 
§  5242,  which  invalidates  all  transfers 
of  notes,  etc.,  of  a  national  bank  after 
the  commission  of  an  act  of  insolvency 
with  a  view  to  the  preference  of  one 
creditor  over  another  does  not  pro- 
hibit a  bank  which  has  in  good  faith 
accepted  a  draft  of  a  national  bank 
the  day  before  the  latter's  insolvency, 
and  afterwards  paid  the  same,  from 
applying  the  profits  of  collections 
made  by  it  in  its  hands  belonging  to 
the  insolvent  bank  to  the  payment  of 
the  draft  since  its  lien  on  such  collec- 
tions runs  from  the  date  of  accept- 
ance. 

In  Armstrong  v.  chemical  Nat. 
Bank,  41  Fed.  Rep.  234,  it  was  held 
under  U.  S.  Rev.  Stat,  t^  5242,  that  the 
section  is  directed  to  a  preference  as  iu 
giving  security  for  a  debt  which  is 
created;  and  if  the  transaction  be  free 
from  fraud  in  fact  and  is  intended 
merely  to  adequately  protect  a  loan 
made  at  the  time,  the  creditor  can  re- 
tain the  property  transferred  to  se- 
cure such  loan  until  the  debt  is  paid, 
though  the  debtor  is  insolvent,  and 
the  creditor  has  reason  to  believe  at 
the  time  that  to  be  the  facty     A  bank 


is  not  in  contemplation  of  insolvency 
until  the  fact  becomes  reasonably  ap- 
parent to  its  officers  that  It  will  pres- 
ently be  unable  to  meet  its  obliga- 
tions, and  will  be  obliged  to  suspend 
its  ordinary  operations.  Cf.  Roberts 
V.  Hill,  24  Fed.  Kep.  571;  Tiffany 
v.  Lucas,  82  U.  S.  15  Wall.  410,  21 
L.  ed.  198;  Cook  v.  Tullis,  85  U.  S.  18 
Wall.  332,  31  L.  ed.  933;  Clark  v. 
Iselin,  88  U.  S.  21  Wall.  360,  22  L. 
ed.  568;  Casey  \.La  Societe  de  Credit 
Mobilier,  2  Woods,  77. 

In  Cook  County  Nat.  Bank  v.  United 
States,  107  U.  S.  445,  27  L.  ed.  537,  it 
is  held  that  §  3466  of  U.  S.  Rev.  Stat, 
which,  in  certain  cases  mentioned, 
gives  the  United  States  priority  of 
payment  of  debts  due  to  it,  does  not 
apply  to  its  demands  against  an  in- 
solvent national  bank. 

In  Hayes  v.  Beardsley,  136  N.  Y. 
299,  an  action  was  brought  by  a  re- 
ceiver of  a  national  bank  to  recover 
payments  alleged  to  have  been  made 
by  the  bank  in  violation  of  the  Na- 
tional Banking  Act,  which  declared 
void  all  transfers  of  securities  and 
payments  made  by  a  bank  organized 
under  it  "after  the  commission  of  an 
act  of  insolvency,  or  in  contemplation 
thereof,  made  with  a  view  to  prevent 
the  application  of  its  assets,"  where 
it  appeared  that  the  bank  at  the  time 
of  the  payments  was  in  fact  insolvent, 
and  had  been  so  for  years,  which  was 
known  only  to  the  cashier,  it  was 
held  that  the  complaint  of  the  receiver 
was  properly  dismissed  as  the  plain- 
tiff failed  to  show  that  the  payments 
were  made  in  contemplation  of  in- 
solvency, or  to  prevent  the  applica- 
tion of  the  bank  assets  as  prescribed 
by  law.  In  this  case  the  insolvency 
of  the  bank   was  concealed   by   the 


4^8 


RECEIVERSHIPS. 


good  faith.'     The  statute  also  prohibits  attachments  of  the  prop- 
erty of  the  bank  after  insolvency.* 

§  260.    Liability  of  directors. 

Section  5239,  United  States  Revised  Statutes,  provides  that  if 
the  directors  of  any  national  banking  association  shall  knowingly 
violate,  or  knowingly  permit  any  of  the  officers,  agents,  or  serv- 
ants of  the  association  to  violate,  any  of  the  provisions  of  title 
Ixii.  of  National  Bank  Act,  all  the  rights,  privileges,  and  fran- 
chises of  the  association  shall  be  thereby  forfeited,  to  be  deter- 
mined and  adjudged  by  a  proper  circuit,  district,  or  territorial 
court  of  the  United  States  in  a  suit  brought  for  that  purpose  by 
the  comptroller  of  the  currency  in  his  own  name  before  the  asso- 
ciation shall  be  declared  dissolved.  And  in  cases  of  such  viola- 
tion every  director  who  participated  in  or  assented  to  the  same 
shall  be  held  liable  in  his  personal  and  individual  capacity  for  all 
damages  which  the  association,  its  shareholders,  or  any  other  per- 
son, shall  have  sustained  in  consequence  of  such  violation.  Ac- 
tions for  a  violation  of  this  section  are  properly  brought  by  the 
receiver,'  but  inasmuch  as  the  form  of  action  is  not  prescribed,  the 


cashier  and  none  of  its  directors  were 
suspicious  thereof,  but,  under  the  cir- 
cumstances, the  fact  that  the  defend- 
ant was  a  director  did  not,  as  a  mat- 
ter of  law,  charge  him  with  liability 
for  the  payments  made  to  him,  he 
having  acted  in  good  faith  and  in  ig- 
norance of  the  wrongdoing  and  of  the 
bank's  insolvency. 

The  preference  of  one  creditor  to 
another  by  a  national  bank,  as  con- 
templated in  U.  S.  Rev.  Stat.  §  5242,  is  a 
preference  given  to  the  creditor  to  se- 
cure or  pay  a  pre-existing  debt.  When 
a  national  bank,  in  embarrassed  cir- 
cumstances and  in  need  of  assistance, 
receives  a  loan  of  money  or  other 
valuable  material  aid  from  a  person 
who  knows  its  embarrassed  state,  on 
condition  that  the  party  making  the 
loan  or  giving  the  aid,  shall  be  se- 
cured therefor,  and  the  security  is 
accordingly  given  on  a  pledge  of  part 


of  the  assets  of  the  bank,  this  is  not 
giving  him  a  preference  within  the 
meaning  of  the  statute.  Casey  v.  La 
Societe  de  Credit  Mobilier,  2  Woods, 
77;  Clark  v.  Iselin,  88  U.  S.  21  Wall. 
360,  22  L.  ed.  568. 

^Harvey  v.  Allen,  16  Bin  eh  .  29; 
Mrst  Nat.  Bank  v.  Colby,  88  U.  S.  21 
Wall.  609,  22  L.  ed.  687.  And  see 
Butler  V.  Coleman,  124  U.  S.  721,  31 
L.  ed.  567;  Raynor  v.  Pacific  Nat. 
Bank,  93  N.  Y.  371;  National  Shoe  <& 
L.  Bank  v.  Mechanics'  Nat.  Bank,  89 
N.  Y.  467. 

''In  Briggs  v.  Spaulding,  141  U.  S. 
132,  35  L.  ed.  662,  a  bill  was  filed  by 
a  receiver  of  a  national  bank  against 
the  directors  of  the  bank  seeking  to 
recover  from  such  directors  by  reason 
of  negligence  in  the  management  of 
the  affairs  of  the  bank.  The  court 
held  that  the  directors  were  not  to  be 
held  responsible  siraply  because  they 


RECEIVERSHIP  OF  NATIONAL  BANKS. 


449 


practice  is  not  iiTiiform  as  to  whether  the  action  shall  be  at  law  or  in 
equity.  Equity  has  becTi  held  to  furnish  a  more  complete  and 
adequate  remedy  in  similar  cases  under  similar  statutes/  but  ac- 
tions at  law  have  also  been  maintained.'  The  managers  of  a  bank 
are  not  liable  when  personally  sued  by  the  receiver  for  alleged 


did  not  prevent  the  losses  during  the 
period  they  were  directors  and  that  it 
was  not  their  duty  as  such  to  go 
among  the  clerks  and  look  through 
the  books,  or  call  for  and  run  over  the 
bills  receivable.  The  directors  of  a 
bank  must  exercise  ordinary  care  and 
prudence  iu  the  administration  of  its 
affairs  and  use  reasonable  supervision 
over  the  conduct  of  the  business,  but 
they  are  not  to  be  shielded  from  lia- 
bility because  of  want  of  knowledge 
of  wrongdoing  if  such  ignorance  is 
the  result  of  gross  intention. 

Cf.  Brinckerhoff  v.  Bostwick,  88  N. 
Y.  52;  Movius  v.  Lee,  30  Fed.  Rep. 
298. 

A  suit  by  a  receiver  may  be  main- 
tained in  the  United  Slates  circuit 
court  without  reference  to  citizenship 
of  the  parties  {^Armstrong  v.  Traut- 
man,  36  Fed.  Rep.  275),  or  in  a  state 
court,  Brinckerhoff  Y.  Bosiwick,  88  N. 
Y.  52. 

A  suit  by  a  receiver  cannot  be  com- 
pounded by  the  comptroller  without 
leave  of  court.  Case  v.  Siuall,  4 
Woods,  78. 

Bank  oflficers  are  not  liable  for 
errors  of  judgment  in  making  loans 
and  discounts  in  good  faith  and  for 
what  they  deemed  the  best  interests  of 
the  bank.  Witters  v.  Sowles,  31  Fed. 
Rep.  1. 

'  Horrwr  v.  Eenning,  93  U.  S.  228, 
23  L.  ed.  879;  Stone  v.  Chiaolm,  113 
U.  S.  302,  28  L.  ed.  991;  Crown  v. 
Brainerd,  57  Vt.  625.  And  see  under 
this  statute,  Briggs  v.  Spaulding,  141 
U.  S.  132,  35  L.  ed.  662. 

In  Welles  v.  Grates,  41   Fed.  Rep. 

29 


459,  it  is  held  that  the  personal  liabil- 
ity of  directors  of  a  national  bank  for 
a  violation  of  §  5204,  by  declaring 
dividends  in  excess  of  net  profits,  and 
of  §  5200,  for  loaning  to  separate  per- 
sons, firms,  or  corporations,  amounts 
exceeding  one  tenth  of  the  capital 
slock,  cannot  be  enforced  in  an  action 
at  law.  It  is  also  held  that  before  a 
suit  can  be  instituted  against  directors 
for  a  violation  of  the  statute  it  must 
be  adjudged  by  a  proper  court,  that 
such  acts  have  been  done  as  authorize 
the  forfeiture  of  the  charter.  In  this 
suit  the  action  was  instituted  and 
prosecuted  by  the  receiver. 

^  Slejyhens  v.  Overstolz,  43  Fed.  Rep. 
771;  Bank  of  Poughkeepsie  v.  Ihhotson, 
24  Wend.  479;  Perry  v.  Turner,  55 
Mo.  418;  Culver  v.  Third  Nat.  Bank, 
64  111.  528;  Matthews  v.  Albert,  24  Md. 
527;  Norris  v.  Johnson,  34  Md.  485. 

In  Stephens  v.  Overstolz,  supra,  it 
was  held  that  an  action  by  a  receiver 
of  a  bank  whose  charter  had  been  for- 
feited under  the  statute  against  a  di- 
rector is  properly  brought  at  law, 
there  being  no  necessity  of  invoking 
the  aid  of  a  court  of  chancery  by  rea- 
son of  the  nature  of  the  issues  in- 
volved, or  to  avoid  a  multiplicity  of 
suits.  In  this  case  it  is  also  held  that 
the  right  to  maintain  an  action  by  a 
receiver  under  t^  5239  against  a  bank 
director  on  account  of  excessive  loans 
made  while  the  defendant  was  acting 
as  director,  does  not  depend  upon  the 
fact  that  the  comptroller  has  or  has 
not  procured  a  forfeiture  of  the  bank's 
charter. 


450  RECEIVERSHIPS. 

mismanagement  in  not  requiring  in  their  discretion  a  bond  from 
the  president  for  the  faithful  discharge  of  his  duty  as  an  official, 
nor  for  unsafe  or  irregular  investments  made  without  their  knowl- 
edge or  complicity,  and  may  also  plead  the  statute  of  limitations.' 
They  are  liable,  however,  for  receiving  deposits  when  they  know, 
or  may  readily  learn,  that  the  bank  is  insolvent/ 

^Williams  v.  Halliard,  38  N.  J.  Eq,  the  bank  to  become  insolvent  and  its 

373.  stock   worthless   (Comoay  v.   Ualsey, 

^Delano  v.  Case,  17  111.  App.  531;  44  N.  J.    L.  462),  unless  the  comp- 

Cragie  V.  Hadley,  99  N.Y.  131;  Ci'aigie  troUer  and  receiver  refuse  to  do  so 

V.  Smith,  14  Abb.  N.  C.  409.  {JVelson  v.  Burroics,  9  Abb.  N.  C.  280), 

A  shareholder  cannot  maintain  a  or  where  the  receiver  is  a  director, 

suit  against  the  officers  for  misman-  Brinckerhoff  v.  Bostwick,  88  N.  Y,  52. 
ugement  and  negligence  which  causes 


CHAPTER   Xiy. 


RECEIVERSHIP  OF  RAILWAYS. 


^  270.  General— attitude  of  courts. 
§  271.  Notice  of  application. 
j^  212.  When  appointed. 

(ii)  When  road  unlawf uUyleased. 

(b)  When  default  in  payment  of 

mortgage  indebtedness. 

(c)  When  diversion   of   income 

and  revenues. 

(d)  When  default  in  payment  of 

interest. 

(e)  Whenmismanagement.squan- 

dering  funds,  etc. 

(f)  When  neglect  to  elect  officers. 

(g)  When  statutory  cause, 
g  276.   When  not  appointed. 

(a)  When  no  notice  of  applica- 

tion. 

(b)  When  insolvency  alone  not 

sufficient. 

(c)  When      right    to     foreclose 

doubtful. 

(d)  When  application  by  minor- 

ity bondholders. 

(e)  When  default  in  interest  in- 

sufficient. 

(f)  When  plaintiff  has  adequate 

remedy  at  law. 

(g)  When   trustees    have  ample 

power, 
(h)  When  rights  of  third  parties 

are  prejudiced, 
(i)  When    disagreement    as    to 
management  alone. 
§  274.  Powers  of  railway  receiver. 
^5  275.   Power  to  pay  unsecured  claims. 

(a)  Mortgage  by  implication  sub- 

ject to  claims  for  lal)orand 
supplies. 

(b)  Limitations  as  to  preferred 

claims. 


§  276,  Grounds  upon  which  preferred 
claims  allowed. 

(a)  Payment  a  necessity  to  lien- 

holder. 

(b)  Payment  as   a   condition  to 

relief  asked. 

(c)  Diversion  of  income  a  ground 

for  allowance. 

(d)  When  allowed  by  statute. 

(e)  Classes  of  claims  preferential, 
(i)  Operating  expenses. 

(S)  Construction  account. 
§  277.  Scope  of  implied  power  as  to 
operating  expenses. 

(a)  Application   as  to  railroads. 

■  Preferential  debts. 

(b)  Not  extended  to  private  cor- 

porations generally. 
§  278.  Preferential  claims,  basis  of. 

(a)  Not  based  on  liens. 

(b)  Not  a  condition  of  equitable 

relief. 
§  279.  Rule  in  Federal  courts. 

(a)  Inherent  power  of  court  to 

pay  operating  expenses. 

(b)  Is  not  a  condition  to  equitable 

relief. 

(c)  Lien  not  a  matter  of  contract. 

(d)  When  receiver  appointed  at 

instanceof  general  creditor. 

(e)  When  receiver  appointed  at 

instance  of  mortgagee. 

(f)  Limitations  in  such  case. 

(i)  Tendency  not  to  enlarge 
scope. 

(2)  Payment  does  not  depend 
on  order. 

{3)  Must  accrue  within  rea- 
sonable time. 

(4)  Necessity  of  notice. 


451 


i52 


RECEIVE  RSPIIPS. 


(5)  Confined  to  operating  ex- 

penses generally. 

(6)  Equitable  nature  of  suck 

claims. 
§  280.  Application   to    rolling    stock 
and  car  trusts. 

(a)  Receiver  not  adopting  con- 

tract must  pay  reasonable 
price  for  use. 

(b)  Receiver    if    adopting  must 

pay  contract  price. 

(c)  Contract  price  is  not  neces- 

sarily an  equitable  price. 

(d)  Vendor-lessor   entitled    to  a 

return.     Demand. 
§  281.  Claims  not  preferential. 

(a)  Advances  to  complete  road. 

(b)  Damages     from    operation, 

fire,  etc. 

(c)  Attorneys'    fees    before   ap- 

pointment of  receiver. 

(d)  Goods    sold    subsequent    to 

mortgage. 

(e)  Locomotives    sold    to    com- 

pany. 

(f)  Construction    of    such    con- 

tract. 

§  282.  Extent  of  power  of  railway  re- 
ceiver. 

§  283.  General  scope  of  his  power, 
(a)  Preservation  of  receivership 
property. 


(b)  Collection  of  outstanding  in- 

debtedness. 

(c)  Reduce  to  possession   prop- 

erty of  company. 

(d)  Disaffirm    unlawful    acts  of 

officers  and  directors. 

(e)  Restrain  unlawful  acts. 

(f)  Defend  suits  and  proceedings 

when. 

(g)  Traffic  arrangements  and  fa- 

cilities. 
(h)  As  to  unfinished  or  incom- 
plete contracts, 
(i)  As  to  unexpired  leases. 
^  2S4.  LimitationsQn  receiver's  power. 
§  285.  Liability  of  railway  receivers. 

(a)  Receiver    acting    as    carrier 

governed  by  general  rules. 

(1)  Corporation  liable  under 
statute. 

(f)  Receiver  not  liable  on  ex- 
ecutory contracts. 

(b)  Railroad  not  liable  when. 

(c)  When     receiver    personally 

liable. 

(d)  AVhen      receiver      officially 

liable. 

(e)  Liability  measured  by  that  of 

corporation. 

§  286.  Effect  of  discharge  as  to  lia- 
bility. 

§  287.  Receivers'  Certificates. 


§  270.    (xeneral — attitude  of  courts. 

Courts  are  averse  to  the  apjjoiiitiiient  of  a  receiver  of  railway 
corporations  by  reason  of  the  fact  that  such  corporations  derive 
their  power  and  franchises  from  tlie  legislative  department  of 
government,  and  as  long  as  they  are  faithful  to  the  trusts  vouch- 
safed to  them  and  assumed  by  them,  a  co-ordinate  department  of 
government  is  not  inclined,  without  adequate  cause,  to  interfere  in 
their  management  by  taking  from  the  legally  constituted  ati- 
thorities  the  duties  vested  in  them.'     Besides,  the  common  law 


'  Gardner  v.  London,  C.  &  D.  R. 
Co.  L.  R.  2  Ch.  App.  201.  The  effect 
of  this  decision  lead  to  the  adoption  of 
the  act  of  parliament  known  as  the 


Railway  Companies  Act  of  1867,  un- 
der which  the  high  court  of  chan- 
cery was  given  power  to  appoint  a  re- 
ceiver and  manager  of  railway  com- 


REC]EIVERSHIP  OF  RAILWAYS. 


453 


action  of  quo  warranto  is  adequate  and  av^ailable  to  correct  many 
of  the  al)uses  that  arise  in  the  exercise  of  corporate  functions  and 
frequently  is  resorted  to  and  affords  ample  protection  in  many 
cases  of  railway  manaj^ement,  but  would  not  be  adequate  in  its 
application  to  other  corporations,  joint  stock  companies,  or  part- 
nerships. Moreover  railway  corporations  are  quasi  public  in  their 
nature  and  the  public  have  a  corresponding  interest  in  the  due 
and  proper  exercise  of  their  corpoi-ate  functions  which  it  is  tlie 
duty  of  the  courts  to  recognize  and  protect,  and  for  this  reason, 
if  no  other,  extreme  caution  should  in  all  cases  be  exercised  in  ap- 
pointing a  receiver  over  them,'     In  England  and  in  nearly  all  the 


panies,  and  by  the  Judicature  Act  of 
1873  this  power  was  transferred  to  the 
chancery  division  of  the  high  court 
of  justice  (36  &  37  Vict.  L.  R.  8, 
Stat.  307j.  The  court,  in  Overton  v, 
Memphis  &  L.  R.  R.  Co.  10  Fed.  Rep. 
866,  says:  "Undoubtedly  there  are 
cases  in  which  a  court  of  equity  may, 
through  its  receiver,  take  possession 
and  control  of  the  business  of  corpora- 
tions and  individuals.  But  it  is  a  ju- 
risdiction to  be  sparingly  exercised. 
None  of  the  prerogatives  of  a  court  of 
equity  have  been  pushed  to  such  ex- 
treme limits  as  this  and  there  is  none 
so  likely  to  lead  to  abuses.  It  is  not 
the  province  of  a  court  of  equity  to 
take  possession  of  the  properly  and 
conduct  the  business  of  corporal  ious 
or  individuals,  except  where  the  ex- 
ercise of  such  extraordinary  jurisdic- 
tion is  indispensably  necessary  to  save 
or  protect  some  clear  right  of  a  suitor 
which  would  otherwise  be  lost  or 
greatly  endangered,  and  which  cannot 
be  saved  or  protected  i>y  any  other  ac- 
tion or  mode  of  proceeding."  Cf. 
Pond  v.  Fraiidngham  &  L.  R.  Co.  130 
Mass.  194. 

Con.siderations  of  the  public  interests 
are  controlling  upon  a  court  of  equity, 
when  a  public  means  of  transportation, 
euch  as  a  railroad,  comes  into  the  pos- 
session and  under  the  dominiou  of  the 


court.     Jo7j  V.  St.  Louis,  138  U.  S.  1, 
34  L.  ed.  843. 

'  In  Texus  Trunk  R.  Co.  v.  State,  83 
Tex.  1,  it  was  held  that  though  the 
state  may  not  be  a  creditor,  yet  the 
public  has  such  an  interest  in  the 
proper  management  of  the  property  of 
a  dissolved  corporation  as  makes  it 
proper  for  a  receiver  to  be  appointed 
to  manage  and  control  its  property  to 
the  end  that  it  shall  be  faithfully  ap- 
plied to  the  public  purpose  for  which 
the  corporation  was  originally  created. 
In  Meyer  v.  Johnston,  53  Ala.  237,  it 
was  held  that  a  court  of  chancery  has 
power  independent  of  statute  to  ap- 
point a  receiver  to  manage  and  operate 
a  railroad  when  such  course  is  indis- 
pensable to  secure  the  rights  of  parties 
in  interest,  but  it  must  be  a  case  of  ur- 
gency. 

In  Kelly  v.  Alabama  &  C.  R.  Co.  58 
Ala.  489,  it  is  held:  "  Railway  com- 
panies are  more  than  mere  private  cor- 
porations— they  are  in  many  respects, 
and  for  many  purposes,  quasi-public 
bodies,  invested  with  large  and  pecu- 
liar franchises  and  privileges,  and 
owing  important  duties,  and  under 
varied  responsihililies  to  the  public. 
Hence,  courts  of  equity,  in  the  ap 
pointment  of  receivers  over  them,  act 
with  extreme  caution  and  require  a 
clear  case  of  right  and  of  pressing 


454 


RECEIVERSHIPS. 


states  of  this  country  there  are  now  statutory  regulations  govern- 
ing the  appointment  of  receivers  and  especially  so  regarding  re- 
ceivers of  insolvent  corporations,  and  those  in  process  of 
dissolution. 

§  271.     Notice  of  application. 

A  receiver  of  a  railway  should  under  no  circumstances  be  ap- 
pointed without  notice  to  the  corporation,  if  it  is  practicable  so  to 
do,  and  only  the  gravest  emergency  will  justify  such  appoint- 
ment on  an  ex  parte  application.*     The  application  for  the  ap- 


necessity  to  induce  their  interference." 
Mr.  Justice  Miller  in  Milwaukee  &  M. 
R.  Co.  V.  SouUer,  69  U.  S.  2  Wall. 
510,  17  L.  ed.  900,  says:  "The  ap- 
pointment of  receivers  by  a  court  to 
manage  the  affairs  of  a  long  line  of 
railroad  continued  through  five  or  six 
years  is  one  of  those  judicial  powers, 
the  exercise  of  which  can  only  be  jus- 
tified by  the  pressure  of  an  absolute 
necessity."  Cf.  American  Loan  &  T. 
Co.  V.  Toledo,  C.  &  8.  R.  Co.  29  Fed. 
Rep.  416;  Stevens  v.  Do,vison,  ISGratt. 
819;  Overton  v.  Memphis  &  L.  R.  R. 
Co.  10  Fed.  Rep.  866;  State  v.  Jackson- 
ville, P.  &  M.  R.  Co.  15  Fla.  201; 
Wahash  R.  Co.  v.  Dykeman,  133  Ind. 
56;  Herring  v.  New  York,  L.  E.  &  W. 
R.  Co.  105  N.  Y.  340. 

And  while  courts  are  extremely  cau- 
tious in  the  matter  of  the  appointment 
of  receivers  over  corporations,  particu- 
larly railways,  and  those  owing  duties 
to  the  public,  yet  it  has  been  found 
expedient,  if  not  a  necessity,  to  ap- 
point receivers  over  quasi  public  cor- 
porations, owing  to  the  fact  that  their 
property  is  not  subject  to  levy  and 
sale  under  execution,  in  many  cases. 
Louisville  Water  Co.  v.  Hamilton,  81 
Ky.  517. 

Overton  Bridge  Co.  v.  Means,  33  Neb. 
857;  New  Orleans  v.  Morris,  105  U.  S. 
600.  26  L.  ed.  1184;  Seymour  v.  Mil- 
ford  &  C.  Turnp.   Co.   10  Ohio,  476; 


GoocJi  v.  McGee,  83  N.  C.  59;  Palestine 
V.  Barnes,  50  Tex.  538;  Susquehanna 
Canal  Co.  v.  BonJiam,  9  Watts  &  S. 
27,  Ammant  v.  New  Alexandria  &  P. 
Tump.  Road,  13  Serg.  &  R.  210;  Fos- 
ter V.  Fowler,  60  Pa.  27;  Leonard  v. 
Brooklyn,  71  N.  Y.  498;  Baxter  v. 
Nashville  &  H.  Tump.  Co.  10  Lea,  488; 
Wood  v.  Truckee  Tump.  Co.  24  Cal. 
474;  Que  v.  Tide  Water  Canal  Co.  65 
U.  S.  24  How.  257,  16  L.  ed.  635. 
See,  contra.  Stale  v.  Rives,  5  Ired.  L. 
297;  Arthur  V.  Commercial  &  R.  Bank, 
9  Smedes  &  M.  394. 

It  must  be  understood  that  the 
above  rule  applies  to  that  class  of 
property  of  corporations  which  is  es- 
sential to  the  operation  of  the  road  or 
franchise  in  which  the  public  has  an 
interest,  and  does  not  apply  to  prop- 
erty owned  by  the  corporation  that  is 
not  essential  to  the  due  and  proper 
performance  of  its  duties  to  the  public. 

'  In  Wabash  R.  Co.  v.  Dykeman,  133 
Ind.  56,  by  Ind.  Rev.  Stat.  §  1230 
(1881),  it  is  provided  "receivers  shall 
not  be  appointed  either  in  term  or  va- 
cation, in  any  case,  until  the  adverse 
party  shall  have  appeared  or  shall 
have  had  reasonable  notice  of  the  ap- 
plication for  such  appointment,  ex- 
cept upon  suflicient  cause  shown  by 
aflidavit."  The  court  say:  "The 
statute  being  silent  as  to  what  will 
constitute  a  sufficient  cause,  we  must 


RECEIVERSHIP  OF  RAILWAYS. 


455 


pointment  and  the  degree  of  caution  required  to  be  exercised  has 
been  ab-eady  considered/  but  all  the  primary  principles  relative 
to  the  appointment,  and  the  care  of  the  court  in  assuming  the 
important  functions  of  operating  and  managing  a  railroad,  are 
particularly  important  in  this  class  of  receiverships.  Not  only 
the  parties  to  the  suit  are  affected,  but  a  large  number  of  em- 
ployees are  disturbed  in  their  relation  to  the  employer,  and  the 
general  public  along  the  line  of  road  are  liable  to  be  greatly  in- 
convenienced by  the  disturbance  of  their  shipping  facilities." 
The  application  may  be  made  by  various  parties  in  interest.' 


look  to  precedents,  and  adjudged  cases 
to  deiermine  that  question.  The  suf- 
ficient cause  required  to  be  shown 
must  be  (1)  for  the  appointment  of  a 
receiver  at  all,  and  (2)  for  not  giving 
notice  of  the  application  to  the  adverse 
party.  The  stattniint  in  verified  com- 
plaint that  there  was  an  emergency 
for  the  immediate  appointment  of  a 
receiver  without  notice  was  not  a  suf. 
ficient  showing.  This  was  a  mere 
statement  of  an  opinion.  The  facts 
on  which  the  opinion  was  founded 
should  have  been  pleaded  in  order  to 
enable  the  court  to  judge  of  its  cor- 
rectness." Verplanck  v.  Mercayitile 
Ins.  Co.  2  Paige,  438;  French  v.  Gif- 
ford,  ;iO  Iowa,  148;  Moritz  v.  Miller, 
87  Ala.  331. 

It  was  further  held  that  the  settled 
practice  now  is  not  to  appoint  a  re- 
ceiver ex  parte  and  thereby  deprive 
the  corporation  of  the  possession  of 
its  property  before  it  has  had  an  op- 
portunity to  be  heard  in  relation  to  its 
rights,  except  in  those  cases  where  it 
is  out  of  the  jurisdiction  of  tlie  court, 
or  none  of  its  officers  can  be  found, 
or  where,  for  some  other  reason,  it 
becomes  absolutely  necessary  for  the 
court  to  interfere  before  there  is  time 
to  give  notice  to  the  corporation  to 
prevent  the  destruction  or  loss  of 
property.  Citing  the  following  cases 
among  others:     People  v.  Albany  tfc  S. 


R.  Co.  55  Barb.  344,  369;  French  v. 
Gijfurd,  30  Iowa,  148,  160;  Bisson  v, 
Curry,  35  Iowa,  72;  Howe  v.  Jones,  57 
Iowa,  130;  Cleveland,  G.  C.  &  I.  11. 
Co.  v.  Jeicett,  37  Ohio  St.  649;  Briar- 
field  Iron  Works  Co.  v.  Foster,  54  Ala. 
622;  Word  v.  Word,  90  Ala.  81;  Moritz 
V.  Miller,  87  Ala.  331;  Martin  v.  I'ar- 
ver,  43  Miss.  517;  Cook  v.  Detroit  & 
M.  R.  Co.  45  Mich.  453;  Turnhull  v. 
Prentiss  Lumber  Co.  55  Mich.  387. 

'  Chap.  II. 

*  In  passing  upon  an  application  for 
the  appointment  of  a  receiver  it  is  the 
duty  of  a  court  to  scrutinize  not  only 
the  rights  asserted  by  the  moving 
part}%  but  the  injuries  that  may  be 
suffered  by  the  adverse  party  and  the 
public  at  large.  This  is  particu- 
larly the  case  where  a  line  of  railroad 
forming  part  of  a  system  operated  as 
a  unit  is  thereby  del  ached  from  the 
main  road.  In  such  case  not  only  the 
parlies  to  the  suit  are  affected,  but  a 
large  number  of  employees  are  dis- 
turbed iu  their  relation  to  the  em- 
ployer, and  the  general  public  along 
the  line  of  road  are  liable  to  be  greatly 
inconvenienced  by  the  disturbance  of 
their  shipping  facilities,  especially  to 
remote  points.  Wabash  R.  Co.  v. 
Dykenian,  133  Ind.  56. 

2  See  §  272. 

In  8ii;ie  v.  Memphis  cf;  A.  It.  li.  Co. 
125  U.  S.  361.  31  L.  ed.  691,  a  bill  iu 


456 


RECEIVERSHIPS. 


§  272.     When  appointed. 

A  court  of  equity  in  the  exercise  of  its  cliaucery  jurisdiction, 
and  in  the  absence  of  statutory  power,  on  a  proper  showing  by  a 
proper  party  on  due  notice,  and  in  the  exercise  of  a  sound  judi- 
cial discretion,  may  appoint  a  receiver  over  a  railway  : 

(a)  Where  the  directors  without  lawful  authority,  and  without 
the  sanction  of  the  stockholders,  have  leased  the  road  and  its 
property  and  placed  their  management  in  the  hands  of  another 
corporation.' 


equity  was  filed  by  a  judgment  cred- 
itor of  a  railroad  company  against  Ihe 
company,  alleging  that  the  property 
was  heavily  mortgaged  and  that,  if 
plaintiff  should  attempt  to  secure  the 
payment  of  his  debt  by  seizure  and 
sale,  bidders  could  not  be  obtained 
for  more  than  a  nominal  amount,  and 
praying  for  a  receiver. 

In  Union  Trust  Co.  v.  Illinois  M.  R. 
Co.  117  U.  S.  434,  29  L.  ed.  963,  af- 
firmed in  28  Fed.  Rep.  169,  the  own- 
ers of  the  majority  of  the  stock 
together  with  judgment  creditors 
brought  a  suit  in  equity  in  the  state 
court,  praying  for  a  receiver.  Subse- 
quently the  trustee  in  some  of  the 
mortgages  filed  a  bill  in  the  United 
States  circuit  court  in  Illinois  to 
foreclose  their  mortgages,  after  which 
the  proceeding  in  the  state  court  was 
removed  to  the  United  States  court, 
and  subsequently  all  suits  were  con- 
solidated. 

In  Decker  v.  Gardner,  124  N.  Y. 
334,  11  L.  R.  A.  480,  an  action  was 
brought  in  the  Circuit  Court  of  the 
United  States  for  the  Western  District 
of  Pennsylvania  to  foreclose  mort- 
gages upon  the  railroad  property. 
An  auxiliary  action  was  subsequently 
brought  in  the  Circuit  Court  for  the 
Northern  District  of  New  York. 

In  Brown  v.  Lake  Superior  Iron  Co. 
134  U.  S.  530,  33  L.  ed.  1021,  the  bill 
•was  filed  by  creditors  in   behalf  of 


themselves  and  other  creditors  whose 
number  was  so  great  as  to  make  it 
impossible  to  join  them  as  parties,  al- 
leging the  insolvency  of  the  defend- 
ant, etc. 

'  In  Sage  v.  Memphis  &  L.  R.  R.  Go.  5 
McCrary,  643,  it  was  held,  on  the  au- 
thority of  Overton  v.  Memplds  &  L.  R. 
R.  Co.  10  Fed.  Rep.  866,  that  there  are 
cases  in  which  a  court  of  equity  may, 
through  its  receiver,  take  possession 
and  control  of  the  property  and  busi- 
ness of  corporations,  but  it  is  a  juris- 
diction to  be  sparingly  exercised. 
None  of  the  prerogatives  of  a  court 
of  equity  have  been  pushed  to  such 
extreme  limits  as  this  and  none  is  as 
likely  to  lead  to  abuses.  It  is  not  the 
province  of  a  court  of  equity  to  take 
possession  of  the  property  and  con- 
duct the  business  of  the  corporations 
except  where  the  exercise  of  such  ex- 
traordinary jurisdiction  is  indispensa- 
bly necessary  to  save  or  protect  some 
clear  right  which  would  otherwise  be 
lost  or  greatly  injured  and  which  can- 
not be  protected  by  any  other  action 
or  mode  of  proceeding.  Therefore, 
where  it  appears  that  by  collusion  be- 
tween a  corporation  and  a  creditor  a 
receiver  is  appointed  over  the  prop- 
erty of  the  company  for  the  purpose 
of  keeping  such  property  from  their 
creditors,  the  court  will  discharge  the 
receiver. 

In  Stevens  v.  Davison,  18  Gratt.  819, 


RECEIVERSHIP  OF  RAILWAYS. 


457 


(b)  Wliere  the  company  has  made  default  in  the  payment  of 
its  morto-age  indebtedness/  or  where  default  is  imminent  by  rea- 


it  was  held  that  a  board  of  directors 
had  no  authority  without  the  sanction 
of  a  lawful  meeting  of  the  stockhold- 
ers to  make  a  lease  for  years  of  the 
railroad  and  its  property  with  author- 
ity to  the  lessee  to  operate  the  road, 
and  charge  for  carrying  upon  it.  Be- 
fore a  court  will  appoint  a  receiver 
for  a  railway  to  manage  it  such  a 
course  must  be  indispensable  to  the 
rights  of  legitimate  stockholders  and 
prevent  a  failure  of  justice.  Oardner 
V.  London,  G.  &  D.  R.  Co.  L.  R.  2 
Ch.  App.  201. 

'  Where  the  appointment  of  a  re- 
ceiver is  asked  to  displace  the  exercise 
of  corporate  authority  over  a  railroad 
courts  of  equity  act  with  extreme  cau- 
tion and  require  a  clear  case  of  right 
and  of  pressing  necessity  to  induce 
their  interference;  but  when  the  cor- 
poration itself  has  been  declared 
bankrupt  with  interest  having  accu- 
mulated upon  its  bonds  exceeding  the 
value  of  the  property  mortaged  to  se- 
cure them  and  purchasers  of  the 
equity  of  redemption  at  the  assignee's 
sale  are  in  possession  of  the  road  and 
property  mortgaged,  receiving  the  in- 
come, profits,  and  earnings  of  the  road 
belonging  to  the  mortgagee  and  using 
the  property  for  its  own  exclusive  use 
and  benefit,  a  clear  case  is  presented 
for  the  appointment  of  a  receiver. 
Kelly  V.  Alabama  &  G.  R.  Go.  58  Ala. 
489. 

While  a  receiver  will  not  be  ap- 
pointed to  supersede  permanently  the 
managers  of  a  railway  and  to  take 
charge  of  the  affairs  of  the  road,  yet 
where  two  railway  companies  possess 
a  community  interest  of  a  property 
in  dispute  the  court  of  equity  will 
exercise  judicious  control  over  their 
conduct  towards  each  other,  in  order 


to  protect  their  respective  rights. 
Delaware,  L.  &  W.  R.  Co.  v.  Erie  R. 
Co.  21  N.  J.  Eq .  299. 

Where  it  is  shown  that  the  railway 
company  in  violation  of  its  duty  is  ap- 
plying and  intending  to  continue  to 
apply  its  revenues,  which  are  the  only 
means  of  paying  an  annuity,  towards 
the  payment  of  a  junior  incumbrance, 
the  court  ought  to  interfere,  on  the  ap- 
plication of  a  prior  mortgagee  by  in- 
junction, and  appoint  a  receiver. 

In  BolUnheck  v.  Donnell,  94  N.  Y. 
342,  it  was  held  that  the  power  to  ap- 
point a  receiver  of  the  rents  and  profits 
of  mortgaged  premises,  accruing  pend- 
ing a  foreclosure,  was  inherent  in  a 
court  of  chancery  before  the  adoption 
of  the  code  of  procedure  and  such 
power  is  not  abrogated  by  a  subse- 
quent portion  of  the  code  defining  the 
case  in  which  a  receiver  may  be  ap- 
pointed. It  appeared  in  this  case  that 
about  one  sixth  of  the  mortgage  debt 
was  due  and  the  premises  divided  into 
two  neatly  equal  parcels  which  could 
be  sold  separately  without  injury  to  the 
parties  interested,  and  the  court  held 
that,  assuming  the  appointment  of  a 
receiver  of  the  rents  and  profits  was 
proper,  in  the  absence  of  a  subse- 
quent pledge  plaintiff  was  not  en- 
titled to  a  receivership  for  the  pro- 
tection of  that  portion  of  the  debt  not 
yet  due  or  of  that  portion  of  the  prem- 
ises as  to  which  his  rights  to  sell  had 
not  accrued  and  appointed  a  receiver 
over  one  of  the  parcels. 

To  authorize  the  appointment  of  a 
receiver  of  the  rents  and  profits  of 
mortgaged  premises  it  must  clearly 
appear  in  an  action  to  foreclose  the 
mortgage  that  the  premises  are  an  in- 
adequate security  for  the  debt  and 
that   the  mortgagor  or  other  person 


458 


RECEIVERSHIPS. 


liable  for  the  debt  is  insolvent.  Bur- 
lingame  v.  Puree,  12  Hun,  144. 

In  Shepley  v.  Atlantic  &St.  L.  R.  Co. 
55  Me.  895,  a  railway  company  by  or- 
der of  its  stockholders  and  directors 
conveyed  its  property  and  francliises 
to  trustees  and  their  survivors  by  deed 
to  be  void  upon  the  payment  of  cer- 
tain boncis  issued  by  the  corporation. 
In  this  deed  it  was  stipulated  that  a 
failure  to  pay  interest  or  principal  of 
the  bonds  according  to  their  tenor 
should  authorize  the  mortgagee  to 
take  the  property  into  their  actual 
possession  and  manage  and  control 
the  same  and  apply  the  net  proceeds 
to  the  payment  of  such  interest  and 
principal  due.  On  a  bill  filed  by  the 
trustees  asking  for  special  perform- 
ance of  the  trust  deed  with  reference 
to  the  possession  it  was  held  that  the 
complainants  were  entitled  to  the  re- 
lief and  the  court  by  its  decree  placed 
the  trustees  in  possession.  Cf.  Shaw 
V.  Norfolk  County  R.  Co.  5  Gray,  163. 

In  such  case  the  death  of  one  of  the 
trustees  does  not  abate  the  suit,  but  the 
proceedings  must  be  continued  until 
the  vacancy  is  filled.  Shaw  v.  Norfolk 
County  R.  Go.  supra. 

In  Sage  v.  Memphis  &  L.  R.  R.  Co. 
125  U.  S.  361,  31  L.  ed.  694,  it  was 
held  that  the  appointment  of  a  re- 
ceiver was  always  within  the  discre- 
tion of  the  court  to  be  exercised  with 
great  caution  and  with  reference  to 
the  circumstances  to  each  particular 
case;  that  where  a  bill  of  equity  was 
filed  by  a  judgment  creditor  alleging  in 
substance  that  the  property  of  the  com- 
pany was  so  heavily  mortgaged  that 
if  plaintiff  should  attempt  to  enforce 
the  payment  of  his  debt  by  seizure 
and  sale  of  execution  there  would  be 
no  bidders  at  more  than  a  nominal 
amount,  presents  a  case  giving  the 
court  of  equity  jurisdiction  to  appoint 
a  receiver  of  the  property  under  the 
peculiar  circumstances  of  the  case. 


But  it  was  further  held  that  a  judg- 
ment creditor,  or  any  number  of  such 
creditors,  are  not  entitled  as  a  matter 
of  right  to  have  the  company's  prop- 
erty put  in  the  hands  of  a  receiver, 
merely  because  of  its  failure  or  re- 
fusal to  pay  its  debts.  If  it  appears 
that  such  a  suit  is  conclusive  and  an 
imposition  on  the  court  such  receiver 
will  be  discharged.  Cf.  Pennsylvania 
Co.  for  Ins.  etc.  v.  American  Const.  Co. 
2  U.  S.  App.  606,  55  Fed.  Rep.  131. 

InWilliamson  v.  New  Albany  etc. 
R.  Co.  1  Biss.  198,  it  is  said  that  the 
appointment  of  a  receiver  of  a  rail- 
way company  on  a  foreclosure  of  a 
mortgage  is  not  a  matter  of  course  on 
default  in  the  payment  of  interest, 
but  rests  in  the  sound  discretion  of 
the  court;  and  that  a  court  of  equity, 
when  its  jurisdiction  is  invoked,  will 
look  into  the  facts  and  exercise  an 
equitable  jurisdiction,  and  will  not 
enforce  the  strict  penalties  of  the  deed 
if  such  a  course  is  not  equitable. 

In  Allen  v.  Dallas  &  W.  B.  Co.  3 
Woods,  316,  it  appeared  that  by  a 
deed  of  trust  the  company  had  mort- 
gaged its  income  and  profits  as  well 
as  its  railway  and  their  property  to 
secure  the  payment  of  the  principal 
and  interest  of  its  bonds  and  it  au- 
thorized its  trustees  in  default  of  the 
payment  of  interest  to  take  possession 
of  the  mortgaged  property,  and  apply 
the  income  to  the  payment  of  the  in- 
terest. It  was  held  that  the  applica- 
tion of  the  trustees  should  be  granted, 
and  that  such  default  was  a  sufficient 
ground  for  the  appointment  of  a  re- 
ceiver. 

In  Dow  v.  Memphis  &  L.  R.  R.  Co. 
20  Fed.  Hep.  260,  it  is  held  that  where 
a  railway  company  makes  default  in 
the  payment  of  the  interest  on  this 
mortgage  indebtedness,  and  that  the 
property  is  inadequate  security  for 
the  mortgaged  debt,  the  company 
being  insolvent  and  appropriating  its 


RECEIVERSHIP  OF  RAILWAYS. 


459 


earnings  to  its  O'wn  use,  a  receiver  pen- 
dente lite  will  be  appointed. 

In  Moi'rison  v.  Buckner,  Hempst. 
444,  the  general  rule  is  stated  to  be 
that  the  receiver  will  not  be  appointed 
in  mortgage  cases  unless  it  clearly  ap- 
pears that  the  security  is  inadequate, 
or  there  is  imminent  danger  of  a 
waste,  removal,  or  destruction  of  the 
mortgaged  property,  or  that  the  earn- 
ings and  profits  have  been  expressly 
pledged  for  the  debt.  Cf .  Shotioell  v. 
Smith,  3  Edw.  Ch.  588;  Cheever  v. 
Rutland  &  B.  R.  Co.  39  Vt.  653. 

ln^Yilmer  v.  Atlanta  &  R.  Air  Line 
R.  Co.  2  Woods,  409,  it  is  held  that  on  a 
default  in  the  payment  of  interest, 
and  a  uemand  upon  the  trustees  by 
the  bondholders  for  possession  of  the 
trust  property,  and  a  failure  of  the 
trustees  to  do  so,  the  court  may  re- 
quire them  on  a  bill  filed  for  such 
purpose  to  execute  the  trust  and  com- 
pel them  to  take  possession  of  the 
trust  property,  or  may  appoint  a  re- 
ceiver for  that  purpose. 

In  Whitehead  v.  Woolen,  43  Miss. 
523,  it  was  held  that  to  justify  the  ap- 
pointment of  a  receiver  before  no- 
tice, strong  special  reasons  must  be 
shown;  that  a  mortgagee  is  not  enti- 
tled after  default  to  the  earnings  and 
income  of  the  mortgaged  premises, 
nor  to  a  receiver,  unless  the  property 
is  inadequate  security,  or  unless  the 
earnings  and  income  are  specifically 
pledged. 

In  McLane  v.  Placerville  &  8.  V.  U. 
Co.  66  Ca'i.  600,  it  was  provided  by 
the  mortgage  that  upon  default  in  the 
payment  of  interest  for  one  year,  the 
trusteesor  the  survivors  of  them  should 
be  entitled  to  take  possession  of  the 
mortgaged  property,  hold  it,  receive 
and  collect  the  income  and  profits, 
and  apply  the  same  to  certain  pur- 
poses. It  was  held  tbat  upon  the 
happening  of  that  event,  or  any  action 
to  enforce   the  specific  execution  of 


the  mortgage,  that  a  receiver  pendente 
lite  might  be  appointed  to  operate  the 
road.  Cf.  Sacramento  P.  R.  Co.  v. 
San  Francisco  Super.  Ct.  55  Cal.  458. 

W^hile  it  may  appear  that  there 
has  been  a  default  in  the  payment  of 
the  interest  coupons  secured  by  the 
railroad  mortgage,  yet  if  it  appear 
that  there  is  a  fair  and  reasonable 
claim  by  the  defendant  company 
growing-out  of  contemporaneous  con- 
tracts that  the  time  of  payment  has 
been  extended,  or  that  the  plaintiffs 
are  precluded  from  relying  on  the  de- 
fault, a  receiver  will  not  be  appointed. 
The  court  must  first  determine 
whether  the  right  of  foreclosure  ex- 
ists. American  Loan  &  T.  Co.  v.  To- 
ledo, C.  &  S.  R.  Co.  29  Fed.  Rep.  416. 

In  Baker  v.  Backus,  32  111.  79,  it 
was  contended  that  the  stockholders 
had  a  right  to  have  the  funds  of  the 
company  appropriated  in  discharge  of 
its  liabilities  and  in  exoneration  of 
their  individual  liabilities,  and  that 
the  neglect  of  the  trustees  to  make 
such  appropriation  was  a  breach  of 
trust  which  entitled  the  stockholders 
to  come  into  a  court  of  equity,  and 
have  the  appropriation  made,  but  it 
was  held  that  the  stockholders  had 
no  such  right  in  the  absence  of 
fraud  or  collusion,  or  neglect  of  duty 
or  indifference  by  the  trustees.  The 
court,  under  the  circumstances  of  the 
case,  say:  "There  was  no  necessity 
to  appoint  a  receiver  because  no  fraud 
is  alleged  or  shown,  and  no  sullicicnt 
proof  that  such  a  step  was  necessary 
to  save  the  property  from  material 
injury  or  rescue  it  from  impending 
destruction." 

In  Pond  V.  Framincjham  &  L.  R, 
Co.  130  Mass.  194,  it  was  alleged  in 
the  bill  by  creditors  that  the  company 
was  insolvent,  that  all  its  property 
was  mortgaged  to  trustees  for  the 
benefit  of  one  class  of  creditors;  tliat 
it  owed  large  amounts  to  other  crcdi- 


460 


RECEIVERSHIPS. 


tors,  one  of  whom  had  attached  all 
its  property;  that  it  was  about  to 
execute  a  lease  to  an  attaching  creditor 
for  a  long  term  of  years  at  a  rental 
which  would  not  pay  the  interest  on 
its  indebtedness;  that  the  execution  of 
the  lease  would  be  injurious  to  the  in- 
terest of  its  stockholders  and  credi- 
tors. Held  tbat  the  bill  did  not  state 
a  case  within  the  equity  jurisdiction 
of  the  court.  Cf.  'Treudicell  v.  Salis- 
bury Mf<j.  Co.  7  Gray,  893. 

In  like  V.  St.  Paul  &  P.  R.  Co.  24 
]\Iinn.  464,  in  an  action  brought  to 
foreclose  the  mortgage  or  trust  deed 
it  was  held  tbat  where  the  plaintiffs 
had  a  complete  and  adequate  remedy 
at  law  a  receiver  would  not  be  ap- 
pointed. 

In  Milwaukee  &  M.  R.  Co.  v.  Sautter, 
69  U.  S.  2  Wall.  510,  17  L.  ed.  900, 
which  was  a  proceeding  to  foreclose 
a  mortgage  on  the  railroad  and  its 
property  where  the  matter  of  the 
amount  due  under  the  mortgage  was 
unsettled  and  fiercely  contested,  it 
was  held  that  the  appointment  of  a 
receiver  or  refusal  to  discharge  the 
receiver  by  the  lower  courts  becomes 
a  judicial  error  which  the  appellate 
court  may  correct. 

In  Wagar  v.  Stone,  36  Mich.  364,  it 
is  held  that  in  Michigan  the  mortgagee 
does  not  have  the  legal  title  to  the 
premises,  but  merely  a  security  for 
his  debt,  and  before  foreclosure  has 
no  legal  interest  in  the  mortgaged 
premises,  and  is  not  entitled  to  posses- 
sion, and  the  appointment  of  a  re- 
ceiver will  not  be  made.  Cf.  Hogftett 
V.  Ellis,  17  Mich.  363;  Laduev.  Detroit 
&  M.  R.  Co.  13  Mich.  380;  Van  Hman 
V.  Eanouse,  13  Mich.  303;  Caruthers 
V.  numphrey,  12  Mich.  270. 

In  St.  Louis,  K.  C.  &  C.  R.  Co.  v. 
Dewees,  23  Fed.  Rep.  519,  where  the 
title  of  an  unused  railroad  track  was 
in  dispute,  both  parties  claiming 
possession  and  neither  in  the  actual 


physical  possession,  it  was  held  that 
the  court  of  equity  would  not  inter- 
fere by  the  appointment  of  a  receiver 
even  where  the  defendant  had  under- 
taken to  obtain  forcible  possession. 
The  right  of  possession  must  first  be 
established. 

In  People  v.  ErieR.  Co.  36  How.  Pr. 
129,  it  is  held  that  a  receiver  could 
not  be  properly  appointed  on  the  ap- 
plication of  a  stockholder  under  the 
circumstances  of  the  case  before  the 
court. 

As  to  the  necessary  allegations  on 
the  part  of  a  creditor  and  bondholder, 
see  Riimsey  v.  Erie  R.  Co.  38  How. 
Pr.  193. 

In  Tysen  Y .Wabash  R.  Co.  8  Biss. 
247,  it  is  held  that  the  mere  fact  that 
a  default  has  been  made  in  the  pay- 
ment of  a  debt  is  not  ground  for  the 
appointment  of  a  receiver  in  the 
absence  of  a  provision  in  the  mort- 
gage to  that  effect,  nor  will  the  court 
appoint  a  receiver  on  the  application 
of  a  small  minority  of  the  bondholders 
where  it  appears  that  said  action 
would  imperil,  If  not  destroy,  the  in- 
terest of  the  others  whose  rights  are 
entitled  to  equal  protection. 

In  Belmont  v.  Erie  R.  Co.  52  Barb. 
637,  it  is  held  that,  to  enable  a 
stockholder  to  maintain  a  bill  for 
the  appointment  of  a  receiver,  the 
court  has  no  visitorial  power  over 
corporations  except  such  as  are  ex- 
pressly conferred  by  the  statute,  and 
a  suit  will  not  be  maintained  by  a 
stockholder  for  the  appointment  of 
a  receiver  upon  allegations  of  mis- 
conduct on  the  part  of  some  of  the 
directors  where  other  directors  are 
not  charged  with  participating  in 
such  misconduct;  that  the  misconduct 
of  some  or  even  all  the  directors 
affords  no  ground  for  taking  away 
the  rights  of  the  stockholders  consti- 
tuting the  company. 

In  Union  Trust  Co.  v.  St.  Louis,  I. 


RECEIVERSHIP  OF  RAILWAYS 


461 


son  of  insolvency,'  or  where  the  mterest  upon  the  mortgages  has 
been  long  past  due,  and  the  property  is  inadequate  to  satisfy  the 
mortgage  indebtedness,  or  taxes  have  not  been  paid.' 


M.  <&  8.  R.  Co.  4  Dill.  114,  it  was 
held  that  a  mere  default  in  the  pay- 
ment of  interest  is  not  sufficient 
ground  for  the  appointment  of  a  re- 
ceiver. It  is  necessary  in  addition  to 
this  to  show  that  ultimate  loss  will 
happen  to  the  beneficiaries  under  the 
mortgage  by  permitting  the  property 
to  remain  in  the  hands  of  its  owners 
until  final  decree  and  sale. 

In  Union  Mut.  L.  Ins.  Co.  v.  Union 
mils  Plaster  Co.  37  Fed.  Rep.  286,  it 
is  held  that  the  mere  disuse  of  a 
manufacturing  plant  under  an  agree- 
ment with  other  manufacturers  to 
restrict  production,  though  attended 
with  decay  and  dilapidation  insep- 
arable from  disuse,  is  not  such  de- 
struction and  waste  as  entitles  the 
mortgagee  to  a  receiver. 

In  Bodbourn  v.  Utica,  I.  &  E.  R.  Go.  28 
Hun,  369,  where  the  judgment  form- 
ing the  basis  of  the  appointment  of 
a  receiver  was  opened  to  allow  the 
defendant  to  appear  and  defend,  but 
which  order  directed  the  judgment 
and  execution  to  stand  as  security,  it 
was  held  that  there  was  no  adjudication 
of  the  amounts  due  the  plaintiff,  and 
the  order  appointing  a  receiver  should 
be  -vacated. 

'  In  Brassey  v.  Netc  York  &  N.  E. 
R.  Co.  19  Fed.  Rep.  663,  22  Blatchf. 
72,  it  is  held  that  an  insolvent  rail- 
road corporation  may  be  put  in  the 
hands  of  a  receiver  whenever  the 
welfare  of  the  various  interests  clearly 
requires  it,  even  though  no  default 
has  actually  been  made  by  the  cor- 
poration in  its  obligations,  but  where 
the  default  is  imminent  and  manifest, 
and  the  corporation  is  in  peril  of  a 
breaking  up  and  the  destruction  of  its 
business.  Cf.  Long DockCo.'v.  Mallery, 
12  N.  J.  Eq.  431. 


'  Hopkins  v.  Worcester  &  B.  Canal 
Co.  L.  R.  6  Eq.  437. 

In  Doio  \.  Memphis  &  L.  R.  R.  Co.  20 
Fed.  Rep.  260,  a  receiver  was  allowed 
on  the  application  of  a  mortgagee 
where  there  was  a  default  in  the  pay- 
ment of  the  interest  on  the  mortgage 
indebtedness,  and  the  mortgaged 
property  was  inadequate  security  to 
pay  the  mortgage  debt,  and  the  com- 
pany was  insolvent  and  appropriated 
the  earnings  to  its  own  use.  Where 
there  was  a  stipulation  in  the  mort- 
gage that  in  case  of  default  in  the 
payment  of  the  interest  for  sixty  days 
it  should  be  obligatory  on  the  trustees 
upon  a  written  request  of  one-third  of 
the  bondholders  to  take  possession 
and  sell  the  road  and  other  mortgaged 
properly.  It  was  held  that  its  remedy 
in  the  mortgage  was  cumulative  and 
not  exclusive  of  the  remedies  given 
by  law.  While  the  mortgagee  may 
have  a  remedy  at  law,  yet  if  such 
remedy  is  not  adequate,  as  where  the 
mortgage  embraces  real,  personal,  and 
mixed  property,  then  the  appropriate 
remedy  is  not  in  equity.  Cf.  Shepley 
V.  Atlantic  &  St.  L.  R.  Co.  55  Me.  395; 
Hall  V.  Sullivan  R.  Co.  2  Redf.  Ry. 
Cas.  621;  First  Nat.  L.  Ins.  Co.  v. 
Salisbury,  130  Mass.  303;  Warner  v. 
Rising  Fawn  Iron  Co.  3  Woods,  514; 
North  Carolina  R.  Co.  v.  Drew,  3 
Woods,  713;  State  v.  Northern  C.  R. 
Co.  18  M(l.  193. 

In  Wilmer  v.  Atlanta  <&  R.  Air  Line 
R.  Co.  2  Woods.  409,  there  was  pro- 
vision in  the  trust  deed  authorizing 
the  trustees,  in  case  the  railroad  com- 
pany failed  to  pay  either  the  interest 
or  the  principal  of  the  bonds,  to  take 
possession  of  the  property  conveyed 
by  the  trust  deed,  advertise,  and  sell  it 
to  pay  the  amount  in  default,  and  it 


462 


RECEIVERSHIPS. 


was  held  that  on  a  failure  of  the  trus- 
tees to  perform  their  duty  a  bill  misht 
be  filed  by  the  bondholders  reqinring 
the  trustees  to  execute  their  trust  or 
appoint  a  receiver  for  that  purpose, 
and  that  such  appointment  would  be 
made  though  there  was  no  probable 
deficiency  in  the  trust  property  to  pay 
the  debt  secured   by  the  trust  deed. 
The  court  say:     "AVhere  there  is  a 
trust  fund  in  danger  of  being  wasJLod 
or    misapplied,    a    court    of    equity 
will  interfere  upon  the  application  of 
any  of  the  creditors,  either  in  his  own 
behalf  or  in  behalf  of  himself  and 
other  creditors,  and  by  the  appoint- 
ment of  a  receiver,  or  in  some  other 
mode,  grant  a  relief.     The  appoint- 
ment of  a  receiver  is  not  necessarily 
predicated  upon  the  apprehended  loss 
of  the  debt.     It  would  be  suflacient  to 
allege  that  the  trustees  appointed  re- 
fused to  perform  the  trust.     Where 
there  has  been  negligence  or  improper 
conduct  on  the  part  of  a  trustee  and 
the  fund  is  in  danger,  the  appoint- 
ment of  a  receiver  upon  the  applica- 
tion of  the  cestui  que  trust  is  a  matter 
of  right."    Jones  v,  Dougherty,  10  Ga. 
274;  McDougald  v.  Doxigherty,  11  Ga. 
586;  Jenkins  v.  Jenkins,  1  Paige,  243. 
In  this  class  of  cases  the  application 
for  a  receiver  is  not  based  upon  the  de- 
ficiency of  the  trust  property  but  upon 
the  right  of  the  beneficiaries  under  the 
deed  to  have  the  trust  performed  ac- 
cording to  the  intention  of  the  parties. 
In  Sacramento  P.   B.    Co.    v.  San 
Francisco  Super.  Ct.  55  Cal.  453,  there 
was  provision  in  the  trust  deed  that 
upon  default  in  the  payment  of  the 
principal,    or  upon  default  for  one 
year  in  the  payment  of  the  interest, 
the  trustees  should  take  possession  of 
the  property  and   apply  the  net  in- 
come to  the  payment  of  the  principal 
and  interest  of  the  bonds.     Default 
having    been    made,    an  action   was 
brought  by  the  trustees  to  foreclose 


the  lease  and  trust,  and   a  receiver 
was  appointed  on  this  application. 

Cf.  Shaw  V.  Norfolk  County  R.  Co. 
5  Gray,  162;  Shepley  v.  Atlantic  &  St. 
L.  R.  Co.  55  Me.  395;  American 
Bridge  Co.  v.  Ileidelbach,  94  U.  S.  798, 
24  L.  ed.  144. 

In  McLane  v.  Placerville  <&  S.  V.  R. 
Co.  66  Cal.  606,  there  was  a  provision 
in  the  mortgage  that  upon  default  in 
the  payment  of  interest  for  one  year 
the  trustees  should  take  possession  of 
the  property  mortgaged,  collect  the 
income  and  profits  arising  from  it 
and  apply  the  same  for  certain  pur- 
poses. It  was  held  upon  the  liappen- 
ing  of  that  event  a  court  of  equity 
had  power  in  an  action  to  forclose 
under  the  specific  power  of  the  mort- 
gage to  appoint  a  receiver. 

In  Allen  v.  Dallas  <&  W.  R.  Go.  3 
Woods,  316,  it  appeared  that  a  deed 
of  trust  was  executed  by  the  railroad 
company  upon  its  income  and  profits 
as  well  as  its  railroad  and  other  prop- 
erty, to  secure  the  payment  of  the 
principal  and  interest  of  its  bonds, 
and  authorized  the  trustees  in  default 
of  the  payment  of  the  interest  to  take 
possession  of  the  mortgaged  property 
and  apply  the  income  to  the  payment 
of  the  interest.  It  was  held  upon  the 
application  of  the  trustees  that  such 
default  was  sufficient  ground  for  the 
appointment  of  a  receiver,  and  that  it 
was  not  necessary  in  such  cases  to 
show  inadequacy,  or  that  the  prop- 
erty was  in  jeopardy,  or  tlie  insol- 
vency of  the  company,  or  that  the 
amount  due  on  the  bonds  is  in  dis- 
pute. This  case  is  based  on  the  fact 
that  there  was  a  stipulation  in  the 
mortgage  that  the  mortgagee  shall 
have  the  rents  in  case  of  default. 

Cf.  Slate  V.  Northern  C.  R.  Co.  18 
Md.  193;  Dumville  v.  Ashbrooke,  3 
Russ.  99,  note  c;  Whitehead  v.  Wooten, 
43  Miis.  523;  Morrison  v.  Bvckner, 
Hempst.  443. 


RECEIVERSHIP  OF  RAILWAYS. 


403 


(c)  "Where  the  revenues  and  income  of  tlie  road  are  being  di- 
verted from  their  proper  application,  or  misapplied.* 


In  Union  Trust  Go.  v.  St.  Louis,  I. 
M.  &  S.  R.  Co.  4  Dill.  114,  it  was  held 
that  a  court  of  equity  would  not  ap- 
point a  receiver  merely  upon  the 
showing  that  there  has  been  a  default 
in  the  payment  of  the  interest  secured 
by  a  mortgage  upon  the  property  and 
income  of  the  company,  but  that  upon 
a  default  the  trustees  were  entitled  to 
immediate  possession,  and  having 
made  such  demand  and  having  been 
refused  possession,  it  is  still  necessary 
to  show  that  ultimate  loss  will  happen 
to  the  beneficiaries  under  the  mort- 
gage by  permitting  the  property  to 
remain  in  the  hands  of  its  owners 
until  final  decree.  The  facts  in  this 
case  were  held  not  to  exhibit  such 
danger  to  the  bondholders  as  would 
warrant  the  appointment  of  a  receiver, 
following  the  case  of  Williamson  v. 
iVew  Albany  etc.  R.  Co.  1  Biss.  198. 

In  Tysen  v.  Wabash  R.  Co.  8  Biss. 
247,  it  is  said  that  the  appointment  of 
a  receiver  in  proceedings  for  foreclos- 
ure is  a  matter  resting  in  the  sound 
discretion  of  the  court,  but  the  mere 
fact  that  there  has  been  a  default  in 
the  payment  of  the  debt  is  not  ground 
for  the  appointment  of  a  receiver,  in 
the  absence  of  a  stipulation  in  the 
mortgage  providing  that  the  mortga- 
gee shall  have  the  earnings,  and  that 
the  court  will  not  interfere,  upon  the 
application  of  a  small  minorilj'^  of  the 
bondholders,  and  appoint  a  receiver 
■where  it  appears  that  such  action 
would  imperil  if  not  destroy  the  in- 
terest of  others  whose  rights  are  enti- 
tled to  equal  protection. 

In  Williamson  v.  New  Albany  etc. 
R.  Co.  1  Biss.  198,  it  is  also  held  that 
the  appointment  of  a  receiver  of  the 
properly  of  a  railroad  company  in  a 
foreclosure  proceeding  is  not  a  matter 


of  course  on  default  in  the  payment 
of  the  interest. 

In  Mercantile  Trust  Co.  v.  Missouri, 
K.  &  T.  R.  Co.  36  Fed.  Rep.  a31,  1  L. 
R.  A.  397,  there  was  a  clause  in  the 
mortgage  providing  that  in  case  of 
demand  and  default  in  the  payment 
of  interest  for  six  months  the  trustees 
might  enter  upon  the  property,  and  it 
was  held  that  upon  default  a  bill  to 
foreclose  might  be  entertained  by  the 
court,  though  six  months'  default  did 
not  exist.  In  this  case  it  appeared 
that  the  railroad  was  heavily  mort- 
gaged; had  made  several  defaults  in 
the  payment  of  interest,  aggregating 
over  one  million  dollars;  that  the 
business  was  decreasing  and  liable  to 
continue  decreasing  from  competition 
with  new  lines;  that  it  was  in  need  of 
repairs  and  improvements  and  there 
was  want  of  harmony  between  the 
bondholders,  and  it  was  held  that  a 
receiver  was  properly  appointed. 

In  Pullan  v.  Cincinnati  &  G.  Air 
Line  R.  Co.  4  Biss.  35,  it  was  held 
that  the  appointment  of  a  receiver 
should  be  made  only  in  strong  cases, 
and  that  in  no  case  on  the  foreclosure 
of  a  mortgage  should  a  receiver  be 
appointed,  if  it  is  clear  that  on  the 
foreclosure  the  property  will  bring 
enough  money  to  pay  the  debt,  inter- 
ests, and  costs,  and  that  it  would  be 
otherwise  if  it  was  clearly  averred 
that  the  mortgaged  property  was  ia- 
suflicient  security  for  the  debt. 

'  Dreicry  v.  Barnes,  3  Russ.  94. 

In  Kelly  v.  Alabama  &  C  R.  Co.  53 
Ala.  489,  it  appeared  that  the  corpo- 
ration had  been  declared  bankrupt; 
that  interest  had  accumulated  on  its 
bonds  exceeding  the  value  of  the  prop- 
erty mortgaged  to  secure  them;  that 
purchasers  of  equity  of  redemption  at 


464 


RECEIVERSHIPS. 


(d)  Where  the  income  and  profits  of  tlie  railroad  as  well  as  its 
property  and  franchises  are  pled<ijed  to  secure  the  payment  of  its 
bonds,  principal  and  interest,  and  there  is  a  default  in  the  pay- 
ment of  the  interest.' 


the  assignee's  sale  were  in  possession 
of  the  road  and  the  property  mort- 
gaged, receiving  the  income,  profits, 
and  earnings  of  the  road  belonging  to 
the  mortgagee  and  using  the  property 
for  their  own  exclusive  use  and  ben- 
efit, and  it  was  held  to  be  a  clear  case 
for  the  appointment  of  a  receiver. 
Llatchford  v.  Ross,  54  Barb.  42. 

In  Dei>  Moines  Oas  Co.  v.  West,  44 
Iowa,  23G,  it  was  held  that  where  the 
bond  or  mortgage  pledges  the  income, 
rents,  or  profits  to  the  payment  of  the 
debt,  the  creditor  need  not  conclu- 
sively establish  his  right  to  recover 
before  he  is  entitled  to  ask  for  the  ap- 
pointment of  a  receiver;  it  is  sufficient 
if  he  shows  a  probable  right  to  re- 
cover; that  if  in  such  case  the  debtor 
is  insolvent  the  appointment  of  a  re- 
ceiver follows  as  a  matter  of  course 
(see  Code,  gS  29-103).  Checvcr  v.  Rut- 
land <&  B.  K  Co.  39  Vt.  653. 

'  In  Allen  v.  Dallas  &  W.  R.  Co.  3 
"Woods,  316,  the  income  and  profits 
were  mortgaged  as  well  as  the  other 
property,  and  it  was  held  that  a  de- 
fault in  the  payment  of  the  interest 
was  sufficient  ground  for  the  appoint- 
ment of  a  receiver.  Insufficiency  in 
such  cases  or  insolvency  is  not  in- 
volved in  the  issue. 

In  Morrison  v.  Buclcner,  Hempst. 
442,  the  court  say:  "Now,  without 
adopting  this  rule  (English)  to  its  full- 
est extent  it  is  proper  to  observe  gen- 
erally that  receivers  in  mortgage  cases 
will  never  be  appointed  unless  it  is 
clearly  shown  that  the  security  is  in- 
adequate, or  that  the  rents  and  profits 
have  been  expressly  pledged  for  the 
debt."  Shotwell  v.  Smith,  3  Edw.  Ch. 
588. 


In  Bow  V.  Memphis  &  L.  R.  R.  Co.  20 
Fed.  Rep.  260,  a  receiver  was  ap- 
pointed upon  default  in  the  payment 
of  the  interest  where  inadequate  se- 
curity and  insolvency  of  the  company 
was  shown  together  with  the  appro- 
priation of  the  rents. 

In  Wilmer  v.  Atlanta  &  R.  Air  Line 
R.  Co.  2  Woods,  409,  a  receiver  was 
appointed  upon  default  in  the  pay- 
ment of  interest,  but  the  application 
was  based  on  the  ground  that  the 
trustees  had  failed  to  perform  their 
duty  in  regard  to  taking  possession  of 
the  property  upon  such  default, 
as  it  was  held  that  deficiency  in  the 
trust  properly  was  not  material. 

In  Brassey  v.  New  York  &  N.  E.  R. 
Co.  19  Fed.  Rep.  663,  22  Blatchf.  72, 
a  receiver  was  appointed  prior  to  any 
default  on  the  securities,  but  it  was 
shown  that  a  default  was  imminent 
and  manifest,  and  the  company  was 
entirely  insolvent,  and  unable  to  pay 
such  interest,  and  unable  to  pay  its 
floating  indebtedness  or  borrow 
money  for  such  purpose. 

In  Whitehead  v.  Wooten,  43  Miss. 
523,  it  was  held  that  a  mortgagee  was 
not  entitled  after  default  to  the  rents 
and  income,  nor  to  a  receiver  unless 
the  rents  and  profits  were  mortgaged, 
or  unless  the  mortgaged  property  is 
insufficient  to  meet  the  debt.  The 
court  say:  "Unless  the  mortgagee 
has  contracted  that  he  shall  have  the 
rents  and  income  after  default  is 
made  he  is  not  entitled  to  them,  or  to 
a  receiver  to  get  them  in  except  in 
case  of  the  insufficiency  of  the  prop- 
erly to  meet  the  debt." 

In  Shepley  v.  Atlantic  &  St.  L.  R. 
Co.  55  Me.  395,  it  was  provided  in  the 


RECEIVERSHIP  OF  RAILWAYS. 


tt65 


(e)  "Where  the  officers  and  directors  are  mismanaging  the  busi- 
ness and  wasting  the  property  of  the  corporation,  or  squandering 
its  money,  or  embezzling  the  same.' 

(f).  Where  by  reason  of  a  neglect  to  elect  officers,  or  otherwise, 
there  is  no  one  competent  to  take  charge  of  the  property  of  the 
company.^ 

(g)  Where  the  company  has  committed  some  act  which  consti- 
tutes a  statutor}^  cause  for  revoking  its  charter  or  for  the  ap- 
pointment of  a  receiver/ 

§  273.     When  not  appointed. 

A  court  of  equity  will  not  appoint  a  receiver  over  a  railway 
corporation : 


trust  deed  that  a  failure  to  pay  inter- 
est or  principal  of  the  bonds  gave  the 
mortgagees  the  right  to  take  the  mort- 
gaged property  into  their  actual  pos- 
session, and  manage  and  control  the 
same,  and  apply  the  net  income  and 
profits  to  the  payment  of  the  interest 
and  principal.  A  specific  perform- 
ance of  the  contract  was  asked  by  the 
mortgagees,  and  the  court  granted 
the  relief.  See  also  Shaw  v.  Norfolk 
County  B.  Co.  5  Gray,  162. 

In  McLane  v.  Placerville  &  S.  V.  R. 
Co.  66  Cal.  606,  a  receiver  was  ap- 
pointed upon  a  default  in  the  payment 
of  interest  for  a  period  of  one  year  on 
the  ground  of  the  action  being  brought 
for  a  specific  execution  of  the  mort- 


In  Sacramento  P.  R.  Co.  v.  San 
FranciHco  Super.  Ct.  55  Cal.  453,  a  re- 
ceiver was  appointed  for  the  nonpay- 
ment of  the  interest. 

In  Doe  V.  Northwest  Coal  <fe  T.  Co. 
64  Fed.  Rep.  928,  a  receiver  was  ap- 
pointed on  the  ground  of  insolvency 
and  mismanagement. 

>  In  Blatchfurd  v.  Ross,  54  Barb.  42, 
a  receiver  was  held  to  be  proper  upon 
the  ground  that  the  executive  com- 
mittee of  a  company  had  voted  them- 
30 


selves  money  in  addition  to  their 
regular  compensation  for  services  as 
promoters  and  originators  of  the  com- 
pany and  other  parties,  and  it  was 
held  that  the  action  of  the  committee 
in  this  regard  afforded  ample  reason 
for  the  appointment  of  a  receiver. 

In  People  v.  Bruff,  9  Abb.  N.  C. 
153,  misconduct  by  the  officers  of  a 
corporation  was  alleged,  and  it  was 
held  to  be  sufficient  ground  for  the 
appointment  of  a  receiver.  See  also 
Eeeler  v.  Brooklyn  Elev.  R.  Co.  9  Abb. 
N.  C.  166. 

In  Lawrence  v.  Greenwich  F.  Ins. 
Co.  1  Paige,  587,  where  the  majority 
of  stockholders  neglected  to  choose 
oflicers  to  take  charge  of  the  properly, 
a  receiver  was  appointed  on  the  ap- 
plication of  the  minority  stockholders 
for  the  purpose  of  preserving  the 
property  for  the  benefit  of  the  stock- 
holders generally.  Cf.  Andrercs  v. 
Poicys,  2  Bro.  P.  C.  504;  Maguire  v. 
Allen,  1  Ball  &  B.  75. 

*  Smith  V.  Danzig,  64  How.  Pr.  320: 
Re  Ijouisiana  Sav.  Bank  <fe  Safe  De- 
posit Co.  35  La.  Ann.  196;  Stark  v. 
Burke,  5  La.  Ann.  740;  Dobson  v.  Sir 
monton,  78  N.  C.  63. 

^  Cvnro  V.  Gray,  4  How,  Pr.  165. 


466 


RECEIVERSHIPS. 


(a)  In  the  absence  of  notice  to  such  corporation  of  the  applica- 
tion, and  an  opportunity  to  be  heard  thereon.' 


'As  a  general  rule  an  order  for  a  re- 
ceiver will  not  be  granted  c.v  parte  un- 
til the  lime  for  the  defendant's  appear- 
ance has  expired,  and  the  bill  has  been 
taken  for  confessed  against  hin?..  Tbia 
is  not  the  rule  where  the  defendant 
has  fraudulently  withdrawn  himself 
from  the  jurisdiction  of  the  court  to 
avoid  service  of  process.  Sandford  v. 
Sinclair,  8  Paige,  373. 

In  Whelpley  v.  Erie  R.  Co.  6  Blatchf. 
271,  it  is  held  that  a  receiver  cannot 
be  appointed  even  with  the  consent  of 
both  parties  in  an  improper  case. 

In  Cook  V.  Detroit  &  M.  R.  Co.  45 
Mich.  453,  it  is  held  that  a  receiver 
cannot  be  appointed  ex  parte  in  a  pro- 
ceeding by  creditors  to  wind  up  an  in- 
solvent corporation  and  pending  the 
possession  on  a  demurrer,  whereby 
the  right  to  file  the  bill  is  put  in  issue. 

In  State  v.  Jacksonville,  P.  &  M.  R. 
Co.  15  Fla.  201,  it  is  held  that  it  is  not 
necessary  for  a  party  defendant  to  be 
served  with  process  before  the  entry 
of  an  appeal  from  an  ex  parte  order 
or  demand  pending  his  rights,  if  such 
order  is  the  subject-matter  of  an  ap- 
peal. It  is  also  held  upon  the  author- 
ity of  Verplanck  v.  Mercantile  Ins.  Co. 
2  Paige,  450,  that  it  is  irregular  to  de- 
prive the  corporation  of  the  possession 
of  its  property  and  corporate  rights 
without  its  having  an  opportunity  to 
be  heard,  and  without  sufficient  cause 
for  such  a  summary  proceeding.  The 
settled  practice  in  ordinary  suits  is 
that  a  receiver  cannot  be  appointed 
ex  parte  before  the  defendant  has  had 
an  opportunity  to  be  heard  in  relation 
to  his  rights,  except  where  he  is  out 
of  the  jurisdiction  of  the  court  or  can- 
not be  found,  or  where  for  some  other 
reason  it  is  absolutely  necessary  for 
the  court  to  interfere  before  there  is 


time  to  give  notice  to  the  opposite 
party  to  prevent  the  destruction  or 
loss  of  property.  And  where  the  court 
is  asked  to  deprive  a  defendant  of  the 
possession  of  his  property  without  a 
hearing  or  an  opportunity  to  be  heard 
the  particular  facts  and  circumstances 
which  render  such  a  summary  proceed- 
ing proper  must  be  set  forth  in  the  bill 
or  petition  on  which  the  application  is 
founded.  See  also  People  v.  Norton, 
1  Paige,  17;  Triehert  v.  Burgess,  11 
Md.  456;  Ilaight  v.  Burr,  19  Md.  134. 

In  Cleveland,  C.  C.  <fc  /.  R.  Co.  v. 
Jewett,  37  Ohio  St.  649,  it  is  said  that 
the  appointment  of  a  receiver  to  take 
from  the  defendant  the  possession  of 
his  property  cannot  be  lawfully  made 
without  notice,  unless  the  delay  re- 
quired to  give  notice  will  result  in  ir- 
reparable loss. 

In  People  v.  Albany  &  S.  R.  Co.  55 
Barb.  344,  369,  it  is  said  that  the  or- 
der for  the  appointment  of  a  receiver 
ex  parte  must  have  been  granted  in- 
cautiously upon  some  mistaken  oral 
representation  or  statement  of  facts 
in  the  case,  as  it  was  in  clear  conflict 
with  the  law  and  settled  practice  of 
the  court.  Cf.  Field  v.  Ripley,  20 
How.  Pr.  26;  McCarthy  v.  Peake,  9 
Abb.  Pr.  166. 

In  JJowe  V.  Jones,  57  Iowa,  130,  the 
appointment  of  a  receiver  in  viicalion 
and  without  notice  to  the  adverse 
party  was  held  to  be  clearly  errone- 
ous. Cf.  French  v.  Oiffotd,  30  Iowa, 
148;  Bisson  v.  Curry,  35  Iowa,  72. 

See  also  Blondheim  v.  Moore,  11 
Md.  364,  where  it  is  held  that  in  order 
to  justify  the  appointment  of  a  re- 
ceiver it  must  appear  that  the  claim- 
ant has  title  to  the  property  and  the 
court  must  be  satisfied  that  a  receiver 
is  necessary  to  preserve  such  property. 


RECEIVERSHIP  OF  RAILWAYS. 


4G7 


(b)  In  the  absence  of  statutory  authority  and  when  the  appH- 
cation  is  based  on  the  insolvency  of  the  corporation  alone,  no 
fraud  or  breach  of  trust  being  alleged.' 

(c)  In  foreclosure  cases  when  it  does  not  clearly  appear  that 


The  court  will  never  appoint  a  re- 
ceiver merely  because  tbe  measure  can 
do  no  harm  and  that  fraud  or  immi- 
nent dauger,  should  any  be  apparent' 
must  be  clearly  proved.  Unless  the 
necessity  be  of  the  most  stringent 
character  the  court  will  not  appoint  a 
receiver  until  the  defendant  is  tirst 
heard  in  response  to  the  application. 
See  alse  to  the  same  effect,  Triebert  v. 
Burgess,  11  Md.  452;  Voshell  v,  Ryn- 
son,  26  Md.  8^;  Smith  v.  Port  Dozer  & 
L.  H.  B.  Co.  12  U.  C.  App.  288;  Rogers 
V.  Dougherty,  20  Ga.  271. 

lu  McLean  v.  Lafnyette  Bank,  3 
McLean,  503,  it  is  held  that  the  notice 
of  motion  to  appoint  a  receiver  is 
necessary  when  counsel  for  opposite 
party  is  not  present  in  court. 

In  Whitehead  v.  Woolen,  43  Miss. 
523,  it  is  held  that,  to  justify  the  ap- 
pointment of  a  receiver  before  answer 
filed  or  pro  confesso  taken,  there  must 
be  strong  special  reasons  given  as 
where  the  defendant  has  withdrawn 
himself  from  tbe  jurisdiction  of  the 
court  to  avoid  service,  or  is  guilty  of 
fraud  endangering  the  property. 

In  People  v.  Albany  &  S.  R.  Co.  7 
Abb.  Pr.  N.  S.  265,  it  is  held  that  a 
receiver  should  not  be  appointed  ex 
parte  except  where  the  defendant  is 
out  of  the  jurisdiction  of  the  court  and 
cannot  be  found,  or  it  is  necessary  to 
interfere  before  there  is  time  to  give 
notice  to  prevent  destruction  or  loss  of 
property. 

'  In  Farmers'  Loan  <&  T.  Co.  v.  Chi- 
cago &  A.  R.  Co.  27  Fed.  Rep.  147,  it 
is  said  that  the  appointment  of  a  re- 
ceiver rests  in  the  sound  discretion  of 


the  court  and  that  mere  insolvency 
may  or  may  not  call  for  such  action. 

In  New  Foundland  R.  Const.  Co.  v. 
Schack,  40  N.  J.  Eq.  232,  the  allega- 
tions of  the  bill  were  that  the  com- 
pany was  insolvent  and  had  sus- 
pended its  business  for  want  of  funds 
to  carry  on  the  same  and  it  was  held 
that  the  allegations  were  not  sufficient 
for  the  appointment  of  a  receiver. 
The  facts  and  circumstances  must  be 
set  out  from  which  the  insolvency  of 
the  corporation  shall  appear.  See  also 
Raicnsley  v.  Trenton  Mut.  L.  Ins.  Co. 
9  N.  J.  Eq.  95,  347;  Baker  v.  Backus, 
32  111.  79. 

In  Pond  V.  Framingham  &  L.  R. 
Co.  120  Mass.  194,  a  bill  in  equity  was 
filed  by  the  creditors  of  the  railway 
corporation  alleging  that  the  corpora- 
tion was  insolvent;  that  all  its  prop- 
erty was  mortgaged  to  trustees  for  the 
benefit  of  one  class  of  creditors;  that 
it  owed  large  amounts  to  other  credit- 
ors, one  of  whom  had  attached  all  of 
its  property;  that  it  was  about  to  exe- 
cute a  lease  to  the  attaching  creditor 
for  a  long  term  of  years  at  a  rental 
which  would  not  pay  the  interest  on 
its  indebtedness  and  that  the  execu- 
tion of  the  lease  would  be  injurious  to 
the  interest  of  its  creditors  and  stock- 
holders. It  was  held  that  the  bill  did 
not  state  a  ca.se  within  the  equity  ju- 
risdiction of  the  court,  in  the  absence 
of  allegations  of  fraud  or  breach  of 
trust  or  other  ground  of  jurisdiction, 
which  l)ring  the  case  within  the  es- 
tablished equity  powers  of  the  court 
of  cliancery. 


iGS 


RECEIVERSHIPS. 


tliG  conditions  of  the  mortga«^-e  have  been  broken  or  the  right  to 
foreclose  is  doubtful.' 

(d)  AYlien  the  application  is  in  behalf  of  a  small  minority  of 
the  bondholders  and  it  appears  that  the  interests  of  the  majority 
bondholders  would  be  prejudiced  thereby.' 

(e)  Wlien  there  has  been  a  default  in  the  payment  of  interest, 
but  it  does  not  appear  tliat  there  will  be  a  loss  to  the  beneficiaries 
under  the  mortgage  by  permitting  the  road  to  remain  in  the 
hands  of  the  mortgagor  until  decree  and  sale.' 


'  In  Briarfield  Iron  Works  v.  Foster, 
54  Ala.  623,  it  is  lield  that  wliile  no 
unbending  rule  can  be  declared  ap- 
plicable to  every  case  in  which  the 
appointment  of  a  receiver  is  sought, 
yet  a  receiver  should  not  be  appointed 
in  the  first  instance  on  the  assertion 
of  a  disputed  right  and  the  defendant 
displaced  from  the  possession  of 
property  when  the  required  protec- 
tion can  be  given  by  a  writ  of  injunc- 
tion or  equitable  attachment,  where 
the  party  injured  may  have  the  benefit 
of  a  bond. 

In  Pidlan  v.  Cincinnati  &  G.  Air 
Line  B.  Go.  4  Biss.  35,  it  is  held  that 
while  the  appointment  of  a  receiver  is 
generally  within  the  sound  discretion 
of  the  court,  yet  it  is  a  power  only  to 
be  exercised  in  strong  cases;  that  in 
no  case  of  a  mortgage  ought  a  receiver 
to  be  appointed  if  it  is  clear  that  on 
a  foreclosure  the  mortgaged  property 
will  bring  enough  money  to  pay  the 
debt,  interest,  and  costs. 

In  American  Loan  &  T.  Go.  v. 
Toledo,  G.  &  8.  R.  Go.  29  Fed.  Rep. 
416,  it  is  said  that  although  there  has 
been  a  default  in  the  payment  of  the 
interest  coupons  secured  by  the  mort- 
gage, yet  if  it  appear  that  there  is  a 
fair  and  reasonable  claim  by  the  de- 
fendant company  growing  out  of  con- 
temporaneous contracts,  that  the  time 
of  payment  has  been  extended  or  that 
the  plaintiffs  are  precluded  from  re- 


lying upon  the  default,  a  receiver 
will  not  be  appointed  until  the  court 
shall  determine  that  the  right  to  fore- 
close exists.  Mere  disagreement  of  the 
parlies  is  not  sufficient  ground  for 
the  appointment  of  a  receiver. 

Mere  default  in  the  payment  of  the 
debt  is  not  ground  for  the  appoint- 
ment of  a  receiver  in  the  absence  of  a 
stipulation  in  the  mortgage  that  the 
mortgagee  shall  have  the  rents.  Tysen 
V.  Wabash  B.  Go.  8  Biss.  247. 

2  In  Ti/sen  v.  Wabash  B.  Co.  8  Biss. 
247,  it  was  held  that  the  court  would 
not,  in  deference  to  the  mere  technical 
rights  of  a  very  small  minority  of 
bondholders,  appoint  a  receiver  where 
it  appears  that  such  action  would 
imperil,  if  not  destroy,  the  interest  of 
others  whose  rights  are  entitled  to 
equal  consideration.  In  making  the 
appointment  it  must  be  apparent  to 
the  court  that  much  greater  injury 
would  result  to  those  interested  in  the 
railway  by  not  appointing  than  by 
leaving  the  property  in  the  hands  of 
the  persons  then  holding  it  and 
especially  so  where  it  appears  that  a 
funding  plan  is  being  negotiated. 

*  If  the  plaintiff  has  a  complete  and 
perfect  remedy  at  law  in  respect  to 
the  matters  complained  of  in  the  bill, 
a  receiver  will  not  be  appointed. 
Bice  V.  St.  Paul  &  P.  B.  Co.  24  Minn. 
464. 

If  the  security  is  ample  a  receiver 


RECEIVERSHIP  OF  RAILWAYS. 


469 


(f)  When  the  plaintiff  lias  an  adequate  remedy  at  law.* 

(g)  When  by  statute,  on  the  dissolutiou  of  a  corporation,  the 


■wil!  not  be  appointed  before  a  decree 
and  sale,  though  provision  may  he 
made  therefor  in  the  mortgage.  Deg- 
ener  v.  Stiles,  6  N.  Y.  Supp.  474; 
Williamson  v.  New  Albany  etc. R.  Co.  1 
Biss.  198. 

In  Blair  v.  St.  Louis,  H.  &  K.  E. 
Co.  20  Fed.  Rep.  348,  it  is  said:  "A 
court  should  not,  on  mere  default  of 
interest  on  bonds,  take  possession  of  a 
railway  and  substitute  a  receiver  of 
its  appointment  to  do  what  the  cor- 
porate authorities,  more  familiar  with 
its  interests,  could  belter  do.  In  the 
absence  of  fraud,  incompetency,  etc., 
the  court,  pending  a  proceeding  for  a 
foreclosure,  under  ordinary  circum- 
stances will  not  take  possession 
through  its  receiver  of  the  corporate 
property  and  substitute  its  ofHcer  in 
the  place  of  the  corporate  officers. 
*  *  *  The  sole  object  in  ordinary 
cases  of  foreclosure,  if  the  corporate 
authorities  in  possession  are  incom- 
petent, is  to  put  the  property  in  a  re- 
ceiver's hands  for  the  interest  of  all 
concerned  in  the  litigation,  viz.,  stock- 
holders, mortgagees,  other  lien  credit- 
ors, creditors  at  large,  etc.  Courts 
should  not  interfere  with  the  custody 
and  management  of  the  business  of 
the  corporation  through  its  corporate 
officers,  pending  litigation,  except  for 
cause  shown." 

In  Michigan  it  is  held  where  the 
mortgagor  is  entitled  under  the  statute 
to  the  possession,  and  consequently 
to  the  rents  and  profits  of  the  mort- 
gaged premises  until  such  a  time  as 
he  is  devested  by  a  perfected  fore- 
closure, it  is  not  competent  to  cut 
short  his  rights  in  this  regard  by 
means  of  a  receiver.  War/ar  v.  Stone, 
36  Mich.  364;  Uazeltine  v.  Oranger, 
44  Mich.  503;  Beecher  v.  MarqneUe  & 
P.  liolling  Mill  Co.  40  Mich.  307.     It 


Is  different,  however,  where  the  mort- 
gagor voluntarily  puts  the  mortgagee 
in  possession.  Beading  v.  Waterman, 
46  Mich.  107.  The  above  cases  are 
based  on  the  settled  doctrine  that  a 
mortgage  conveys  no  title  to  the 
mortgagee,  the  mortgage  being  a 
security  for  the  debt  only  until  the 
title  passes  by  a  foreclosure  and  sale 
of  the  properly.  See  llogmtt  v.  Ellis, 
17  ]\Iich.  363;  Ladt/e  v.  Detroit  &  M. 
B.  Co.  13  Mich.  380;  Van  Ihisan  v, 
Kanouse,  13  Mich.  303;  Carutkers  v. 
Humjihrey,  12  Mich.  270. 

In  Union  Trust  Co.  v.  St.  Louis,  I. 
M.  &  8.  R.  Co.  4  Dill.  114,  it  is  held 
that  in  a  foreclosure  it  must  be  shown 
that  loss  will  happen  to  the  bene- 
ficiaries under  the  mortgage  by  per- 
mitting the  property  to  remain  in  the 
hands  of  its  owners  until  final  decree 
and  sale. 

'  In  Bice  v.  St.  Paul  &  P.  B.  Co.  24 
Minn.  464,  where  the  facts  show  the 
plaintiff  to  have  a  complete  and  ade- 
quate remedy  at  law,  the  court  refused 
to  appoint  a  receiver. 

In  Erie  B.  Co.  v.  Delaware,  L.  &  W. 
R.  Co.  21  N.  J.  Eq.  282,  it  appeared 
that  defendants  in  common  of  an  ease- 
ment disagreed  as  to  the  use  of  a  tun- 
nel jointly  and  the  court  held  that  it 
had  jurisdiction  in  such  circumstances 
of  the  subject-matter,  but  that  under 
the  peculiar  circumstances  it  was  not 
deemed  necessary  or  advisable  to  ap- 
point a  receiver  or  manager  of  the 
tunnel. 

In  Blondheim  v.  Moore,  11  Md.  365, 
the  court,  after  a  review  of  previous 
decisions,  lays  down  the  following 
propositions: 

(1)  That  the  power  of  appointment 
is  a  delicate  one  and  to  be  exercised 
with  great  circumspection. 

(2)  That  it  must  appear  the  claimant 


470 


RECEIVERSHIPS. 


directors  or  officers  are  made  trustees  for  the  closing  up  of  the 
affairs  of  the  corporation.' 


has  title  to  the  property,  and  the  court 
must  be  satisfied  that  a  receiver  is 
necessary  to  preserve  the  property. 

(3)  That  there  is  no  case  in  which 
the  court  appoints  a  receiver  merely 
because  the  measure  can  do  no  harm. 

(4)  That  fraud  or  imminent  danger, 
if  the  immediate  possession  should  not 
be  taken  by  the  court,  must  clearly  be 
proved. 

(5)  That  unless  the  necessity  be  of 
the  most  stringent  character  the  court 
will  not  appoint  until  the  defendant  is 
first  heard  in  response  to  the  applica- 
tion. 

In  Ramsey  v.  Erie  R.  Co.  38  How. 
Pr.  193,  it  was  held  under  the  facts  of 
the  case  that  the  plaintiff  had  no  such 
standing  in  court  as  a  creditor,  bond- 
holdcr.ur  stockholder  as  to  entitle  him 
to  a  receiver  and  that  the  law  is  well 
settled  that  a  receiver  of  a  railway 
company  cannot  be  properlyappointed 
in  an  action  by  a  stockholder  or  a  cred- 
itor who  has  no  judgment. 

In  Smith  V.  Port  Dover  &  L.  E.  R. 
Co.  12  U.  C.  App.  288,  it  is  held  that 
in  the  appointment  of  a  receiver  the 
court  acts  only  upon  the  proper  case 
being  made  for  the  exercise  of  its  ju- 
risdiction according  to  well-estab- 
lished principles,  and  in  that  sense 
only  can  a  receiver  be  said  to  be  ex 
debito  justitim,  whether  the  appli- 
cation be  interlocutory  or  made  at 
the  hearing,  whether  the  appointment 
of  a  receiver  is  the  sole  object  of  the 
action  or  only  incidental  to  other  re- 
lief and  whether  the  relief  is  sought  at 
the  instance  of  a  judgment  creditor  or 
of  anyone  else. 

'A  receiver  will  not  be  appointed 
where  it  appears  that  it  would  be  more 
conducive  to  the  interest  of  all  other 
Btockholders  not  to  disturb  the  exist- 


ing management  and  arrangements  in 
the  company,  and  where  the  relief 
asked  for  would  produce  irreparable 
injury  to  the  majority  of  the  stock- 
holders. Hamilton  V.  Accessory  Transit 
Co.  26  Barb.  46. 

In  Parsons  v.  Charter  Oak  L.  Ins.  Co. 
31  Fed.  Rep.  305,  under  the  statutes  of 
Connecticut  providing  for  receivers,  it 
was  held  that  it  was  a  part  of  the  con- 
tract with  the  policyholders  that  in  case 
of  insolvencya  receiver  should  marshal 
all  the  assets  so  that  his  powers  would 
not  be  limited  as  those  of  a  receiver 
usually  are;  that  when  such  receiver 
has  been  duly  appointed  in  the  mode 
provided  for  in  the  charter  policy 
holders  cannot  deny  his  authority; 
that  the  distribution  of  the  assets  of 
the  company  should  be  made  accord- 
ing to  the  charter;  that  tbe  facts  set 
forth  in  the  bill  of  complaint  did  not 
show  complainant  had  a  superior 
right  to  the  assets  of  the  company  in 
the  state  of  Iowa,  but  on  the  contrary 
such  assets  were  part  of  the  common 
fund  in  which  all  policy  holders  had 
an  interest. 

In  Pyles  v.  Riverside  Furniture  Co. 
30  W.  Va.  123,  it  was  held  that  the 
facts  alleged  in  the  bill  did  not  justify 
the  taking  of  the  property  of  the- cor- 
poration out  of  the  hands  of  trustees 
and  putting  it  in  the  hands  of  a 
receiver. 

In  Vose  V.  Reed,  1  Woods,  647,  it 
was  held  that  where  funds  are  in  the 
hands  of  trustees  appointed  by  the 
legislature  to  hold  their  trust  ex  officio 
as  high  public  olficers  of  the  state  and 
especially  where  one  part  of  the  trust 
involves  duty  of  a  public  character 
the  court  will  not  willingly  take  the 
funds  out  of  their  hands  and  will  not 
do  so  except  for  the  most  cogent  rea- 


RECEIVERSHIP  OF  RAILWAYS 


471 


(li)  "When  the  rights  of  third  parties  who  are  not  before  the 
conrt  are  affected  by  the  appointment.' 

(i)  When  it  is  apparent  that  the  plaintiff's  application  is  based 
solely  upon  a  disagreement  as  to  the  management  of  the  business 
of  the  corporation.' 

§  274.     Powers  of  railway  receiyer. 

The  receiver  of  a  railroad  company,  as  a  rule,  ex  necessitate  has 
powers  far  in  excess  of  those  ordinarily  given  to  receivers  of 
other  corporations,  and  his  duties  are  correspondingly  increased. 
Generally  speaking,  the  magnitude  of  the  interests  intrusted  to 
his  management  carries  with  it  greater  power  and  discretion,  and, 
from  the  very  nature  of  the  business,  a  judicious  management 
depends  largely  upon  the  exercise  of  a  sound  business  judgment 
in  the  many  conflicting  and  emt^rrassing  positions  in  which  the 
receiver  is  placed,  sometimes  requiring  prompt  action,  where 
application  to  court  for  specific  directions  is  not  practicable.  As 
in  other  cases,  the  receiver's  power  is  derived  from  the  order  of 


sons,  such  as  gross  fraud  and  immi- 
nent danger  to  the  trust  fund,  it  must 
resort  to  every  course  and  means  of 
compelling  the  trustees  to  perform 
their  duty. 

'  Whelplerj  v.  Eh'ie  R.  Co.  6  Blatchf. 
271 ;  Bigelow  v.  Union  Freight  R.  Co. 
137  Mass.  478. 

In  Searles  v.  Jacksonville,  P.  &  M. 
R.  Co.  2  Woods,  621,  the  court  refused 
to  appoint  a  receiver  of  property 
which  was  in  the  possession  of  a  per- 
son not  a  party  to  the  suit. 

*  In  American  Loan  &  T.  Co.  v.  To- 
ledo, C.  &  S.  R.  Co.  29  Fed.  Rep.  416, 
it  is  said  the  court  will  not  appoint  a 
receiver  on  account  of  the  mere  dis- 
agreement of  the  parties  as  to  the  man- 
agement of  the  property;  that  can 
only  be  done  as  an  incident  to  some 
relief  falling  within  the  jurisdiction  of 
the  court  in  relation  to  the  contracts 
of  the  parties.     The  appointment  of  a 


receiver  merely  to  manage  the  prop- 
erty is  not  within  the  power  of  the 
court  of  equity. 

In  Cleveland,  C.  C.  &  I.  R.  Co.  v. 
Jeicett,  37  Ohio  St.  649,  the  con- 
troversy between  the  parties  was  solely 
as  to  the  effect  of  an  attempted  consoli- 
dation of  corporations  and  under  such 
circumstances  the  appointment  of  a 
receiver  was  held  to  bean  unwarranted 
e-xercise  of  judicial  power,  which  the 
court  would  reverse  and  set  aside. 
See  Cincinnati,  S.  &  C.  R.  Co.  v.  Sloan, 
31  Ohio  St.  15;  Verplanck  v.  Mercan- 
tile Ins.  Co.  2  Paige,  438. 

In  Hinkley  v.  Blethen,  78  ]VIe.  221, 
there  was  a  contest  between  the  stock- 
holders of  the  corporation  and  the 
court  held  there  was  no  ground  for 
the  appointment  of  a  receiver.  See 
Delaware,  L.  &  W.  R.  Co.  v.  Erie  R. 
Co.  21  N.  J.  Eq.  298, 


472  RECEIVERSHIPS. 

appointment,  and  snch  specific  orders  and  directions  as  the  court, 
from  time  to  time,  may  make.  The  primary  object  in  tlie  ap- 
pointment of  a  receiver  over  a  railway  is  the  sale  of  its  property 
and  conversion  of  its  assets,  and  the  distribution  of  the  proceeds 
thereof  among  those  entitled  thereto,  accordino-  to  their  several 
rig-hts  and  interests,  as  fixed  by  the  court. 

In  all  cases  it  is  the  duty  of  the  court,  acting  through  its  re- 
ceiver, to  pi-eserve  the  ]iroperty  and  carefully  protect  the  interests 
of  bondliolders,  creditors,  lienholders,  and  all  others  therein, 
which  can  only  be  done  by  keeping  the  property  intact.  The  re- 
ceiver is  required  to  manage  and  operate  the  road  as  a  going 
concern,  and  this,  of  necessity,  requires  the  investment  of  the 
receiver  with  all  requisite  power  and  authority  therefor,  as  inci- 
dental and  secondary  to  the  main  purpose  of  the  litigation.  Be- 
sides, the  railway  corporation,  in  consideration  of  its  franchises 
and  grants,  assumed  duties  ofta  quasi-public  nature,  which  the 
court  will  recognize  as  of  primary  importance  and,  through  its 
receiver,  will  perform,  and,  in  order  to  properly  do  so,  will  clothe 
the  receiver  with  additional  powers  not  ordinarily  granted  to 
other  receivers,  in  the  way  of  affording  facilities  for  the  adequate 
and  proper  management  of  the  road  and  the  safety  and  con- 
venience of  the  public.  , 

As  elsewhere  noted,  the  appointment  of  a  receiver  cannot  have 
any  effect  as  to  the  validity  of  existing  liens,  or  in  a  word  he 
takes  the  property  subject  to  all  valid  existing  liens.* 

§  275.    Power  to  pay  unsecured  claims. 

The  power  of  the  court  to  order  the  receiver  to  pay  from  the 
current  earnings  of  the  road  the  unsecured  claims  for  labor,  s-up- 

'  The  court  appointing  a  receiver  of  a  lien.  Scott  v.  Farmers'  Loan  tfe  T. 
a  railroad  company,  in  a  suit  by  stock  Co.  69  Fed.  Rep.  17. 
and  bond  holders  andgeneral  creditors  The  holder  of  a  judgment  constitu- 
for  the  appointment  of  receivers  to  ting  a  lien  on  real  estate  of  a  railroad 
preserve  the  property  and  manage  it  not  embraced  in  mortgages  under 
as  a  unit,  has  no  power  to  vacate  any  which  a  receiver  was  appointed  is  en- 
valid  lien  upon  the  properly,  and  pre-  titled  to  have  such  land  discharged 
vent  the  enforcement  of  a  judgment  from  the  custody  of  the  receiver,  and 
constituting  a  valid  lien  thereon,  but  to  levy,  for  the  sale  of  the  same,  an  ex- 
should  either  order  payment  thereof  ecution  to  satisfy  the  judgment.  Scott 
or  grant  leave  to  sue  out  execution  v.  Fanners'  Loan  &  T.  Co.  supra. 
and  sell  the  property  upon  which  it  is 


RECEIVERSHIP  OF  RAILWAYS.  473 

plies,  and  equipment  existing  at  the  time  of  the  appointment,  has 
been  a  subject  of  much  discussion,  but  is  now  firmly  established 
in  railway  foreclosure  cases.  There  is  not  entire  hai-mony  in  the 
courts,  it  is  true,  as  to  the  nature  of  the  claims  allowed  priority 
under  this  rule,  nor  as  to  the  time  within  which  the  claims  must 
have  accrued  in  order  to  receive  the  sanction  of  the  court  in  their 
payment.  The  New  York  courts,  prior  to  the  passage  of  the 
statute  of  1885  (see  chap.  376),  refused  to  permit  receivers  to  pay 
or  to  issue  receiver's  certificates  for  the  payment  of  indebtedness 
for  labor  and  services  rendered  to  the  corporation  prior  to  the 
receiver's  appointment,  where  the  lienholders  objected.'  The 
Federal  courts,  however,  have  shown  great  liberality  in  author- 
izing the  receiver  to  pay  this  class  of  indebtedness  from  the  cur- 
rent receipts,  and,  if  insufficient,  then  from  the  corpus  of  the 
property.  It  is  impossible  to  determine  from  the  adjudicated 
cases  any  rules  of  universal  application,  and  the  chancellor,  in 
the  absence  of  statutory  regulations,  and  in  the  exercise  of  a 
sound  judicial  discretion,  must  determine  from  each  particular 
case  the  justice  and  equity  of  granting  the  receiver  power  to  pay 
from  the  current  receipts  the  indebtedness  of  the  corporation 
accruing  prior  to  the  appointment,  on  account  of  labor  and  sup- 
plies in  operating  the  road,  or  borrow  money  upon  receiver's  cer- 
tificates for  such  purpose.  In  favor  of  the  exercise  of  this  power 
by  the  court,  the  following  principles  have  been  recognized  and 
liave  received  the  sanction  of  the  courts : 

(a)  While  courts  of  equity  have  no  power  to  impair  the  valid- 
ity of  existing  mortgage  liens  by  the  creation  of  liens  in  favor  of 
a  class  of  unsecured  creditors  and  give  them  a  priority  over 
the  former,  yet  the  mortgagee  at  the  time  of  taking  his  mortgage 
fully  understood  he  was  procuring  a  lien  upon  a  live  and  going 
concern,  and  that  it  was  to  be  continued  as  such,  and  in  order  to 
do  so  the  operating  expenses,  including  supplies  and  labor,  nmst 
be  paid  from  the  current  receipts,  and  when  he  asks  the  aid  of 

'  The  act  of  1885,  chap.  376,  required  for  the  payment  of  labor  and  services 
an  insolvent  railroad  corporation  to  in  operating  the  road  prior  to  the  re- 
pay the  wages  of  its  employees  in  ceiver's  appointment  and  make  the 
preference  to  its  other  debts.  Prior  certificates  a  lieu  prior  to  the  mort- 
to  the  passage  of  this  act  the  court  gage.  Metropolitan  Trust  Co.  v.  Tona- 
had  no  power  to  authorize  a  receiver  wanda  Valley  &  G.  It.  Co.  108  N.  Y. 
to  issue  certificates  of  indebtedness  2i5.  CL  liaht  y.  Attrill,  Wd  N.Y.  i2ti. 


474 


RECEIVERSHIPS. 


the  court  in  realizing  upon  bis  securities  he  is  not  in  a  position  to 
insist  upon  a  dili'erent  understanding.  Besides,  but  for  the  labor 
and  supplies  already  furnished  and  not  paid  for,  the  value  of  his 
security  is  maintained.  He  asks  the  court,  as  a  means  of  pre- 
venting a  depreciation  in  the  value  of  the  security,  to  continue 
the  business  as  a  going  concern,  and  shall  he  repudiate  that  which 
has  been  done  of  equal  value  for  the  same  end  'i 

(b)  There  must  of  necessity  be  a  limit  as  to  the  time  in  which 
the  indebtedness  accrued,  which  in  all  cases  must  be  reasonable, 
sometimes  being  fixed  at  tliree  months,  and  sometimes  six  months 
or  even  longer.  It  is  also  quite  as  necessary  to  determine  what 
classes  of  claims  are  entitled  to  protection.  Usually,  however, 
they  are  confined  to  labor  and  supplies  strictly  necessary  for  the 
operation  of  the  road,  though  sometimes  permanent  improve- 
ments under  peculiarly  equitable  circumstances  are  embraced.' 


I  In  Wallace  v.  Loomis,  97  U.  S.  146, 
163,  24  L.  ed.  895,  901,  the  receivers 
were  authorized  by  the  order  appoint- 
ing them  to  put  the  road  in  repair 
and  operate  the  same  and  to  procure 
such  rolling  stoclv  as  might  be  neces- 
sary; and  for  these  purposes  to  raise 
money  by  loan  to  an  amount  named 
in  the  order,  and  issue  their  certifi- 
cates of  indebtedness  therefor,  and 
the  order  declared  that  such  loan 
should  be  a  first  lien  on  the  property, 
payable  before  the  first  mortgage 
bonds.  The  court  say  the  power  to 
authorize  such  receivers  to  raise 
money  necessary  for  the  preservation 
and  management  of  the  property,  and 
make  the  same  chargeable  as  a  lien 
thereon  for  the  repayment,  cannot  at 
this  day  be  seriously  questioned.  It 
is  a  part  of  that  jurisdiction  always 
exercised  by  the  court,  by  which  it  is 
its  duty  to  protect  and  preserve  the 
trust  funds  in  its  hands.  It  is  un- 
doubtedly a  power  to  be  exercised 
with  great  caution;  and,  if  possible, 
with  the  consent  or  acquiescence  of 
the  parlies  interested  in  the  fund. 
In  Humphreys  v.  Allen,  101  111.  490, 


it  is  held  that  any  person  desiring  to 
object  to  the  issuance  of  such  certifi- 
cates must  do  so  before  they  are 
issued  and  sold  to  bona  tide  purchas- 
ers or  paid  out  to  creditors. 

In  Pldladelphia  Invest.  Co.  v.  Ohio 
&N.  W.  E.  Co.  36  Fed.  Rep.  48.  where 
it  was  doubtful  if  the  improvements 
would  add  to  the  selling  price  of  the 
road,  it  was  held  that  the  issuing  of 
receiver's  certificates  should  be  denied 
absolutely  for  an  item  for  purchas- 
ing and  laying  track  over  a  portion  of 
the  road  not  yet  completed;  also  for 
another  item  to  reimburse  bondhold- 
ers for  advances  made  to  meet  arrears 
of  wages  and  divert  a  strike;  that  an- 
other item  for  the  payment  of  claims 
for  material  furnished  should  not  be 
allowed  except  upon  the  consent  of 
all  lienholders,  and  that  certain  other 
items,  if  desired  by  the  consenting 
bondholders,  should  be  allowed  and 
made  a  charge  as  against  the  non- 
consenting  bondholders. 

In  Humphreys  v.  Allen,  101  111.  490, 
it  is  held  that  if  the  holder  of  railroad 
bonds  secured  by  trust  deeds  has  no- 
tice of  the  iipp  iuliiient  of  a  receiver 


RECEIVERSHIP  OF  RAILWAYS. 


475 


In  order  to  make  payments  of  this  nature,  where  the  receiver  has 
not  adequate  funds  in  his  hands  for  such  purpose,  the  court  in 
foreclosure  proceedings  frequently  orders  the  issuance  of  re- 
ceiver's certiiicates,  payable  out  of  the  current  net  income  or  in 
case  of  its  inadequacy,  out  of  the  proceeds  of  sale,  prior  to  the 
payment  of  the  mortgage  bondholders. 


and  the  entry  of  an  order  directing 
such  receiver  to  issue  certificates  on 
which  to  raise  money  to  discbarge  a 
chattel  mortgage  on  personal  properly 
of  the  company,  pay  taxes  and  cur- 
rent expenses,  and  making  such  cer- 
tificates a  prior  and  first  lien  on  all 
the  property  of  the  company,  and  he 
desires  to  question  the  power  of  the 
court  to  make  such  an  order,  it  must 
be  done  before  the  certificates  are 
issued  and  sold  to  bona  fide  purchasers 
or  paid  out  to  creditors  of  the  com- 
pany. 

In  Meyer  v.  Johnston,  53  Ala.  237, 
it  is  held  that  a  court  of  chancery  has 
power,  after  notice  of  a  hearing  of  in- 
terested parties,  to  authorize  the  issue 
of  certificates  creating  a  first  lien  and 
displacing  their  lien  to  that  extent  on 
the  property  of  a  railroad  which  it  is 
operating  through  its  receivers  when- 
ever it  is  necessary  to  raise  money  for 
the  economical  management  and  con- 
servation of  the  property. 

In  Hoover  v.  Montdair  &  O.  L.  R. 
Co.  29  N.  J.  Eq.  4,  it  was  held  that 
where  a  receiver  had  no  funds  with 
which  to  make  repairs  he  would  be 
authorized  to  issue  receiver's  certifi- 
cates therefor,  such  certificates  be- 
ing for  a  debt  incurred  for  the  benefit 
and  protection  of  the  property,  and  a 
first  lien  upon  the  properly  of  the 
road  and  the  net  receipts  and  income 
thereof. 

In  Kennedy  v.  8l.  Paul  &  P.  R.  Co. 
2  Dill.  448,  it  was  held  that  in  order 
to  prevent  a  valuable  land  grant  in 
favor  of    a  railroad   company   from 


lapsing,  a  receiver  might  be  appointed 
at  the  instance*  of  bondholders,  where 
the  principal  security  was  the  land 
granted,  and  the  receiver  was  author- 
ized to  complete  the  unfinished  por- 
tion of  the  road  and  his  debentures 
issued  for  that  purpose  were  made  a 
first  lien. 

In  Taylor  v.  PMladelpJda  <&  R.  R. 
Co.  7  Fed.  Rep.  377,  where  the  mort- 
gage bondholders  obtain  appointment 
of  receivers  in  a  foreclosure  proceed- 
ing, the  court  in  its  discretion  was 
empowered  to  pay  employees  and  ma- 
terialmen, who  had,  prior  to  the  ap- 
pointment, furnished  labor  and  mate- 
rial and  supplies  necessary  for  the 
operation  of  the  road.  And  the  fund 
produced  by  the  administration  of  the 
court  may  be  distributed  at  the  dis- 
cretion of  the  court  in  such  manner 
as  not  to  embarrass  the  receivers,  and 
pay  for  labor  and  materials  by  cer- 
tificates payable  out  of  any  funds  ap- 
plicable thereto,  at  such  dates  as  the 
receiver  may  designate. 

In  Fanners'  Loan  &  T.  Co.  v.  Grape 
Creek  Coal  Co.  50  Fed.  Rep.  481,  the 
court  refused  to  authorize  a  receiver 
to  issue  certificates  and  make  a  first 
lien  on  mortgaged  property  in  order 
to  continue  the  business  in  the  case  of 
a  mining  company.  See  note  on  this 
case  in  16  L.  R.  A.  C03. 

In  MetropoUtan  Trust  Co.  v.  Tona- 
icanda  &  S.  C.  R.  Co.  103  N.  Y.  245, 
it  is  held  that  prior  to  the  passage  of 
the  Act  of  1885  the  court  had  no  power 
to  authorize  a  receiver  in  a  foreclosure 
proceeding  to  pay  or  issue  his  certifl- 


4:76 


RECEIVERSHIPS. 


§  276.     Grounds  iipoa  uiiicli  preferred  claims  allowed. 

The  grounds  upon  which  uusecnred  claims  have  been  allowed 
preferential  pa}Mnent  from  the  cm-rent  income  derived  from  the 
operation  of  the  road  prior  to  the  lien  indebtedness  may  be  stated 
as  follows : 

(a)  The  necessity  of  the  payment  of  such  claims  in  order  to 
keep  the  road  in  operation  as  a  going  concern,  and  thus  preserv- 
ing the  property  from  depreciation  and  ruin,  thereby  protecting 
the  lienholders.' 

(b)  Where  the  mortgagee  applies  to  the  court  for  a  foreclosure 
of  his  mortgage  or  trust  deed,  and  asks  the  court  through  its  re- 
ceiver to  take  from  the  legally  constituted  authorities  the  opera- 
tion and  management  of  the  road  pending  such  foreclosure,  the 
com-t,  as  an  equitable  condition  to  the  appointment  of  a  receiver, 
may  require  the  payment  of  operating  expenses  incurred  prior  to 
the  appointment,  at  least  for  a  reasonable  period.' 


cates  in  payment  of  labor  and  services 
in  operating  the  road  prior  to  his  ap- 
pointment, and  make  such  certificates 
a  prior  lien  to  the  mortgage. 

'  Union  Trust  Co.  v.  Illinois  M.  R. 
Co.  117  U.  S.  434,  29  L.  ed.  963;  Cen- 
tral Trust  Co.  V.  St.  Louis,  A.  &  T. 
R.  Co.  41  Fed.  Rep.  551;  Miltenberger 
V.  Logansport,  C.  tfc  S.  W.  R.  Co.  106 
U.  S.  286,  27  L.  ed.  117;  Barton  v. 
Barbour,  104  U.  S.  126.  26  L.  ed.  672. 

*  Farmers'  Loan  &  T.  Co.  v.  Kansas 
City,  W.  &  N.  W.  R.  Co.  53  Fed.  Rep. 
182.  In  Fosdick  v.  Schall,  99  U.  S.  235, 
253,  25  L.  ed.  339,  343.  Chief  Justice 
Waite  said:  "The  mortgagee  has  his 
strict  rights  which  he  may  enforce  in 
the  ordinary  way.  If  he  asks  no 
favors  he  need  grant  none.  But  if  he 
calls  upon  a  court  of  chancery  to  put 
forth  its  extraordinary  powers,  and 
grant  him  purely  equitabie  relief,  he 
may,  with  propriet}'.  be  required  to 
submit  to  the  operation  of  a  rule 
■which  always  applies  in  such  cases, 
and  do  equity  in  order  to  get  equity. 
The  appointment  of  a  receiver  is  not 
a  matter  of  strict  right,  such  an  ap- 


plication always  calls  for  the  exercise 
of  judicial  discretion,  and  the  chan- 
cellor should  so  mould  his  order  that, 
while  favoring  one,  injustice  is  not 
done  to  another."  To  the  same  ef- 
fect, substantially,  are  the  following 
cases:  Union  Trust  Co.  v.  Souther, 1^1 
U.  S.  591  27  L.  ed.  488;  Miltenberger, 
V.  Logansport,  C.  &  S.  W.  R.  Co.  106 
U.  S.  286,  311,  27  L.  ed.  117,  127; 
Union  Trust  Co.  v.  Illinois  M.  R.  Co. 
117  U.  S.  434,  457,  29  L.  ed.  963,  971; 
Thomas  v.  Peoria  &  R.  I.  R.  Co.  36 
Fed.  Rep.  808;  Central  Trust  Co.  v. 
St.  Louis,  A.  &  T.  R.  Co.  41  Fed. 
Rep.  551;  Dow  v.  Memphis  &  L.  R.  R. 
Co.  20  Fed.  Rep.  260;  Central  Trust 
Co.  V.  Texas  &  St.  L.  R.  Co.  22  Fed. 
Rep.  135;  Douglass  v.  Cline,  12  Bush, 
&0'i;Williamson  v.  Washington  City,  V. 
M.  &  Q.  S.R.  Co.  33  Gratt.  624;  Poland 
V.  Lamoille  Valley  R.  Co.  52  Vl.  144; 
Eervey  v.  Blinois  M.  R.  Co.  28  Fed. 
Rep.  169;  United  States  Trust  Co.  v. 
NeiD  York,  W.  8.  &  B.  R.  Co.  25  Fed. 
Rep.  797;  Mercantile  Trust  Co.  v.  Pitts- 
burg &  W.  R.  Co.  29  Fed.  Rep.  730; 
Atkins  v.  Petersburg  R.  Co.  8  Hughes. 


RECEIVERSHIP  OF  RAILWAYS. 


477 


(c)  "Where  the  current  receijDts  have  been  diverted  from  tlie 
payment  of  the  operating  expenses  and  applied  in  payment  of 
tlie  bonded  indebtedness  or  such  permanent  improvements  as  re- 
sult in  the  enhanced  value  of  the  property  constituting  the  secur- 
ity of  the  bondholders,  the  court  upon  equitable  grounds  may  re- 
store to  the  labor  and  supply  creditors  from  the  current  net 
receipts,  or  the  corpus,  the  money  thus  diverted.  This  principle 
is  based  upon  the  tacit  understanding  of  the  lienholders  that  the 
income,  so  far  as  necessary,  shall  be  applied  in  payment  of  the 
ordinary  current  operating  expenses  due  for  labor  and  supplies.' 


307;  Western  Pennsylvania  R.  Co.  v. 
Johnston,  59  Pa.  290;  Addison  v.  Lewis, 
75  Va.  701;  Coe  v.  New  Jersey  M.  R. 
Co.  31  N.  J.  Eq.  105;  Porter  v.  Pitts- 
burg Bessemer  Steel  Co.  120  U.  S.  649, 

30  L.  ed.  830;  Farmers'  Loan  &  T. 
Co.  V.  CJiicago  &  A.  R.  Co.  42  Fed. 
Rep.  6;  Jessup  v.  Atlantic  &  G.  R.  Co. 
3  Woods,  441 ;  Blair  v.  St.  Louis,  11. 
&  K.  R.  Co.  22  Fed.  Rep.  471;  Union 
Trust  Co.  V.  Morrison,  125  U.  S.  591, 

31  L.  ed.  825;  Morgan's  Louisiana  & 
T.  R.  db  S.  S.  Co.  V.  Texas  G.  R.  Co. 
137  U.  S.  171,  34  L.  ed.  625;  Quincy, 
M.  &  P.  R.  Co.  V.  Humphreys,  145  U. 
S.  82,  36  L.  ed.  632;  Penn  Mut.  L. 
Ins.  Co.  V.  Heiss,  141  111.  35,  62. 

The  requirement  imposed  as  a  con- 
dition of  the  appointment  of  receivers 
of  a  railroad  corporation,  that  a  judg- 
ment against  the  company  be  paid 
out  of  the  proceeds  of  the  property, 
is  conclusive  where  all  the  parties  ac- 
quiesce and  accept  it,  whether  or  not 
the  court  had  the  power  to  impose  it 
in  the  first  instance.  Union  Trusi 
Co.  V.  Atchison,  T.  <&  S.  F.  R.  Co.  (N. 
M.)  42  Pac.  89. 

The  lime  within  which  the  claim 
must  have  accrued  in  order  to  be  en- 
titled to  a  preferential  payment  has 
been  arbitrarily  fixed  at  various  pe- 
riods, sometimes  ninety  days,  some- 
times six  months,  twenty-two  months, 
and  even  three  years.     See  as  to  sev- 


eral periods.  Blair  v.  St.  Louis,  H. 
&  A".  R.  Co.  22  Fed.  Rep.  478,  note; 
Hale  V.  Frost,  99  U.  S.  389,  25  L.  ed. 
419;  Doiiglass  v.  Cline,  12  Bush,  608; 
Skiddy  v.  Atlantic,  M.  &  0.  R.  Co.  3 
Hughes,  320;  Williamson  v.  Washing- 
ton City,  V.  M.  &  O.  8.  R.  Co.  33 
Gratt.  624;  Atkins  v.  Petersburg  R.  Co. 
3  Hughes,  307.  It  is  not  essential 
that  the  order  for  the  payment  of  the 
preferred  debts  should  be  made  at 
the  time  of  the  appointment,  though 
it  is  the  better  practice  to  do  so.  Cen- 
tral Trust  Co.  V.  St.  Louis,  A.  &  T. 
R.  Co.  41  Fed.  Rep.  551 ;  Fosdick  v. 
Schall,  99  U.  S.  235,  25  L.  ed.  339; 
Blair  v.  St.  Louis,  H.  &  K.  R.  Co.  22 
Fed.  Rep.  471.  Nor  is  the  payment 
of  this  class  of  claims  as  preferential 
dependent  upon  the  appointment  of 
a  receiver.  They  have  priority  over 
the  mortgage  without  regard  to  the 
question  of  receivership.  Farmers' 
Loan  &  T.  Co.  v.  Kansas  City,  W.  & 
N.  W.  R.  Co.  53  Fed.  Rep.  182. 

'In  Williamson  v.  Washington  City, 
V.  M.  &  O.  S.  R.  Co.  33  Gratt.  624,  it 
was  held  that  if  a  railroad  company 
before  the  appointment  of  a  receiver 
had  paid  out  of  the  net  revenues  in- 
terest on  the  bonded  indebtedness,  or, 
for  the  purpose  of  repair  and  improve- 
ment of  the  road  upon  the  sale  of  the 
road,  there  should  bo  p.aid  to  the  cred- 
itors for  labor  atul  material  from  the 


478 


RECEIVERSHIPS. 


proceeds  of  the  sale,  the  amount  of 
net  revemies  so  divert«Hl.  This  de- 
cision is  based  on  Dovglass  v.  Cline, 
12  Bush,  608;  Ellin  v.  Boston,  II.  tt  E. 
R.  Co.  107  Mass.  1,  with  other  cases. 

In  Mcllhenny  v.  Bim,  80  Tex.  1,  it 
appeared  that  the  net  earnings  of  the 
road  sufficient  to  pay  all  the  labor 
and  supply  claims  had  been  appro- 
priated towards  betterments  upon  the 
roads,  and  the  interest  upon  the  bonds, 
and  it  was  held  that  such  diversion 
was  in  derogation  of  the  rights  of 
those  entitled  to  the  fund,  and  that  it 
was  proper  that  the  money  should  be 
restored  or  provided  for  in  the  order 
of  the  sale  of  the  road. 

In  Blair  v.  St.  Louis,  E.  &  K.  R.  Co. 
22  Fed.  Rep.  471,  it  is  held  that  claims 
for  labor  and  supplies  accruing  within 
six  months  prior  to  the  appoint- 
ment of  a  receiver  are  entitled  to  be 
paid  out  of  the  net  income  of  the  re- 
ceivership, and  in  exceptional  cases 
where  special  equity  appears  such 
claims  may  be  made  a  first  lien  upon 
the  corpus  of  the  mortgaged  property. 

In  Turner  v.  Indianapolis,  B.  &  W. 
R.  Co.  8  Bias.  315,  a  receiver  was 
ordered  to  pay  the  claims  of  operatives 
and  supply  men  owing  at  the  time  of 
his  appointment  and  to  hold  the 
property  subject  to  them,  not  as  a  lien 
upon  the  road  but  in  the  exercise  of 
the  equitable  discretion  of  the  court. 
In  fixing  the  time  within  which  such 
claims  will  be  allowed  and  ordered 
paid,  the  court  adopted  by  analogy 
the  rule  of  the  statute  of  Illinois  in 
relation  to  liens  on  railroads  for  work 
done  and  material  furnished. 

In  Thomas  v.  Peoria  &  R.  I.  R.  Co. 
36  Fed.  Rep.  808,  Mr.  Justice  Harlan 
held  that  if,  both  before  and  during  the 
receivership  of  the  property  of  a  rail- 
road corporation  pending  a  mortgage 
foreclosure,  moneys  from  the  current 
receipts  are  expended  for  materials 
and  equipment,  a  claim  for  rent  of 


cars  may  be  charged  upon  the  income 
during  ihe  receivership,  and  if  tliit  is 
inadequate,  upon  the  proceeds  of  the 
mortgageil  properly;  but  that  in  the 
absence  of  special  circumstances  such 
preferential  payment  would  not  be 
extended  back  of  six  months  before 
the  receivership. 

In  Pennsylvania  Finance  Co.  v. 
Charleston,  C.  &  C.  R.  Co.  48  Fed. 
Rep.  188,  it  is  held  that  persons  who 
furnish  labor  supplies  and  material  to 
a  railroad  to  keep  it  a  going  concern 
are  entitled  to  payment  out  of  the 
earnings  thereof  before  the  payment 
of  any  interest  on  the  mortgaged 
bonds,  and  if  it  appears  that  money 
due  upoD  claims  of  this  nature  has 
been  paid  out  as  interest  on  the  bonds 
or  for  permanent  improvements 
whereby  the  bondholders  have  been 
benefited,  the  court  will  order  an 
amount  equal  to  the  sum  so  diverted 
to  be  paid  upon  such  claims  out  of 
any  earnings  in  the  hands  of  a  re- 
ceiver, or  failing  in  this,  out  of  the 
proceeds  of  sale. 

In  Pennsylvania  Finance  Co.  v. 
Charleston,  C.  &  C.  R.  Co.,  Ex  parte 
Moore,  49  Fed.  Rep.  693,  preferential 
payment,  it  was  held,  would  not  be 
given  to  a  merchant  for  rations  fur- 
nished to  laborers  upon  the  railway 
under  contract  with  the  company  and 
for  which  the  company  alone  is  liable, 
although  the  company  charges  the 
rations  to  its  laborers  as  part  of  their 
wages. 

In  Farmers'  Loan  &  T.  Co.  v.  Kansas 
City,  W.  &  N.  W.  R.  Co.  53  Fed.  Rep. 
182,  claims  for  which  a  preferential 
payment  will  be  made  are  said  to  be 
in  favor  of  those  who  have  aided  to 
conserve  the  property,  and  have  been 
contracted  within  a  reasonable  lime, 
and  that  the  six  months'  rule  is  not  a 
fixed  and  unbending  rule  barring  all 
claims  contracted  more  than  six 
months  before  the  appointment,  nor 


RECElVEliSHIP  OF  RAILWAYS. 


479 


(d)  "Where  tlie  statute  creates  a  lien  in  favor  of  specific  cred- 
itors having  priority  over  the  mortgage  bondholders.' 


is  the  authority  to  prefer  claims  con- 
lined  to  cases  where  there  has  been  a 
diversion  of  the  income. 

In  Fosdick  v.  ScJudl,  99  U.  S.  253, 
25  L.  ed.  342,  Chief  Justice  Waite 
says  that  every  railroad  mortgagee  in 
accepting  his  security  impliedly  agrees 
that  the  current  debts  made  in  the 
ordinary  course  of  business  shall  be 
paid  from  the  current  receipts  before 
he  has  any  claim  upon  the  income. 
If,  for  the  convenience  of  the  moment, 
something  is  taken  from  what  may 
not  be  improperly  called  the  current 
debt  fund  and  put  into  that  which 
belongs  to  the  mortgage  creditors,  it 
certainly  is  not  inequitable  for  the 
court,  when  asked  by  the  mortgagees 
to  take  possession  of  the  future  in- 
come and  hold  it  for  their  benefit,  to 
require  as  a  condition  to  such  order 
that  what  is  due  from  the  earnings  to 
the  current  debt  shall  be  paid  by  the 
court  from  the  future  current  receipts 
before  anything  derived  from  that 
source  goes  to  the  mortgagees.  In 
this  way  the  court  will  only  do  what, 
if  a  receiver  should  not  be  appointed, 
the  company  ought  itself  to  do,  and 
even  though  the  mortgage  may  in 
terms  give  a  lien  upon  the  profits  and 
income  until  possession  of  the  mort- 
gaged premises  is  actually  taken, 
or  something  equivalent,  the  whole 
earnings  belong  to  the  company  and 
are  subject  to  its  control.  See  Galves- 
ton, II.  &  II.  R.  Go.  V.  Coicdrey,  78 
U.  S.  11  Wall.  459,  20  L.  ed.  199;  Gil- 
man  V.  Illinois  &  SI.  Teleg.  Co.  91  U.  S. 
003,  23  L.  ed.  405;  American  Bvidije 
Co.  V.  Heidtlbach,  94  U.  S.  798,  24 
L.  ed.  144. 

In  Miltenberrjer  v.  Logansport,  C.  & 
8.  W.  R.  Co.  106  U.  S.  286,  27  L.  ed. 
117,  the  receiver   was  authorized  to 


pay  arrears  due  for  operating  expen- 
ses not  exceeding  $10,000  to  other 
connecting  Hues  for  materials  and 
repairs  and  for  ticket  and  freight 
balances,  part  of  which  had  been  in- 
curred more  than  90  days  before  the 
order  appointing  the  receiver  was 
made,  and  to  purchase  rolling  stock 
and  build  6  miles  of  road  and  a 
bridge  on  the  main  line  of  the  road, 
and  make  such  expenditures  a  lien 
prior  to  the  lien  of  the  mortgagees.  See 
also  Union  Trud  Co.  v.  Souther,  107 
U.  S.  591,  27  L.  ed.  488;  Burnham  v. 
Boicen,  111  U.  S.  776,  28  L.  ed.  596. 
In  this  case  income  was  diverted  to 
the  improvement  of  the  property,  and 
an  assignee  of  such  a  claim  is  entitled 
to  the  same  rights  as  the  original 
holder. 

In  Union  Tru.^t  Co.  v.  Illinois  M.  R. 
Co.  117  U.  S.  434,  29  L.  ed.  963,  certifi- 
cates issued  for  necessary  repairs 
were  allowed  priority,  and  it  is  held 
that  the  rule  is  applicable  to  a  case  in 
which  the  first  receiver  was  appointed 
in  a  suit  not  brought  by  thebondholders 
or  the  trustees;  that  it  was  sufficient 
if  the  bondholders  and  their  trustee, 
after  they  were  made  parties,  knew  of 
the  merits  of  the  order  and  the  appli- 
cation of  the  money  upon  which  the 
certificates  were  issued,  to  replace 
earnings  diverted  from  the  payment 
of  operating  expenses  and  ordinary 
repairs.  See  also  Sage  v.  Memphis  & 
L.  R.  R.  Co.  125  U.  S.  361,  31  L.  ed.  694; 
Freedman's  Sav.  &  T.  Go.  v.  Shepherd, 
127  U.  S.  494,  32  L.  ed.  163. 

'  In  nearly  all  the  states  and  territo- 
ries liens  have  been  given  by  statute 
for  labor,  and  usually  for  labor  and 
materials  furnislied  for  tlie  construc- 
tion and  operation  of  railroads,  as 
follows: 


480 


RECEIVERSHIPS. 


Alabama, 

for  labor 

Arizona, 

"        and 

material 

Arkansas, 

" 

" 

California, 

" 

i< 

Colorado, 

(( 

<< 

Connecticut, 

<t 

<( 

Florida, 

" 

Georgia, 

f( 

(< 

Idaho, 

i< 

X 

Illinois, 

<( 

<< 

Indiana, 

<( 

i< 

Iowa, 

c< 

<i 

Kansas, 

<c 

t( 

Kentucky, 

(< 

Maine, 

<( 

Massachusetts, 

" 

<< 

Michigan, 

<( 

c< 

Minnesota, 

l< 

II 

Jlississippi, 

" 

Missouri, 

u 

X 

Montana, 

ft 

l< 

Nebraska, 

it 

" 

Nevada, 

l< 

II 

New  Jersey, 

<< 

New  Mexico, 

« 

<l 

New  York, 

C( 

North  Carolina 

i< 

North  Dakota, 

t( 

«< 

Ohio, 

<< 

<l 

Pennsylvania, 

<( 

l< 

Rhode  Island, 

<( 

(1 

South  Dakota, 

Tennessee, 

it 

« 

Texas, 

<( 

Utah,  " 

Vermont,  ** 

Virginia,  ** 

Washington,  " 

West  Virginia,  " 

Wisconsin,  " 

Wyoming,  '* 

It  should  be  observed  in  this  connec- 


Code  1876,  §  3481. 

Rev.  Stat.  1887,  §  2294. 

Act  1887,  p.  96. 

Stat.  1883,  §§  2131,  2139,  2148. 

Gen.  Stat.  1888,  §  3022. 

Code,  1882. 

Gen.  Laws,  1880,  1881,  Code  Civ.  Proc. 

§g  815,  829. 
Stat,  of  1895.  1872,  1877. 
Laws  1887,  chap.  9.  p.  27;  Rev.  Stat. 

1881,  ^g  5286,  5291. 
Rev.  Code,  1880,  §  2132. 
Comp.  Laws  1885,  chap.  84. 
Gen.  Stat.  1881,  p.  982. 
Rev.  Stat.  1883,  chap.  51. 
Act  1873,chap.  353;  Act  1882, chap.  112. 
Stat.  1882,  §§  3423,  3425. 
Gen.  Stat.  1878,  chap.  10,  §  1. 
Laws  1882,  chap.  88. 
Rev.  Stat.  1879,  g§  3200,  3216. 
Comp.  Stat.  1887, '§§  1370,  1394. 
Comp.  Stat.  1885,  p.  426. 
Gen.  Stat.  1885,  §i^  3808,  3827. 
Rev.  Stat.  1877,  p.  927. 
Comp.  Laws  1884,  g§  1519,  1535. 
3  Rev.  Stat.  7th  ed.  1882,  p.  2439. 
Act  1871,  1872,  chap.  138;  Codo   1882, 

§  1942. 
Rev.  Code,  §  4790. 
Laws  1884,  p.  126;  Laws  1883,  p.  99. 
Purdon's  Bright.  Dig.  1883,  p.  118. 
Pub.  Stat.  chap.  177,  §§  1-28. 

Code  1882,  §§  2774,  2775.  2778. 

Laws  1879,  p.  8,  chap.  12,  §  1,  4;  Laws 

1887,  chap.  25. 
Laws  1884,  p.  340,  §§  1057-1070;  Code 

1880. 
Rev.  Laws  1880,  §  3372. 
Code  1887,  §g  2485.  2486. 
Code  1893,  §  1229. 
Code  1887,  chap.  75. 
Rev.  Stat.  1878,  §g  3314,  3318;  Supp. 

1883. 
Rev.  Stat.  1887,  §§  1507,  1512,  1517, 

1540. 
tion  that  where  the  statute  has  given  a 


RECEIVERSHIP  OF  RAILWAYS. 


481 


(e)  The  classes  of  claims  for  which  preferential  payments  have 
been  allowed  in  priority  over  the  mortgage  indebtedness  are  gen- 
erally confined  to  (7)  the  o^^erating  expen  ses,  such  as  for  labor, 
supplies,  rolling  stock,  and  rentals.'     (^)  There  is  a  class  of  cases? 


lien  to  a  class  or  classes  of  persons,  the 
lien  cannot  be  extended  to  others  not 
clearly  within  the  class  or  classes  speci- 
fied. If  the  term  "laborer"  is  used  it 
does  not  include  others  who  furnish 
labor.  Lehigh  Coal  &  Nav.  Co.v. Cen- 
tral R.  Co.  29  N.  J.  Eq.  252;  Pennsyl- 
vania &  D.  R.  Go.  V.  Levffer,  88  Pa. 
168;  Ericsson  v.  Brown,  38  Barb.  390; 
Poland  V.  Lamoille  Valley  R.  Co.  52 
Vt.  144.  In  other  words,  the  statutes 
will  not  be  extended  beyond  the  clear 
purport  thereof  by  implication. 

'  In  Turner  v.  Indianapolis,  B.  &  W. 
R.  Co.  8  Biss.  315,  the  court  say: 
"The  practice  has  been  to  allow  all  to 
be  paid  that  could  be  fairly  regarded 
as  a  part  of  the  actual  operating  ex- 
penses of  the  road,  whether  for  labor 
or  supplies  in  their  various  form.s." 

In  Kneeland  v.  American  Loan  & 
T.  Co.  13G  U.  S.  89,  34  L.  ed.  379, 
Mr.  Justice  Brewer  says:  "The  ap- 
pointment of  a  receiver  vests  in  the 
court  no  absolute  control  over  the 
property,  and  no  general  authority  to 
displace  vested  contract  liens.  Be- 
cause in  a  lew  specified  and  limited 
cases  this  court  has  declared  that  un- 
secured claims  were  entitled  to  prior- 
ity over  mortgage  debts  an  idea  seems 
to  have  obtained  that  a  court  appoint- 
ing a  receiver  acquires  power  to  give 
such  preference  to  any  general  and 
unsecured  claims.  It  has  been  as- 
sumed that  a  court  appointing  a  re- 
ceiver could  rightfully  burden  the 
mortgaged  property  for  the  payment 
of  any  unsecured  indebledness.  In- 
deed we  are  advised  that  some  courls 
have  made  the  appointment  of  a  re- 
ceiver conditional  upon  the  payment 
of  all  un.secured  indebtedness  in  pref- 
31 


erence  to  the  mortgage  liens  sought 
to  be  enforced.  Can  anything  be 
conceived  which  more  thoroughly  de- 
stroys the  sacredness  of  contract  ob- 
ligations? One  holding  a  mortgage 
debt  upon  a  railroad  has  the  same 
right  to  demand  and  expect  of  the 
court  respect  for  his  vested  and  con- 
tracted priority  as  the  holder  of  a 
mortgage  on  a  farm  or  lot.  So,  when 
the  court  appoints  a  receiver  of  rail- 
road property  it  has  no  right  to  malie 
that  receivership  conditional  on  the 
payment  of  other  than  those  few  un- 
secured claims  which  by  the  rulings 
of  this  court  have  been  declared  to 
have  an  equitable  priority.  No  one 
is  bound  to  sell  to  a  railroad  company 
or  to  work  for  it,  and  whoever  has 
dealings  witli  a  company  who.«e  prop- 
erty is  mortgaged  must  be  assumed  to 
have  dealt  vvith  it  on  the  faith  of  its 
personal  responsibility,  and  not  in  ex- 
pectation of  subsequently  displacing 
the  priority  of  the  mortgage  liens.  It 
is  the  exception  and  not  the  rule  that 
such  priority  of  liens  can  be  displaced. 
We  emphasize  this  fact  of  the  sacred- 
ness of  contract  liens  for  the  reason 
that  there  seems  to  be  growing  an  idea 
that  the  chancellor,  in  the  exercise  of 
his  equitable  powers,  has  unlimited 
discretion  in  this  matter  of  the  dis- 
placement of  vested  liens."  St.  Louis, 
A.  &  T.  H.  R.  Co.  V.  Cleveland,  C.  C. 
&  L  R.  Co.  125  U.  S.  658,  31  L.  ed. 
832.  It  should  be  observed  that  the 
foregoing  remarks  of  Mr.  Justice 
Brewer  were  in  a  case  brought  by  a 
creditor  and  not  in  a  case  wliere  the 
mortgagee  was  seeking  to  foreclose 
his  mortgage. 


482  RECEIVERSHIPS. 

however,  growing  out  of  the  construction  of  tlie  road,  which  are 
entitled  to  payment  in  priority  to  the  l)on(llioldcrs,  that  are  not 
inchulcd  in  tlie  general  class  of  operating  expenses  al)Ove.  Thus, 
where  tlie  mortgage  is  executed  prior  to  the  construction  of  the 
road,  or  at  least  prior  to  its  completion,  and  it  is  apparent  that  the 
lien  of  the  mortgage  is  designed  to  attach  to  the  road  when  com- 
pleted, and  claims  for  construction  account  have  accrued  growing 
out  of  labor  and  supplies  furnished  after  the  execution  of  the 
mortgage  and  in  the  completion  of  the  road,  and  the  net  income 
has  been  diverted  to  the  payment  of  interest  or  improvements, 
the  claimants  in  such  case  are  entitled  to  priority  over  the  secured 
bondholders.' 

§  277.     Scope  of  iinplirul  power  as  to  operating  expenses. 

(a)  In  regard  to  the  receiver's  right  to  pay  indel)tedness  accru-' 
ing  out  of  his  management  of  the  road  pending  the  receivership 
less  difficulty  has  been  experienced,  and  it  may  now  be  stated  as 
a  general  principle  well  established  that  all  expenditures  made 
by  him  in  the  ordinary  course  of  business  and  in  good  faith,  with 
a  view  to  a  careful  and  judicious  management  and  operation  of 
the  road,  are  to  be  considered  within  the  discretion  allowed  to  a 
receiver  of  a  railroad.  In  the  absence  of  general  direction  and 
power  given  to  the  receiver,  in  this  regard,  in  the  order  of  ap- 
pointment, the  nature  and  scope  of  his  duties  would  necessarily 
imply  such  power,  for  the  law  never  imposes  a  duty  without,  at 
the  same  time,  giving  the  necessary  power  to  perform  such  duty, 
and  especially  is  this  true  in  regard  to  receiverships  of  railways 
where  the  power  is  a  necessary  attribute  to  the  duties  imposed. 
The  scope  of  the  outlays  which  a  railway  receiver  may  be  con- 
sidered as  authorized  to  make  may  be  considered  as  including  the 
cost  of  all  necessary  labor  and  supplies  adequate  to  the  due  and 
proper  management  of  the  road,  as  a  going  concern  keeping  in 
mind  the  preservation  of  the  property,  and  the  safety  and  con- 
venience of  the  public ;  all  necessary  rej)airs  to  the  same  end ;  all 
liabilities  incurred  in  sustaining  the  necessary  business  relations 
with  other  railroads  and  carriers;  and  all  obligations  incurred  by  rea- 
son of  his  relations  to  the  public  and  duties  as  a  common  carrier.'' 

^Mcllhenny  v.  Binz,  80  Tex.  1.  Trust  Co.  v.  Illinois  M.  R.  Co.  117  U. 

» Mr.  Justice  Blalchford   in    Unioti       S.  434,  455,  29  L.  ed.  963,  970.  says: 


RECEIVERSHIP  OF  RAILWAYS. 


483 


"Property  subject  to  liens  and  claims 
and  debts  of  various  characters  and 
ranks  which  is  brought  within  the 
cognizance  of  a  court  of  equity  for 
administration  and  conversion  into 
money  and  distribution,  is  a  trust 
fund.  It  is  to  be  preserved  for  those 
entitled  to  it.  This  must  be  done  by 
the  hands  of  the  court  through  offi- 
cers. The  character  of  the  property 
gives  character  to  the  particular 
species  of  preservation  which  it  re- 
quires. Unimproved  land  may  lie 
idle  with  only  payment  of  taxes.  Im- 
proved property  should  be  rented. 
Movable  property  that  is  not  perish- 
able may  be  locked  up  and  kept;  but 
if  perishable  it  must  be  sold  by  way 
of  preservation.  A  railroad  and  its 
appurtenances  is  a  peculiar  species  of 
property.  Not  only  will  its  structures 
deteriorate,  decay,  and  perish  if 
not  cared  for  and  kept  up  but  its  busi- 
ness and  goodwill  will  pass  away  if 
it  is  not  run  and  kept  in  good  order. 
Moreover,  a  railroad  is  a  matter  of 
public  concern.  The  franchises  and 
rights  of  the  corporation  which  con- 
structed it  were  given  not  merely  for 
private  gain  to  the  corporators  but  to 
furnish  a  public  highway;  and  all  per- 
sons who  deal  with  the  corporation  as 
creditors  or  holders  of  its  oblii^alions 
must  necessarily  be  held  to  do  so  in 
the  view  that  if  it  falls  into  insolvency 
and  its  affairs  come  into  a  court  of 
equity  for  adjustment,  involving  the 
transfer  of  its  franchises  and  prop- 
erty, by  a  .sale,  into  other  hands  to 
have  the  purposes  of  its  creation  still 
carried  out,  the  court  while  in  charge 
of  the  property  has  the  power,  and 
under  some  circumstances  it  may  be 
its  duty  to  make  such  repairs  as  are 
necessary  to  keep  the  road  and  its 
structures  in  a  safe  and  proper  condi- 
tion to  serve  the  public.  Its  power  to 
do  this  does  not  depend  on  consent 
nor  on  prior  notice.     Consent  is  de- 


sirable, but  is  seldom  practicable, 
where  the  debts  exceed  the  value  of 
the  property."  Cf.  Wallnce  v.  Loomis, 
97  U.  S.  146,  24  L.  ed.  1008;  Milten- 
berger  v.  Logannport,  G.  <&  S.  W.  R. 
Co.  106  U.  S.  286,  27  L.  ed.  117;  Bar- 
ton v.  Barbour,  104  U.  S.  126,  26  L. 
ed.  673. 

Arrears  due  for  operating  expenses, 
ticket  and  freight  balances,  money 
due  for  rolling  stock,  labor,  car 
springs,  salary  of  the  attorney  imme- 
diately prior  to  the  appointment,  and 
taxes,  are  among  the  claims  that  have 
been  treated  as  preferred.  Litzenher- 
ger  v.  Jarvis-Conklin  Trust  Co.  8  Utah, 
15;  Miltenberger  v.  Logansport,  C.  &S. 
^.  R.  Co.  106  U.  S.  286,  27  L.  ed.  117; 
Atkins  v.  Petersburg  B.  Co.  3  Hughes, 
307;  Skiddy  v.  Atlantic,  M.  &  6.  R. 
Co.  3  Hughes,  320;  Blair  v.  St.  Louis, 
H.  &  K.  R.  Co.  23  Fed.  Rep.  521; 
Giles  v.  Stanton,  86  Tex.  620;  Re 
Eastern  &  M.  R.  Co.  L.  R.  45  Ch.  Div. 
367. 

This  class  of  preferential  claims  are 
in  their  nature  equitable  claims  and 
are  subject  to  assignment.  Burnham 
V.  Bowen,  111  U.  S.  776,  28  L.  ed.  596; 
Union  Trust  Co.  v.  Walker,  107  U.  S. 
596,  27  L.  ed.  490;  Mcllhenny  v.  Bim, 
80  Tex.  1. 

The  right  of  preference  in  payment 
out  of  funds  in  the  hands  of  receivers 
attaches  to  the  debt,  and  not  to  the 
per.son  of  the  original  creditor,  and 
will  pass  to  an  assignee  of  the  debt. 
Northern  P.  R.  Co.  v.  Lament,  69 
Fed.  Rep.  23. 

The  receiver  has  power  to  make 
such  reasonable  outlays  as  are  re- 
quired in  the  ordinary  course  for  such 
as  keeping  the  road  and  its  rolling 
stock  in  repair,  etc.  McLane  v.  Placer- 
mile  (&  S.  V.  R.  Co.  06  Cal.  606. 

In  Union  Trust  Co.  v.  Illinois  M.  R. 
Co.  117  U.  S.  434,  29  L.  ed.  903,  pri- 
ority ^as  allowed  over  the  mortgage 
indebtedness  for    necessary    repairs, 


484 


RECEIVERSHIPS. 


(b)  Tt  should  be  observed,  however,  that  the  doctrine  above 
announced,  authori/iui;  the  receiver  to  create  indebtedness  enti- 
tled to  priority  over  the  bonded  indebtedness,  is  not  to  be  applied, 
as  a  rule,  to  private  corporations,  which  are  not  quasi  public  in 
their  nature.' 


tax  liens,  receivers'  certificates  issued, 
or  svirphis  earnings  diverted  from  the 
payment  of  operating  expenses,  worn- 
out  parts  of  the  road,  wages  for  the 
employees  of  the  receiver,  debts  due 
to  other  railroad  companies,  ordinary 
expenses  of  the  receivers  in  operating 
the  road,  and  rents  of  rolling  stock, 
and  if  the  earnings  were  not  sufficient 
they  were  to  be  paid  out  of  the  corpus 
of  the  property;  but  it  was  held  that 
debts  for  money  borrowed  by  the  re- 
ceiver without  the  previous  order  of 
the  court  were  not  to  be  allowed  pri- 
ority, though  the  money  was  applied 
to  pay  expenses  of  the  receivership, 
repairs,  and  supplies. 

In  Cowdrey  v.  Galveston,  H.  d  H.  R. 
Co.  1  Woods,  331,  all  outlays  of  the 
receiver  intrusted  with  the  manage- 
ment of  a  railroad  which  were  made 
in  good  faith,  in  the  ordinary  course 
of  business,  with  a  view  of  advancing 
the  business  of  the  road  and  to  make 
it  profitable  and  successful,  were  held 
to  be  within  the  line  of  the  discretion 
necessarily  allowed  to  the  receiver, 
but  where  extraordinary  outlays  of 
money  are  to  be  made  the  receiver  in 
all  cases  should  apply  to  the  court  for 
authority.  In  this  case  receivers'  ex- 
penses for  counsel  and  witness  fees 
incurred  in  a  motion  for  his  removal 
were  allowed  as  a  charge  against  the 
trust  fund  when  it  appeared  that  he 
acted  in  good  faith  and  with  integrity 
of  purpose  and  when  it  further  ap- 
peared that  there  were  no  grounds 
nor  apparent  grounds  for  the  motion. 

'  In  Farmers'  Loan  &  T.  Co.  v. 
Qrape  Creek  Coal  Co.  50  Fed.   Rep. 


481,  16  L.  R.  A.  603,  Judge  Gresham 
says:  "Private  corporations  owe  no 
duty  to  the  public,  and  their  continued 
operation  is  not  a  matter  of  public 
concern.  It  is  only  against  railroad 
mortgages  that  the  Supreme  Court  of 
the  United  States  has  sustained  orders 
giving  priority  to  receiver's  certificates 
representing  particular  indebtedness, 
and,  as  already  stated,  then  only  on 
principles  having  no  application  to  a 
mortgage  executed  by  a  private  cor- 
poration owing  no  duty  to  the  public." 
In  Wood  V.  Ouarantee  fnist  &  Safe 
Deposit  Co.  128  U,  S.  417,  32  L.  ed. 
472,  the  court  say:  "The  doctrine  of 
Fosdick  V.  Schall,  99  U.  S.  252,  25  L. 
ed.  342,  has  never  yet  been  applied  in 
any  case  except  that  of  a  railroad." 
And  see  Kneeland  v.  American  Loan 
&  T.  Co.  136  U.  S.  89,  34  L.  ed 
379;  Bound  v.  South  Carolina  E.  Co. 
50  Fed.  Rep.  312;  Manchester  Locomo- 
tive Works  V.  Truesdale,  44  Minn.  118, 
9  L.  R.  A.  140;  Fidelity  Lns.  <&  S. 
D.  Co.  V.  Shenandoah  Iron  Co.  42 
Fed.  Rep.  372;  Seventh  Nat.  Bank  v. 
Shenandoah  Iron  Co.  35  Fed.  Rep. 
436;  Raht  v.  Altrill,  42  Hun,  414.  But 
see  Earn  v.  Hover  Iron  Co.  86  Va. 
754.  In  this  case  it  does  not  seem  that 
the  question  as  to  the  right  in  the  mat- 
ter of  a  private  corporation  was 
raised  against  the  right  of  the  re- 
ceiver to  issue  certificates  having  pri- 
ority over  existing  mortgages  in  pay- 
ment of  claims  accruing  prior  to  re- 
ceiver's appointment  generally.  See 
Manchester  Locomotive  Works  v.  Trves- 
dale  (Minn.)  9  L.  R.  A.  140,  note 
p.  143,  where  the  following  cases  are 


RECEIVERSHIP  OF  RAILWAYS.  485 

§  27S.     Preferential  claims,  basis  of. 

(a)  In  receiverships  of  railways  there  hass^rown  up  a  practice  in 
courts  of  equity  of  allowing  a  species  of  claims  a  preferential  at- 
titude towards  contract  lienholders,  and  thus  giving  such  claims 
a  priority  in  payment  over  the  bonded  indebtedness  secured  by 
mortgage  or  trust  deed.  These  are  sometimes  called  by  the  courts 
equitable  liens  and,  whatever  may  be  said  as  to  the  justice  and 
equity  of  giving  them  priority  over  the  recorded  contractual  liens, 
it  is  doubtful  whether  the  court  has  power  to  base  the  priority  of 
their  payment  upon  the  existence  of  an  actual  lien.  The  equi- 
table priority  in  the  allowance  of  these  claims  is  to  be  found  rather 
in  the  contractual  relation  of  the  parties.  Thus  when  a  mort- 
gagee takes  mortgage  security  upon  a  railway  and  its  income,  it 
is  done  with  the  tacit  understanding  that  the  mortgagor  shall 
operate  the  road  as-a  going  concern,  and  that  his  lien  attaches  to 
the  corpus  and  its  earnings  only  when  the  operating  expenses 
have  been  paid.  The  giving  of  this  class  of  claims  a  priority  in 
payment  over  the  mortgage  indebtedness  has  for  its  basis  the  non- 
existence of  a  mortgage  lien  rather  than  a  lien  of  the  claimants, 
in  so  far  as  the  necessary  operating  exj)enses  are  concerned.  If 
it  be  true  that  from  any  state  of  facts  or  relationship  of  parties 
a  court  of  equity  can  create  a  lien,  and  make  it  superior  to  that 
of  a  recorded  mortgage,  it  is  a  power  beyond  that  usually  sup- 
posed to  belong  to  such  courts. 

(b)  Sometimes  this  class  of  claims  is  given  an  equitable  prior- 
ity in  mortgage  foreclosures  upon  the  ground  that  the  court,  in 
the  exercise  of  a  sound  judicial  discretion,  may  impose  terms  upon 
the  plaintiff  and  require  him,  as  a  condition  of  granting  a  receiver- 
ship, to  consent  to  the  payment  from  the  income  of  the  operating 

cited:  Dunham  v.  Cincinnati,  C.  &  C.  U.  S.  592,  27  L.  ed.  488;  Fanners'  i& 

R.Co.  68  U.  S.  1  Wall.254. 17L.ed.  584;  M.  Nat.  Bank  v-.  Philadelphia  &  R. 

Denniston  v.  Chicago,  A.  &  St.  L.  R.  R.    Co.   7   Fed.    Rep.  379;   Meyer   v. 

Co.  AH'i&s.  AM;  Duncan V.  Mobile  &0.  Johnston,    53  Ala.    237;    Coe  v.  Neio 

R.  Co.  2  Woods,  542;  Jerome  v.   Mc-  Jersey  M.  R.   Co.  31  N    J.  Eq.  105; 

Carter,  94  U.  S.  734,  24  L.  ed.  136;  Turner  v.  Peoria  &  8.  R.  Co.  95  111. 

Wallace  v.  Loomis,  97  U.  S.  146,  24  L.  135;  Coe  v.  Golumbm,  P.  <t-  /.  R.  Co. 

ed.  895;  Brown  v.  New   York  &  E.  R.  lO  Ohio  St.   372;  Qnrney  v.  Atlantic 

Co.  19  How.   Pr.  84;  Vatable  v.  New  &  q_  w.  R.  Co.  58  N.  Y.  358;  United 

York,  L.  E.  &  W.  R.  Co.  96  N.  Y.  49;  states  Trust  Co.  v.  New  York,  W.  8.  db 

Atkins  V.  Petersburg  R.  Co.  3  Hughes,  jj  Ji_  Co.  25  Fed.  Rep.  803. 
307;   Union  Trust   Co.  v.  Souther,  107 


486  RECEIVERSHIPS. 

indebtedness  accrnini^  witliin  a  limited  period  prior  to  tlie  re- 
cciversliip,  and  tliereafter,  on  the  ground  that  before  lie  is  in  a 
condition  to  ask  for  equity  he  must  do  equity.  In  other  words 
the  court,  in  effect,  says  to  the  plaintiff  "the  equitable  rights  asked 
for  will  be  granted  only  on  condition  that  you  consent  that  the 
receiver  pay  certain  specified  indebtedness"  which,  in  the  view  of 
the  court,  is  entitled  to  peculiar  equitable  considerations.  Tliis 
doctrine,  as  a  basis  of  judicial  action,  it  would  seem  ouglit  not  to 
be  extended,  and  particularly  so  where,  as  in  this  class  of  cases, 
its  application  is  wholly  unnecessary. 

§  279.     Rule  in  Federal  courts. 

The  Supreme  Court  of  the  United  States  in  a  case  wliere  it  ap- 
peared that  rolling  stock  was  purchased  under  the  form  of  leases 
in  which  the  title  was  reserv^ed  in  the  vendors  until  certain  an- 
nual amounts  were  paid,  with  a  provision  that  the  vendors  might 
retake  the  property  on  default  in  the  payments,  and  the  bill  was 
filed  by  a  judgment  creditor,  and  subsequently,  after  the  expira- 
tion of  four  months',  bills  were  filed  by  the  trustees  for  the  fore- 
closure of  the  mortgages,  and  a  receiver  was  continued  there- 
under, where  it  appeared  that  the  receipts  were  not  sufficient  to  pay 
the  operating  expenses,  and  that  the  rolling  stock  was  returned 
to  the  intervenors  prior  to  the  sale,  but  no  demand  was  made 
prior  to  the  filing  of  the  bills  for  foreclosure  for  the  return,  and  it 
was  sought  to  recover  from  the  receiver  the  contract  price  or 
rental  for  the  rolling  stock  during  the  four  months  prior  to  the 
filing  of  bills  for  foreclosure,  tlie  following  propositions  were 
considered  and  estaljlished  by  the  court : 

(a)  The  court  by  the  appointment  of  a  receiver  acquires  certain 
rights,  and  assumes  certain  obligations,  and  the  expenses  which 
the  court  creates  in  discharge  of  these  obligations  are  burdens 
necessarily  on  the  property  taken  possession  of,  and  this  iri-espec- 
tive  of  the  question  who  may  be  the  ultimate  owner  or  who  may 
have  the  preferred  lien  or  who  may  invoke  the  receivership. 

(b)  The  court  has  no  right  to  make  the  receivership  conditional 
on  the  payment  of  other  tlian  those  few  unsecured  claims  which 
by  the  rulings  of  that  court  have  been  declared  to  have  an  equi- 
table priority. 

(c)  No  one  is  bound  to  sell  to  a  railroad  company  or  to  work 


RECEIVERSHIP  OF  RAILWAYS.  487 

for  it,  and  whoever  has  dealings  with  a  company  whose  property 
is  mortgaged  must  be  assumed  to  have  dealt  with  it  on  the  faith 
of  its  personal  responsibility,  and  not  in  expectation  of  subse- 
quently displacing  the  priority  of  the  mortgage  liens. 

(d)  When  the  receiver  is  appointed  at  the  instance  of  a  gen- 
eral creditor  and  there  is  a  deficit  in  the  running  expenses  of 
the  road,  and  rolling  stock  is  taken  back  by  the  lessor  under  the 
provisions  of  his  lease,  his  claim  for  i-ent  is  not  entitled  to  pi'iority 
over  the  mortgage  creditors. 

(e)  If,  however,  the  rolling  stock  is  taken  possession  of  by  the  re- 
ceiver at  the  instance  of  the  mortgagee,  and  is  used  for  the  benefit 
of  the  mortgagee's  interest  in  the  real  estate,  the  rent  for  the  roll- 
ing stock  has  priority  to  the  mortgage,  as  to  the  earnings  and  pro- 
ceeds of  sale. 

And  in  such  case  the  reasonable  rental  value  is  the  rental 
to  be  paid.' 

(f)  (i)  Where  the  interests  of  moi'tgagees  are  involved  the 
growing  tendency  of  courts  is  not  to  enlarge  the  class  of  claims 
which  are  given  preference  in  payment  over  the  mortgage  in- 
debtedness.'^ (3)  The  better  rule  would  seem  to  be  that  the  pay- 
ment of  claims  as  preferential  to  the  mortgage  lien  does  not  depend 
upon  a  provision  therefur  incorporated  in  the  order  of  appoint- 
ment,^ though  it  has  been  held  to  be  a  prerequisite."  (3)  The 
general  rule  is  that  claims  for  which  a  preference  is  allowed  must 
liave  accrued  within  a  reasonable  time  prior  to  the  aj^pointraent 
of  the  receiver,'^  and  while  some  courts  have  fixed  an  arbitrary 

•  Kneeland  v.  American  Loan  &  T.  rendered  to  a  railroad  compmy before 
Co.  136  U.  S.  89,  34  L.  ed.  379.  the  appointment  of  a  receiver  entitled 

'  The  teodency  of  judicial  decision  to  preference  over  mortgage  indebled- 

is  to  narrow  rather  than  enlarge  the  ness,  there  mu.st  have  been  an  order 

class  of  claims  against  railroad  com-  of  court  at  the  time  the    receivers 

panies  to  be  preferred  over  mortgage  were  appointed,  for  its  payment,  and 

liens  out  of  funds  in  the  hands  of  re-  the  current  earnings  before  or  after 

ceivers.      ^yood  v.  New  Turk  &  N.  E.  the  appointment  of  the  receivers  must 

R   Co.  70  Fed.  Rep.  741.  have  been  diverted  to  paying  interest 

'The  allowance  of  claims  again.st  on  the  mortgage  debt.     Central  Truat 

railroads  in   preference   to  mortgage  Co.  v.  Chatlnnvoga  S.  It.  Co.  69  Fed. 

liens  does  not  depend  upon  the  order  Rep.  295. 

of  court  appoifiliog  receivers.     Wood  "  The  allowance  of  claims  in  {jrefer- 

V.  New   York  &  N.  K.  R.  Co.  supra.  ence  to  mortgage  liens  against  rail- 

*  To  make  a  claim  for  the  services  road  property  in  the  hands  of  receiv- 


488 


RECEIVERSHIPS. 


period  of  four,  six,  or  twelve  months  within  which  claims 
are  preferred,'  yet  no  fixed  and  inliexihle  rule  can  be  laid 
down  upon  the  subject.^  {Jf)  The  allowance  of  claims  of  this 
nature  should  not  be  granted  without  notice  to  those  interested." , 
{5)  Claims   for   preference  have    been    held   to   include   labor/ 


ers  does  not  depend  upon  any  fixed 
or  arbitrary  rule  as  to  the  lime  when 
the  debts  were  contracted,  further 
than  that  they  must  have  been  in- 
curred within  a  reasonable  time  be- 
fore the  appointment  of  receivers, 
depending  upon  the  circumstances  of 
each  particular  case.  Wood  v.  Neio 
York  &  N.  E.  R.  Co.  70  Fed.  Rep.  741. 

A  debt  for  coupling  links  and  pins 
and  tank  steel  furnished  a  railroad 
company  within  a  reasonable  lime 
before  the  appointment  of  receivers 
is  one  for  supplies  necessary  to  keep 
it  a  going  concern,  possessing  a  su- 
perior equity  over  mortgage  liens, 
when  such  supplies  were  necessary 
to  the  operation  from  day  to  day  of 
the  road.  Wood  v.  New  York  <&  N.  R 
B.  Co.  supra. 

'  A  claim  for  necessary  supplies  to 
keep  a  railroad  a  going  concern,  fur- 
nished within  four  months  of  the 
time  of  the  appointment  of  receivers 
in  a  foreclosure  suit  in  which  the  de- 
cree allows  the  receivers  to  pay  sup- 
ply accounts  contracted  within  four 
months,  and  within  a  year  of  the  ap- 
pointment of  the  same  receivers  in 
another  suit  in  which  the  decree  de- 
clared that  no  payment  should  be 
made  without  special  order  of  the 
court, — is  not  barred  as  not  coming 
■within  the  time  within  wliich  priority 
can  be  given  over  the  mortgage  liens. 
Wood  V.  New  York  &  N.  E.  B.  Co. 
70  Fed.  Rep.  741. 

The  six  months'  limitation,  in  an 
order  appointing  receivers,  upon  the 
payment  of  claims  for  supplies,  has 
no  effect  in  barring  meritorious  pref- 


erential claims.     Northern  P.  B.  Co. 
V.  Lamont,  69  Fed.  Rep.  23. 

^  There  is  no  fixed  rule  of  a  Federal 
court  barring  claims  contracted  more 
than  six  months  before  the  appoint- 
ment of  a  receiver  of  a  railroad  com- 
pany or  giving  claims  contracted 
within  such  time  a  preferential  char- 
acter in  respect  to  a  mortgage  upon 
the  railroad  property.  Central  Trust 
Co.  V.  East  Tennesee,  V.  &  O.  B.  Co. 
69  Fed.  Rep.  658;  Wood  v.  New  York 
&  N.  E.  R.  Co.  70  Fed.  Rep.  741. 

*  An  order  authorizing  the  receiver 
of  a  railroad  company  to  issue  his 
certificates  to  raise  funds  for  the 
maintenance  of  the  road  cannot  be 
granted  without  notice  of  the  motion 
therefor  to  the  parties  interested  in 
the  fund  sought  to  be  charged  thereby. 
State  V.  Port  Royal  &  A.  R.  Co.  (S.  C.) 
23  S.  E.  380. 

^  By  the  act  of  1885  (N.Y.Stat,  chap. 
37G),  a  receiver  of  a  corporation 
is  required  to  pay  the  wages  of  his 
employees  and  laborers  in  preference 
to  other  debts  or  claims,  as  therein 
specified.  Prior  to  that  act  the  court 
had  no  power  to  authorize  a  receiver 
in  a  foreclosure  proceeding  to  pay  or 
issue  certificates  for  the  payment  of 
labor  and  services  in  operating  a  rail- 
road accruing  prior  to  his  appoint- 
ment and  make  such  certificates  a 
lien  prior  to  the  mortgage.  Metro- 
politan Trust  Co.  v.  Tonawanda  Valley 
&  C.  R.  Co.  103  N.  Y.  244. 

In  the  case  of  RaJit  v.  Attrill,  106 
N.  Y.  423,  it  is  held  that  the  lien  of 
a  mortgage  attaches  not  only  to  the 
land  in  the  condition  in  which  it  waa 


RECEIVERSHIP  OF  RAILWAYS. 


4:89 


at  the  time  of  its  execution,  but  as 
changed  or  improved  by  accretions  or 
by  labor  expended  upon  it  during  the 
existence  of  the  mortgage;  and  credi- 
tors whose  debts  were  created  for 
money,  labor,  or  material  used  in  the 
improvement  acquire  a  legal  or  equita- 
ble claim  to  displace  or  subordinate 
the  lien  of  the  mortgage  for  their  pro- 
tection. The  payment  of  this  class 
of  claims,  where  a  bill  is  filed  to  fore- 
close a  mortgage,  is  sometimes  made 
a  condition  to  the  granting  of  an 
order  for  a  receiver  where  the  claims 
accrued  within  a  .short  time  prior  to 
the  receivership.  Fosdick  v.  Schall, 
99  U.  S.  235,  251,  25  L.  ed.  339,  342; 
Union  Trust  Co.  v.  Souther,  107  U.  S. 
592,  27  L.  ed.  448;  Burnham  v.  Bowen, 
111  U.  S.  776,  783,  28  L.  ed.  596,  599; 
United  States  Trust  Co.  v.  Nero  York, 
W.  S.  &  B.  R.  Co.  25  Fed.  Rep.  800,802. 

All  debts  incurred  by  a  receiver  for 
the  necessary  repairs  and  for  the 
general  protection  and  preservation 
of  the  property  may  be  made  and 
charged  upon  the  corpus  of  the  prop- 
erty itself.  Meyer  v.  Johnston,  53  Ala. 
337,  345,  350;  Wallace  v.  Loomis,  97 
U.  S.  146,  162,  163,  24  L.  ed.  895,  901 ; 
Vermont  <&  C.  B.  Co.  v.  Vei-niont  C. 
R.  Co.  50  Vt.  500,  576;  Hoover  v.  Mont- 
clair  cfe  Q.  L.  R.  Co.  29  N.  J.  Eq.  4; 
Hale  V.  Nashua  &  L.  B.  Co.  60  N. 
H  333,  341;  McLane  v.  Placer viUe  & 
8.  V.  R.  Co.  66  Cal.  606,  et  seq. 

The  operating  expenses  of  an  in- 
solvent railroad  are  preferred,  as 
necessary  for  the  preservation  of  the 
property.  Meyer  v.  Johnston,  58  Ala. 
237,  346;  Ellis  v.  Boston,  U.  &  E.  R. 
Co.  107  Mass.  28;  Barton  v.  Barbour, 
104  U.  S.  126,  134,  135,  26  L.  ed.  672, 
677,  678;  Poland  v.  Lamoille  Valley  R. 
Co.mYi.  178;  Woodruffs.  Erie  R.  Co. 
93  N.  Y .609,620,  622 ;  McLane  v.  Placer- 
ville&S.V.  R.  Co.'&i  Cal.  600,623; 
Union  Trust  Co.  v.  Illinois  M.  R.  Co. 
117  U.  S.  434,  464,  465.  29  L.  ed.  903, 


973,  974;  Metropolitan  Trust  Co.  v. 
Tonawanda  Valley  &  C.  R.  Co.  103  N. 
Y.  245. 

The  test  is  whether  it  has  been 
shown  that  the  debts  or  expenses  for 
which  priority  is  claimed  were  neces- 
sarily incurred  for  the  protection  or 
preservation  of  the  property  in  the 
hands  of  the  courts.  Hale  v.  Nashua 
&  L.  R.  Co.  60  N.  H.  333;  Scott  v. 
Delahunt,  65  N.  Y.  128;  Woodruff  v. 
Erie  R.  Co.  93  N.  Y.  609,  623,  623; 
Meyer  v.  Western  Car  Co.  102  U.  S. 
13,  20  L.  ed.  61;  Union  Trust  Co.  v. 
Illinois  M.  R.  Co.  117  U.  S.  463,  464, 
29  L.  ed.  963,  973. 

A  telegraph  company  rendering 
services  to  a  railroad  company  in 
operating  a  line  along  its  road  is  a 
laborer  within  the  Virginia  statute 
giving  laborers'  claims  priority  over 
mortgages  upon  properly  in  the  hands 
of  receivers.  Newgass  v.  Atlantic  cfe 
D.  R.  Co.  72  Fed.  Rep.  712. 

A  bookkeeper  of  an  insolvent  cor- 
poration is  an  "employee"  witliin  N. 
Y.  Laws  1885,  chap.  376,  §  1,  pro- 
viding that  where  the  receiver  of  a 
corporation  is  appointed  the  wages  of 
the  employees  shall  be  preferred  to  all 
other  debts  or  claims  against  the  cor- 
poration. People  V.  Beveridge  Brew. 
Co.  91  Hun,  313. 

Independently  of  the  claim  of  divi- 
sion of  income,  debts  may  be  preferred 
over  mortgage  liens  upon  railroad 
property  in  the  hands  of  receivers 
when  incurred  for  labor  and  supplies 
necessary  to  keep  the  road  a  going 
concern  from  day  to  day,  or  the  out- 
come of  indispensable  business  rela- 
tions, the  continuance  of  which  in- 
volve the  interests  of  the  public  and 
the  trafhc  of  the  road.  Wood  v.  New 
York  &  N.  E.  R.  Co.  70  Fed.  Rep. 
741. 

Tlie  inchoate  right  of  one  furnisliing 
supplies  and  materials  to  an  insolvent 
railroad  company,  to   be  preferred  in 


490 


RECEIVERSHIPS. 


money  expended,  waitin<j^  rooms,  ticket   offices,'  and   operating 
expenses,"  bnt  docs  not  include  damages  for  personal    injuries' 


case  a  receiver  is  appointed,  to  the 
lien  of  a  mortgage  upon  the  property, 
is  lost  by  the  giving  of  a  note  by  the 
railroad  company  guaranteed  by  the 
furnisher  of  the  supplies  and  mate- 
rials under  a  requirement  that  it  be 
secured  by  a  deposit  of  mortgage 
bonds  of  the  railroad  and  a  lien  on  all 
securities  owned  by  the  railroad  in  the 
possession  of  the  bank  discounting 
the  note.  Ohio  Falls  Gar  Mfg.  Co.  v. 
Central  Trvst  Co.  71  Fed.  Kep.  916. 

'  Moneys  due  for  providing  waiting- 
rooms,  ticket  offices,  and  a  place  for 
the  employees  of  a  railroad  to  board 
and  lodge  at  reduced  rates,  at  one  of 
the  principal  stations  of  a  railroad, 
constitute  a  preferential  debt,  where 
the  road  is  in  the  hands  of  receivers. 
Northern  P.  B.  Co.  v.  Lamont,  69 
Fed.  Rep.  23. 

^  Liability  of  sureties  on  a  super- 
sedeas bond  obtained  by  a  railroad 
company,  fixed  by  default  of  the  com- 
pany after  the  appointment  of  a  receiv- 
er, is  entitled  to  rank  as  a  current 
operating  expense  which  should  be 
paid  out  of  the  funds  in  the  receiver's 
hands  in  preference  to  a  mortgage 
debt.  Farmers'  Loan  <&  T.  Co.  v. 
Northern  P.  li.  Go.  71  Fed.  Rep.  245. 

Current  expenses  of  a  railroad  in  the 
bauds  of  a  receiver,  whether  con- 
tracted before  or  after  his  appoint- 
ment, are  properly  paid  out  of  the 
revenue  coming  into  his  hands,  in 
preference  to  a  mortgage.  Farmers' 
Loan  &  T.  Go.  v.  Northern  P.  B.  Go. 
snpra;  Wood  v.  New  York  &  N  E.  R. 
R.  Go.  70  Fed.  Rep.  741;  Filkins  v. 
Adams,  60  III.  App.  410. 

Compensation  and  expenses  allowed 
to  the  trustee  in  a  railroad  mortgage 
and  its  solicitor  should  not  be  given 
priority  over  receivers'  certificates  out 


of  the  funds  in  the  receiver's  hands. 
Petersbiwg  Sav.  <&  I.  Go.  v.  Bellatorre, 
70  Fed.  Hep.  643. 

Money  borrowed  to  pay  taxes  is  a 
preferred  claim.  Ilanna  v.  State 
Trust  Go.  70  Fed.  Rep.  2,  30  L.  R.  A. 
201. 

The  filing  of  a  bill  for  foreclosure 
of  a  mortgage  covering  the  income  of 
a  railroad  company  does  not  impound 
its  gross  revenue  so  as  to  prevent  the 
payment  to  connecting  lines  of  road 
of  their  just  and  equitable  share  of 
the  earnings  from  interchanged  busi- 
ness. Ames  V.  Union  P.  R.  Go.  73 
Fed.  Rep.  49. 

The  current  income  of  a  railroad 
is  primarily  to  be  devoted  to  the  pay- 
ment of  current  debts,  and  when  used 
for  the  payment  of  interest  upon 
mortgage  indebtedness  or  for  per- 
manent improvements  or  for  the  bene- 
fit of  the  mortgagees  in  any  manner, 
at  the  expense  of  the  current  debt 
fund,  must  be  restored  to  the  extent 
of  such  diversion.  Woody.  New  York 
&  N.  E.  R.  Go.  70  Fed.  Rep.  741. 

^A  judgment  for  personal  injuries 
in  favor  of  a  passenger  upon  a  railway 
operated  by  a  receiver  appointed  in 
quo  warranto  proceedings  instituted 
by  the  state  to  forfeit  the  company's 
charter  for  the  purpose  of  having  the 
railroad  operated  for  the  benefit  of  its 
owners,  pending  such  proceeding,  is 
not  entitled  to  superior  rank  to  the 
lien  of  a  mortgage  executed  before 
the  cause  of  action  for  damages  ac- 
crued, notwithstanding  a  provision  of 
the  state  court  vacating  such  receiver- 
ship, that  the  charges  upon  the  prop- 
erly in  the  hands  of  a  receiver  are 
made    a    lien    thereon.     F'oreman  v. 

Central  Trust  Co.  30  U.  S.  App.  653, 
71  Fed.  Rep.  776. 


RECEIVERSPIIP  OF  RAILWAYS. 


491 


nor  rents.*  {6)  As  to  the  justice  and  propriety  of  the  allowance 
of  these  claims  as  preferential  there  can  be  no  question,  if  the 
proper  caution  is  exercised  as  to  the  scope  of  the  allowance.^ 

§  280.     Application  to  rolling  stock  and  car  trnsts. 

Preferential  pa3'nient  has  been  extended  to  rentals  under  the 
conditional  sales  of  rolling  stock  commonly  designated  as  car  trust 
leases.  The  payment  or  liability  for  such  rentals,  by  the  receiver, 
is  governed  by  the  same  principles  as  oljtain  in  the  case  of  rentals 
for  leased  lines  of  road  coming  into  the  receiver's  hands  at  the 
time  of  his  appointment.  He  is  entitled  to  a  reasonable  time  in 
which  to  determine  whether  he  will  retain  the  rolling  stock  under 
the  leases,  or  return  the  same  to  the  lessors.     If  he  retains  the 


Preference  over  a  mortgage  debt  in 
respect  to  the  receiver's  earnings  can- 
not be  given  to  a  claim  for  damages 
caused  by  negligence  of  a  street  rail- 
way company  before  the  appointment 
of  the  receiver,  in  a  suit  to  foreclose 
the  mortgage  on  the  street  railway 
property.  St.  Louis  Trust  Co.  v. 
Riley,  70  Fed.  Rep.  32,  30  L.  R.  A. 
45C ;  Farmers'  Loan  cfc  T.  (J<>.  v.  De- 
troit, B.  C.  &  A.  R.  Co.  71  Fed. 
Rep.  29. 

A  judgment  creditor  of  a  railroad 
for  damages  for  personal  injuries  ac- 
quires no  superior  equity  over  a  mort- 
gage in  funds  paid  by  the  company  to 
its  receiver  from  earnings  prior  to  his 
appointment,  where  he  has  acquired 
no  lien  and  obtained  no  injunction  be- 
fore the  commencement  of  the  suit  to 
foreclose  the  mortgage,  although  pay- 
ment of  such  sum  to  the  receiver  could 
not  have  been  enforced  against  the  ob- 
jection of  the  mortgagor,  as  the  right 
to  make  such  oi)jeclion  is  personal  to 
the  latter.  Farmers'  Loan  &  T.  Co.  v. 
Detroit,  B.  G.  &  A.  R.  Co.  71  Fed. 
Rep.  29. 

The  liability  to  a  person  injured  by 
the  operation  of  a  railroad  in  the  hands 
of  receivers  is  a  part  of  the  running 


expenses  of  the  road,  which  will  take 
precedence  of  mortgage  liens  upon  the 
property  iu  the  receiver's  hands.  St. 
Louis  S.  W.  R.  Co.  V.  Eolbrook,  73 
Fed.  Rep.  112. 

'Rents  accruing  for  property  leased 
by  a  corporation  from  the  appoint- 
ment of  a  receiver  of  its  property 
until  confirmation  of  a  sale  of  the 
leasehold  do  not  constitute  a  prior 
charge  upon  the  funds  in  the  hands  of 
the  receiver,  where  he  has  not  adopted 
the  lease,  on  the  ground  that  they  are 
an  operating  expense.  Tradesman 
Pub.  Co.  V.  Knoxville  Car  Wheel  Co. 
95  Tenn.  634. 

^Kneelfvnd  v.  American  Loan  <&  T. 
Co.  136  U.  S.  89,  34  L.  ed.  379;  Union 
Trust  Co.  v.  Illinois  M.  R.  Co.  117  U. 
S.  436.  29  L.  ed.  968:  Miltenbenjer  v. 
Lofjansport,  C.  &  S.  W.  R.  Co.  106  U. 
S.  286,  27  L.  ed.  117;  Wallace  v. 
Loomis,  97  U.  S.  146,  24  L.  ed.  895; 
Meyer  v.  Johnston,  53  Ala.  337;  Ellis 
V.  Vernon  Ice,  L.  &  W.  Co.  86  Tex.  109; 
Bank  of  Montreal  v.  Chicaxio,  C.  &  W. 
R.  Co.  48  Iowa,  518;  Hoover  s.Montclair 
&  (I.  L.  R.  Co.  29  N.  J.  Ecj.  4;  Mc- 
Lane  v.  I'laccnille  <&  S.  V.  R.  Co.  60 
Cal.  606. 


492 


RECEIVERSHIPS. 


rolling  stock  under  this  class  of  leases  and  uses  it,  or  signifies  his 
intention  of  retaining  the  same  by  other  unequivocal  acts  of  own- 
ership, as  the  sale  thereof,  with  the  other  property  embraced  in 
the  foreclosure,  he  must  pay  a  reasonable  rental  therefor  during 
the  time  it  is  in  his  possession  and  use,'  and  in  some  cases  the 


'As  to  the  right  of  the  mortgagee  to 
hold  the  rolling  stock  under  his  mort- 
gage, where  the  rolling  stock  is  by  the 
Constitution  or  statutes  made  personal 
propert}',  see  Radebaiigh  v.  Tacoma 
&  P.  R.  Co.  8  Wash.  570;  Hammock 
V.  Farmers'  Loan  &  T.  Co.  105  U.  S. 
77,  26  L.  ed.  1111;  Hoyle  v.  Piatisburg 
&  M.  R.  Co.  51  N.  Y.  314;  Vilas  v. 
Page,  106  N.  Y.  439.  But  see  Doio  v. 
Memphis  &  L.  R.  R.  Co.  20  Fed.  Rep. 
260. 

In  Farmers'  Loan  &  T  Co.  v.  Chi- 
cago &  A.  R.  Co.  42  Fed.  Rep.  6,  roll- 
ing stock  under  a  car  trust  lease  was 
taken  possession  of  by  a  receiver  and 
continuously  used  by  him  without  ob- 
jection from  the  bondholders  or  trus- 
tees and  payments  were  made  on  the 
rentals  from  the  income.  On  applica- 
tion by  the  lessor  it  was  held  that 
the  retention  and  use  of  the  cars  by 
the  receiver  and  the  nonaction  of  the 
bondholders  did  not  amount  to  a  con- 
version; that  the  lessor  was  not  en- 
titled to  the  rental  according  to  the 
terms  of  the  lease  out  of  the  corpus  of 
the  estate,  but  only  to  a  return  of  the 
cars  within  a  reasonable  time,  if  so  de- 
manded, and  a  quantum,  meruit  for  the 
use  thereof.  In  Coe  v.  Neio  Jersey  M. 
R.  Co.  27  N.  J.  Eq.  37,  it  was  held 
that  if  the  lessors  were  willing  to  ac- 
cept for  the  rolling  stock  in  the  hands 
of  the  receiver  what  in  fact  it  was 
worth  irrespective  of  the  price  fixed 
in  the  agreement  and  to  allow  on  such 
price  what  had  been  received  by  them 
on  account  of  rent  the  receivers  would 
be  authorized  to  purchase  the  rolling 
slock  at  its  true  value  and  pay  for  the 


same  in  certificates.  In  Taylor  v. 
Philadelphia  cfe  R.  R.  Co.  9  Fed.  Rep. 
1,  where  the  net  earnings  were  suffi- 
cient for  the  purchase  of  additional 
rolling  stock,  the  court  refused  to  per- 
mit the  receiver  to  raise  money  for 
such  purpose  by  the  creation  of  a  car 
trust.  In  Fosdick  v.  Schall,  99  U.  8. 
235,  25  L.  ed.  339,  it  was  held  that  the 
mortgagees  under  a  contract  of  this 
character  took  only  such  title  under 
their  mortgage  as  the  mortgagor  held, 
no  more  and  no  less;  that  the  mort- 
gagee's title  was  subject  to  the  rights 
of  the  vendor  in  the  rolling  stock,  and 
the  decree  of  the  court  ordering  a  re- 
turn of  the  rolling  stock  to  the  vendor 
was  proper.  The  receiver  was  di- 
rected to  pay,  for  tlie  use  of  the  cars, 
out  of  the  funds  in  his  hands  the  sum 
of  $14,568.75,  as  rent  for  the  period 
the  cars  were  in  use  before  the  ap- 
pointment of  the  receiver,  but  on  ap- 
peal this  order  was  reversed  on  the 
ground  that  there  was  no  fund  sub- 
ject to  the  payment  of  the  rental  ex- 
cept the  fund  arising  from  the  sale  of 
the  mortgage  property,  to  which  fund 
the  rolling  stock  had  in  no  way  con- 
tributed; that  the  vendor  as  to  such 
claim  was  but  a  general  creditor.  In 
Meyer  v.  Western  Car  Co.  102  U.  S. 
1,  26  L.  ed.  59,  the  doctrine  of 
Fosdick  V.  Schall,  supra,  was  ad- 
hered to  so  far  as  the  title  of  the 
vendor  as  against  the  mortgagee  was 
concerned.  It  was  also  held  that  the 
receiver  must  pay,  from  the  fund  in 
his  hands  to  the  credit  of  the  suit, 
compensation  for  the  use  of  the  cars 
during  the  time  they  were  in  his  pos- 


RECEIVERSHIP  OF  RAILWAYS. 


493 


contract  price.     In  reference  to  the  amount  of  rental  which  the 
receiver  will  be  required  to  pay  for  the  use  of  rolling  stock  while 


session,  the  amount  being  substan- 
tially agreed  upon.  In  Miltenberger 
V.  Logamport,  C.  &  S.  W.  R.  Co.  106 
U.  S.  286,  27  L.  ed  117,  the  receiver 
was  authorized  to  pay  as  rental  of  a 
leased  line  of  road  what  such  rental 
was  reasonably  worth  during  the  time 
it  was  in  the  use  of  the  receiver,  and 
not  the  contract  price.  In  Kneeland 
V.  American  Loan  &  T.  Co.  136  U.  S. 
89,  34  L.  ed.  379,  one  question  before 
the  court  was  as  to  the  method  of  as- 
certaining the  reasonable  rental.  It 
was  held  that  the  reasonable  value  ir- 
respective of  use  was  the  true  meas- 
ure and  not  the  actual  mileage.  In 
Thomas  v.  Western  Car  Co.  149  U.  S. 
95,  37  L.  ed.  663,  it  was  held  that  a 
debt  due  a  car  company  for  the  use  of 
rolling  stock  prior  to  the  appointment 
of  a  receiver  is  not  a  preferred  debt 
having  priority  over  the  mortgage 
lien;  and  it  is  also  held  that  the  lessor 
is  not  entitled  to  interest  on  a  debt 
due  for  rental  from  the  receiver  while 
the  property  is  in  use  by  him. 

In  Sunflower  Oil  Co.  v.  Wilson,  142 
U.  S.  313,  35  L.  ed.  1025,  Mr.  Justice 
Brown  says:  "Upon  taking  po.'-session 
of  the  property  he  was  entitled  to  a 
reasonable  time  to  elect  whether  he 
would  adopt  this  contract  and  make 
it  his  own,  or  whether  he  would  in- 
sist upon  the  inability  of  the  company 
to  pay,  and  return  the  property  in 
good  order  and  condition,  paying  of 
course  the  stipulated  rental  for  it  so 
long  as  he  used  it."  Turner  v.  Rich- 
ardson, 7  East,  335;  Com.  v.  Franklin 
Ins.  Co.  115  Mass.  278;  Sparhawk  v. 
Yerkes,  142  U.  S.  1,  35  L.  ed.  915.  If 
he  elects  to  lake  property  subject  to  a 
condition,  he  is  bound  to  perform  the 
condition  before  he  can  obtain  title  to 
the  properly.     He  may,  however,  de- 


cline to  assume  this  obligation  and  re- 
turn the  property  to  the  purchaser 
upon  complying  with  the  terms  of  the 
contract  with  respect  to  such  return. 
Southern  Exp.  Co.  v.  Western  M.  C.  R. 
Co.  99  U.  S.  191,  25  L.  ed.  319. 

In  Radehaughv.  Tacoma  &P.  R.  Co. 
8  Wash.  570,  it  is  held  that,  under  the 
laws  of  Washington  (Gen.  Stat.  1646 
etseq.),  a  mortgage  upon  the  real  estate 
of  a  railroad  and  purporting  to  cover 
the  rolling  slock  also  does  not  bind 
the  latter  class  of  property  when  the 
instrument  is  executed  and  recorded 
as  a  real-estate  mortgage  and  does  not 
comply  with  the  formalities  in  the  ex- 
ecution of  a  chattel  mortgage.  It 
is  also  held  that  the  appointment 
of  a  receiver  of  a  railroad  corporation 
has  the  same  effect  in  law  as  though 
the  creditors  whom  he  represents  had 
taken  possession  of  the  rolling  stock 
under  legal  proceedings  and  the  right 
of  the  morlgagee  to  take  possesion  of 
the  rolling  stock  does  not  give  the 
mortgagee  any  priority  over  creditors 
when  its  right  of  po-ssession  accrues 
subsequent  to  the  appointment  of  the 
receiver. 

In  Tliomas  v.  Western  Car  Co.  149 
U.  S.  95,  37  L.  ed.  663,  a  debt  due 
from  a  car  company  for  rental  of  cars 
prior  to  the  commencement  of  a  suit 
to  foreclose  a  mortgage  on  the  road 
and  the  appointment  of  a  receiver,  is 
held  not  to  be  a  preferred  debt  hav- 
ing priority  over  the  mortgage  debt. 
It  was  also  held  that  where  a  corpo- 
ration for  the  manufacture  and  sale 
of  cars  deals  with  a  railroad  company 
whose  road  is  subject  to  a  mortgage 
securing  outstanding  bonds,  the  holder 
of  a  claim  under  such  contract  occu- 
pies a  very  different  position  from 
workmen  and  employees  and  must  be 


404  RECEIVERSHIPS. 

retained  by  him,  tliout;ii  i"i-e(|ucntly  passed  upon  by  the  courts, 
]ias  not,  as  yet,  met  with  such  uniformity  of  treatment  as  renders 
it  possible  to  fix  definitely  the  nnderlyint;  principles  2;overning 
the  matter.  It  would  seem,  however,  that  a  careful  examination 
of  the  cases  will  establish  the  fullowiiio-  propositions  as  reasonably 
well  settled : 

(a)  The  receiver  not  being  required  to  adopt  the  contract  as  an 
entirety,  and  exercising  his  discretion  by  refusing  to  adopt  it, 
need  not  adopt  the  terms  of  payment,  but  must  in  erpiity  pay  a 
reasonable  price  for  the  use  of  the  property  while  he  re- 
tains it. 

(b)  If  in  the  exercise  of  his  discretion  he  adopts  the  contract  as 
an  entirety  he  must  pay  the  contract  price. 

(c)  Even  as  between  the  original  parties  the  contract  price 
stipulated  d.)es  not  necessarily  represent  a  just  and  equitable 
rental  value,  the  contract  being  intended  as  essentially  a  sale  con- 
tract in  most  cases  rather  than  a  lease. 

(d)  Tiie  Tcndee-lessee  being,  as  a  rule,  wholly  unable  to  com- 
plete his  contract,  the  vendor-lessor  is  entitled  to  a  return  of  his 
property,  and,  on  proper  demand  upon  the  receiver  therefor  and  a 
refusal,  should  be  entitled  to  compensation  for  the  use  of  the 

regarded  as  contracting  upon  the  re-  and  reserved  the  right,  which  was 
sponsibility  of  the  raihoad  company  never  exercised,  of  purchasing  the 
and  not  in  reliance  upon  the  interpo-  cars  at  tlie  original  cost  at  any  time 
silion  of  a  court  of  equity.  during  the  contract.  The  seller  re- 
in Fusdick  V.  Southwestern  Car  Co.  served  the  right  to  rescind  the  con- 
99  U.  S.  256,  25  L.  ed.  344,  a  car  con-  tract  if  the  company  failed  to  pay  the 
tract  providing  that  the  cars  should  interest  on  its  bonds.  The  mortgagor 
be  the  property  of  the  seller  until  filed  a  bill  to  foreclose  his  mortgage, 
paid  for,  it  was  held  tliat  the  lien  in  which  case  a  receiver  was  ap- 
of  the  seller  was  not  subordinated  to  pointed  who  took  charge  of  the  road 
the  lien  of  a  pre  existing  mortgage.  and  used  the  leased  cars  in  operating 
In  Meyer  v.  Western  Car  Co.  102  U.  it.  It  was  held  that  the  contract  was 
S.  1,  26  L.  ed.  59,  it  appeared  that  a  binding  between  the  parties,  and  the 
railroad  company,  after  executing  a  failure  to  record  the  contract  did  not, 
mortgage  to  secure  its  bonds  covering  imder  the  Iowa  statutes,  render  the 
all  the  property  it  then  possessed  or  cars  subject  to  the  lien  of  the  raort- 
might  thereafter  acquire,  entered  into  gage;  that  the  seller  was  entitled  to 
a  written  contract  whereby  it  leased  the  possession  of  them  and  compen- 
for  a  speeitic  period,  and  at  stipulated  tion  for  their  use  by  the  receiver,  pay- 
sums  payable  monthfy,  certain  cars,  able  out  of  the  funds  in  his  hands. 


RECEIVERSHIP  OF  RAILWAYS. 


495 


property  at  the  stipulated  rental,  on  the  principle  that  the  re- 
ceiver by  his  act  makes  the  contract  his  own  by  adoption.' 


'  In  Farmers'  Loan  &  T.  Co.  v.  Clii- 
eago  <&  A.  R.  Co.  42  Fed.  Rep.  6,  the 
elle  r,  upon  the  abandonment  of  a  re- 
ceiver, petitioned  the  court  for  a  return 
of  its  cars  within  thirty  daj's  there- 
after, said  cans  being  sold  under  a  car 
trust  contract.  They  were  not  re- 
turned, but  were  continuously  used 
by  the  receiver  without  objection 
from  the  bondholders  or  the  trustee, 
and  payments  were  made  upon  the 
rental.  After  a  furtlier  lapse  of  three 
mouths  a  second  petition  was  filed 
slating  the  facts  asking  for  a  rule 
on  the  receiver  to  pay  the  amount 
due  under  the  car  trust  contract, 
and  asking  to  have  the  same  de- 
clared a  prior  lien  upon  the  rent- 
als of  the  road  as  well  as  upon 
the  property  embraced  in  the  mort- 
gages. It  was  held  that  the  retention 
and  use  of  the  cars  by  the  receiver, 
the  bondholders  taking  no  action,  did 
not  amount  to  a  conversion;  that  pe- 
titioner was  not  entitled  to  payment 
according  to  the  terms  of  the  lease 
out  of  the  corpus  of  the  estate,  but 
only  to  a  return  of  the  cars  within  a 
reasonable  time  if  so  demanded,  and 
a  quantum  meruit  for  the  use  thereof. 
lint  Stie  MiUenberger  y.  Lor/ansjwrt,  G. 
&  S.  W.  R.  Co.  lOG  U.  S.  280,  27  L.  ed. 
117;  Burnham  v.  Bowen,  111  U.  S.  770, 
28  L.  ed.  590.  In  Union  Trust  Co.  v. 
niiyiois  M.  R.  Co.  117  U.  S.  479,  29 
L.  ed.  979,  it  was  held  that  car  ren- 
tals accruing  before  the  receiver  was 
appointed  are  not  entitled  to  be  first 
paid  out  of  the  corpus  of  the  prop- 
erty. 

In  Woodrujf  v.  Erie  R.  Co.  93  N.  Y. 
609,  it  is  held  that  a  receiver,  by  en- 
tering into  possession  of  and  iteeping 
leased  property,  manifested  by  an  un- 
e(iuivocal  act  his  election  to   regard 


the  continuance  of  such  lease  as  bene- 
ficial for  all  the  parlies  interested,  and 
his  intention  to  continue  the  interest 
acquired  by  the  railroad  company  un- 
der such  lease.  He  could  not  take 
possession  of  the  property,  and  enjoy 
its  use  and  occupation  without  in- 
curring a  liability  for  the  payment  of 
the  rent  under  the  lease  by  which  his 
predecessor  secured  its  collection. 
The  principles  which  govern  the  lia- 
bility of  an  assignee  of  a  lease  seem 
to  be  applicable  to  the  case  of  a  re- 
ceiver, and  he  would  be  equitably 
and  legally  chargeable  with  the  pay- 
ment of  rent  under  a  lease  for  such 
time  as  he  continued  to  occupy  the 
property  demised.  While  it  was  com- 
petent for  him  at  any  time  to  nego- 
tiate anew  and  secure  a  modification 
of  the  terms  of  the  lease  with  the  con- 
sent of  the  various  parties  interested, 
or  to  repudiate  the  lease  and  surren- 
der the  property,  yet,  not  having  done 
so,  he  muse  be  held  to  continue  his 
acceptance  under  the  terms  and  con- 
ditions of  the  existing  lease  as  to  the 
payment  of  rent  thereon.  See  Mar- 
tin V.  B'ack,  9  Paige,  641,  where  the 
same  principle  is  applied  to  an  exec- 
utor who  takes  possession  of  leased 
properly  under  a  lease  to  his  testator. 
See  also  MiUenbcrf/er  v.  Logansport,  0. 
&  S.  W.  R.  Co.  90  U.  S.  286,  27  L.  ed. 
117. 

In  People  v.  National  Trust  Co.  83 
N.  Y.  283,  a  receiver  was  appointed 
on  the  application  of  stockholders 
over  a  railroad,  and  such  receiver  oc- 
cupied leased  premises  from  May  1, 
1870,  until  February  1,1879,  when  he 
abandoned  possession,  having  paid 
rent  up  to  that  time.  Suhse(pK;nt  to 
the  abantldnment  the  corporation  was 
dissolved  and  the  receiver  continued, 


496 


RECEIVERSHIPS. 


but  p.n  application  was  made  by  the 
lessors  for  an  order  on  the  receiver  to 
pay  rent  accruing  subsequent  to  bis 
abandonment.  It  appeared  that  he 
had  paid  ail  admitted  debts,  and  had 
deposited  a  sum  sullicient  to  pay  all 
disputed  claims,  including  the  rent 
accrued  and  to  accrue,  upon  the  lease 
in  question,  and  that  there  was  still 
a  large  surplus  distributable  among 
the  stockholders.  It  was  held  that 
the  lessors  were  entitled  to  the  relief 
sought. 

In  Com.  V.  Franklin  Ins.  Co.  115 
Mass.  278,  it  is  said  that  the  receivers 
have  elected  to  take  possession  and 
assume  the  liability  to  pay  the  rent 
according  to  the  covenants  of  the 
lease,  if  they  retained  it  for  the  in- 
terest of  the  creditors,  but  until 
such  election,  or  the  doing  of  some 
act  which  would,  in  law,  be  equiv- 
alent to  an  election,  they  are  not  lia- 
ble. As  receivers  they  cannot  be  held 
merely  on  the  covenants,  but  become 
liable  solely  by  reason  of  their  own 
acts.  Turner  v.  Richardson,  7. East, 
835.  It  is  also  held  that  the  payment 
of  a  quarter  rent  by  the  receiver  as  a 
compromise  is  not  to  be  construed  as 
an  election.  To  amount  to  an  elec- 
tion there  must  be  some  occupation 
and  use  of,  or  some  dealing  and  inter- 
mingling with,  the  estate,  or  some 
act,  admission,  or  agreement  which, 
in  terms,  or  by  necessary  implication, 
indicates  an  election.  Citing  Cope- 
land  V.  Stephens,  1  Barn.  &  Aid.  593; 
Ansell  V.  Robson,  2  Cromp.  &  J.  610; 
Hanson  v.  Stevenson,  1  Barn.  &  Aid. 
303;  Thomas  v.  Pcmherton,  7  Taunt. 
206;  mil  V.  Bohie,  8  Taunt.  325;  Ex 
parte  Faxon,  1  Low.  Dec.  404;  Mar- 
tin V.  Black,  9  Paige,  611;  Hoyt  v. 
Stoddard,  2  Allen,  442. 

When,  at  the  instance  of  a  general 
ere  lltor,  a  receiver  of  a  railroad  com- 
pany and  its  rolling  stock  is  appointed 
and  with  the  latter  its  rolling  stock 


leased  to  the  company  with  the  right 
of  purchase,  and  there  being  a  deficit 
in  the  running  of  the  road  by  the  re- 
ceiver, and  the  rental  is  not  paid,  and 
the  lessor  takes  possession  of  his  roil- 
ing slock,  his  claim  for  rent  is  not  en- 
titled to  priority  over  the  mortgage 
on  the  foreclosure  sale  of  the  road 
under  the  mortgage.  Kneeland  v. 
American  Loan  <fe  T.  Go.  136  U.  S. 
89,  34  L.  ed.  379.  In  this  case  Mr. 
Justice  Brewer,  in  speaking  of  the 
granting  of  preferences  over  the  mort- 
gage, says:  "The  appointment  of  a 
receiver  vests  in  the  couit  no  absolute 
control  over  the  property  nnd  no  j  en- 
eral  authority  to  displace  vesied  con- 
tract liens.  Because,  in  a  few  spci  .- 
tied  and  limited  cases,  this  c mrt  has 
declared  that  unsecured  claims  weie 
entitled  to  priority  over  mortgage 
debts,  an  idea  seems  to  have  obtained 
that  a  court  appointing  a  receiver  .-  c- 
quires  power  to  give  such  prefeience 
to  any  general  and  unsecured  claims. 
It  has  been  assumed  that  a  court  ap- 
pointing a  receiver  could  rightfully 
burden  the  mortgaged  property  for 
the  payment  of  any  unsecured  indebt- 
edness. Indeed,  we  are  advised  that 
some  courts  have  made  the  appoint- 
ment of  a  receiver  conditional  upon 
the  payment  of  all  unsecured  indebt- 
edness in  preference  to  the  mortgage 
liens  sought  to  be  enforced.  Can 
anything  be  conceived  which  more 
thoroughly  destroys  the  sacred ness  of 
contract  obligations?  One  holding  a 
mortiXMge  debt  upon  a  railroad  has 
the  same  right  to  demand  and  expect 
of  the  court  respect  for  his  vested 
contract  priority  as  the  holder  of  a 
mortgage  on  a  farm  or  lot.  So,  when 
a  court  appoints  a  receiver  of  railroad 
property,  it  has  no  right  to  make  that 
receivership  conditional  on  the  pay- 
ment of  other  than  those  few  unse- 
cured claims  which,  by  the  rulings  of 
this  court,  have  been  declared  to  have 


RECEIVERSHIP  OF  RAILWAYS. 


497 


an  equitable  priority.  No  one  is 
bound  to  sell  to  a  railroad  company 
or  to  work  for  it,  and  whoever  lias 
dealings  with  a  company  whose 
property  is  mortgaged  must  be  as- 
sumed to  have  dealt  with  it  on  the 
faith  of  its  personal  responsibility, 
and  not  in  expectation  of  subsequently 
displacing  the  priority  of  mortgage 
liens.  It  is  the  exception,  and  not 
the  rule,  that  such  priority  of  liens 
can  be  displaced.  We  emphasize 
this  fact  of  the  sacrcdness  of  contract 
liens,  for  the  reason  that  there  seems 
to  be  growing  an  idea  that  the  chan- 
cellor, in  the  exercise  of  his  equitable 
powers,  has  unlimited  discretion  in 
this  matter  of  the  displacement  of 
vested  liens." 

In  Re  Oak  Pits  Colliery  Co.  L.  R. 
21  Ch.  Div.  322,  it  is  said  that  when 
the  liquidator  retains  the  property  for 
the  purpose  of  disposing  of  it,  or 
when  he  continues  to  use  it,  the  rent 
ought  to  be  regarded  as  a  debt  con- 
tracted for  the  purpose  of  winding 
up  the  company  and  ought  to  be  paid 
in  full,  like  any  other  debt  or  ex- 
pense properly  incurred  by  the  liqui- 
dator for  the  same  purpose,  and  in 
such  case  it  appears  that  the  rent  for 
the  whole  period  during  which  the 
property  is  so  retained  or  used  ought 
to  be  paid  in  full,  without  reference 
to  the  amount  which  could  be  real- 
ized by  a  distress.  Cf.  Re  Lundy 
Granite  Co.  L.  R.  6  Ch.  4G2;  Re  Brown, 
Bayley,&  Dixon,  L.  R.  18  Ch.  Div.  649. 

In  Central  Trunt  Co.  v.  Wahai<h,  St. 
L.  &  P.  R.  Co.  32  Fed.  Rep.  566,  it 
appeared  that  a  railroad  company 
had  promised  the  owner  of  a  sawmill, 
where  one  of  its  .switches  was  not  used 
for  the  receiving  of  freight,  but  only  to 
get  sand  for  track  repairing,  that  it 
would  take  up  lumber  for  him  at  that 
point  in  certain  quantities.  A  short 
lime  after  the  contract  was  made  the 


mill  owner  was  notified  that  the  road 
would  refuse  to  receive  any  more 
lumber  at  the  switch,  and  then  the 
road  passed  into  the  hands  of  the  re- 
ceivers. It  was  held  that  even  if  the 
contract  could  not  be  terminated  by 
the  company  at  its  pleasure,  the  claim 
for  damages  for  its  breach  did  not 
entitle  the  mill  owner  to  an  allow- 
ance against  the  property  in  the  hands 
of  the  receiver  or  out  of  the  earnings 
of  the  road  in  priority  to  the  mortgage. 
As  to  the  payment  of  a  reasonable 
price,  see  Fanners'  Loan  &  T.  Co.  v. 
Chimgo  &  A.  R.  Co.  42  Fed.  Rep.  6; 
Coe  V.  New  Jersey  M.  R.  Co.  27  N.  J. 
Eq.  37;  Miltenberger  v.  Logansport,  C. 
&  8.  W.  R.  Co.  106  U.  S.  286,  27  L. 
ed.  117;   Thomas  v.  Weslei'n  Car  Co. 

149  U.  S.  95,  37  L.  ed.  663. 

As  to  the  paj'ment  of  the  contract 
price,  see  Farmers'  Loan  d:  T.  Co.  v. 
Northern  P.  R.  Co.  58  Fed.  Rep. 
257;  Fosdick  v.  Schall,  99  U.  S.  235, 
25  L.  ed.  339;  Fosdick  v.  Southwestern 
Car  Co.  99  U.  S.  256,  25  L.  ed.  314; 
Union  Trust  Co.  v.  Illinois  M.  R.  Co. 
117  U.  S.  434,  29  L.  ed.  963;  Peoria  & 
P.  U.  R.  Co.  V.  Chicago.  P.  &  S.  W. 
R.  Co.  127  U.  S.  200,  32  L.  ed.  110; 
Kneeland  v.  American  Loan  &  T.  Co. 
136  U.  S.  104,  34  L.  ed.  385;  Sunflower 
Oil  Co.  V.  Wilson,  143  U.  IS.  313,  35  L. 
ed.  1025;  United  States  Trust  Co.  v. 
Wabash  W.  R.  Co.  150  U.  S.  287,  37 
L.  ed.  1085. 

As  to  mode  of  ascertaining  what  is 
reasonable  rental,  see  Kneeland  v. 
American  Loan  &  T.  Co.  supra. 

As  to  rentals  generally,  see  Taylor 
V.  Philadelphia  &  R.  R.  Co.  9  Fed. 
Rep.  1;  Meyer  V.  Western  Car  Co.  102 
U.  S.  1,  26  L.  ed.  59;  Quincy,  M.  & 
P.  R.  Co.  V.  Humphreys,  145  U.  S.  82, 
36  L.  ed.  632;  St.  Joseph  &  St.  L.  R. 
Co.  V.  nnmphreys,  145  U.  S.  105,  36 
L.  ed.  640;  Seney  v.  Wabash  W.  R.  Co. 

150  U.  S.  310,  37  L.  ed.  1092;  Farm- 


32 


498 


RECEIVERSHIPS. 


§  281.     Claims  not  preferential. 

There  is  a  class  of  uiipreferred  claims  wliicli  are  not  considered 
as  having  any  special  equitable  features  and  are  not  entitled, 
therefore,  to  preferential  payment  from  the  income  or  corpus  of 
the  mortjrao-ed  property  in  priority  to  niortga<^e  liens.  This 
class,  of  course,  is  extensive  and  embraces  all  claims  not  preferen- 
tial and  not  secured  by  mortgage,  and  embraces  such  as  (a)  ad- 
vances made  to  complete  the  road ;'  (b)  damages  occasioned  by 
fire  ;"  (c)  attorneys'  fees  earned  before  appointment ;'  (d)  articles 
sold  to  the  company  after  the  mortgage  is  given  ;*  (e)  locomotives 


ers'  Loan  c6  T.  Co.  v.  NortJieni  P.  B. 
Co.  58  Fed.  Rep.  257. 

Where  the  receiver  is  directed  by 
the  courts  to  take  possession  of  leased 
property,  as  sleeping  cars,  with  full 
knowledge  of  the  covenants,  and  he 
continues  the  use  of  such  property 
until  the  expiration  of  the  term,  he 
will  be  liable  for  necessary  repairs,  in 
the  same  manner  and  to  the  same  ex- 
tent as  the  lessee.  Easton  v.  Houston 
<fe  T.  C.  R.  Co.  38  Fed.  Rep.  784. 

The  mere  appointment  of  a  receiver 
for  a  railway  company  is  not  a  breach 
of  a  contract  by  the  company  for  the 
purchase  of  goods  so  as  to  relieve  the 
other  party  to  the  contract  from  the 
necessity  of  performing  before  bring- 
ing an  action  for  breach  of  the  con- 
tract. Diamond  State  Iron  Co.  v.  San 
Antonio  &  A.  P.  R.  Co.  (Tex.  Civ. 
App.)33  S.W.  987. 

'  In  Kelly  v.  Qreen  Bay  &  M.  R.  Co. 
5  Fed.  Rep.  846,  a  claim  for  advances 
made  to  a  railroad  company  for  the 
purpose  of  completing  the  construc- 
tion of  the  road  will  not  be  preferred 
to  the  mortgage  lien,  unless  the  ad- 
vances were  made  in  consequence  of 
the  requests,  promises,  and  acts  of  the 
bondholders. 

«In  Ililes  V.  Case,  14  Fed.  Rep.  141, 
damage  occasioned  by  fire  along  the 
line  of  road  occasioned  by  a  defective 
locomotive  is  not  such  a  claim  as  to 


constitute  part  of  the  operating  ex- 
penses and  has  no  equity  superior  to 
that  of  the  bondholders. 

"In  Blair  v.  St.  Louis,  H.  &  K.  B. 
Co.  23  Fed.  Rep.  521,  the  claim  of  an 
attorney  for  fees  earned  a  year  and  a 
half  before  the  appointment  of  a  re- 
ceiver are  not  entitled  to  preference, 
but  where  the  annual  salary  of  an  at- 
torney falls  due  only  a  short  time  be- 
fore the  road  is  placed  in  the  hands  of 
a  receiver  he  is  entitled  to  priority. 

*In  United  States  Trust  Co.  v.  New 
York,  W.  S.  &  B.  B.  Co.  25  Fed.  Rep. 
800,  where  articles  such  as  clocks 
were  furnished  to  be  used  in  operating 
the  road  which  was  sold  subsequent 
to  the  giving  of  the  mortgage,  a  pref- 
erence is  not  allowed. 

In  Bound  v.  South  Carolina  R.  Go. 
51  Fed.  Rep.  58,  it  is  held  that  inas- 
much as  the  services  of  the  attorney 
had  nothing  to  do  with  keeping  the 
road  a  going  concern  such  fees  were 
not  entitled  to  priority. 

In  Pennsylvania  Finance  Co.  v. 
Charleston,  C.  <&  C.  B.  Co.  52  Fed. 
Rep.  678,  it  was  held  that  legal  serv- 
ices rendered  to  a  railroad  company  in 
maintaining  before  the  courts  the 
validity  of  municipal  aid  bonds  are 
not  of  a  character  to  take  precedence 
of  the  mortgage  bonds.  The  fact 
that  such  services  resulted  in  benefit 
to  the  bondholders  will  not  justify  the 


RECEIVEP.SIIIP  OF  RAILWAYS. 


499 


sold  more  than  six  months  prior  to  the  appointment.'    (f)  In  the 
matter  of  construction  to  be  given  to  car  trust  contracts  or  leases 
the  rule  is  not  uniform  but  the  weight  of  authority  would  seem 
to  be  that  the  law  of  the  state  where  the   property  is  situated 
governs.'     AVhether  they  will  be  construed  as  leases  or  as  condi- 


(lisplacing  of  the  latter's  lien  when 
they  were  not  parties  to  the  contract 
of  employment.  See  also  Pennsylva- 
nia Finance  Co.  v.  Charleston,  C.  &  G. 
R.  Go.  52  Fed.  Rep.  52G;  Central 
Trust  Go.  V.  Valley  R.  Co.  55  Fed. 
Rep.  903. 

'  In  Mancliester  Locomotive  Works  v. 
Truesdale,  44  Minn.  115,  9  L.  R.  A. 
140,  where,  more  than  six  months  after 
the  sale  of  locomotives,  the  road  was 
placed  in  the  hands  of  a  receiver  on 
application  of  the  mortgage  bond- 
holders to  foreclose  a  mortgage  given 
long  before  the  sale  and  covering  all 
the  railroad  property,  both  real  and 
prospective,  including  its  earnings,  it 
was  held  that  the  debt  was  properly  a 
general  debt  of  the  corporation  and 
not  incurred  for  current  expenses 
proximately  connected  with  the  opera- 
tion of  the  road  where  the  receiver 
and  the  court  refused  to  give  the 
claim  a  preference  over  the  bond- 
holders. 

In  Addison  v.  Lewis,  75  Va.  701,  it 
is  held  that  the  claims  which  are  enti- 
tled to  preference  are  con  fined  to  out- 
standing debts  for  labor,  supplies, 
equipments,  or  permanent  iniprove- 
ments  of  the  mortgaged  property, 
such  as  may  under  the  circumstances 
appear  to  be  reasonable,  but  the 
claims  of  general  creditors  can  never 
take  priority  over  the  mortgage  cred- 
itors except  where  it  is  shown  that 
the  general  creditors  have,  by  prin- 
ciples of  the  courts  of  equity,  a  supe- 
rior equity  to  the  lien  creditor;  that 
each  claim  must  be  determined  upon 
the  particular  facts  showing  the  par- 
ticular equity.     But  see  Union  Trust 


Co.  V.  Morrison,  125  U.  S.  591,  31  L. 
ed.  825,  where,  after  judgment  was 
rendered  against  the  surely  on  an  in- 
junction bond,  he  intervened  and 
asked  the  protection  of  the  court  as 
to  his  claim  as  against  the  mortgage 
bondholders. 

^  In  Green  v.  Van  Bu.^kirk,  72  U.  S.  5 
Wall.  307, 18  L.  ed.  599,  it  is  held  that 
the  liability  of  personal  property  to  be 
sold  under  writ  must  be  determined 
by  the  law  of  the  state  where  the 
property  is  situated,  notwithstanding 
the  domicil  of  all  the  claimants  to 
the  property  may  be  in  another  state. 
Title  to  personal  property  must  be 
determined  by  the  law  of  the  state 
where  the  proceedings  are  had  in  re- 
gard to  the  levy  and  sale  thereof. 
Mr.  Justice  Miller  in  this  case  says, 
"But  after  all  this  is  a  mere  principle 
of  comity  between  the  court  which 
must  give  way  where  statutes  of  the 
country  where  the  property  is  situated, 
or  the  established  policy  of  its  laws, 
prescribe  to  its  courts  a  different  rule. 
No  one  can  seriously  doubt  that  it  is 
competent  for  any  state  to  adopt  such 
a  rule  in  its  own  legislation  since  it 
has  perfect  jurisdiction  over  all  prop- 
erty, personal  or  real,  within  its  ter- 
ritorial limits.  Every  nation  having  a 
right  to  dispose  of  all  tlie  property 
actually  situated  within  it,  has  (as  has 
been  often  said)  a  right  to  protect  it- 
self and  its  citizens  against  the  in- 
equalities of  foreign  laws  which  are 
injuriousto their  interests."  And  Chan- 
cellor Kent,  in  commenting  on  the  law 
of  contracts,  says:  "Upon  this  .subject 
of  conflicting  laws  it  may  be  gener- 
ally observed   that    there  is   a   stub- 


500 


RECEIVERSHIPS. 


tional  sales  turns  upon  the  fact  as  to  whether  the  rio;hts  of  cred- 
itoi's  are  involved,  and,  if  so,  then  such  contracts  are  fraudulent  or 
at  least  not  enforceable  as  to  third  parties.' 

§  282.    Extent  of  power  of  railway  veceiver. 

The  power  of  a  railway  receiver  embraces,  in  addition  to  the 
ordinary  duty  of  preservin*^  the  property,  the  additional  duties  of 


born  principle  of  jurisprudence  that 
will  often  intervene  and  act  with  con- 
trolling efficacy.  This  principle  is 
that  where  the  lex  loci  contractus  and 
the  lex  fori  as  to  conflicting  rights  ac- 
quired in  each  come  in  direct  collu- 
sion, the  comity  of  nations  must  yield 
to  the  positive  law  of  the  land." 

In  the  case  of  Milne  v.  Moreton,  6 
Binn.  361,  the  supreme  court  of  Penn- 
sylvania says:  "Every  country  has  a 
right  of  regulating  the  transfer  of  all 
property  within  its  territory;  but  when 
no  positive  regulation  exists,  the 
owner  transfers  it  at  his  pleasure." 
Cf.  Lanfear  v.  Summer,  17  Mass.  110; 
Story.  Conf .  L.  §  390.  The  general 
rule  no  doubt  is,  that  in  the  absence  of 
any  local  law  or  policy,  transfers  of 
personal  property  will  be  respected  by 
the  courts  of  the  country  where  the 
property  is  located.  But  see  Taylor  v. 
Boardman,  25  Vt.  589;  Ward  v.  Mor- 
rison, 25  Vt.  593;  Emerson  v.  Par- 
tridge, 27  Vt.  8;  Olivier  v.  Townes,  2 
Mart.  (N.  S.)  93.  Cf.  Herveyv.  Rhode 
Island  Locomotive  Works,  93  U.  S.  664, 
23  L.  ed.  1003;  McCormick  v.  Hadden, 
37  111.  370. 

'  In  McCormick  v.  Hadden,  37  111. 
370,  it  was  held  that  where  the  seller 
delivered  possession  to  the  purchaser 
which  was  coupled  with  an  agreement 
that  the  property  is  to  be  considered  as 
belonging  to  the  seller  until  the  pay- 
ment of  the  purchase  money,  notwith- 
standing such  delivery  of  possession, 
such  agreement  as  to  creditors  of  the 
purchaser  is  fraudulent  and  void. 
In  Hervey  v.  Rhode  Island  Locomo- 


tive Works,  93  U.  S.  664,  23  L.  ed. 
1003,  the  doctrine  of  Green  v.  Vari  Bus- 
kirk,  72  U.  S.  5  Wall.307,  18  L.ed.  599, 
is  affirmed,  and  it  is  held  that  the  real 
owner  of  personal  property  who  vests 
another  to  whom  it  is  delivered  with 
an  interest  therein,  must,  if  desirous 
of  preserving  a  lien  on  such  property, 
situated  in  Illinois,  comply  with  the 
requirements  of  the  laws  of  that  state. 
And  that,where  personal  property  has 
been  sold  and  delivered,  secret  liens 
treating  the  seller  as  its  owner  until 
the  payment  of  the  purchase  money 
cannot  be  maintained  in  such  state. 
Such  contracts  are  constructively 
fraudulent  as  to  creditors  and  the 
property,  so  far  as  their  rights  are 
concerned,  is  considered  as  belonging 
to  the  vendee  holding  the  possession. 
The  law  in  such  case  is  not  changed 
by  reason  of  the  agreement  assuming 
the  form  of  a  lease,  the  real  purpose 
of  the  parties  being  looked  to  to  deter- 
mine the  nature  of  the  contract.  See 
also  to  the  same  effect  Fosdick  v.  Schall, 
99  U.  S.  235,  25  L.  ed.  339,  and  where 
it  is  also  held  that  as  between  the  par- 
ties, notwithstanding  the  statute,  the 
transaction  is  just  what  on  its  face  it 
purports  to  be,  i.  e.,  a  conditional  sale 
with  a  right  of  rescission  on  the  part 
of  the  vendor  in  case  the  purchaser 
shall  fail  in  payment  of  his  instal- 
ments, a  contract  legal  and  valid  as 
between  the  parties,  but  made  with 
the  risk,  on  the  part  of  the  vendor, 
of  losing  his  lien  if  it  works  a  legal 
wrong  as  to  third  parties.  Murch  v. 
Wright,  46  111.  488. 


RECEIVERSHIP  OF  RAILWAYS.  501 

a  manager,  and  this  carries  with  it  the  necessary  power  of  properly 
and  adequately  performing  the  appropriate  functions  pertaining 
to  his  office.  Assuming,  as  he  does,  under  the  direction  of  the 
court,  the  exercise,  for  the  time  being,  of  the  franchises  of  the 
corporation,  and  at  the  same  time  taking  upon  himself  the  efficient 
and  economical  management  of  the  road,  and  charged,  as  he  is, 
with  tlie  duty  of  preserving  the  property  from  deterioration  and 
maintaining  its  integrity  as  a  going  concern,  it  is  only  possible 
for  him  to  do  so  by  investing  liim  with  a  large  measure  of  dis- 
cretionary as  well  as  plenary  power  adequate  to  the  duties 
imposed.  His  responsibility  to  the  court,  the  parties,  and  the 
public,  necessarily  implies  power  coextensive  with  duties  of  his 
three-fold  relationship,  and  more  extensive  than  those  pertaining 
to  the  ordinary  jpendente  lite  receivership.  The  receivership 
property  being  in  custodia  legis,  it  is  protected  from  in.terference 
by  execution,  attachment,  garnishment,  or  trustee  process.'  Of 
course,  it  must  be  understood  the  power  of  the  receiver  emanates 
from  the  court,  he  being  in  fact  the  hand  of  the  court,  or  the  in- 
strumentality by  which  the  will  of  the  court  is  put  into  execution 
and  made  effective.'* 

§  283.     General  scope  of  his  power. 

The  scope  of  power  ordinarily  exercised  by  the  railway  receiver 
in  the  performance  of  the  functions  pertaining  to  his  office  may 
be  stated  in  general  terms  as  follows : 

(a)  The  preservation  of  railway  property,  whether  at  the  in- 
stance of  the  mortgagee,  creditors,  or  stockholders,  if  necessity 
implies  the  continued  operation  of  the  road  as  a  going  concern, 

•  Russell  V.    Texas  &  P.  R.  Co.  68  but  the  hand  of  the  court  appointing 

Tex.  646;  Richards  v.  People,  81  111.  him,  and  holds,  manages,  and  operates 

551 ;  Bell  v.  Chicago,  St.  L.  &  N.  0.  R.  the  property  under  the  orders   and 

Co.  34  La.  Ann.  785;  Robinson  v.  At  directions  of  the  court  as  itscustodian 

lajUic  &   0.  W.   R.    Co.   66  Pa.    160;  and  not  for  or  under  the  control  of 

Texas  Trunk  R.  Co.  v.  Lewis,  81  Tex.  the  directors  or  shareholders  of  the 

10.  corporation.     Uis  managotnent  is  for 

'  In  Memphis  &  C.  R.  Co.v.  Iloechner,  the  benefit  of  those  ultimately  entitled 

67  Fed.  Hep.  456,  it  is  held  that  a  re-  under  the  decree  of  court.     His  acts 

ceiver  appointed  by  a  court  of  equity  are  not  the  acts  of  the  corporation, 

to  hold,  manage,  and  operate  an  insolv-  and  his  servants  are  not  the  agents  or 

ent  railroad  company  is  not  the  agent  servants  of  the  corporation. 
of  the  insolvent  railroad  corporation, 


502 


RECEIVERSHIPS. 


and  this  in  the  very  niiture  of  things  enil)races  all  necessary  con- 
tracts for  labor  and  snpplies  such  as  will  enaljle  the  receiver  to 
preserve  the  property  for  the  benefit  of  the  parties  in  interest, 
and  at  tlie  same  time  subserve  the  public  interests." 

(b)  It  is  also  a  part  of  his  duty  Mdiich  includes  the  necessary 
power  therefor  to  collect  in  all  outstanding  indebtedness  due  the 
company.* 


'  In  LeMgli  Coal  S  Nav.  Co.  v.  Cen- 
tral R.  Co.  41  N.  J.  Eq.  1G7,  it  is  held 
tliat  a  receiver  of  an  insolvent  rail- 
road company  Las  power  to  make 
such  contracts  for  labor  and  supplies 
as  are  reasonably  necessary  for  him 
to  perform  the  duties  of  bis  appoint- 
ment. And  equity  will  enforce  such 
contracts  against  the  trust.  To  the 
same  effect  is  Ex  parte  Carolina  Nat. 
Bank,  18  S.  C.  289;  Union  Trust  Co. 
V.  Illinois  M.  R.  Co.  117  U.  S.  436, 
29  L.  ed.  963;  Clarke  v.  Central  R.  & 
Bkg.  Co.  66  Fed.  Rep.  16;  Piatt  v. 
Philadelpliia  &  R.  R.  Co.  65  Fed.  Rep. 
660;  Phinizy  v.  Atigusta  &  K.  R.  Co. 
62  Fed.  Rep.  771;  Continental  Trust 
Co.  V.  Toledo,  St.  L.  &  K.  C.  R.  Co. 
59  Fed.  Rep.  514;  Lehigh  Coal  &  Nav. 
Co.  V.  Central  R.  Co.  41  N.  J.  Eq.  167. 

The  ordinary  outlays  a  receiver  is 
permitted  to  make  are  to  keep  the 
road,  buildings,  and  rolling  stock  in 
repair,  and  such  additional  facilities 
as  the  business  may  require.  Extraor- 
dinary outlays  must  receive  the 
sanction  of  the  court.  McLane  v. 
Placerville  &  8.  V.  R.  Co.  66  Cal.  606. 

If  the  receiver  in  the  operation  of 
the  road  creates  an  indebtedness,  with 
the  consent  of  the  lienholders,  which 
is  beyond  the  income,  it  may  be  paid 
from  the  proceeds  of  the  corpus. 
Hand  v.  Savannah  cfe  C.  R.  Co.  17  S.  C. 
219. 

Traffic  balances  are  necessary  ex- 
penditures. Langdon  v.  Vermont  &  C. 
R.  Co.  54  Vt.  mZ;Woodrvffv.  Erie  R. 
Co.  93  N.  Y.  609;   Central   Trust  Co. 


V.  Ohio  0.  R.  Co.  23  Fed.  Rep. 
306,  23  Am.  &  Eng.  R.  Cas.  666; 
Philadelpliia  Invest.  Co.  v.  Ohio  S  N. 
W.  R.  Co.  41  Fed.  Rep.  378. 

la  Woodruffv.  Erie  R.  Co.  93  N.  Y. 
609,  it  was  held  that  the  court  had 
full  authority  to  direct  how  the  rail- 
road property  should  be  managed 
while  in  the  possession  of  the  re- 
ceiver; that  whatever  might  be  the 
rights  of  the  various  parties  as  between 
themselves  to  priority  in  the  distribu- 
tion of  the  assets  of  an  insolvent  cor- 
poration, such  rights  could  affect 
only  the  property  remaining  after  the 
liabilities  created  by  the  receivership 
had  been  fully  paid. 

'  The  receiver  of  a  railroad  may 
properly,  in  exercise  of  his  business 
judgment,  give  an  unusually  low  rale 
in  order  to  introduce  into  general  use  a 
cheap  and  valuable  article  which,  if 
brought  into  general  demand,  would 
add  to  the  freight  receipts  of  the  road 
handling  it.  Clarke  v.  Central  R.  <fc 
Bkg.  Co.  66  Fed.  Rep.  16. 

In  Langdon  v.  Vermont  &  C.  R.  Co. 
54  Vt.  593,  it  is  held  that  where  a 
court  of  equity  charges  receivership 
property  on  behalf  of  bona  fide  credi- 
tors with  an  equitable  lien,  the  equita- 
ble charge  does  not  arise  from  nor 
depend  upon  the  contract  relation  of 
the  parties,  but  solely  from  the  act  of 
the  court. 

In  Bank  of  Montreal  v.  Chicago,  G. 
&W.  R.  Co.  48  Iowa,  518,  it  was  held 
that  the  receiver  had  no  power  to 
issue  certificates  in  payment  for  ma- 


RECEIVERSHIP  OF  RAILWAYS. 


503 


(c)  And  reduce  to  his  possession  the  property  of  tlie  company 
in  the  possession  of  or  held  by  persons  or  corporations  for  its 
benefit  and  use.' 

(d)  lie  may  disaffirm  the  unlawful  acts  of  the  ofhcers  and 
directors  of  the  company.^ 

(e)  He  may  also  restrain  the  performance  of  illegal  acts  which 
have  the  effect  of  rendering  the  title  and  rights  to  the  receiver- 
ship property  of  less  value.^ 


terial  until  such  material  had  been 
furnished,  and,  haviDg  issued  certifi- 
cates for  material  contracted  to  be 
delivered,  but  which  in  fact  never 
was  delivered,  such  certificates  were 
void. 

In  Re  Seattle,  L.  S.  &  E.  R.  Co.  61 
Fed.  Rep.  541,  it  is  held  that  a  re- 
ceiver of  a  railroad  company  is  not 
bound  by  an  agreement  made  before 
his  appointment  between  the  railroad 
company  and  its  employees  whereby 
the  latter  are  not  to  be  discharged 
except  for  cause,  to  be  determined  by 
arbitrators. 

'  In  Terry  V.  Bamberger, 14^  Blatchf. 
234,  it  was  held  that  a  receiver  had  a 
right  of  action  against  one  for  con- 
version of  the  property  of  the  com- 
pany made  prior  to  his  appointment. 

2  In  Warden  v.  Union  P.  R.  Co.  103 
U.  S.  651.  26  L.  ed.  509,  it  is  held  that 
the  directors  of  a  corporation  were 
subject  to  the  obligations  which  the 
law  imposes  upon  trustees  and  agents 
and  cannot  therefore,  with  respect  to 
the  same  matters,  act  for  themselves 
and  for  it,  nor  occupy  a  position  in 
conflict  with  its  interest. 

In  Flint  &  P.  31.  R.  Co.  v.  Dezrcij, 
14  Mich.  477,  it  is  said  that  the  law 
would  not  permit  an  agent  to  place 
himself  In  a  situation  in  which  he 
may  be  tempted  to  disreftard  the  in- 
terest of  his  principal  for  his  own 
private  gain.  And  to  the  same  effect 
is  Kitchen  v.  St.  lyouis,  K.  C.  &  N.  R. 
Co.  69  Mo.  224,  as  well  as  Slewarl  v. 


LelnghValley  R.  Co.  38  N.  J.  L.  504, 
and  the  Great  Luxembourg  R.  Co.  v. 
Magnay,  25  Beav.  586. 

In  European  t&N.  A.  R.  Co.  v.  Poor, 
59  Me.  277,  it  is  held  that  if  a  direc- 
tor of  a  railroad  company  enter  into  a 
contract  for  the  construction  of  the 
road  he  cannot  then,  or  subsequently, 
derive  any  benefit  personally  from 
such  contract. 

In  Bogle  v.  Plaitsburg  &  M.  R.  Co. 
54  N.  Y.  314,  it  is  held  that  the  officer 
of  a  railroad  company  occupies  the 
position  of  a  fiduciary  character  and 
is  incapacitated  from  dealing  in  his 
own  behalf  in  respect  to  the  corpora- 
tion properly  or  in  respect  to  any 
matters  involving  his  powers  and 
duties  as  a  director.  He  cannot  be- 
come the  purchaser  of  property  of 
the  corporation  under  an  execution 
sale,  and  in  such  case  actual  fraud  or 
actual  advantage  need  not  be  shown. 
This  was  in  an  action  brought  to  fore- 
close a  mortgage  of  the  railroad  cor- 
poration in  which  a  receiver  was 
appointed. 

In  Paine  v.  Lake  Erie  S  L.  R.  Co. 
31  Ind.  283,  353,  it  is  held  that  the 
directors  of  a  railroad  company  could 
not  acquire  an  interest  in  the  profits 
of  a  contract  for  the  construction  of 
the  road,  such  as  would  give  them  a 
standing  in  a  court  of  ecjuily.  Tlieir 
relations  to  liie  company  forbade  such 
an  agreement. 

'  In  Davis  v.  Orag,  83  U.  S.  16  Wall. 
203,  21   L.  ed.  447,  suit   was   brought 


504 


RECEIVERSHIPS. 


(f)  lie  is  empowered  to  defend  all  suits  and  proceedin^^s  in  the 
interest  of  those  wliom  he  represents,  wlien  in  the  exercise  of  a 
sound  judgment  a  defense  will  be  available.' 
I'  (e;)  lie  may  make  all  necessary  arrangements  for  the  transaction 
of  the  business  of  a  common  carrier,  including  accommodations 
with  connectino;  lines." 


to  enjoin  the  Memphis,  E.  &  P.  R.  Co. 
from  disposing  of  its  effects,  in  which 
action  a  receiver  was  appointed  and  re- 
quired to  take  possession  of  the  money 
and  assets,  real  and  personal,  of  every 
kind  belonging  to  the  railroad  com- 
pany, and  subsequently  an  order  was 
made  that  the  receiver  should  be  au- 
thorized and  empowered  to  defend 
and  continue  all  suits  brought  by  or 
against  the  railroad  company  before 
or  after  his  appointment,  and  a  suit 
was  instituted  by  the  receiver  in  his 
own  name  to  enjoin  the  defendants 
from  all  illcgiil  acts  which  the  bill 
alleges,  if  done,  would  render  the 
rights  and  title  of  the  company  to  its 
property  of  greatly  diminished  value, 
if  not  wholly  worthless.  The  court 
says:  "We  think  it  is  competent  for 
him  to  perform  this  function  in  the 
mode  he  has  adopted.  The  decree  in 
the  case  wherein  he  was  appointed 
expressly  authorizes  him  to  sue  for 
that  purpose  in  his  own  name.  The 
order  was  made  by  a  court  of  ade- 
quate authority  and  in  the  regular  ex- 
ercise of  its  jurisdiction."  The  pro- 
ceeding by  the  receiver  was  held  to 
be  auxiliary  to  the  original  suit.  The 
court  further  says:  "  In  the  progress 
and  growth  of  equity  jurisdiction  it 
has  become  usual  to  clothe  such  offi- 
cers with  much  larger  powers  than 
were  formerly  conferred.  It  is  not 
unusual  for  courts  of  equity  to  put 
them  in  charge  of  railroads  or  com- 
panies which  have  fallen  into  finan- 
cial embarrassments,  and  require 
them  to  operate  such  road  until  the 


difficulties  are  removed  or  such  ar- 
rangements are  made  that  the  roads 
can  be  sold  with  the  least  sacrifice  of 
the  interest  of  those  concerned. 

1  In  Bartlett  v.  Keim,  50  N.  J.  L. 
2C0,  it  is  held  that  a  receiver  of  a  rail- 
road has  the  right  to  set  up,  as  a  de- 
fense against  a  suit  for  injuries  sus- 
tained from  negligence  in  running 
the  trains  by  such  receiver,  the  stat- 
ute of  limitations. 

"^  In  Biers  v.  Wabanh,  St.  L.  &  P.  R. 
Co.  34  Fed.  Rep.  244.  35  Am.  &  Eng. 
R.  Cas.  646,  it  was  held  to  be  the 
duty  of  a  receiver  of  a  railroad,  who 
controls  its  operation  and  who  is  no 
less  a  common  carrier  because  the 
property  is  in  the  custody  of  the  court, 
to  receive  and  transport  cars  and 
freight,  and  to  furnish  accommoda- 
tions to  connecting  lines  to  the  same 
extent  and  in  the  same  manner  as 
arc  the  proper  officers  of  railroad  com- 
panies. The  court  say:  "  His  rights 
and  duties  are  those  of  a  carrier.  He 
is  bound  to  afford  to  all  railroad  com- 
panies whose  lines  connect  with  his 
equal  facilities  for  the  exchange  of 
traffic.  It  is  his  duty  to  receive  from 
and  deliver  to  other  connecting  roads 
both  loaded  and  empty  cars.  He  can- 
not discriminate  against  one  road  by 
maintaining  a  policy  of  noninter- 
course  with  it."  See  also  Chicago,  B. 
&  Q.  R.  Co.  v.  Burlington,  C.  R.  & 
N.  R.  Co.  34  Fed.  Rep.  481. 

In  Pldladelphia  Invest.  Co.  v.  Ohio 
&  N.  W.  R.  Co.  41  Fed.  Rep.  378, 
where  a  receiver  of  a  railroad  com- 
pany  made  an   arrangement  for  the 


RECEIVERSHIP  OF  RAILWAYS. 


505 


(li)  He  cannot  be  compelled  to  complete  the  unfinished  con- 
tracts of  the  corporation  if  not  ad  van  tao^eous  to  the  estate;'  but 
the  rule  is  otherwise  if  the  contract  is  performed  upon  one  side," 


transportation  of  freight  and  passen- 
gers with  another  railroad  company 
over  the  line  of  his  road,  and  there 
was  nothing  making  the  arrangement 
obligatory  on  either  party  for  any 
stated  period  of  lime,  it  was  held  that 
the  receiver  may  terminate  the  ar- 
rangement at  will  without  previous 
notice. 

'  In  Southern  E.rp.  Co.  v.  Wei^tcrn  N. 
C.  R.  Co.  99  U.  S.  191,  25  L.  ed.  319, 
it  appeared  that  a  contract  was  made 
between  the  express  company  and 
the  railroad  company  by  which  the 
latter  should  give  the  former  the 
necessary  facilities  for  the  transaction 
of  all  its  business  upon  the  road,  for- 
ward without  delay  by  the  passenger 
trains  both  ways,  haul  the  express 
matter  that  should  be  offered,  in  con- 
sideration for  which  the  express  com- 
pany was  to  loan  to  the  railroad  com- 
pany twenty  thousand  dollars  to  be 
expended  in  repairs  and  equipments 
for  the  road,  the  contract  to  continue 
for  the  period  of  one  year,  and  until 
the  principal  and  interest  of  the  debt 
should  be  fully  paid.  This  contract 
the  receiver  refused  to  carry  out,  and 
a  bill  for  specific  performance  was 
filed  again.st  him.  The  court  refused 
to  grant  the  prayer  of  the  petition  on 
the  ground  that  the  road  was  in  the 
hands  of  a  receiver  in  a  suit  brought 
by  the  bondholders  to  foreclose  their 
mortgage;  that  the  express  company 
had  no  lien;  that  it  was  simply  a  con- 
tract for  the  transportation  of  persons 
and  property  over  the  road,  and  the 
specific  performance  by  the  receiver 
would  be  a  form  of  satisfaction  or 
payment  which  tiie  receiver  could  not 
be  required  to  make.  The  court  say: 
"As  well  might  he  be  decreed  to  sat- 


isfy appellant's  demand  by  money  as 
by  the  service  sought  to  be  enforced. 
Both  belong  to  the  lienholders  and 
neither  can  be  thus  diverted." 

« In  Central  Trust  Co.  v.  Ohio  C.  R. 
Co.  23  Fed.  Rep.  306,  23  Am.  &  Eng. 
R.  Cas.  G66,  the  receiver  was  author- 
ized to  continue  a  pooling  contract  in 
force  at  the  time  of  his  appointment. 
The  court  say:  "The  existence  of 
this  contract,  it  must  be  presumed, 
was  well  known  to  those  who  are  now 
seeking  to  repudiate  it;  if  not,  it 
might  have  been  by  the  exercise  of 
the  slightest  diligence.  In  conse- 
quence of  casualties  not  foreseen  at 
the  beginning  it  baseventuated  in  the 
accumulation  of  the  cash  balance  now 
in  controversy.  The  contract  has 
been  fully  executed  as  to  the  transac- 
tions and  business  out  of  which  that 
balance  has  grown."  As  to  the  ques- 
tion of  an  unperformed  and  executory 
contract,  the  court  say:  "The  ques- 
tion now  presented  to  me  is  not 
whether  an  unperformed  and  execu- 
tory contract  shall  be  enforced,  nor 
whether  damages  shall  be  recovered 
against  a  parly  who  refuses  to  operate 
under  it.  It  is  whether  one  party 
who  has  received  all  the  expected  ben- 
efits to  be  derived  from  it  shall  ac- 
count for  the  fruits  of  its  perform- 
ance, which,  by  its  terms,  belong  to 
another,  and  which,  contrary  to  its 
terms,  it  retains.  The  contract, 
whether  legal  or  not,  was  not  binding 
on  the  complainant  or  the  receiver, 
and  if  objected  to  in  season,  proper 
instructions  would  have  been  given  iu 
reference  to  its  recognition  and  adop- 
tion. Failing  to  lake  proper  steps  to 
that  end  the  receiver  was  necessarily 
left   at   liberty    to   exerci.sc   his   own 


506 


RECEIVERSHIPS. 


or  the  receiversliip  property  has  received  tlie  benefit  of  the  con- 
tract' 

(i)  He  may  adopt  or  refuse  to  adopt  the  nncxi)ired  leases  of 
the  corporation,  and  is  entitled  to  a  reasonable  time  in  which  to 
exercise  his  option." 


judgment  and  discretion  in  reference 
to  it.  The  contract  itself  was  a  cus- 
tomary one  among  railroads,  and  the 
receiver  believed  it  to  be  reasonable 
and  fair,  and  that  it  was  expedient  to 
continue  it  in  force.  This  was  done 
with  the  result  already  stated.  Good 
faith  requires  that  the  proceeds  aris- 
ing from  its  operation,  and  which,  by 
its  terms,  belonged  to  the  petitioner, 
should  be  paid  over  to  it  without  re- 
gard to  the  question  now  made  as  to 
the  original  validity  of  the  contract." 
'  In  Easton  v.  Hoiiston  &  T.  C.  E. 
Co.  38  Fed.  Rep.  784,  where  the  receiver 
was  authorized  to  take  charge  of  all 
the  company's  property  including 
leases,  and  carry  on  the  road,  and 
have  the  use  and  benefit  of  certain 
sleeping  cars  with  knowledge  of  the 
terms  of  a  lease  under  which  the  cars 
were  held  and  used,  it  was  held  that 
the  receivers  became  the  assignees  of 
the  railroad  company,  and'were  bound 
to  perform  the  covenants  of  the  lease 
as  to  the  care  and  terms  of  the  leased 
cars.  It  appeared  that  the  receiver 
used  the  leased  cars,  operated  the 
same,  and  enjoyed  all  the  advantages 
thereof  for  the  benefit  of  the  trust 
fund,  and  were  thereby  legally  and 
equitably  obligated  to  perform  the 
several  covenants  of  the  railroad  com- 
pany. The  lease  in  this  case  was  an 
entirety  and  of  necessity  an  assignment 
and  the  assumption  thereof  was  of 
the  whole  and  not  any  particular  part. 
Cf.  Woodruff  V.  Erie  R.  Co.  93  N.  Y. 
619;  Dorrance  v.  Jones,  27  Ala.  630; 
Pufjdey  V.  Ailcin,  11  N.  Y.  494;  Sut- 
liffy.  Atwood.  15  Ohio  St.  186;  People, 
Qrisskr,  v.  Dudley,  58  N.  Y.  323. 


*In  Central  Trust  Co.  v.  WabasJi,  St. 
L.  &  P.  R.  Co.  34  Fed.  Rep.  259,  it 
was  held  that  the  mere  fact  of  taking 
possession  of  the  leased  lines  forming 
a  continuous  road  over  which  the  re- 
ceivers were  appointed  did  not  muke 
the  receivers  assignees  so  as  to  make 
the  rentals  due  under  such  leases  prior 
to  the  mortgages.  See  also  Central 
Trust  Co.  v.  Wabash,  St.  L.  <&  P.  R. 
Co.  46  Fed.  Rep.  26;  Park  v.  New 
York.  L.  E.  &  W.  R.  Co.  57  Fed.  Rep. 
799;  New  York,  P.  &  0.  R.  Co.  v.  New 
York,  L.  E.  &  W.  R.  Co.  58  Fed.  Rep. 
268.  In  the  last-named  case  it  was  also 
held  that  the  use  of  a  leased  line  for  a 
considerable  period  did  not  work  an 
adoption  where  the  lessor  had  not  de- 
manded a  surrender.  Ames^j.  Union 
P.  R.  Co.  60  Fed.  Rep.  966;  Central 
7'rust  Co.  V.  Charlotte,  C.  <&  A.  R.  Co. 
65  Fed.  Rep.  264. 

In  Quiacy,  M.  &  P.  R.  Co.  v.  Humph- 
reys, 145  U.  S.  82,  36  L.  ed.  632.  it 
was  held  that  the  receivers,  by  the  oc- 
cupation of  the  road  under  the  order 
of  the  court,  were  not  obliged  to  pay 
rental  under  a  lease  made  with  the 
insolvent  corporation.  The  court 
adopts  the  rule  established  in  bank- 
ruptcy matters  that  a  reasonable  time 
is  allowed  to  the  receivers  to  ascertain 
the  value  of  the  lease  before  exercis- 
ing their  election;  that  in  such  case 
receivers  will  not  be  required  without 
their  consent  to  take  that  which  will 
charge  the  estate  with  a  burden. 
Glenny  v.  Langdon,  98  U.  S.  20,  25  L. 
ed.  43;  American  File  Co.  v.  Qarrett, 
110  U.  S.  288,  28  L.  ed.  149;  Sparhawk 
V.  Yerkes,  142  U.  S.  1,  35  L.  ed.  915; 
Martin  v.  Black,  9  Paige,  641;  Com. 


RECEIVERSHIP  OF  RAILWAYS.  507 

§  284.    Limitations  on  receiver's  power. 

Tlie  receivership  property  being  held  by  the  receiver  in  behalf 
of  mortgagees,  creditors,  or  stockholders,  and  thus  impressed  witii 
a  species  of  trust  relationship,  it  follows  that  there  must  of  neces- 
sity be  certain  limitations  upon  his  power  in  his  dealings  there- 
with. All  his  contracts,  likewise,  are  made  with  reference  to 
the  receivership  fund  or  property  in  his  custody,  and  the  7'es  or 
the  income  is  impressed  with  the  ultimate  payment  of  all  indebt- 
edness incurred  in  the  management  of  the  road.  Hence  it  is 
that  the  rule  has  become  well  settled  that  all  persons  dealing 
with  the  receiver  in  his  official  capacity  must  do  so  with  the 
knowledge,  and  are  chargeable  with  notice,  of  the  limitations  on 
his  power.'  If  his  contracts  and  transactions  have  not  received 
in  advance  the  sanction  of  the  court,  they  are  at  all  times  subject 
to  the  annulment  of  the  court  as  not  being  for  the  best  interests 
of  the  estate.  Occupying  as  he  does  a  fiduciary  relationship,  he 
is  not  permitted  to  become  personally  interested  in  the  receiver- 
ship property,  or  make  contracts  in  his  official  capacity  resulting 
in  his  personal  gain.'^  Operating  the  road,  in  one  sense,  in  the 
interest  of  the  public,  he  cannot  make  unjust  discrimination  as  to 
freight  rates,^or  form  pooling  arrangements  for  discriminating  pur- 
poses.* He  has  no  discretionary  power  as  to  the  i)ayment  of  the 
corporate  debts  from  the  assets  or  earnings  of  the  road.^     He  has 

Y.  Franklin  Ins.    Co.    115  Mass.  278:  case  it  was  held  that  the  receiver  re- 

Berry  v.  Gillin,   17  N.   H.  9;  Re  Oak  taiuing  and  using  the  cars  made  him 

Pita  Colliery  Co.  L.   R.   21   Ch.   Div.  liable  for  the  rental  according  to  the 

822;  Sunflower  Oil  Co.  v.  Wiltion,  142  terms  of  the  lease. 

U.  S.  313,  35  L.  ed.  1025.  '  Slate  v.  Edgefield   &  K.   R.   Co.  6 

la  DaioHon  Mfg.  Co.  v.  Brunswick  &  Lea,  353. 

A.  R.  Co.  51  Ga.  136,  it  was  held  that  '^  Farley  v.  St.  Paul,  M.  tfc  M.  R.  Co. 

where  the  contract  between  themanu-  4  McCrary,  138. 

facturing  company  and  the  railroad  ^ Biers  v.  Wabash,  St.  L.  dt  P.  R.  Co. 

company  was  rescinded   for  nonpay-  34  Fed.  Rep.  244,  35  Am.  &  Eng.  R. 

ment   of   the   money  stipulated,    the  Cas.  64G;  Uandy  \.  Cleveland  &  M.  R. 

railroad  company  was  liable  for  rent  Co.  31  Fed.  Rep.  0s9. 

and  fordamages  to  the  cars  while  used,  *  Missouri  P.  R.  Co.  v.  Te.ras  &  P. 

on  the  ground  that  it  could   not  be  R.  Co.  31  Fed.   Rep.  862,  28  Am.  & 

presumed   to  keep  and  use  the  cars  Eug.  R.  Cas.  1, 

and  not  pay  for  Iheni.  ^  Ellis  v.  Boston,  II.  dc  E.  R.  Co   107 

Farmers'  Loan  &  T.  Co.  v.  Chicago  Mass.  1. 
&  A.  R.  Co.  42  Fed.  Rep.  6.     In  this 


508 


RECEIVERSHIPS. 


no  power  to  appropriate  receiversliip  funds  in  the  promotion  or 
defeatini^  of  parallel  lines  of  road,'  or  to  grant  permission  to  an- 
other road  to  cross  his  line  of  road,''  or  to  contract  for  municipal 
aid  in  buildinoj,  completing,  or  equipping  a  road,'  or  lease  the 
receivership  road,^  and  unless  specially  authorized  cannot  contract 
delUs  on  the  faith  of  tlie  receivership  property,"  and  as  a  rule  his 
power  is  confined  to  the  property  in  litigation/  lie  has  no 
power  to  grant  an  animal  pass  for  life,"  and  has  no  power  to  lease 
for  a  term  of  years  general  offices  and  thereby  bind  his  successors 
or  the  property  without  the  sanction  of  the  court.' 

§  285.     Liability  of  railway  receivers. 

The  general  liability  of  receivers  lias  been  considered  heretofore 
and  only  the  liability  of  railway  receivers  will  be  considered  in 
this  connection  in  so  far  as  their  liability  may  be  different  from 
that  of  ordinary  receivers  such  as  grows  out  of  the  varied  and 
more  extended  duties  imposed  upon  them.  The  lial)ility  of  rail- 
way receivers  is  measured  by  the  functions  and  duties  pertaining 
to  his  office.  Being  a  common  carrier  of  passengers  and  property 
and  exercising  the  franchises  of  a  corjjoration,  he  assuines  corre 
sponding  duties  to  the  public  and  the  patrons  of  the  road,  and  in 


'  CoiDclrey  v.  Galveston,  IT.  &  H.  B. 
Vo.  93  U.  S.  353,  23  L.  ed.  950. 

UloiDlett  V.  New  York,  W.  8.  &  B. 
R.  Co.  14  Abb.  N.  C.  328. 

^ Smith  V.  McCtiUough,  104  U.  S.  25, 
26  L.  ed.  637. 

■•Ill  MeMinnville  &  M.  R.  Co.  v. 
Huggins,  3  Baxt.  177,  it  is  held  that  a 
receiver  of  a  railroad  company  has 
no  power  to  lease  the  receivership 
road  so  as  to  vest  in  the  lessees  an  in- 
terest in  the  road  and  its  franchises, 
which  could  not  be  devested  by  a  sub- 
sequent act  of  the  legislature. 

^  In  Hand  v.  Savannah  &  C.  R.  Co. 
17  S.  C.  219,  it  was  held  that  claims 
against  the  receiver  of  an  insolvent 
railroad  company  for  moneys,  ser- 
vices, supplies,  damages,  and  neces- 
eary  expenses  of  the  management 
cannot  be  paid  from  the  proceeds  of 
the  mortgaged   property  where  such 


proceeds  were  insufficient  to  pay  the 
mortgage  debt;  that,  unless  specially 
authorized  by  the  court  to  contract 
debts  on  the  faith  of  the  property,  the 
receiver  is  restricted  to  the  income 
and  profits  of  the  road. 

« In  Noyes  v.  Rich,  52  Me.  115,  it  is 
held  that  the  receiver's  right  to  cus- 
tody of  the  property  extends  only  to 
the  property  which  is  the  subject- 
matter  of  the  litigation,  but  the  rule 
is  otherwise  where  the  receiver  is 
appointed  under  a  creditor's  bill,  in 
which  case  he  takes  the  whole  es- 
tate. To  the  same  effect  is  Smith  v. 
McCullough,  104  U.  S.  25,  20  L.  ed. 
637. 

'  Martin  v.  Neio  York,  S.  &  W.  B. 
Co.  36  N.  J.  Eq.  109. 

*  Chicago  Deposit  Vault  Go.  v.  Me- 
Nulta,  152  U.  S.  554,  38  L.  ed.  819. 


RECEIVERSHIP  OF  RAILWAYS. 


509 


general  is  liable  to  the  same  extent,  and  his  liability  is  o-overned 
by  precisely  the  same  principles  as  are  applicable  to  ordinary  car- 
riers. His  relations  to  the  public  and  to  his  employees  are  in  no 
manner  limited  or  modified  by  reason  of  his  official  position  or 
trust  relationship.  It  may  be  stated  in  general  terms  therefore : 
(a)  A  receiver  exercising  the  functions  of  a  common  carrier  by 
virtue  of  the  franchises  of  a  railway  corporation  should  be  held 
amenable  in  his  official  capacity  to  the  same  rules  of  liability  that 
are  applicable  to  the  company  while  it  exercises  the  same  powers 
in  operating  the  road.' 


'  In  Klein  v.  Jcwett,  26  N.  J.  Eq. 
474,  the  vice  chancellor  says:  "  I 
think  the  rule  may  be  considered  set- 
tled that  where  the  injury  results 
from  default  or  misconduct  of  a  re- 
ceiver appointed  by  the  court  of 
equity  while  acting  under  the  color 
of  authority  of  the  court, — tliere  being 
no  dispute  as  to  the  power  of  the 
court  to  make  the  order  under  which 
he  claims  to  have  acted, — the  court 
may,  in  its  discretion,  eilher  take  cog- 
nizance of  the  question  of  the  re- 
ceiver's liability  and  determine  it,  or 
permit  the  aggrieved  party  to  sue  at 
law.  But  if  the  power  of  the  court 
is  disputed  the  court  has  no  choice;  it 
must  assume  exclusive  jurisdiction 
and  inhibit  the  aggrieved  person 
from  seeking  redress  against  the  re- 
ceiver in  any  other  tribunal.  Any 
other  course  when  its  jurisdiction  is 
assailed  would  be  an  abandonment  by 
the  court  of  both  its  power  and  dig- 
nity. Aston  V.  Heron,  2  Myl.  &  K. 
890;  Parker  v.  Browning,  8  Paige, 
388.  *  *  *  It  was  not  seriously  dis- 
puted that  the  receiver  must  be  held 
liable  if  actionable  negligence  was 
shown.  It  would  seem  to  be  clear 
that  no  person  can  be  perniiltcd  to 
exercise  the  rights  and  power  of  a 
common  carrier,  especially  when  they 
embrace  the  franchise  granted  to  a 
railway   corporation,    except   subject 


to  the  duties  and  liabilities  of  a  com- 
mon carrier.  Whether  a  receiver  is 
regarded  as  an  officer  of  the  law,  or 
the  representative  of  the  proprietors 
of  the  corporation,  or  its  creditors,  or 
has  combined  all  these  characters,  he 
is  intrusted  with  the  powers  of  the 
corporation,  and  must  therefore  neces- 
sarily be  burdened  with  its  duties  and 
subject  to  its  liabilities.  There  can 
be  no  such  thing  as  an  irresponsible 
power,  force,  or  authority  without 
being  subject  to.  duty  under  any  sys- 
tem of  laws  framed  to  do  justice.  It 
is  an  inseparable  condition  of  every 
grant  of  power  by  the  state,  whether 
expressed  or  not,  that  it  shall  be 
properly  exercised,  and  that  the 
grantee  shall  be  liable  for  injuries 
resulting  directly  and  exclusively 
from  his  negligence  in  its  use.  Both 
upon  principle  and  authority  I  think 
it  must  be  held  that  a  receiver  oi)er- 
ating  a  railroad  under  an  order  of  a 
court  of  equity  stands  in  respect  to 
duty  and  liability  just  where  the  cor- 
poration would  were  it  operating  the 
road,  and  the  question  wliether  or 
not  the  receiver  is  liable  for  negli- 
gence must  be  tested  by  the  same 
rules  that  would  be  applied  if  the 
corporation  was  the  actual  party  de- 
fendant before  the  court."  lUiimcn- 
tJuU  V.  liriu'ndvd,  WH  Vt.  402;  Paige  v. 
iiiaitk,  'J8  Mass.  890. 


510 


RECEIVERSHIPS. 


To  this  rule  thorc  are  the  followiiic;  exceptions :     (/)  Where  a 
liability  is  created  by  statute  against  the  corporation  itself  which 


In  Ex  parte  Brown,  15  S.  C.  518,  it 
was  held  that  a  passenger  injured 
upon  a  railway  while  in  the  hands  of 
a  receiver  was  entitled  to  damages 
for  such  injuries  received  and  to  be 
paid  out  of  the  fund  in  court  realized 
from  the  earnings  of  the  road  during 
the  receivership  in  preference  to  mort- 
gage or  other  debts.  It  is  held  it 
cannot  be  denied  that  a  company, 
while  managed  by  its  own  directors^ 
is  liable  to  demands  of  this  kind,  and 
when  managed  by  a  receiver  as  an 
oflicer  of  the  court  it  is  equally  liable 
out  of  its  property  to  respond  to  un- 
paid claims  of  this  kind,  whether  the 
cause  of  action  arose  before  or  after 
the  judgment  of  insolvi-ncy  and  ap- 
pointment of  a  receiver.  Ex  parte 
Johnson,  19  S.  C.  493. 

In  3Ieara  v.  Holbrook,  20  Ohio  St. 
137,  it  is  held  that  a  receiver  of  a  rail- 
road operating  the  same  under  the 
order  of  court  in  the  same  manner  as 
a  railroad  company,  and  having  the 
exclusive  control  of  the  road  and  its 
agents  and  employees  in  the  business, 
is  answerable  in  his  official  capacity 
to  his  employees  and  others  for  in- 
juries sustained  through  the  negligent 
discharge  of  his  duties  by  himself  or 
his  agents  where  the  railroad  com- 
pany, if  it  had  been  operating  the  road, 
would  have  been  liable.  See  also 
Potter  V.  Bunnell,  20  Ohio  St.  150, 
where  it  is  held  that  in  an  action  for 
Injuries  against  the  receiver  exercising 
the  franchises  of  the  company  it  must 
be  determined  by  the  principles  ap- 
plicable to  a  like  action  against  the 
company  when  it  operates  the  road. 

In  Erioin  v.  Davenport,  9  Heisk.  44, 
an  employee  was  run  over  and  killed 
by  a  train  of  cars,  and  the  receiver 
was  sued  under  the  provisions  of  the 


Tenn.  Code  for  $10,000  damages.  It 
was  held  that  a  receiver  under  §  1101 
of  the  Code  is  vested  with  the  powers 
and  duties  of  the  board  of  directors 
in  managing  the  affairs  of  the  com- 
pany and  as  a  public  agent  of  the 
state;  that  where  the  public  are 
concerned  receivers  are  subordinalo 
agents  of  the  state  in  the  discharge 
of  their  official  duties,  and  are  guilty 
of  wrong  to  third  persons,  they  are 
liable  to  the  same  extent  as  private 
agents  and  are  responsible  for  mis- 
feasance but  not  for  nonfeasance. 

In  Blumenthal  v.  Brainard,  38  Vt. 
402,  receivers  were  operating  a  rail- 
way under  the  order  of  a  court  of 
equity,  and  it  was  claimed  that  being 
agents  and  officers  of  that  court  they 
were  subject  to  account  only  to  that 
court,  and  were  entitled  to  protec- 
tion in  all  matters  growing  out  of 
a  performance  of  their  duties  as 
receivers,  and  therefore  could  not 
be  made  liable  as  a  common  carrier 
or  warehouseman,  but  the  court  held 
that  the  mere  fact  that  they  were  act- 
ing as  receivers  under  the  appoint- 
ment of  a  court  of  chancery  could 
not  be  recognized  as  a  defense  to  a 
suit  at  law  for  a  breach  of  any  obliga- 
tion or  duty  which  was  fairly  and 
voluntarily  assumed  by  them  in  mat- 
ters of  business  conducted  or  carried 
on  by  them  while  acting  as  such  re- 
ceivers. 

In  Lyman  v.  Central  Vei-mont  R. 
Co.  59  Vt.  167,  where  it  appeared 
that  the  same  person  is  receiver  of 
one  railroad  and  lessee  of  another, 
and  both  are  operated  by  him  to- 
gether, the  leased  railway  is  not 
receivership  property,  and  an  em- 
ployee could  maintain  an  action  at 
law    against  him   without    leave    to 


RECEIVERSHIP  OF  RAILWAYS. 


511 


recover  for  injuries  resulting  from 
the  negligence  of  his  servants  in 
operating  the  leased  road.  It  is  also 
held  that  he  would  be  liable  as  re- 
ceiver for  injuries  resulting  upon  the 
receivership  property  to  the  same  ex- 
tent as  a  railwaj'  company  itself.  See 
Sprague  v.  Smith,  29  Vt.  421;  Blu- 
menthal  v.  Brainard,  supra;  Newell  v. 
Smith,  49  Vt.  255;  Paige  v.  Smith,  99 
Mass.  191;  Nichols  v.  Smith,  115  Mass. 
332;  Ballon  v.  Farnum,  9  Allen,  47; 
Barter  v.  Wheeler,  49  N.  H.  9;  Lam- 
phear  v.  Buckingham,  33  Conn.  237; 
Kinney  v.  Crocker,  18  Wis.  74;  Allen 
v.  Central  B.  Co.  42  Iowa,  683. 

Receivers  running  a  road  under  ap- 
pointment of  a  court  of  chancery  in 
another  state  who  act  as  common  car- 
riers, and  are  liable  in  actions  at  law 
in  the  state  in  which  appointed,  may 
be  sued  as  common  carriers,  in  Massa- 
chusetts. Paige  v.  Smith,  99  Mass.  395; 
Nichols  v.  Smith,  115  ]\Iass.  332. 

In  Ohio  <&  M.  E.  Co.  v.  Davis,  23 
Ind.  553,  it  is  said :  "The  court  can- 
not permit  her  possession  to  result  in 
wrong  to  one  without  fault,  but  upon 
sullicient  proof  will  grant  the  relief 
to  which  the  sufferer  may  be  enti- 
tled." It  was  further  held  that  the 
railroad  company  is  not  liable  for  an 
act  of  negligence  of  the  receiver  hav- 
ing possession  of  sucli  road. 

In  Southern  Exp.  Co.  v.  Wenterji  N. 
C.  R.  Co.  99  U.  S.  191,  25  L.  ed.  319, 
the  receiver  declined  to  carry  out  a 
contract  made  by  the  railroad  com- 
pany over  which  he  was  receiver  with 
an  express  company,  and  a  bill  for 
specific  performance  was  filed  by  the 
express  company.  11  was  held,  first, 
that  the  receiver  was  the  only  neces- 
sary party  defendant;  and,  .second, 
that  the  transaction  between  tlie  com- 
panies was  simply  a  contract  for  tran.s- 
portation  wliich  created  no  lien,  and 
the  spec!  fie  performance  thereof  would 
be  a  form  of  satisfaction  or  payment 


which  the  receiver  could  not  be  re- 
quired to  make. 

In  Harding  v.  Netlleton,  86  Mo.  658, 
an  action  was  brought  in  a  state  court 
against  the  receiver  of  a  railroad  by 
permission  of  the  Federal  court  which 
appointed  him,  for  the  breach  of  a 
contract  for  the  purchase  of  ties  made 
by  the  railroad  before  the  appoint- 
ment of  a  receiver,  and  it  was  held 
that  the  judgment  of  the  state  court 
could  not  be  enforced  against  the  prop- 
erty of  the  corporation  in  the  hands 
of  a  receiver,  but  must  be  presented 
to  the  Federal  court  for  allowance 
and  that  the  latter  would  determine 
the  manner  and  time  of  paying  the 
judgment  out  of  the  a.ssets  of  the  road. 

In  Sloan  v.  Central  Iowa  R.  Co.  62 
Iowa,  728,  it  is  held  that  where  the 
receiver  is  operating  a  railroad  under 
the  appointment  and  direction  of  a 
court  he  is  included  under  the  terms 
"persons  owning  or  operating  rail- 
ways" in  contemplation  of  g§  1278 
and  1307  of  the  Iowa  Code,  and 
that  such  receiver,  or  rather  the  prop- 
erty in  his  hands,  is  liable  for  the  claim 
of  an  employee  for  injuries  received 
through  the  negligence  of  coem- 
ployees. 

In  Brown  v.  Brown,  71  Tex.  355,  it 
is  held  that  the  judgment  for  personal 
injuries  should  be  against  the  receiver 
in  his  otlicial  capacity,  leaving  the 
matter  of  its  enforcement  to  be  deter- 
mined by  the  court  having  jurisdic- 
tion of  the  receivership  which  is  in 
view  of  the  rights  of  all  persons  inter- 
ested in  the  proper  application  of  the 
fund  in  the  custody  of  tlie  court. 

In  Missouri  P.  R.  Co.  v.  Texas  P. 
R.  Co.  30  Fed.  Rep.  167.  it  is  iu-ld 
that  where  a  receiver  lias  exclusive 
charge  of  the  management  and  of  llic 
employment  of  operatives  and  em- 
ployees, the  entire  control  of  tlie  com- 
jtaiiy  having  passed  to  liie  receivers 
as  fully  as  it  was  before  exercised  by 


512 


RECEIVERSHIPS. 


is  in  the  nature  of  a  personal  or  special  obligation  not  assumed 
by  the  receiver/  and  {2)  where  contracts  exist  at  the  time  of  the 


the  officers  of  the  road,  the  receiver 
is  answerable  in  his  official  capacity 
for  injuries  sustained  in  the  same 
manner  that  the  corporation  would 
have  been  liable.  (See  note).  See  also 
Pope\  Cim,  30  Fed.  Rep.  1C9;  Cen- 
tral Trust  Co.  V.  Wabanh,  St.  L.  &  P. 
R.  Co.  30  Fed.  Rep.  344.  In  this  case 
it  is  held  that  where,  except  for  a 
receivership,  the  rights  of  an  inter- 
venor  would  be  determined  by  the 
laws  of  the  state  in  which  he  resides, 
as  interpreted  by  the  supreme  court, 
the  fact  that  a  receivership  has  been 
instituted  should  not  be  allowed  to 
operate  to  increase  the  intervenor's 
rights. 

In  Ilonisby  v.  Eddy,  56  Fed.  Rep. 
461,  the  statute  provided  "every  rail- 
road company  organized  or  doing 
business  in  this  state  shall  be  liable 
for  all  damages  done  to  any  employee 
of  such  company  in  consequence  of 
any  negligence  of  its  agents  or  by  any 
mismanagement  of  its  engineers  or 
other  employees  to  any  person  susfain- 
ing  such  damage."  Under  this  stat- 
ute it  was  held  that  a  person  injured 
from  the  negligence  of  coemployees 
was  in  no  wise  effected  by  the  fact 
that  the  railroad  was  in  the  hands  of 
a  receiver  and  operated  by  him. 
Union  Trust  Co.  v.  Thomason,  25 
Kan.  1. 

In  Central  Trust  Co.  v.  Wabasli,  St. 
L.  &  P.  R.  Co.  26  Fed.  Rep.  12,  it  is 
held  that  the  fact  that  a  railroad  is  in 
the  hands  of  a  receiver  does  not  make 
it  any  the  less  liable  imder  §  809  of 
the  Revised  Statutes  of  ^lissouri  for 
double  damages  in  killing  stock. 

In  Cardot  v.  Barney,  63  N.  Y.  281, 
it  is  held  that  a  receiver  of  an  insol- 
vent railroad  company  who  is  running 
and  operating  its  road  in  the  absence 


of  evidence  that  he  assumed  to  act 
other  than  as  assignee,  or  that  he  held 
himself  out  as  a  carrier  of  passengers 
other  than  as  an  officer  of  the  court,  is 
not  liable  in  an  action  for  negligence 
causing  the  death  of  a  passenger 
where  no  personal  neglect  is  imputed 
to  him,  either  in  the  selection  of  his 
agents  or  in  the  performance  of  duty, 
and  where  the  negligence  charged 
was  that  of  a  subordinate  whom  he 
necessarily  and  properly  employed  in 
compliance  with  the  order  of  the 
court. 

In  Thurman  v.  Cherokee  R.  Co.  56 
Ga.  376,  it  is  held  that  an  employee 
of  a  railroad  company  cannot  main- 
tain an  action  against  the  company 
for  personal  injury  sustained  by  him 
while  the  road  is  in  the  hands  of  a  re- 
ceiver. See  Henderson  v.  Walker,  55 
Ga.  481.  To  the  same  effect  is  Camp  v. 
Barney,  6  Thomp.  &  C.  622,  4  Hun, 
373;  Metz  v.  Buffalo,  G.  &  P.  R.  Co. 
58  N.  Y.  61. 

'  In  Ohio  &  M.  R.  Co.  v.  Fitch,  29 
Ind.  498,  it  is  held  that  where  a  rail- 
road company,  in  answer  to  an  action 
to  recover  the  value  of  animals  killed 
by  their  machinery,  desires  to  set  up 
the  fact  that  its  road  is  in  the  posses- 
sion and  being  operated  by  a  receiver 
of  the  Federal  court,  the  answer 
should  be  accompanied  by  the  origi- 
nal or  a  copy  of  the  order  of  the 
latter  court  for  the  appointment;  and 
it  is  further  held  that  the  mere  ap- 
pointment of  a  receiver  with  the 
usual  powers  of  a  chancery  receiver 
does  not  relieve  the  railroad  company 
from  liability  to  suit,  and  that  the 
receiver  operates  the  road  subject  to 
that  liability. 

In  McKinney  v.  Ohio  &  M.  R.  Co. 
22  Ind.  99,  it  is  held  that  a  railroad 


RECEIVERSHIP  OF  RAILWAYS 


513 


company  is  liable  for  stock  killed  by 
its  cars, although  the  road  at  the  lime  is 
operated  by  a  receiver.  (See  statute.) 
In  Louisville,  N.  A.  &  G.  R.  Co.  v. 
Cauhle,  46  Ind.  277,  the  same  prin- 
ciple is  aftirmed. 

In  Ohio  &  M.  It.  Co.  v.  Eusnell, 
115  111.  52,  it  is  lield  that  in  an  action 
against  a  railroad  company  to  recover 
double  the  value  of  a  fence  built  by 
the  owner  or  occupant  of  the  premises 
adjoiuing  the  railroad  right  of  way 
after  the  neglect  or  refusal  of  the 
company  to  build  the  same  on  notice 
as  required,  it  is  no  defense,  so  far  as 
the  corporation  is  concerned,  that  its 
property  is  in  the  hands  of  a  receiver 
or  used  by  another  party.  It  is  said 
that  the  appointment  of  a  receiver 
gives  to  him  only  the  temporary  man- 
agement of  its  affairs,  under  the 
direction  of  the  court,  and  that  the 
corporation  still  exists  and  may  exer- 
cise its  franchises,  in  so  far  as  it  does 
not  interfere  with  the  rightful  man- 
agement of  the  receiver. 

In  Ennsan  P.  R.  Co.  v.  Wood,  24 
Kan.  619,  the  legislature  has  passed  a 
law  requiring  railroad  companies  to 
fence  their  roads  or  be  liable  for  any 
stock  killed  by  the  trains.  A  receiver 
of  a  corporation  was  appointed,  and 
after  his  discharge  the  property  was 
returned  to  the  possession  of  the  cor- 
poration, but,  while  the  posses.sion  of 
the  receiver  continued,  stock  belong- 
ing to  the  plaintiffs  was  killed  by  the 
railroad  trains  at  a  place  where  the 
road  was  not  fenced,  and  it  was  held 
that  an  action  might  be  maintained 
against  the  corporation  for  the  en- 
forcement of  the  liability  imposed  by 
the  statute.  The  decision  is  based  on 
the  ground  that  a  statutory  dut}'  was 
cast  upon  the  company  and  for  such 
duty  it  is  liable,  whether  property  in 
the  hands  of  the  company  can  be 
reached  or  not. 

33 


Kan.  Laws  1874,  chap.  94,  relating 
to  the  killiug  and  wounding  of  stock 
by  railroads,  applies  to  receivers  oper- 
ating a  road,  who  have  been  appointed 
by  courts  of  competent  jurisdiction. 
Rouse  v.  Redinger,  1  Kan.  App.  355. 

In  Turner  v.  Cross,  83  Tex.  218,  15 
L.  R.  A.  262,  it  is  held  that  a  receiver 
is  neither  property  owner,  charterer, 
nor  hirer  of  a  railroad  operated  by 
him,  under  article  2899  of  the  Revised 
Statutes  of  Texas,  prior  to  its  amend- 
m'ent  April  11,  1892,  and  it  is  not 
liable  for  any  injury  negligently  in- 
flicted upon  and  resulting  in  the  death 
of  an  emplo}'ee  of  a  road;  that  when 
receivers  are  lawfully  apointed  they 
are  not  the  representatives  of  the 
company  or  persons  whose  property 
may  be  placed  in  their  management, 
though  it  may  in  some  cases  be  sub- 
jected to  liability  for  charges  arising 
under  the  permission  of  the  court  ap- 
pointing him  or  from  the  negligence 
of  the  receivers  and  their  employees. 

A  railroad  company  is  not  liable 
under  the  Texas  statutes  for  claims 
arising  out  of  the  management  of  the 
road  by  receivers,  upon  the  redeliv- 
ery of  the  property  to  it,  unless  funds 
were  expended  in  betterments  during 
the  receivership,  or  unless  the  prop- 
erty returned  to  it  is  of  a  value  equal 
to  or  exceeding  the  claim.  Missouri, 
K.  &  T.  R.  Co.  V.  Wijlie  (Tex  Civ. 
App.)  33  S.  W.  771. 

Where  a  statute  makes  a  railroad 
company  liable  for  injury  to  an  em- 
ployee through  the  negligence  of  a 
coemployee  in  the  same  line  of  em- 
ployment, it  is  inapplicable  to  a  re- 
ceiver of  the  railroad.  Campbell  v. 
Cook,  86  Tex.  630;  Allen  v.  Dilling- 
ham, 60  Fed.  Rep.  176;  Bonner  v. 
Franklin  Co-Operative  Asso.  4  Tex. 
Civ.  App.  166;  Missouri,  K.  &  T.  R. 
Co.v.  Sioner,  5 Tex.  Civ.  App.  50.  See, 
contra,  Texas  &  P.  R.  Co.  v.  Cox,  145 


614 


RECEIVERSHIPS. 


U.  S.  593,  36  L.  ed.  8i9.  But  this 
depends  upon  the  language  of  the 
statute,  and  if  the  statute  is  broad 
enough  to  embrace  a  receiver,  he  is 
liable.  Sloan  v.  Central  Iowa  R.  Co. 
63  Iowa,  728;  Bond  v.  Slate,  68  Miss. 
648;  Rouse  v.  Eornsby,  67  Fed.  Rep. 
219;  Hornsbysf.  Eddy,  56  Fed.  Rep. 
461. 

The  Ohio  statute  giving  a  right  of 
recovery  against  a  lessor  railroad 
company  for  wrongs  and  injuries 
committed  by  the  lessee  company 
does  not  give  a  right  of  action  against 
the  lessor  compuny  for  wrongs  and 
injuries  committed  by  a  receiver  of 
the  lessee.  Chamberlain  v.  New  York, 
L.  E.  cfcTF.  R.  Co.  71  Fed.  Rep.  636. 
A  receiver  operating  a  railroad  un- 
der the  direction  of  a  court  of  equity 
is  liable  to  an  employee  injured  by 
the  negligence  of  acoemployee,  under 
Minn.  Gen.  Stat.  1894,  g  2701,  making 
"every  railroad  corporation  owning 
or  operating  a  railroad "  liable  for 
such  negligence.  Mikkelson  v.  Trues- 
dale  (Minn.)  65  N.  W.  260: 

The  liability  of  a  receiver  appointed 
to  conduct  the  business  of  a  corpora- 
tion, pending  an  action  in  a  United 
States  court,  upon  a  contract  which 
is  still  executory  at  the  time  of  his 
appointment,  is  not  affected  by  24 
Stat,  at  L.  554,  g^  2,  8,  providing 
that  such  receiver  shall  manage  the 
property  according  to  the  require- 
ments of  the  valid  laws  of  the  stale  in 
which  the  property  is  situated,  in  the 
same  manner  as  the  owner  would  be 
bound  to  do,  as  such  provisions  ren- 
der him  responsible  only  for  things 
occurring  while  he  is  in  possession. 
Scott  V.  Rainier  Power  &  R.  Co.  13 
Wash.  108. 

The  Georgia  statutes  making  re- 
ceivers of  railroad  companies  liable 
for  injuries  to  persons  and  property 
caused  by  the  running  of  cars  on  the 
road,  for  which  the  road  is  liable  as 


common  carrier  by  the  ]aw8  of  the 
state,  docs  not  make  a  receiver  liable 
for  injuries  to  an  employee  knocked 
from  a  moving  train  by  striking  a 
structure  beside  the  track,  under  Ga. 
Code,  §  2083,  declaring  that  railroad 
companies  are  liable  as  common  car- 
riers, and,  as  they  have  employees 
who  cannot  control  those  running  the 
trains,  they  shall  be  liable  to  such 
employees  as  to  passengers  for  in- 
juries arising  from  the  want  of  care 
and  diligence  of  the  train  employees. 
Central  Trust  Co.  v.  East  Tennessee, 
V.  &  G.  R.  Co.  69  Fed.  Rep.  353,  357; 
Baltimore  Trust  &  O.  Co.  v.  Atlanta 
Traction  Co.  69  Fed.  Rep.  358. 

In  Texas  &  P.  R.  Co.  v.  Collins,  84 
Tex.  121,  suit  was  brought  for  the 
death  of  the  husband  of  the  plaintiff 
who  was  an  employee  of  the  railroad, 
and  it  was  held  that  the  receiver 
could  not  be  held  reliable  for  injuries 
resulting  in  death  unless  the  receiver 
was  primarily  liable  for  such  death 
either  under  the  common  law  or  the 
statutes.  See  Yoakum  v.  Selph,  83 
Tex.  607. 

In  Dcck-cr  v.  Gardner,  124  N.  Y, 
834,  11  L.  R.  A.  480,  it  is  held  that 
receivers  pendente  lite  are  officers  of 
the  court  merely  and  their  functions 
are  limited  to  the  care  and  preserva- 
tion of  the  property  commended  to 
their  charge  and  possession,  with  no 
authority  except  what  is  conferred 
by  the  court,  and  do  not  represent  the 
corporation  in  its  individual  or  per- 
sonal character  or  supersede  it  in  the 
exercise  of  its  corporate  powers,except 
in  so  far  as  the  mortgaged  properly 
is  concerned.  In  this  respect,  except 
as  to  the  possession  and  management 
of  the  mortgaged  property, thecorpora- 
tion  is  free  and  unfettered  to  exercise 
its  franchises,  and  it  was  held  that 
with  the  particular  cause  of  action  set 
out  in  the  complaint  the  receiver  had 
no  connection,  and  it  could  not  possi- 


RECEIVERSHIP  OF  RAILWAYS. 


515 


receiver's  appointment  executory  in  their  nature,  which  the  court, 
in  the  interest  of  the  beneficiaries  of  the  trust  fund  in  the  hands 
of  the  receiv'Cr,  will  not  require  him  to  assume  and  carry  out.' 

(b)  If  a  i*ailroad  company  is  not  in  the  management  of  its  road 
it  cannot  be  held  liable  for  the  negligence  of  the  receiver,  who  is 
in  such  management.' 


bly  be  charged  upon  the  property  in 
the  receiver's  possession.  This  was 
an  action  of  trespass  to  which  the  re- 
ceiver was  made  a  party. 

In  PowelL  v.  Dayton,  8.  <&  G.  B.  Co. 
16  Or.  33,  it  was  held  that  in  an  action 
for  waste  it  is  no  defense  to  show  that 
at  the  time  of  the  grievance  com- 
plained of  the  corporation  was  in  the 
hands  of  a  receiver. 

Neither  a  lessor  nor  lessee  railroad 
company  is  liable  for  wrongs  and  in- 
juries done  by  receivers  who  have  the 
sole  and  exclusive  management  and 
control  of  the  property  of  both  roads. 
Chamberlain  v.  New  Toi-k,  L.  E.  &  W. 
R.  Co.  71  Fed.  Rep.  636. 

'  In  Central  Trvst  Co.  v.  Marietta  & 
N.  G.  R.  Co.  51  Fed.  Rep.  15,  16  L.  R. 
A.  90,  it  is  held  that  a  receiver  ap- 
pointed in  a  suit  by  the  bondholders 
to  foreclose  a  mortgage  on  a  railroad 
could  not  be  compelled  to  perform  a 
contract  of  the  corporation,  although 
payment  had  been  received  on  such 
contract  before  the  appointment  of 
the  receiver.  This  decision  is  based 
upon  the  ground  that  the  enforce- 
ment of  such  a  contract  against  the 
receiver  would  be  equivalent  to  re- 
quiring the  repayment  of  the  money 
received  by  tlic  corporation,  and  this 
could  not  be  done  inasmuch  as  there 
was  no  lien  on  such  money  so  paid. 

In  Sontlicrn  Exp.  Co.  v.  Western  N. 
C.  R.  Co.  99  U.  S.  191,  25  L.  ed.  319, 
the  same  principle  is  affirmed.  See 
Frankle  v.  Jackxon,  30  Fed.  Rep.  398. 

*  In  Pennsylvania  R.  Co.  v.  Jones, 
155  U.  S.  333,  39  L.  ed.    176,  it  was 


held  that  where  a  railroad  was  "in  the 
hands  of  a  receiver,  but  the  road  was 
managed  and  controlled  by  the  agents 
and  employees  of  the  company,  and 
the  receiver's  functions  were  restricted 
to  the  receipt  of  its  share  of  the  net 
earnings,  the  company  was  liable  for 
personal  injury  received  by  a  passen- 
ger upon  the  road.  This  decision 
was  based  upon  the  case  of  ]ra«/a'«^- 
ton,  A.  &  G.  R.  Co.  v.  Bro7m,  84  U. 
S.  17  Wall.  448.  21  L.  ed.  675,  where 
it  appeared  that  a  railroad  company 
was  run  on  a  joint  account  of  the 
lessees  on  the  Virginia  end  of  the  road, 
and  the  receiver  on  the  end  in  the 
District.  It  was  urged  in  that  case 
that  the  company  was  not  liable  for 
anything  done  while  the  road  was 
operated  by  the  lessees  and  the  re- 
ceiver, but  Mr.  .Justice  Davis  said: 
"It  is  the  accepted  doctrine  in  this 
country  that  a  railroad  corporation 
cannot  escape  the  performance  of  any 
duty  or  obligation  imposed  by  its  char- 
ter,or  the  general  laws  of  the  state,  by 
a  voluntary  surrender  of  its  road  into 
the  hands  of  lessees.  The  operation 
of  the  road  by  the  lessees  does  not 
change  the  relations  of  the  original 
company  to  the  public.  It  is  argued, 
however,  that  this  rule  is  not  applica- 
ble where  the  proceeding,  instead  of 
being  voluntary,  is  compulsory,  as  in 
the  case  of  the  transfer  of  possession 
to  a  receiver  by  a  decree  of  a  court  of 
competent  jurisdiction.  Whether  this 
be  so  or  not  we  are  not  called  upon  to 
decide,  because  it  has  never  been  held 
that  the  company  is  relieved  from  Ha- 


516 


RECEIVERSHIPS. 


(e)  A  receiver  may  make  liimsolf  personally  liable  for  injuries 
rcsiiltiiii^  from  the  use  of  defective  machinery  where  he  has 
knowledo-e  of  the  existence  of  such  defects.' 

(d)  llo  is  liable  in  his  official  capacity,  as  a  common  carrier  for 
goods  lost  in  shipment,"  and  for  injury  occasioned  by  the  careless- 
ness and  ne^liu'cnce  of  his  servants.' 

(e)  lie  will  not  be  compelled  to  carry  out  an  executory  con- 


bilily  unless  possession  of  the  receiver 
is  exclusive,  and  the  servants  of  the 
road  are  wholly  employed  and  con- 
trolled by  him.  In  this  case  the  pos- 
session was  not  exclusive  nor  were 
the  servants'subjocl  to  the  receiver's 
order  alone.  On  the  contrary,  the 
road  was  run  on  the  joint  account  of 
the  lessees  and  the  receiver,  and  the 
servants  employed  and  controlled  by 
them  jointly.  Both  Avere,  therefore, 
alike  responsible  for  the  act  com- 
plained of,  and,  if  so,  the  original  com- 
pany is  also  responsible  for  the  serv- 
ants under  such  an  employment  in 
legal  contemplation  and  are  as  much 
the  servants  of  the  receiver  as  of  the 
lessees  and  receiver  of  the  court."  God- 
frey V.  Ohio  &  M.  R.  Co.  116  Ind.  30; 
State  V.  Wabaxh  R.  Co.  115  Ind.  46C>; 
Bell  V.  Indianapolis,  C.  <&  L.  R.  Co.  53 
Ind.  57;  Mitz  v.  Buffalo,  G.  &  P.  R. 
Co.  58  N.  Y.  61;  Turner  v.  Hannibal 
d  St.  J.  R.  Go.  74  Mo.  602;  Kansas  <g 
G.  S.  L.  R.  Co.  V.  Dorough,  73  Tex. 
108;  Ryan  v.  Hnys,  62  Tex.  42;  Mem- 
phis  &  L.  R.  R.  Co.  v.  Stringfdlow,  44 
Ark.  322;  Thurman  v.  Cherokee  R.  Co. 
56  Ga.  376;  Davis  v.  Duncan,  19  Fed. 
Rep.  477. 

But  the  appointment  of  a  receiver 
does  not  relieve  the  company  from  the 
payment  of  a  tax  upon  gross  receipts. 
Philadelphia  dc  R.  R.  Co.  v.  Com.  104 
Pa.  80. 

The  statute  may,  however,  make  a 
corporation  liable, though  in  the  hands 
of  a  receiver.  Brockert  v.  Central 
Iowa  R.  Co.  82  Iowa,  '669;McNuUav. 


Ensch,  134  111.  46;  McNultaw.  Lock- 
ridge,  137  111.  270. 

If  the  corapuny  is  in  the  manage- 
ment of  the  road  and  a  receiver  in 
receipt  of  the  income,  the  company  is 
liable.  Pennsylvania  R.  Go.  v.  Jones, 
155  U.  S.  350,  39  L.  ed.  182.  And 
see  Washington,  A.  &  G.  R.  Co.  v. 
Brown,  84  U.  S.  17  Wall.  445,  21  L. 
ed.  675;  Clark  v.  Dyer,  81  Tex.  339; 
Louistille,  N.  A.  <&  C.  R.  Co.  v.  Canble, 
46  Ind.  277;  Central  Trust  Co.  v.  Wa- 
bash, St.  L.  &  P.  R.  Co.  26  Fed.  Rep. 
12;  Missouri  P.  R.  Co.  v.  Ilumes,  115 
U.  S.  572,  29  L.  ed.  463. 

'  Erwin  v.  Davenport,  9  Heisk.  44, 
but  he  is  not  personally  liable  for  neg- 
ligence of  his  employees,  as  a  general 
rule.  Ryan  v.  Hays,  62  Tex.  42;  Davis 
v.  Duncan,  19  Fed.  Rep.  477;  Gardot 
V.  Barney,  63  N.  Y.  281. 

'  Blumentlial  v.  Brainard,  38  Vt. 
402;  Paige  v.  Smith,  99  Mass.  395; 
Kain  v.  Smith,  80  N.  Y.  458. 

^A  receiver  exercising  the.  fran- 
chises of  a  road  under  the  direction  of 
court  is  responsil)le  officially  for  the 
negligence  of  his  servants.  Meara  v. 
Ilolbrook,  20  Ohio  St.  137;  Klein  v.' 
Jeioett,  26  N.  J.  Eq.  474;  PoUtn-  v. 
Bunnell,  20  Ohio  St.  150;  Coicdrcy 
V.  Galveston,  H.  &  H.  R.  Go.  93  U.  S. 
352,  23  L.  ed.  950;  Winbourn's  Case,  30 
Fed.  Rep.  167;  Pope's  Case,  30  Fed. 
Rep.  169;  Brown  v.  Wabash  R.  Co.  96 
111.  297;  Little  v.  Dusenberry,  46  N.  J. 
L.  614;  Brown  v.  Brown,  71  Tex.  355; 
Melendy  v.  Barbour,  78  Va.  544. 


RECEIVERSHIP  OF  RAILWAYS. 


517 


tract  existing  at  the  time  of  his  appointment  where  the  corpora- 
tion could  not  liave  been  compelled  to  perform  it.'  The  mere 
fact  that  a  leased  line,  formino;  part  of  a  unit  system  covered  by 
a  mortgage,  does  not  pay  expenses,  is  not  sufficient  justification 
for  the  receiver  to  disaffirm  the  lease  as  to  such  branch  line." 

§  286.     Effect  of  tlischarge  as  to  liability. 

The  liability  of  the  receiver  being  official  in  its  nature,  and  not 
personal,  it  follows  that  no  action  can  be  maintained  against  him 
after  he  has  been  discharged  growing  out  of  personal  injuries 
occasioned  by  the  negligence  of  his  agents  and  employees,  nor 
will  a  suit  pending  against  him  at  the  time  of  his  discharge  be 
continued  against  him."     And  where  injuries  have  been  sustained 


'A  receiver  appointed  to  conduct 
the  business  of  a  corpoialion  pending 
an  action  may  refuse  to  perform  a 
contract  which  was  still  executory  at 
the  lime  of  his  appointment,  and  the 
specitic  performance  of  which  could 
liot  have  been  enforced  against  the 
corporation;  and  such  refusal  does 
not  give  liability  under  the  contract 
a  preference  over  executed  contracts. 
Scott  v.  Rainiei'  Power  &  R.  Co.  13 
Wash.  108. 

Refusal  of  the  receivers  of  a  rail- 
road company  to  carry  out  a  contract 
by  the  company  for  the  purchase  of 
steel  rails  to  be  delivered  at  a  specified 
time  will  not  authorize  the  seller  to 
maintain  an  action  for  breach  of  the 
contract,  where  the  latter,  before  such 
refusal,  has  so  delayed  its  preparations 
for  performance  that  it  could  not  have 
the  rails  ready  for  delivery  at  the  time 
specified.  Diamond  State  Iron  Co.  v. 
San  Antonio  &  A.  P.  B.  Co.  (Tex.  Civ. 
App.)  33  8.  W.  987. 

'^  Receivers  of  a  branch  railroad  will 
not  be  permitted  to  disathrm  leases  of 
feeding  roads  where  a  mortgage  upon 
all  the  property,  including  the  leased 
lines,  contemplates  that  it  .shall  be 
operated  as  a  unit,  although  such  lines 
do    not    pay    expenses.       Mercantile 


Trust  Co.  v.  St.  Louis  cfe  S.  F.  R.  Co.  71 
Fed.  Rep.  GOl. 

Receivers  of  a  rai'road  company 
will  be  directed  to  carry  out  a  con- 
tract with  a  coal  and  iron  company 
under  which  the  latter  conveyed  to 
the  railroad  company  a  branch  road 
in  consideration  of  a  stipulation  on 
the  part  of  the  latter  to  pay  the  earn- 
ings of  such  branch  to  the  former  un- 
til the  cost  should  be  reimbursed  in 
full.  Fidelity  Ins.  T.  &  S.  D.  Co.  v. 
Norfolk  tfe  W.  R.  Co.  72  Fed.  Rep.  704. 

3  In  Ryan  v.  Hays,  62  Tex.  42,  a 
receiver  was  appointed  by  a  court  of 
competent  jurisdiction  on  the  appli- 
cation of  bond-holding  creditors,  and 
invested  with  exclusive  authority  to 
manage  and  carry  on  the  businea.s  of 
the  road  as  a  common  carrier,  subject 
to  the  supervision  of  the  court,  and 
with  all  the  rights  and  franchises  of 
the  corporation,  A  sale  was  made  of 
the  mortgaged  property  and  a  deed 
executed  to  the  purchasers.  Subse- 
quently the  purchasers  of  the  railroad 
property  conveyed  the  same  back  to 
the  original  company,  and  its  board 
of  directors  passed  a  resolution  ac- 
cepting from  the  receiver  the  property 
and  all  money  in  his  hands  and 
assumed     all    debts    and     liabilities 


518 


RECEIVERSHIPS. 


against  him  as  receiver.  The  receiver 
was  finally  discharged,  but  before 
such  discharge  suit  was  brought 
against  the  receiver  and  railroad 
company  to  recover  damages  for 
injuries  inllicled  on  the  plaintiff 
through  the  negligence  of  the  re- 
ceiver and  his  agents  while  in  his  ex- 
clusive charge.  Held  (1)  that  the  re- 
ceiver was  not  liable  after  all  the 
property  once  in  his  control  as  re- 
ceiver had  been  turned  over  to  the 
purchasers  and  after  he  had  received 
his  discharge.  (2)  That  his  liability, 
being  an  official  one,  ceased  at  his 
discharge,  except  where  he  was  per- 
sonally at  fault.  (3)  That  the  rela- 
tion of  master  and  servant  does  not 
technically  exist  between  a  railroad 
company  and  a  receiver  when  the 
company's  property  is  placed  in  his 
possession  by  the  proper  court.  (4) 
While  this  is  true,  the  profits  or  in- 
come of  the  property  while  in  the 
hands  of  the  receiver  are  responsible 
for  the  satisfaction  of  claims  for  in- 
juries resulting  from  the  negligence 
of  the  receiver  or  his  employees.  (5) 
The  railroad  company  was  not  re- 
sponsible for  damages  sustained  by 
plaintiff  through  the  negligence  of 
the  servants  of  the  receiver  further 
than  its  current  receipts  while  in  his 
hands,  and  the  company,  on  the  dis- 
charge of  the  receiver,  would  not  be 
responsible  merely  by  reason  of  their 
purchase  from  those  who  bought  at 
the  receiver's  sale.  See  also  Hick»  v. 
International  &  Q.  N.  B.  Co.  62  Tex. 
38;  International  &  Q.  N.  R.  Co.  v. 
Ormond,  62  Tex.  274. 

In  Brown  v.  Gay,  76  Tex.  444,  it  is 
held  that  the  sole  liability  of  a  re- 
ceiver, except  in  cases  where  he  is 
personally  at  fault,  is  official,  and  a 
discharge  of  the  receiver  and  return 
of  the  property  to  the  owner  would 
render  a  judgment  against  him  for 
injuries  fruitless.     See  also  Texas  P. 


R.  Co.  V.  Johnnon,  76  Tex.  421;  Bogga 
V.  Brown.  82  Tex.  41;  Texas  P.  R.  Co. 
V.  Overheiner,  76  Tex.  437;  2'exas  P. 
R.  Co.  V.  Oriffm,  76  Tex.  441;  Texas 
(It  P.  R.  Co.  V.  Ceic/er,  79  Tex.  13; 
Te.vas  &  P.  R.  Co.  v.  Miller,  79  Tex. 
81,  11  L.  R.  A.  395;  7'exas  &  P.  R.  Co. 
V.  Cotmiock,  8;i  Tex.  537;  Texas  &  P. 
R.  Co.  V.  Adams,  78  Tex.  372. 

In  Farmers'  Loan  &  T.  Co.  v. 
Central  R.  Co.  7  Fed.  Rep.  537,  it  is 
held  that  no  action  can  be  sustained 
against  the  receiver  of  a  railroad  com- 
pany after  his  discharge  and  the 
transfer  of  the  property  to  a  pur- 
chaser under  an  order  of  court  in  a 
foreclosure  proceeding. 

In  Farmers'  Loan  &  T.  Co.  v.  Cen- 
tral R.  Co.  17  Fed.  Rep.  758,  it  is  held 
that  where  a  receiver  is  discharged 
and  the  sale  of  the  property  confirmed 
with  a  provision  in  the  order  of  con- 
firmation that  the  purchaser  shall  pay 
all  debts  of  the  receiver  and  all  claims 
and  liabilities  pending  in  the  foreclo- 
sure case,  the  purchaser  at  such  sale 
cannot  be  permitted,  after  accepting 
the  property,  to  question  the  validity 
of  the  order,  and  it  is  the  proper  ex- 
ercise of  the  chancery  power  of  the 
court  on  surrendering  the  trust  prop- 
erly to  the  purchaser  to  retain  juris- 
diction of  the  original  case  and  enforce 
the  payment  of  the  debts  and  liabili- 
ties incurred  by  the  receiver  while 
operating  the  railway. 

In  Davis  v.  Duncan,  19  Fed.  Rep. 
477,  it  is  held  that  a  receiver  is  not 
personally  liable  for  the  torts  of  his 
employees,  and  only  when  he  com- 
mits the  wrong  himself  is  he  person- 
ally liable;  that  proceedings  against  a 
receiver  for  the  torts  of  his  employees 
is  in  the  nature  of  a  proceeding  in 
rem  and  renders  the  property  held  by 
the  receiver  liable  in  compensation 
for  such  injuries;  that  the  railroad 
company  is  not  liable  for  injuries  in- 
flicted by  a  receiver  or  his  servants 


RECEIVERSHIP  OF  RAILWAYS. 


519 


by  a  person  through  the  negligence  of  the  receiver's  agents  or 
employees,  and  the  receiver  has  been  discharged  and  the  property 
restored  to  the  company,  the  company  in  such  case  becomes  liable 
for  the  damage  resulting  from  such  injury  if  during  the  receiver- 
ship the  current  receipts  have  been  applied  towards  betterments 
or  permanent  improvement  of  the  road,  at  least  to  the  extent  of 
such  diversion.'     And  in  case  the  property  of  the  company  has 


while  its  property  was  in  the  hauds 
of  a  receiver  and  when  it  was  out  of 
possession,  having  no  control  over  it. 

In  Brown  v.  Wabash  R.  Co.  96  HI- 
297,  it  was  provided  in  the  deed  of 
sale  "that  said  estate  and  interest  are 
hereby  cliarged  witli  and  shall  pass 
by  virtue  of  these  presents  subject  to 
the  payment  of  all  liabilities  incurred 
in  respect  to  the  said  railroad  or  its 
business  by  said  receiver."  Held  that 
the  purchase  under  the  deed  was  sub- 
ject for  the  payment  of  such  liabili- 
ties as  the  receiver  had  incurred  while 
he  had  possession  of  the  road.  And 
it  seems,  in  such  a  case,  if  a  receiver  is 
liable  for  the  personal  injuries  arising 
from  the  negligent  management  of  a 
road  the  party  injured  or  his  repre 
sentative  must  first  sue  at  law  and 
settle  the  question  of  the  receiver's 
liability  and  the  amount  of  damages, 
and  then  file  his  bill  against  the  grantee 
company;  that  a  bill  in  equity  will 
not  be  maintained  in  the  first  instance. 

In  Sloan  v.  Central  Iowa  R.  Co.  62 
Iowa,  728,  it  is  held  under  §§  1278 
and  1307  of  the  Code  that  the  prop- 
erty in  the  hands  of  a  receiver  is  lia- 
ble for  the  claim  of  an  employee  for 
injuries  received  through  the  negli- 
gence of  coemployees. 

In  Schmid  v.  Neio  York,  L.  E.  &  W. 
R.  Co.  33  Hun,  335,  the  railroad  prop- 
erty was  solil  under  an  order  of  fore- 
closure to  certain  parties,  as  trustees, 
subject  to  all  lawful  indebtedness  of 
the  receiver,  made  or  incurred  by  him 
during  his  receivership,  which  indebt- 


edness was  made  a  lien  upon  the 
premises  prior  to  the  lien  of  the  mort- 
gages. Subsequently  the  purchasers 
conveyed  the  property  to  the  defend- 
ant company,  also  making  the  con- 
veyance subject  to  the  debts  and  lia- 
bilities, after  which  the  receiver  was 
discharged.  It  was  held  that  the 
plainlifi:  could  maintain  an  action 
against  the  grantee  of  the  purchaser 
to  recover  the  amount  of  her  judg- 
ment, or  to  have  the  same  declared  a 
lien  upon  the  property  so  sold  and 
satisfied  by  the  sale  thereof.  See  also 
Pennsylvania  Finance  Co.  v.  Charles- 
ton, C.  &  C.  R.  Co.  46  Fed.  Rep.  508. 

'  Texas  &  P.  R.  Co.  v.  Huffinan,  83 
Tex.  286.  In  this  case  it  is  held  that 
a  railroad  company  is  not  liable  for 
the  negligence  of  its  receivers,  ipso 
facto,  but  where  it  is  alleged  and 
proved  on  trial  that  the  earnings  of 
the  road  while  in  the  hands  of  a  re- 
ceiver had  been  invested  in  better- 
ments of  the  property  and  then  turned 
over  to  the  company,  the  company  is 
responsible,  on  the  ground  that  it  has 
received  the  benefit  of  the  fund  which 
was  primarily  liable  for  the  damages 
occasioned  by  the  act  of  the  receiver. 
Te.ias  P.  R.  Co.  v.  Johnson,  76  Tex. 
421;  Texas  P.  R.  Co.  v.  Orijin,  76 
Tex.  441;  Mobile  &  0.  R.  Co.  v.  Davis, 
62  Miss.  271. 

A  railroad  company  cannot  be  held 
.iable  for  breach  of  a  receiver's  con- 
tracts or  his  torts,  by  mere  proof  that 
upon  his  discharge  it  received  the 
property  from  him,  in  the  absence  of 


620 


RECEIVERSHIPS. 


been  sold  under  a  foreclosure  proeeediui^  and  the  purchaser  at 
such  sale  has  assumed  all  the  receiver's  liabilities,  or  the  purchase 
is  made  subject  to  the  liabilities  ai^ainst  the  property,  the  pur- 
chaser becomes  liable  therefor,  and  the  person  entitled  to  damai^es 
ma}'  recover  the  same  in  an  action  at  law  a^^ainst  the  purchaser,' 
or  the  court  making  the  foreclosure,  if  it  retains  jurisdiction  for 
that  purpose,  may  enforce  the  payment  against  the  purchaser.* 
As  we  have  elsewhere  seen,  the  court  will  not  permit  the  receiver 


evidence  of  betterments  to  the  road 
from  the  net,  earnings  realized  by  the 
receiver.  Missouri,  K.  &  T.  R.  Co.  v. 
McFadden  (Tex.)  33  S.W.  853. 

Failure  to  assert  a  claim  against  a 
railroad  company  while  the  property 
is  in  the  hands  of  a  receiver,  aild  the 
presentation  of  another  claim  by  the 
same  claimant,  which  is  paid,  do  not 
estop  him  to  assert  such  claim  after 
the  property  is  turned  over  to  the  cor- 
poration by  the  receiver  without  a 
sale.  Diamond  State  Iron  Co.  v.  Sa}i 
Antonio  &  A.  P.  Ji.  Co.  (Tex.  Civ. 
App.)  33  S.W.  987. 

'  In  Farmers'  Loan  &  T.  Co.  v.  Cen- 
tral R.  Co.  17  Fed.  Rep.  758,  the 
claims  for  damages  were  filed  in  the 
foreclosure  proceeding,  pursuant  to 
the  terms  of  the  order  of  court,  and 
under  the  statute  of  Iowa  the  claims 
were  entitled  to  a  lien  upon  the  railroad 
for  the  amount  of  damages  from  the 
time  of  recovering  judgment.  The 
receiver  was  not  personally  liable,  but 
the  property  in  his  hands  was  liable 
and  could  be  reached  by  suit  in  form 
against  the  receiver. 

In  Schmid  v. New  York,  L. E.  &  W. R. 
Co.  32  Hun, 335, the  action  was  brought 
by  the  plaintiff  against  the  receiver 
and  a  judgment  recovered  against  him. 
SubsequentI}',  plaintiff's  judgment 
not  being  paid,  an  action  was  brought 
for  the  amount  of  the  claim,  claiming 
a  lien  on  the  property  sold  by  the  re- 
ceiver.    See   also  Ryan  v.  Bays,  62 


Tex.  42;  Hicks  v.  International  <&  G. 
JV.  It.  Co.  62  Tex.  38;  International  & 
G.  JSr.  R.  Co.  V.  Ormond,  62  Tex.  275. 
But  see  Ohio  &  M.  R.  Go.  v.  Nickless, 
73  Ind.  383. 

In  Brown  v.  Wabash  R.  Co.  96  111. 
297,  a  bill  in  equity  was  brought  by 
Brown  as  administrator  against  the 
railway  company  on  account  of  an 
accident  occurring  while  the  railway 
was  in  the  hands  of  the  receiver. 
The  basis  of  the  action  was  to  recover 
in  an  action  of  equity  unliquidated 
damages  for  personal  injury,  and  it 
was  held  that  there  being  a  remedy  at 
law  the  court  would  not  take  juris- 
diction. The  court  say:  "A  court 
of  chancery  is  not  a  forum  in  which 
the  question  of  damages  should  be 
settled ;  if  it  was,  the  sacred  right  of 
trial  bj-  jury  could  easily  be  abrogated 
and  set  aside  by  merely  resorting  to 
such  a  tril)uual." 

A  purchaser  of  a  railroad  is  liable 
for  damages  caused  by  negligence  of 
a  receiver  if  the  betterments  upon  the 
road  by  the  receiver  subsequent  to  the 
sale,  and  the  earnings  turned  over  to 
the  purchaser,  exceeded  in  value  the 
liabilities  imposed  upon  the  purchaser 
by  the  decree  of  the  court  and  the 
operating  expenses  of  the  receiver 
and  claims  for  damages  against  him. 
Houston  &  T.  C.  R.  Co.  v.  Kelly  (Tex. 
Civ.  App.)  35  S.W.  878. 

^Farmers'  Loan  &  T.  Co.  v.  Central 
R.  Co.  17  Fed.  Rep.  758. 


RECEIVERSHIP  OF  RAILWAYS. 


521 


to  be  sued  without  its  permission  lirst  obtained,'  except  in  actions 
in  tlie  Federal  court,  where  by  act  of  Congress  the  rule  has  been 
changed." 


^Palys  v.Jewctt,  82  N.  J.  Eq.  302; 
Melendy  v.  Bavbnur,  78  Va.  544. 

In  Kinney  v.  Crocker,  18  Wis.  74,  it 
is  held  that  the  courts  of  Wisconsin 
have  jurisdiction  in  actions  for  inju- 
ries agaiust  a  receiver  appoinled  by 
the  United  Slates  court  without  leave 
to  bring  such  action.  Barton,  v.  Bar- 
bour, 104  U.  S.  126,  26  L.  ed.  672; 
Blumenthal  v.  Brainard,  38  Vt.  402; 
Lyman  v.  Centrdl  Vermont  R.  Co.  59 
Vt.  167;  Pacific  R.  Co.  v.  Wade,  91  Cal. 
449,  13  L.  R.  A.  754. 

^lu  Eddy  v.  Lafayette,  49  Fed.  Rep. 
807,  it  is  held  that  the  act  of  March 
3,  1887,  was  intended  to  place  receiv- 
ers of  railroad  companies  upon  the 
.same  plane  with  the  railroad  compa- 
nies, both  as  respects  their  liability  to 
be  sued  for  acts  done  while  operating 
the  road,  and  as  respects  the  mode  of 
service  of  process. 

In  Central  Trust  Co.  v.  East  Ten- 
nessee, V.  &  G.  R.  Co.  59  Fed.  Rtp. 
523,  it  is  held  that  the  Judiciary  Act 
of  1887  and  1888  is  not  restricted  to 
the  courts  having  jurisdiction  of  the 
receiver  and  the  property  or  to  the 
Federal  courts  generally,  but  extends 
to  any  court  of  competent  jurisdic- 
tion, and  the  appointing  court  has  no 
power  to  enjoin  the  bringing  of  such 
suits  in  any  other  than  the  Federal 
courts.  See  Texas  &  P.  R.  Co.  v. 
Johnson.  151  U.  S.  8'x,  38  L.  ed.  81. 
See  also  Dillingham  v.  Russell.  73  Tex. 
47,  3  L.  R.  A.  (m; Southern  P.  R.  Co. 
V.  Maddox,  75  Tex.  300;  Barton  v. 
Barbour,  104  U.  S.  126,  26  L.  ed.  672; 
Kinney  v.  Crocker,  18  Wis.  75;  Me- 
lendy V.  Baibour,  78  Va.  544. 

In  Central  Trust  Co.  v.  St.  Louis,  A. 
&  T.  R.  Co.  40  Fed.  Rep.  426,  it  is 
held  that  where  receivers  of  a  railroad 


running  through  Arkansas,  and  who 
were  appointed  in  that  case,  had  re- 
moved into  another  state,  the  court 
would  authorize  them  to  be  sued  in 
the  slate  of  Arkansas  by  service  on 
their  station  agents  or  clerks  therein. 
Prior  to  the  Act  of  Congress  it  had 
been  the  rule  in  the  state  courts  of 
Arkansas  to  permit  a  receiver  of  a 
railroad  to  be  sued  without  special 
leave  of  court. 

In  Missouri  P.  R.  Co.  v.  Te.ms  P.  R. 
Co.  41  Fed.  Rep.  311,  it  is  held  that 
a  judgment  rendered  in  an  action  in  a 
Slate  court  agaiust  a  receiver  appointed 
in  an  action  in  the  circuit  court  insti- 
tuted prior  to  the  passage  of  the  ju- 
diciary act  of  March  3,  1887,  and 
which  had  been  brought  without  the 
consent  of  the  court  appointing  such 
receiver  was  not  conclusive  as  to  him 
but  was  subject  to  the  equity  juris- 
diction of  the  court  appointing  him. 

In  Central  Trust  Co.  v.  St.  Louis,  A. 
&  T.  R.  Co.  41  Fed.  Rep.  551,  it  is 
held  that  when  a  stale  court  has  ju- 
risdiction of  the  parties  and  the  sub- 
ject matter  their  judgment  against  the 
receiver  of  a  Federal  court  is  as  final 
and  conclusive  as  it  is  against  any 
other  suitor;  that  it  is  not  within  the 
jurisdiction  of  the  United  States  cir- 
cuit court  to  annul,  vacate,  or  modify 
the  judgment  of  stale  courts,  and  this 
rule  is  not  affected  by  the  last  clause 
of  the  3rd  section  of  the  Act  of  Con- 
gress of  August  13,  1888  (35  Stat,  at 
L.  430). 

A  receiver  of  a  railroad  appointed 
by  a  Federal  court  is  not  entitled  un- 
der the  Act  of  March  3,  1887,  chap. 
373.  §  3  (24  Stat,  at  L.  552-554),  to  im- 
munity from  suit  for  acts  done  by  his 
predecessor  without  previous  permis- 


r.95 


RECEIVERSHIPS. 


§  287.    Receivers'  certificates. 

The  principles  involved  in  the  matter  of  receivers'  certificates 
have  been  so  fully  considered  elsewhere  that  but  a  passing-  notice 
will  be  given  the  subject  in  tliis  connection.  A  few  general  rules 
relatiuii;  to  it  may  be  stated  as  follows : 

(a)  These  certificates  are  issued  under  the  authority  and  direc- 
tion of  the  court  and  are  evidences  of  indebtedness  entitling  the 
holder  to  receive  from  the  receiversliip  funds  the  amount  specified 
therein  if  the  fund  is  sufficient  for  such  purpose,  and,  if  uot,-djjro 
raid  share  with  other  holders  of  certificates. 

(b)  They  have  not  the  element  of  negotial)ility  that  ordinarily 
attaches  to  commercial  paper,  and  are  subject  to  all  the  equities 
existing  against  the  payees,  notwithstanding  the  assignment 
thereof.' 

(c)  The  holder  takes  this  class  of  paper  with  notice  of  the 
authority  and  purposes  for  which  it  is  issued,  and  that  it  is  pay- 
able solely  from  the  funds  of  the  receivership,  and  that  there  is 


sion  given  by  Ihat  court,  affirming 
same  case  in  McNuUa  v.  Lockridge, 
137  111.  270. 

In'  Texas  d.  P.  E.  Co.  v.  Cox,  145  U. 
S.  593.  3G  L.  ed.  829,  it  is  held  that 
the  proviso  in  §  6  of  the  Act  of  March 
3,  1887,  does  not  limit  the  operation 
of  §  3  of  that  Act  as  corrected  by  the 
Act  of  August  13,  1888,  and  the  cir- 
cuit court  of  the  United  Slates  may 
take  jurisdiction  of  an  action  against 
the  receiver  or  manager  of  the  prop 
erty  appointed  by  it  without  previous 
leave  obtained,  although  the  action  is 
commenced,  before  the  enactment  of 
the  statute.  The  court  say:  "As  ju- 
risdiction without  leave  is  maintain- 
able through  the  Act  of  Congress,  and 
as  the  receivers  become  such  by  rea- 
son of  and  derive  their  authority  from 
and  operate  the  road  in  obedience  to 
the  orders  of  the  circuit  court  in  the 
exercise  of  its  judicial  powers,  we 
hold  the  jurisdiction  existed  because 
the  suit   was  one  arising  under  the 


Constitution  and  laws  of  the  United 
Slates,  and  this  is  in  harmony  with 
previous  decisions."  Buck  v.  Colbath, 
70  U.  S.  3  Wall.  334,  18  L.  ed.  257; 
Feibdman  v.  Packard,  109  U.  S.  421, 
27  L.  ed.  984;  Bock  v.  Perkins,  139  U. 
S.  628,  35  L.  ed.  314. 

'  Union  Trust  Co.  v.  Illinois  M.  R. 
Co.  117  U.  S.  434,  29  L.  ed.  963;  Tur- 
ner V.  Peoria  &  S.  R.  Co.  95  111.  134. 
Receivers'  certificates,  being  merely 
evidences  of  indebtedness,  have  no 
higher  character  than  the  debts  which 
they  represent.  Fidelity  Ins.  &  S.  D. 
Co.  V.  Shenandoah  Iron  Co.  42  Fed. 
Rep.  372. 

The  doctrine  that  claims  furnished 
to  a  railroad  corporation  before  the 
appointment  of  receivers  may  have  a 
preference  over  the  lien  of  a  mort- 
gage does  not  apply  to  mining  or 
manufacturing  companies.  Fidelity 
Ins.  tfe  5.  D.  Co.  V.  Slunandoah  Iron 
Co.  supra. 


RECEIVERSHIP  OF  RAILWAYS. 


523 


no   responsible  principal  back    of  them   to    be    made    liable    in 
case  of  default.' 

(d)  In  case  of  private  corporations  such  certificates  are  not  as  a 
rule  made  preferential  to  existino;  liens,  but  may  be  made  so  in 
case  of  public  corporations,  such  as  railways." 


'  Bank  of  Montreal  v.  Chicago,  C.  & 
W.  R.  Co.  48  Iowa.  518;  titanton  v. 
Alabama  &  C.  R.  Co.  2  Woods,  506; 
Wesson  v.  Chapman,  77  Hun,  144; 
Newborn  V.  Peoria  &  K  R.  Co.  5  111. 
App.  367;  Mercantile  Trust  Co.  v. 
Kanaicha  &  0.  R.  Co.  50  Fed.  Rep. 
874;  Turner  v.  Peoria  &  S.  R.  Co.  95 
111.  134. 

Ceilificates  issued  without  author- 
ity are  invalid  and  of  no  effect.  Stan- 
ton V.  Alabama  &  C.  R.  Co.  31  Fed. 
Rep.  585. 

The  holder  is  put  upon  inquiry  as 
to  what  has  been  done  in  the  litiga- 
tion in  which  the  certificates  are 
issued,  and  is  charged  with  notice 
of  subsequent  proceedings  therein. 
Union  Trust  Co.  v.  Illinois  M.  R.  Co. 
117  U.  S.  434,  29  L.  ed.  963. 

*  Farmers'  Loan  &  T.  Co.  v.  Orape 
Creek  Coal  Co.  50  Fed.  Rep.  481,  16 
L.  R.  A.  603;  Kennedy  v.  St.  Paul  & 
P.  R.  Co.  2  Dill.  448;  Bou7id  v.  South 
Carolina  R  Co.  50  Fed.  Rep.  312; 
Jerome  v.  Mc Carter,  94  U.  S.  734,  24 
L.  ed.  136;  Wallace  v.  Loomis,  97  U.  S. 
146.  24  L.  ed.  895;  Fosdick  v.  Schall, 
99  U.  S.  235,  25  L.  ed.  339;  Barton  v. 
Barbour.  104  U.  S.  126,  26  L.  ed.  672; 
Miltenberfjer  v.  Logans'port,  C.  &  S.  W. 
R.  Co.  106  U.  S.  286,  27  L.  ed.  117; 
Union  Trust  Co.  v.  Illinois  M.  R.  Co. 
117  U.  S.  434,  29  L.  ed.  963;  Burn- 
ham  V.  Bowen,  111  U.  S.  776,  28  L.  ed. 
596;  Wood  v.  Guarantee  Trust  &  S.  D. 
Co.  128  U.  S.  421,  32  L.  ed.  473;  Knee- 
land  V.  American  Loan  &  T.  Co.  136 
U.  S.  89,  34  L.  ed.  379;  Morgan's 
Louisiana  &  T.  R.  &  S.  S.  Co.  v.  Texas 
C.  R.  Co.  137  U.  S.  171,  34  L.  ed.  625; 


Kneeland  v.  Luce,  141  U.  S.  491,  35 
L.  ed.  830. 

When  a  railroad  and  mineral  prop- 
erty are  dependent  for  their  value, 
both  may  be  charged  by  certificaies, 
pending  a  creditors'  suit,  to  obtain 
money  to  reconstruct  a  bridge,  and 
such  certificates  may  be  made  a  prior 
lien.  Karn  v.  Rorer  Iron  Co.  86  Va. 
754. 

Receivers'  certificates  issued  to  a 
promoter  of  a  corporation  for  money 
advanced  to  pay  for  improvements 
put  on  the  corporate  property  will 
not  be  given  priority  over  the  rights 
of  the  seller  of  the  property,  who 
waived  his  lien  upon  the  fraudulent 
guaranty  by  another  promoter  at  the 
time  of  the  sale  that  money  was  in  his 
possession  which  would  be  applied  to 
pay  for  such  improvements.  Hooper 
V.  Central  Trust  Co.  (Md.)  29  L.  R.  A. 
262. 

AVhere  the  receiver  of  a  railroad 
company  was  directed  to  issue  cer- 
tificates to  pay  specific  expenses  in- 
curred by  his  predecessor,  and  to  be 
payable  to  the  persons  to  whom  de- 
livered or  order, — Held,  that  the 
holder  of  one  issued  to  S,  or  bearer, 
and  negotiated  by  mere  delivery, 
would  take  subject  to  all  equitable 
defenses  against  the  payee,  and  the 
printed  order  of  the  court  on  the 
back  was  notice  to  him  that  it  was 
made  payable  to  bearer  contrary 
thereto.  2'urner  v.  Peoria  <&  S.  R 
Co.  95  111.  134. 

First  mortgage  bondholders  of  a 
corporation,  protesting  against  the 
issuance   of  receivers'   certificates  to 


524 


RECEIVERSHIPS. 


(e)  It  is  an  essential  to  the  validity  of  such  certificates  that 
tlioy  shall  he  issued  and  delivered  for  the  ])nrposes  authorized  hy 
the  court.' 

(f)  They  are  authorized  with  tiie  greatest  caution  hy  the  court 
and  oidy  when  the  necessity  therefor  is  clear  and  their  propriety 
not  seriously  questioned.^ 


pay  for  work  to  be  done  under  a  con- 
triicl  approved  by  the  court  and  pro- 
viding for  payment  in  cash,  or  such 
certificates,  are  entitled  to  be  heard  as 
to  whether  such  certificates  should 
be  issued.  Dm'n  v.  Crank,  96  Cal. 
383. 

Receivers'  certificates  issued  under 
an  order  made  after  a  decree  of  fore- 
closure and  sale  of  property,  which 
contain  on  their  face  a  provision  au- 
tliorized  by  the  order  making  them  a 
lien  on  the  property,  will  constitute  a 
first  lien  thereon,  if  the  order  is  not 
appealed  from.  Ex  parte  Farmers 
Loan  &  T.  Co.  129  U.  S.  206.  32  L.  ed. 
656. 

The  power  of  court  to  authorize  the 
issuance  of  receivers'  certificates,  and 
to  make  them  a  charge  upon  a  rail- 
road and  its  property  superior  to  the 
lien  of  mortgages  and  statutory  liens, 
is  to  be  exercised  with  great  caution, 
and  when  possible  with  consent  or 
acquiesence  of  the  parties  interested 
in  the  funds.  Inveatment  Co.  v.  Ohio 
<&  iV.  11'.  R.  Co.  36  Fed.  Rep.  48. 

The  petition  of  a  receiver  of  an  in- 
solvent railroad  company  to  borrow 
money  and  iss\ie  certificates  therefor, 
for  the  purpose  of  completing  im- 
provements already  begun,  will  not 
be  granted  if  it  is  doubtful  whether 
the  selling  price  of  the  road  would  be 
enhanced  thereby  except  upon  con- 
sent of  the  bondholders  and  lien- 
holders  interested.  Investment  Go.  v. 
Ohio  &  N.  W.  R.  Co.  supra. 

An  order  made  upon  the  consent  of 
some  of  the  interested   bondholders 


and  lienholders  authorizing  the  re- 
ceiver to  borrow  money  and  issue 
certificates  for  improvements,  will 
not  be  made  a  charge  upon  the  in- 
terest or  affect  the  lien  of  noncon- 
senting  parties,  unless  it  is  made  clear 
to  the  court  that  the  value  of  the  road 
will  be  so  increased  by  the  improve- 
ments to  such  extent  as  to  make  it 
equitable  to  require  them  to  pay  their 
ratable  proportion  of  the  cost.  In- 
mstinent  Co.  v.  Ohio  &  N.  W.  R.  Co. 
snpra. 

A  circuit  judge  may  authorize  the 
receiver  of  a  railroad  to  issue  his  cer- 
tificates to  procure  funds  for  the 
maintenance  of  the  road,  under  S.  C. 
Rev.  Stat,  t^  2244,  providing  that  such 
court  shall  always  be  open  for  the 
purpose  of  making  all  interlocutory 
orders  preparatory  to  the  hearing  of 
all  causes  on  their  merits,  and  that 
any  judge  may  make  such  order. 
Slate  V.  Port  Royal  &  A.  R.  Co.  (S.  C.) 
23  S.  E.  363.  Cf.  Bank  of  Montreal 
V.  Chicago,  C.  &  W.  R.  Co.  48  Iowa, 
518:  Coe  V.  New  Jersey  M.  R.  Co-.  27 
N.  J.  Eq.  37;  Hoover  v.  Montclair  & 
O.  L.  R.  Co.  29  N.  J.  Eq.  4;  Gibert  v. 
WasJdngton  City,  V.  M.  <&  G.  S.  R.  Co. 
33  Gratt.  586;  Meyer  v.  Johnston,  53 
Ala.  237. 

'  Stanton  v.  Alabama  &  C  R.  Co.  31 
Fed.  Rep.  585;  Union  Trust  Co.  v. 
Chicago  &  L.  H.  R.  Co.  7  Fed.  Rep. 
513. 

^  Meyer  V.  Johnston,  53  Ala.  237; 
Wallace  v.  Loomis,  97  U.  S.  146,  24  L. 
ed.  895;  Jerome  v.  McCarter,  94  U.  S. 
734,  24  L.  ed.  136;  Hoover  v .  Montclair 


RECEIVERSHIP  OF  RAILWAYS. 


525 


(g)  The  court,  having  ordered  the  issuing  of  receiver's  certifi- 
cates, sliould  see  tliat  the  holders  are  protected  by  the  final  decree 
either  by  requiring  the  purchaser  to  assume  their  payment,  or 
providing  for  their  payment  from  tlie  sale  proceeds.' 

(h)  A  receiver,  having  deposited  the  money  realized  on  the  sale 
of  certificates  and  checked  against  the  same,  is  estopped  from 
questioning  the  validity  of  certificates  in  the  hands  of  an  innocent 
purchaser.* 


c6  O.  L.  R.  Co.  29  K  J.  Eq.  4;  Smith 
V.  McCullovgh,  104  U.  S.  25,  26  L. 
cd.  637;  Millenberger  v.  Logansport,  C. 
&8.  W.  R.  Co.  106  U.  S.  286,  27  L. 
ed.  117;  Street  v.  Maryland  C.  R.  Co. 
59  Fed.  Rep.  25. 

'  Where  a  decree  of  sale  provides  for 
the  payment  of  the  undue  principal 
of  certain  receivers'  certificates  and 
interest,  it  cannot  be  ciairaed  by  the 
purchaser  that  the  lien  for  such  prin- 
cipal and  interest  extends  only  to  the 
amount  originally  paid  to  the  receiver. 
Central  Nat.  Bank  v.  Hazard,  30  Fed. 
Rep.  484.  Cf.  Mercaiitile  Trust  Co.  v, 
Kanawha  &  0.  R.  Co.  58  Fed.  Rep.  6; 
Wesson  v.  Chapman,  76  Hun,  592. 

The  court,  when  it  has  authorized 
the  issuance  of  certificates,  with 
knowledge  of  all  parlies  in  interest, 


will  protect  the  holders  thereof. 
Humphreys  v.  Allen,  101  111.  490; 
Union  Trust  Co.  v.  Illinois  M.  R.  Co. 
117  U.  S.  434,  29  L.  ed.  963;  Millen- 
berger V.  Logansport,  C.  &  S.  W.  R.  Co. 
106  U.  S.  286,  27  L.  ed.  117;  Central 
IVust  Co.  V.  Seasongood,  130  U.  S.  482, 
32  L.  ed.  985;  Kneeland  v.  Luce,  141 
U.  S.  491,  35  L.  ed.  830;  Alabama 
Iron  &  R.  Co.  v.  Anniston  Loan  &  T. 
Co.  57  Fed.  Rep.  25;  Mercantile  Trust 
Co.  V.  Kanawha  &  0.  R.  Co.  58  Fed. 
Rep.  6;  Cordon  v.  Neicman,  62  Fed. 
Rep.  686;  Laughlin  v.  United  States 
Rolling-stock  Co.  64  Fed.  Rep.  25; 
Snow  V.  Winslow,  54  Iowa,  200;  Lang- 
don  V.  Vermmt  &  C.  R.  Co.  53  Vt.  228; 
Stevens  v.  Union  Trust  Co.  5  Hun,  498 
'•^  Alabama  Iron  &  R.  Co.  v.  Anniston 
Loan  cfc  T.  Co.  57  Fed.  Rep.  25. 


CHAPTER  XV. 


RECEIVERSHIP  IN  DECEDENTS'  ESTATES. 


^  300.   Pertaining    to   decedents'  es- 
tates. 

(a)  General. 

(b)  Contests  over  wills. 

§  301.  As  to  executors  and  adminis- 
trators, 
(a)  When  appointed, 
(i)  Violation  of  trust;  waste, 

etc. 
(f)  Insolvency    of    executor; 

waste,  etc. 
{3)  Removal  from  state. 

(4)  Death  of;  refusal  to  act. 

(5)  Property  devised    belong- 

ing to  another. 

(6)  Misapplication  of  executor; 

fraud. 

(7)  No  one  competent  to  act. 

(8)  Contest    between    foreign 

and  local  administrator. 

(9)  Nonresident  executor. 
(10)  Property  in  foreign  coun- 
try. 


(11)  Bankruptcy  of  executor. 

(12)  Conversion  of  trust  prop- 

erty by  executor. 

(13)  In  matter  of  fraud. 

(l/f)  Refusal  to  obey  order  of 
court.    Illegal  trust. 

(b)  AVhen  not  appointed. 

(1)  Poverty  of  executor  or  ad- 
administrator. 

(S)  Creditor's  proceeding  pend- 
ing at  death  of  testator. 

(3)  Application  of  surety  on 

bond,  etc. 

(4)  When    defendant    is    sol- 

vent. 

(5)  When  complaint  not  ade- 

quate. 

(6)  When   misapplication  not 

clearly  shown. 

(c)  Misconduct  and    refusal    to 

act. 

(d)  Where  no  one  competent  to 

act. 


§  300.    Receivership  in  decedents'  estates. 

(a)  General. 
A  court  of  chaiiceiy  will  not  interfere  in  matters  concerning 
the  ad n illustration  of  an  estate,  and  take  the  administration  from 
those  -who  by  law  are  entitled  to  it,  except  in  cases  where  there 
appears  to  be  an  ui-gent  necessity  in  order  to  preserve  and  pro- 
tect the  property  from  injury  and  loss,  or  where  there  is  no  one 
legally  com])eteiit  to  administer,  or  where  those  charged  with  the 
duty  are  violating  the  trust  imposed  in  them  by  law.  The  rea- 
son for  this  rule  is  in  the  principle  that  where  the  law  has  cre- 
ated an  office  and  charged  the  occupant  with  the  duties  apper- 
taining thereto,  no  court  will  willingly  step  in  and,  through  its 
officers,  assume  the  functions  of  the  legally  constituted  authori- 
ties, and  particularly  so  where  another  court  is  given  jurisdiction 

526 


RECEIVERSHIP  IN  DECEDENTS'  ESTATES.  527 

to  adeqimtel}'^  and  completely  protect  the  interests  of  all  par- 
ties concerned,  as  in  the  administration  of  estates.  The  probate 
courts,  and  those  of  similar  jurisdiction,  are  usually  clothed  with 
ample  and  complete  power  in  this  regard. 

(b)  Contests  over  wills. 

Where  there  is  a  contest  between  parties  interested  in 
estate,  growino;  out  of  the  validity  of  a  will,  and  a  receiver  has 
been  appointed  prior  to  the  appointment  of  an  administrator 
jpendente  lite,  and  the  contest  is  likely  to  be  protracted,  it  is 
proper  to  order  the  receiver  to  turn  over  to  the  administrator 
jpendente  lite  the  personal  and  real  estate  belonging  to  the  testate. 
This  is  based  upon  the  fact  that  the  orphans'  court  appointing 
the  administrator  is  the  proper  court  for  the  adjudication  of  the 
matters  in  dispute,  and  the  jurisdiction  of  the  chancery  court 
was  temporary  and  for  the  purpose  of  preserving  the  property 
until  such  time  as  the  proper  court  appointed  a  person  with  full 
power  to  protect  and  preserve  the  property.' 

AYhere  an  administrator  of  a  life  estate  has  been  appointed  and 
has  partially  administered  the  estate,  a  receiver  will  not  be  ap- 
pointed, however  proper  it  might  have  been  to  do  so  in  the  first 
instance.'' 

Where  land  has  been  devised  to  two  persons  under  a  will,  and 
subsequent  to  the  execution  of  the  will,  the  testator  conveyed  part 
of  the  land  to  one  of  the  legatees,  who  entered  upon  such  land  and 
operated  the  same  as  mining  property,  and  it  appears  that  there  is 
danger  of  waste  of  the  property,  and  the  solvency  of  the  legatee 
and  grantee  was  doubtful,  the  court  may  appoint  a  receiver,  it 
also  appearing  tiiat  the  land  was  charged  by  the  testator  with 
the  payment  of  debts.  In  such  case,  it  appearing  that  the  prop- 
erty over  which  a  receiver  was  asked  to  be  appointed  was  mining 

'Acourt  of  chancery  cannot  appoint  "  Wliere   an   administer   for   a  life 

a  receiver  after  the  granting  of  let-  tenant  has  been  appointed  and  has 

ters  pendente  lite  b}'  the  orplian's  court,  partially  administered  Die  trust  estate, 

and   if    such   receiver  has  been   ap-  a  receiver  for  such  estate  will  not  be 

pointed     prior    thereto,    his    powers  appointed.      Shannon    v.    Davis,    64 

cease  after  the  grant,  and  he  will  be  Miss.  717. 
discharged    and   directed    to   deliver 
over  the  property  to  such  administra- 
tor.    Re  Colvin,  3  Md.  Ch.  278. 


528 


RECEIVERSHIPS. 


property  and  inacliincry  for  operating  such  mines,  every  bene- 
ticial  and  legitimate  object  will  be  attained  l)y  leaving  the  oper- 
ations to  go  on  as  before,  and  requiring  returns  to  be  made  to 
the  appointee  from  time  to  time,  and  securing  the  same  by  bond, 
conditioned  for  the  payment  of  the  proceeds  as  ordered  by  the 
court.' 

§  301.    As  to  executors  and  administrators. 

(a)    AViIKN  APPOINTED. 

As  we  have  ah'eady  seen  in  the  case  of  testamentary  trustees, 
the  court  will  sometimes  appoint  a  receiver  of  property  in  the 
hands  of  executors  and  administrators,  but  in  all  such  cases  there 
must  be  a  strong  case  made  out  establishing  immediate  danger  to 
the  trust  fund  or  property.  This  must,  of  necessity,  be  the  ride 
for  the  reason  that  the  wishes  of  the  testator  would  be  disregarded 
in  case  of  executors  or  the  orders  of  a  court  of  co-ordinate  juris- 
diction be  aimuUed  in  case  of  administrators.  A  receiver  may  be 
appointed  in  lieu  of  an  administrator,  or  executor.  (/)  Where  it 
is  shown  that  the  trust  has  been  clearly  violated,  resulting  in  waste 
or  misappropriation,*  or  that  such  a  result  is  probable ;  {2)  or  that 


'  Stith  V.  Jones,  101  N.  C.  360.  This 
requirement  is  peculiarly  applicable 
where  the  party  in  possession  is  a 
legatee  under  the  will  and  also  claims 
the  property  under  a  deed  from  the 
testator. 

'  Barman  v.  Wagener,  33  S.  C.  487. 
In  this  case  a  suit  was  instituted  by 
the  executor  for  the  sale  of  land  and 
to  marshal  assets  and  to  enjoin  cred- 
itors from  suing  at  law,  in  which  gen- 
eral creditors  intervened,  and  aslied 
to  have  a  receiver  appointed  on  the 
ground  that  the  executor  was  guilty 
of  misconduct  in  his  management  of 
the  estate,  and  was  not  a  safe  custo- 
dian thereof  and  was  insolvent.  It 
was  also  held  that  the  judgment  and 
execution  returned  in  sucli  case  was 
>mnecessary,  for  the  reason  that  the 
{irinciple  has  no  application  in  a  suit 
to  marshal  assets,  or  in  a  suit  to  com- 


pel an  administrator  or  executor  to 
account.  Cf.  Peker  v.  Hughes,  27 
S.  C.  408;  Atii^tin  v.  Morris,  23  S.  C. 
408.  In  Mkldlcion  v.  Dodmoell,  13 
Ves.  Jr.  266,  Lord  Erskine  said: 
"But  if  a  manifest  abuse  of  the  trust 
by  wasting  the  property  appears, 
which  does  appear  in  this  instance, 
not  from  a  single  act  but  an  habitual 
and  prospective  course  of  dealing, 
bringing  the  property  into  danger,  can 
it  be  said  that  this  court  is  not  to  treat 
an  executor  as  any  other  trustee  ?  And 
an  executor  may  say  that  unless  he  is 
proved  to  be  insolvent,  the  court  is  to 
overlook  the  misapplication  and  re- 
fuse a  receiver."  In  this  case  the  ap- 
plication was  before  answer.  The 
marriage  of  an  executrix  to  a  second 
husband  in  necessitous  circumstances 
where  there  were  infant  children  by 
the  tirst  marriage  was  held  sufficient 


RECEIVEKSHIP  IN  DECEDENTS'  ESTATES. 


529 


the  executor  is  insolvent,  and  this  fact  is  coupled  with  waste  or 
misapplication ; '  (J)  or  his  removal  from   the   state  and  thus  an 


ground  for  the  appointment  of  a  re- 
ceiver in  Dillon  v.  Lady  Mount  Cas- 
hell,  4  Bro.  P.  C.  306;  Lake  v.  De 
Lambert,  4  Ves.  Jr.  593.  In  Staiiiey 
V.  Babe,  McMuU.  Eq.  22,  it  appeared 
tbat  the  executrix  had  managed  the 
estate  judiciously,  but  subsequently 
married  a  second  husband  possessing 
no  qualificatious  for  the  management 
of  such  an  estate,  but  was  young,  of 
limited  means,  and  without  experience 
and  with  little  aptitude  for  any  oc- 
cupation. Cf.  Jenkins  v.  Jenkins,  1 
Paige,  243;  Gildersleeve  v.  Lester,  68 
Hun,  532, 

1  Price  V.  Price,  28  N.  J.  Eq,  428, 
in  this  case  the  court  found  that  there 
had  been  waste  and  misappropriation 
and  a  refusal  to  answer  concerning 
the  same.  In  Duval  v.  Marshall,  30 
Ark.  230,  it  appeared  that  the  admin- 
istrator had  hindered  and  embarrassed 
the  colleclion  of  the  debts  of  the  es- 
tate. It  was  also  held  that  the  court 
having  acquired  jurisdiction  to  col- 
lect and  hold  the  assets  it  would  retain 
jurisdiction  to  settle  the  estate.  Up- 
on the  question  of  insolvency  of  the 
executor  the  court  in  Fairbairn  v. 
Fisher,  .57  N,  C,  390,  said  :  "The  mere 
poverty  of  the  executor  does  not  au- 
thorize the  court  against  the  will  of 
the  testator  to  remove  him  by  placing 
a  receiver  in  his  place.  There  must 
be  in  addition  some  maladministra- 
tion or  some  danger  of  loss  from  the 
misconduct  or  negligence  of  the  ex- 
ecutor for  which  he  will  not  be  able 
to  an.swer  by  reason  of  his  insolvency. 
That  seems  to  be  the  well-settled  rule. 
*  *  *  The  only  pretext  for  a  receiver 
as  far  as  the  case  appears  in  these  i)ro- 
ceedings,  is  the  misunderstanding  be- 
tween the  two  executors.  But  that 
is  not  sufficient  of  itself  or  in  conuec- 
34 


tion  with  the  limited  circumstances  of 
the  defendant."  Nor  will  the  fact  that 
it  appears  that  the  executrix  is  a  per- 
son of  little  or  no  fortune  be  sufficient 
in  the  absence  of  proof  of  mismanage- 
ment; nor  is  the  fact  of  a  dispute  in 
another  court  concerning  the  probate 
sufficient.  Knight  v.  Duplessis,  1 
Ves,  Sr.  324.  In  Howard  v,  Papera, 
1  Madd.  142  (Am.  ed.  p.  86)  the  vice 
chancellor  says:  "No  misapplication 
or  abuse  of  trust  is  made  out  against 
this  executrix,  and  it  would  be  too 
much  to  take  the  administration  of 
this  testator's  property  out  of  her 
hands  merely  because  she  is  poor,  a 
circumstance  known  to  her  husband, 
the  testator,  when  he  appointed  her 
executrix."  Cf.  Gladdon  v.  Stoneman, 
note  to  last  case  cited;  Jenkins  v.  Jen- 
kins, 1  Paige,  243;  Price  v.  Price,  23 
N.  J.  Eq.  428. 

In  Anonymous,  12  Ves.  Jr.  4,  the 
question  before  the  court  was  upon 
the  sole  ground  that  the  executrix  had 
no  property  other  than  an  annuity  of 
£20  given  her  by  the  testator,  and 
that  therefore  a  receiver  should  be 
appointed,  and  Sir  William  Grant 
says:  "There  is  no  doubt  that  in  sev- 
eral instances,  as,  if  the  executor  has 
wasted  the  effects,  or  in  other  respects 
has  misconducted  himself,  this  court 
will  interfere.  But  has  the  court  ever 
taken  the  disposition  out  of  the  hands 
of  the  executor  on  account  of  his 
mean  circumstances — for  it  comes  to 
that?  You  must  prove  the  unfitness 
of  the  person.  In  this  case  the  only 
ground  is  that  she  is  not  a  person  of 
property.  *  *  *  If  any  mi.scon- 
ducl, waste, or  improper  disposition  of 
the  assets  were  shown  the  court  would 
instantly  interfere."  Cf.  Oray  v. 
Guither,  74  N.  C,  237.     But  if  the  as- 


530 


RECEIVERSHIPS. 


abandonment  of  the  trust;'  {4)  or  tlie  death  of  the  executor,  or 
death  of  one  and  refusal  of  the  other  to  act;°  {5)  or  where  a  sale 
of  property  is  necessaiy,  the  legal  title  to  which  was  in  the  testa- 
tor, and  which  he  devised  to  an  executor,  but  in  which  another 
person  had  an  interest  and  equitable  title;'  (6")  or  where  judgment 
creditors  allege  fraud  and  misapplication  by  an  executor  and  in- 
solvency," or  where  he  has  given  no  security,  and  has  mismanaged 
the  estate,  and  is  about  to  leave  the  country; '  (7)  or  where  by  reason 
of  a  contest  in  the  court  of  proljate  there  is  no  proper  pei'son  to 
receive  the   estate;"  {8)   or   where  a   foreign  administrator  has 


signee,  upon  his  own  petition,  has 
been  adjutlged  a  bankrupt  a  receiver 
is  proper, it  not  being  within  the  power 
of  his  assignee  in  bankruptcy  to  have 
charge  of  the  trust  properly.  Steele 
V.  Cobham,  L.  R.  1  Ch.  App.  325; 
Gladdon  v.  Sioneman,  1  Madd.  143, 
note  (Am.ed.  p. 86).  In  a  bill  l)y  a  ward 
charging  waste  and  insolvency  on  the 
part  of  an  administrator,  a  receiver 
may  be  appointed.  Ware  v.  Ware,  42 
Ga.  408.  In  Gray  v.  Qaither,  74  N. 
C  237,  an  executor  converted  his 
land  and  personal  estate  into  notes 
and  money,  and  the  court  held  the 
estate  to  be  insecure.  It  was  also  held 
that  though  the  trustee  was  insolvent, 
if  the  testator  knew  of  that  fact  it 
would  not  be  ground  for  removal. 

'  Ex  parte  Galluchat,  1  Hill,  Eq. 
148.  In  this  case  the  executor  had  re- 
moved to  another  state  and  the  appli- 
cation was  made  by  the  cestui  que  trust. 

« Palmer  v.  Wright,  10  Beav.  234.  In 
this  case  it  would  seem  that  the  power 
of  the  probate  court  to  appoint  a  suc- 
cessor would  afford  ample  relief. 
The  Master  of  Rolls  says:  "Nothing,  I 
think,  can  be  more  clear  than  when 
there  are  two  trustees  and  executors, 
and  one  dies  and  the  survivor  refuses 
to  act,  the  per.sons  beneficially  inter- 
ested in  the  estate  are  entitled  to  the 
protection  of  the  court  and  to  a  re- 
ceiver." 


3  Marvine  v.  Drexel,  68  Pa.  362.  In 
this  case  Drexel,  the  trustee,  died,  or- 
dering his  executors  to  sell  his  real 
estate  whenever  they  thought  proper. 
There  was  an  agreement  as  to  the  pur- 
chase of  lands  between  Drexel  in  his 
lifetime  and  Marvine,  and  the  former's 
executors  and  Marvine  disagreeing  in 
regard  to  the  mode  of  selling,  a  re- 
ceiver was  appointed.  This  case  was 
based  upon  the  idea  that  a  receiver 
would  be  disinterested  and  the  execu- 
tors were  representatives  of  the  estate 
only,  and  that  the  court,  having  ob- 
tained jurisdiction,  would  direct  the 
sale  in  the  interest  of  all  parties. 

*  Ex  parte  Walker,  25  Ala.  81;  Scott 
V.  Beclier,  4  Price,  Exch.  Rep.  346. 

6  Chappell  v.  Akin,  39  Ga.  177.  The 
allegations  of  the  bill  in  this  case  were 
that  the  executor  was  insolvent,  un- 
married, extravagant,  engaged  in  no 
settled  business,  intending  soon  to 
move  to  Honduras,  and  was  badly 
managing  his  own  business,  and 
threatened  to  sell  the  trust  property. 

^  Rendall  v.  Rendull,  1  Hare,  152. 
In  Wood  V.  Hutchings,  2  Beav.  289, 
an  appeal  was  pending  in  the  privy 
council  from  the  ecclesiastical  court, 
and  the  power  of  the  administrat- 
or pendente  lite  had  been  suspended 
by  an  inhibition  from  the  appeal 
court  and  there  was  no  one,  pending 
the  litigation,  to  care  for  the  estate. 


RECEIVERSHIP  IN  DECEDENTS  ESTATES. 


ysi 


brought  property  of  the  estate  within  tlie  jurisdiction  of  a  court 
of  chancery  where  there  is  a  local  administrator;'  (5)  or  where 
the  executor  is  a  nonresident;^  {10)  or  where  the  property  is  in 
a  foreign  country ;  ^  {11)  or  where  the  executor  has  become  a 
bankrupt ;  *  {12)  or  where  the  executor  converts  the  trust  prop- 
erty to  his  own  use/  the  great  advantage  to  be  secured,  however, 
through  the  instrumentality  of  this  proceeding  is  preventive  in 
its  nature  rather  than  to  redress  grievances  that  have  already  been 
committed;'  {13)  or  where  fraud  is  charged;'  {IJj)  or  where  the 
trustee  has  been  ordered  to  pay  money  due  from  him  on  an  al- 
leged breach  of  trust,  *  or  where  the  bill  is  filed  to  wind  up  an 


^  Hervey  v.  Fitzpatrick,  Kay,  421. 

^  Jones  V.  Smith,  10  Hare.  71.  (No  ap- 
pearance of  defendant  and  no  written 
opinion.) 

^In  Gockburn  v.  EapJiael,  2  Sim.  & 
S.  453,  the  application  was  made  by  the 
executor  resident  in  England,  and  the 
court  required  resident  sureties  in 
England. 

In  order  to  justify  a  court  in  ap- 
pointing a  receiver  to  take  property 
from  an  executor  or  administrator 
who  has  been  appointed  by  the  proper 
court  under  letters  testamentary  or  of 
administration,  it  must  be  alleged  in 
the  bill  or  otherwise  shown  by  affida- 
vits or  other  competent  evidence: 

(1)  That  there  is  imminent  danger  to 
the  estate;  (2)  that  the  probate  court,  or 
court  exercising  probate  jurisdiction, 
has  inadequate  power  to  afford  ade- 
quate relief  ;  (3)  that  the  allegations 
and  charges  are  definite  and  spe- 
cilic,  and  not  on  information  and 
belief  ;  (4)  that  the  executor  or  ad- 
ministrator is  irresponsible,  or  his 
bond  insufficient  or  inadequate. 

A  receiver  in  lieu  of  an  executor  or 
administrator  may  properly  be  ap- 
pointed: (1)  Where  it  is  shown  that  a 
trust  has  been  clearly  violated  and  as 
a  result  serious  waste  and  misappro- 
priation has  followed;  (2)  that  the  ex. 
eculor  or  administrator  is   insolvent 


and  this  fact  coupled  with  misman- 
agement and  waste  or  misapplica- 
tion; (3)  on  his  removal  from  the  state 
and  thus  abandoning  the  trust;  or  (4) 
in  case  of  his  death,  or  where  there  is, 
by  reason,  a  contest  over  the  right  to 
administer  and  there  is  no  one  legally 
entitled  to  receive  and  care  for  the 
funds  or  property,  pending  the  litiga- 
tion. 

*  Steele  v.  Cobham,  L.  R.  1  Ch.  App. 
335;  Langley  v.  Uawk,  5  Madd.  46; 
Oldddon  v.Stonemait,!  Madd.  142  (Am. 
ed.  p.  86  note).  In  the  first  case  above 
cited  the  court  held  that  the  fact  that 
the  assignees  were  not  before  the  court 
was  not  material. 

*In  Gray  v.  Gaitlier,  74  N.  C.  237, 
the  court  ordered  the  executor  to  give 
the  bond  for  the  protection  of  the  assets 
and  for  the  performance  of  the  final 
decree  and  upon  his  failure  to  do  so 
then  a  receiver  should  be  appointed. 
There  was  no  dereliction  of  duty  on 
the  part  of  the  executor  ami  the  court 
held  under  such  a  state  of  facts  it  was 
error  to  appoint  a  receiver  in  the  first 
instance. 

^  Perrin  v.  Lepper,  56  Mich.  351; 
Doufjherty  v.  McDougald,  10  Ga.  121. 

''Vernon  v.  Kimie,  2  U.  C.  Jur.  40. 

8  Coney  v.  Bennett,  54  L.  J.  Ch.  1130; 
Lealhe^  v.  Z(?a</<es,  Weekly  Notes,  1882, 
p.  71 ;  Whileley  v.  Learoyd,  56  L.  T.  84G. 


632 


■RECEIVERSHIPS. 


illraal  trust.'    or  whore  it  is  necessary  to  prevent  the  transfer  of 
pro|>crty  held  in  trust." 

(b)  When  not  appointed. 

The  conrt  will  not  appoint  a  receiver  in  lieu  of  an  executor  or 
administrator  (/)  where  the  only  ground  of  complaint  alleged  is 
the  poverty  or  financial  irresponsibility  of  the  person  acting  in 
this  relationship;'  nor  (^)  in  a  creditor's  proceeding  where  the 
bill  was  tiled  against  the  intestate  debtor  in  his  lifetime,  and  after 
his  death  revived  against  his  administrator;*  nor  where  the 
allc<»'ed  cause  of  complaint  occurred  during  the  lifetime  of  the 
intestate,  and  where  there  is  no  allegation  of  mismanagement 
against  the  administrator;'  nor  {3)  on  the  application  of  a  surety 
on  the  bond  of  the  administrator,  where  the  purpose  is  to  require 
the  administrator  to  secure  the  bondsman  on  account  of  his  lia- 
bility for  his  principal;*  nor  [4)  where  the  defendant  is  perfectly 
solvent,  and  where  he  offers  to  secure  the  plaintiff  in  whatever 


•  Cameron  v.  Havemeyer,  25  Abb.  N. 
C.  438. 

"^Lutt  V.  Qrimont,  17  111.  App.  308. 

3  In  Fail-bairn  \.  Fisher,  4  Joiits  Eq. 
390,  the  court  say :  "  There  does  not 
appear  to  be  any  change  for  the 
worse,  at  least  in  the  property  or 
credit  of  the  executor,  since  the  death 
of  the  testator  or  even  the  making  of 
his  will;  the  mere  poverty  of  the 
executor  does  not  authorize  the  court 
against  the  will  of  the  testator  to  re- 
move him  by  placing  a  receiver  in  his 
place.  There  must  be  in  addition 
some  maladministration,  or  some 
danger  of  loss  from  the  misconduct 
or  negligence  of  the  executor,  for 
which  he  will  not  be  able  to  answer 
by  reason  of  his  insolvency."  Howard 
V.  Papera,  1  Madd.  142;  Gladdon  v. 
Stoneman,  1  Madd.  143,  note;  Johns  v. 
Johns,  23  Ga.  31;  Anonymous,  12 
Ves.  Jr.  4. 

*Mathews  v.  Neihon,  3  Edw.  Ch. 
346;  Sylveiter  v.  Reed,  3  Edw.  Ch. 
296.     In  these  two  cases  it  was  held 


that  a  creditor's  bill  could  not  be  re- 
vived against  the  debtor's  administra- 
tor where  the  purpose  is  to  obtain 
the  appointment  of  a  receiver. 

*  Perrin  v.  Lepper,  56  Mich.  351. 
There  was  no  showing  whatever  that 
the  property  was  being  wasted  by  the 
complainant  administrator,  or  that 
the  estate  was  unsafe  in  his  hands, 
and  a  receiver  was  refused. 

^  Dtlaney  Y .  Tiplon,  3Hayw.  (Tenn.) 
14.  In  this  case  Delaney,  the  surety 
on  the  administrator's  bond,  Hied  a 
bill  and  asked  for  an  order  on  the 
administrator  to  give  security  to  him, 
and  in  default  of  so  doing  that  a  re- 
ceiver be  appointed  to  take  posses, 
sion  of  the  assets, — held,  that  the  plain- 
tiff was  not  entitled  to  the  relief.  Cf. 
Walker  v.  Drew,  20  Fla.  908.  as  to  a 
surety  of  a  deceased  debtor  and  his 
right  to  have  a  receiver;  and  Sten- 
hmise  V.  Davis,  82  N.  C.  432,  as  to  the 
right  of  a  surety  of  a  purchaser  at  an 
administrator's  sale. 


EECEIVERSHIP  IN  DECEDENTS'  ESTATES. 


533 


rIgLts  he  may  be  entitled  to  on  final  liearincj:;'  nor  (5)  where  the 
acts  of  an  executor  complained  of  are  not  serious,  and  he  has  the 
confidence  of  the  business  men  of  the  community;''  nor  (6')  where 
the  misapplication  of  the  funds  charged  is  not  clearly  shown/ 

There  must  be  a  strong  case  nuide  for  the  appointment  in  oi'der 
to  justify  a  court  in  interfering  in  the  matter  of  trustees  who 
liave  been  appointed,  or  authorized  to  act  under  the  orders  of 
another  court  of  competent  jurisdiction,  and  especially  so  in  the 
case  of  executors  who  are  presumed  to  have  been  appointed  by 
reason  of  some  peculiar  fitness  or  confidence  reposed  in  them  by 
the  testator." 


'  A  receiver  of  a  decedent's  estate 
should  not  be  appointed  without  giv- 
ing a  defendant,  who  is  shown  to  be  en- 
titled to  at  least  half  the  estate  and  to 
be  perfectly  solvent,  an  opportunity  to 
give  a  sufficient  bond  to  protect  the 
petitioner  in  whatever  rights  he  may 
be  able  to  establish  at  the  final  hear- 
ing.    Bivins  v.  Marvin,  96  Ga.  268. 

*  That  one  of  the  three  executors  of 
an  estate  without  bond  has  been  seen 
a  few  times  playing  cards  for  money 
is  not  sufficient  cause  for  the  appoint- 
ment of  a  receiver  pending  an  action 
by  the  heirs  to  recover  their  alleged 
interest  in  the  estate,  and  for  par- 
tition, where  a  large  number  of  busi- 
ness and  professional  men  in  the  com- 
munity where  such  executor  lives 
affirm  his  integrity  of  character  and 
his  entire  fitness  for  the  trust.  Harris 
V.  Ilkka  (Tex.  Civ.  App.)  M  S.  W. 
D83. 

^  The  advance  by  the  executors  to 
the  widow  of  less  than  half  of  the 
cash  on  hand,  which  was  prima  facie 
a  community  fund,  does  not  auihorize 
the  appointment  of  a  receiver  pend- 
ing an  action  by  the  heirs  to  recover 
their  alleged  interest  in  the  estate, 
and  for  partition,  upon  the  ground  of 
misapplication  of  the  funds  and  re- 
fuHftl  to  allow  the  plaintiffs  free 
access  to  the  books  of  deceased,  where 


the  widow's  interest  in  the  estate  is 
apparently  largely  in  excess  of  the 
amount  paid  her,  and  she  was  other- 
wise without  means  of  support.  Har- 
ris V.  Hicks  (Tex.  Civ.  App.)  34  S.  W. 
983, 

A  receiver  cannot  be  appointed  in 
an  action  against  a  foreign  executor 
as  an  individual  to  apply  securities 
of  the  estate  to  redeem  securities  of  a 
third  person  pledged  for  the  testator's 
debt,  as  the  executor  in  his  individual 
capacity  could  not  be  compelled  so  to 
do.  Collins  v.  Stewart,  2  App.  Div. 
271. 

■*  In  Shannon  v.  Davis,  64  Miss. 
717,  it  is  held  that  where  an  adminis- 
trator has  been  appointed  and  has 
partially  administered  the  estate  a  re- 
ceiver is  improper,  though  it  might 
have  been  proper  to  appoint  in  the 
first  instance.  In  Perrin  v.  Lepper, 
56  Mich.  351,  it  was  held  that  in  the 
absence  of  proof  of  waste  on  the  part 
of  the  administrator,  or  danger  to  the 
estate,  the  appointment  would  not  be 
made.  Cooley,  J.,  says:  "Receivers 
are  not  appointed  by  way  of  punish- 
ment of  parties,  and  especially  of 
dead  parties,  for  their  misconduct." 
The  court,  however,  will  not  hesitate 
where  the  administrator  is  seeking  to 
administer  property  the  title  to  which 
appears   to   be   in   another.      Hill    v. 


53i 


RECEIVERSHIPS. 


(c)  Misconduct  and  refusal  to  act. 

Where  an  executor  refuses  to  collect  and  account  for  a  fund 
that  was  placed  by  his  intestate's  will  in  a  firm  for  a  definite 
period,  and  there  is  danger  of  its  beino;  lost  by  reason  of  such 
refusal,  a  receiver  is  proper,  and  the  court  has  power  to  make  the 
appointment.  While  courts  are  slow  to  appoint  receivers  to  take 
property  of  an  estate  from  the  hands  of  an  administrator  who  has 
been  legally  appointed,  yet  where  the  administrator  is  attempting  to 
administer  property  the  title  to  which  appears  to  be  in  another, 
then  in  such  case  a  receiver  should  be  appointed  if  the  circum- 
stances indicate  that  the  rights  of  all  the  parties  would  thereby 
be  more  effectually  and  expeditiously  protected  and  enforced.' 


Arnold,  79  Ga.  367.  Cf.  Stairley  v. 
Babe,  McMull.  Eq.  22;  Middleion  v. 
Dodswell,  18  Ves.  Jr.  68.  And  see  Ren- 
dall  V.  Rendall,  1  Hare,  152,  where 
the  vice  chancellor  reviews  the  Eng- 
lish doctrine  upon  this  subject.  And 
in  Haines  v.  Carpenter,  1  Woods, 
263,  the  court  refused  to  entertain  a 
bill  to  appoint  a  receiver  upon  the 
ground  that  the  executor  had  qualified 
and  given  bond  for  the  discbarge  of 
his  trust  and  had  taken  possession  of 
the  estate  under  the  provisions  of  the 
will  of  the  testator,  where  the  allega- 
tions were  made  on  information  and 
belief.  The  court  say:  "The  property- 
is  in  gremio  legis;  the  jurisdiction  of 
the  parish  court  has  attached  to  the 
assets;  they  are  in  the  hands  of  a 
trustee  who  is  required  to  account 
only  to  the  court  which  appointed 
him,  and  this  court  has  no  power  to 
take  the  assets  from  the  possession  of 
that  trustee  and  compel  him  to  ac- 
count here."  In  Wannelcer  v.  Hitch- 
cock, 38  Fed.  Rep.  383,  it  was  held 
that  where  the  probate  court  had  full 
power  to  protect  the  interests  of  all 
parties  a  receiver  would  not  be  ap- 
pointed. Cf.  Middleton  v.  Dodsicell, 
13  Ves.  Jr.  266;  Haines  v.  Carpenter, 
supra. 


On  a  creditor's  bill,  a  decree  was 
rendered  establishing  the  claims  of 
creditors  and  directing  their  pay- 
ment out  of  such  assets  as  may  be 
applicable  to  them,  by  the  adminis- 
trator, and  ordering  the  receiver  to 
pay  the  claims  out  of  the  moneys  and 
securities  at  their  nominal  amount 
which  should  come  into  his  hands. 
Held,  that  the  direction  to  the  re- 
ceiver to  pay  was  subordinate  to  the 
right  of  the  administrator  to  determine 
the  applicability  of  the  assets,  and 
the  receiver  having  paid  out  money 
to  the  agent  of  a  creditor  without  the 
direction  of  the  administrator,  the 
court  granted  an  injunction  to  re- 
strain the  moneys  paid  to  such  agent 
within  the  control  of  the  court. 
Oreen  v.  Hanberry,  2  Brock.  403. 

'  Where  an  administrator  is  seeking 
to  administer  properly,  the  title  to 
which  clearly  appears  to  be  in  an- 
other, then  a  receiver  should  be  ap- 
pointed, if  the  circumstances  indicate 
that  the  rights  of  all  the  parties  would 
thereby  be  more  effect\ially  and  expe- 
ditiously protected  and  enforced.  Hill 
V.  Arnold,  70  Ga.  367. 


RECEIVERSHIP  IN  DECEDENTS'  ESTATES.  535 

Where  it  appears  that  the  conduct  of  an  administrator  is  such 
as  to  Jiinder  and  dehiy  the  collection  of  the  assets  of  an  estate,  a 
court  of  chancery  has  power,  and  it  is  its  duty,  to  appoint  an  ad- 
ministrator to  collect  and  hold  the  assets,  and,  having  acquired 
jurisdiction  for  that  purpose,  it  may  retain  it  for  the  purpose  of 
finally  settling  the  estate.' 

If  an  executor  of  a  will  and  legatee  thereunder  files  a  bill  in 
the  nature  of  a  creditor's  bill,  enjoining  creditors  of  the  testate 
from  suing  him  at  law,  such  executor  is  a  quasi  trustee  for  the 
creditors,  and  on  proper  application  a  receiver  may  be  appointed, 
where  there  is  a  misuse  or  misapplication  or  waste  of  the  prop- 
erty, and  there  is  danger  of  loss,  and  in  such  case,  on  the  applica- 
tion of  creditors,  it  is  not  incumbent  to  show  that  they  have  ex- 
hausted their  legal  remedies,  the  basis  of  their  application  being 
mismanagement.  Where  the  application  is  based  upon  waste 
connnitted  by  the  executor  or  administrator,  the  charge  must  be 
specific  and  designate  the  thing  done  which  constitutes  the  waste 
complained  of." 

A  creditor  may  file  a  ci'editor's  bill  against  the  executor  of  a 
deceased  debtor  to  make  him  account  for  the  estate  in  his  liands, 
without  first  having  obtained  a  judgment  at  law  and  procured  a 
return  of  execution  nulla  hona.^ 

But  where  an  executor  has  qualified  and  given  bond  for  the 
faithful  discharge  of  his  duties,  and  has  taken  possession  of  the 
property  of  the  estate  by  virtue  of  the  provisions  of  the  will,  a 
strong  case  must  be  made  against  him  to  induce  the  court  to  ap- 
point a  receiver  and  take  from  the  executor  the  property  of  the 
estate;  and  in  such  case  the  charges  of  mismanagement  must  be 
positive  and  not  on  information  and  belief,  and  in  addition  to  the 
proof  of  danger  it  must  also  appear  that  the  executor  in  posses- 
sion is  irresponsible  or  his  bond  is  insufficient/ 

'Where  it  is  shown  that  the  exec-  ^Sanders  v.   Christie,   1  Grant  Ch. 

ufor  is  guilty  of  misconduct,  and  was  (Out.)  137. 

not  a  sate  custodian  and  was  insolvent  ^  ILirmon  v.  Wagener,  33  S.  C.  487. 

and  the  estate  is  insolvent,  a. receiver  *  Where  an  executor  has  qualified 

will  be  appointed.     Harmon  v.  Wag-  and  given  bond  for  the  faithful  dis- 

en&r,  33  S.  C.  487.  charge  of  his  trust,  and  taken  posses- 

In  such  case  it  is  not  necessary  to  sion  of  the  property  of  the  estate  by 

establish  an  exhaustion  of  legal  reme-  virtue  of  the  provisions  of  the  will,  a 

dies.     Harmon  v.  Wagener^  nujjra.  strong  case  must  be  made  against  him 


636 


RECEIVERSHIPS. 


"Where  an  administratrix  is  carrying  on  the  business  of  her  de- 
ceased husband,  on  the  filing  of  a  bill  by  the  heirs  of  such  de- 
ceased person  alleging  that  the  administratrix  was  not  the  widow 
of  the  deceased  it  is  proper  to  appoint  a  receiver.'  And  where  a 
bill  is  filed  by  a  devisee  to  try  the  validity  of  a  will  as  to  real  es- 
tate the  court  will,  under  special  circumstances,  appoint  a  re 
ceiver  ;*  and  so  also  where  the  executor  is  carrying  on  the  business 
of  the  testator  pursuant  to  his  directions  and  it  is  shown  that  the 


to  induce  the  court  to  appoint  a  re- 
ceiver to  take  the  possession  of  the 
property  from  bim.  Haines  v.  Car- 
penter, 1  Woods,  262. 

Cf.  Beverley  v.  Brooke,  4  Graft.  208; 
Bainbridge  v.  Blair,  4  L.  J.  Ch.  N.  S. 
207;  Smith  v.  Smith,  2  Yoiinge  &  C. 
361;  Middleton  v.  Dodswell,  18  Ves. 
Jr.  286;  Haggarty  v.  Pittman,  1  Paige, 
298;  Burt  v.  Burt,  41  N.  Y.  46. 

Willis  V.  Corlies,  2  Edw.  Ch.  281. 
This  was  a  case  again.st  trustees  but 
the  principle  is  applicable  to  executors 
and  administrators  as  well.  The  vice 
chancellor  says:  "The  court  looks  to 
the  security  and  preservation  of  the 
property,  and  ought  not  to  interfere 
pending  the  litigation  when  the  plain- 
tiff's right  is  not  perfectly  clear  and 
the  property  itself,  or  the  income  aris- 
ing from  it,  is  not  shown  to  be  in  dan- 
ger; and  it  is  acknowledged  to  be  the 
rule  in  several  of  the  English  cases 
that  there  must  be  some  evil  actually 
existing,  or  some  evidence  of  danger 
to  the  property  or  a  strong  special 
case  of  fraud  in  the  defendant  clearly 
proved  to  induce  the  court  in  this 
stage  of  the  cause  to  take  the  property 
under  its  care.  Hugonin  v.  Basely,  13 
Ves.  Jr.  105;  Middletoii  v.  Dodsicell, 
18  Ves.  Jr.  286;  Lloyd  v.  Passingham, 
16  Ves.  Jr.  69.  In  another  case  in  the 
Irish  chancery  court  it  has  been  ob- 
served that  such  an  interference  is,  to 
a  certain  extent,  giving  relief — in  fact 
depriving  defendants  of  a  present  use 
and  enjoyment  of  the  estate  and,  so  far, 


a  deci.sion  pro  tempore  against  them; 
and,  therefore,  without  some  strong 
necessity,  the  court  ought  not  to  do 
any  act  to  disturb  the  existing  posses- 
sion until,  from  a  view  of  the  whole 
case  and  by  a  regular  ailjudication,  it 
can  pass  upon  the  right."  Houlditch 
V.  Lord  Donegal,  1  Beatty,  402. 
Speaking  upon  the  general  subject  of 
the  appointment  of  receivers.  Lord 
Eldon  in  Lloyd  v.  Passingham,  16  Ves. 
Jr.  59,  says  the  court  must  not 
only  be  satisfied  of  the  existence  of 
the  fraud  but  must  be  morally  sure 
that  upon  the  hearing  of  the  cause  the 
party  would,  upon  those  circumstan- 
ces, be  turned  out  of  possession,  but  it 
must  see  some  danger  to  the  interme- 
diate rents  and  profits.  Cf.  Clark  v. 
Ridgely,  1  Md.  Ch.  70;  Randle  v.  Car- 
ter, 62  Ala.  95;  Ex  parte  Walker,  25 
Ala.  81 ;  Uitchen  v.  Birks,  L.  R.  10  Eq. 
471. 

To  justify  the  appointment  of  a  re- 
ceiver to  take  the  custody  of  assets  in 
the  hands  of  an  executor  or  adminis- 
trator there  must  be  actual  miscon- 
duct or  fraud,  and  immediate  danger 
of  loss.  Randle  v.  Carter  and  Ex 
parte  Walker,  supra. 

'  Graham  v.  Graham,  2  Vict.  Rep. 
145. 

^  Middleton  v.  Sherburne,  4  Younge 
&  C.  358.  But  not  in  the  absence  of 
an  allegation  of  the  insolvency  of 
those  in  possession  of  the  land.  Bryan 
V.  Moring,  94  N.  C.  694. 


RECEIVERSHIP  IN  DECEDENTS'  ESTATES.  537 

executor  is  insolvent,  that  there  is  sufficient  property  to  pay  the 
debt,  and  that  the  executor  refuses  to  pay  or  use  the  assets  for 
such  purpose  on  apphcation  of  a  creditor, — under  such  a  state  of 
facts  a  receiver  will  be  appointed  ; '  but  in  the  absence  of  proof 
of  danger  of  loss  and  when  the  real  and  personal  property  are 
sufficient  to  pay  the  debts  of  the  decedent,  a  receiver  will  not  be 
appointed  of  the  rents  and  prolits  of  the  real  estate/ 

(d)  Where  no  one  competent  to  act. 

A  receiver  of  the  property  of  a  decedent  will  be  appointed  by 
a  court  of  equity  if  it  appears  from  all  the  circumstances  that 
there  is  no  executor  or  administrator,  and  if  there  is  imminent 
danger  of  tlie  property  of  the  decedent  being  taken  from  the 
state,  leaving  no  other  property  liable  to  pay  tlie  creditors  of  the 
estate,  and  where  the  person  in  possession  is  insolvent  or  is  a  non- 
resident, but  in  such  a  case  it  is  necessary  that  the  plaintiff  sliall 
show  (1)  either  a  clear  right  in  himself  to  the  property  in  con- 
troversy, or  that  he  has  some  lien  upon  it,  or  that  it  constitutes 
a  special  fund  out  of  which  he  is  entitled  to  satisfaction,  and 
(2)  it  must  appear  that  the  pi'operty  was  obtained  by  the  defend- 
ant through  fraud  or  that  the  property  itself  or  the  income  from 
it  is  in  danger  of  loss  from  neghgence,  waste,  misconduct,  or 
insolvency.' 

The  rule  that  a  receiver  will  not  be  appointed  to  take  property 

'  Wiilis  V.  Sharp,  46  Hun,  540.     In  leaving  no  other    property  liable  to 

this  case  the  bill  was  filed  bj'  a  cred-  pay  creditors,  and  the  person  in  pos- 

itor  against  an  insolvent  executor.  session  is  insolvent  or  a  nonresident. 

'^Where  it  does  not  appear  that  real  Flagler  v.  Blunt,  32  N.  J.  Eq.  518. 
and  personal  property  of  the  decedent  In  such  case  it  is  essential  that  the 
will  be  insufficient  to  pay  the  dece-  plaintiff  should  show,  first,  either  a 
dent's  debts,  the  court  will  not  ap-  clear  legal  right  in  himself  to  the  prop- 
point  a  receiver  of  the  rents  and  erty  in  controversy,  or  that  he  has 
profits  of  the  real  estate.  McKaig  v.  some  lien  upon  it,  or  that  it  constitutes 
Javien,  66  Md.  583.  a  special  fund  out  of  which  he  is  en- 

^A  receiver  of  the  assets  of  adeced-  titled  to  satisfaction,  and,  secondly,  it 

ent  will  be  appointed  in  equity  if  it  must  appear  that  the  property  was  ob- 

appears  from    all  the   circumstances  tained     by     the     defendant    through 

that  there   is  no  e.xecutor  or  admiiiis-  fraud,  or    that  the  property  itself  or 

trator    in   existence,    where    there  is  the  income  from  it  is  in  danger  of  loss 

iniminentdangerof  the  property  of  the  from  negligence,  waste,  misconduct, 

decedent  being  taken  from  the  state  or  insolvency.    Flagler  v. Blunt,supra. 


538  RECEIVERSHIPS. 

from  an  administrator  duly  appointed  and  in  possession  does  not 
extend  to  a  case  where  the  pro])erty  was  fraudulently  conveyed 
to  the  deceased  in  his  lifetime.' 

'  The  rule  that  a  receiver  will  not  be  where  the  property  was  fraudulently 
appointed  to  take  property  from  an  conveyed  to  the  deceased,  Werborn 
administrator  docs  not  extend  to  a  case       v.  Kahn,  93  Ala.  201. 


CHAPTER  XYI. 

RECEIVERSHIP  OVER  TRUST  PROPERTY. 

g  305.  General.  {10)  AVhen  continued. 

§  306.  Receiver  In  lieu  of  trustee.  {11)  Claim  against  beneficiary, 

(a)  When  appointed.  (b)  When  not  appointed, 

{1)  In   case  of  misappropria-  (1)  Failure  of  proof. 

tion.  (i?)  Where  money  in  hands  of 

{2)  In  case  of  fraud.  bailee. 

(3)  Disobedience  of  orders  of  (5)  Where    debt    charged    to 

court.  trustee  pensonally. 

(4)  Illegal  trusts.  (4)  Where  trustee  is  statutory. 

(5)  Where   necessary  to   pre-  (5)  Where  trustee  acts  under 

vent  transfer.  marriage  settlement. 

(6)  Fraud  not  alwf.ys   necea-  (6)  AVhere  other  parties  inter- 

sary  to  be  shown.  ested  than  cestui  quetrunt. 

(7)  Where  purposes  of  trust  (7)  Discretion  of  trustee. 

have  failed.  §  C07.  Fraudulent  assignments. 

(8)  Conflicting  claimants;  sep-        §  308.  Testamentary  trustees. 

arate  suits.  §  309.  Infants'  estates. 

(9)  Mixing  of  trust  property.        §  310.  Lunatics'  estates. 

§  305.     General. 

A  court  of  equity  is  peculiarly  qualified  by  reason  of  its  reme- 
dial jDowers  in  affording  relief  to  beneficiaries  of  trust  property 
where  the  trustee  is,  by  mismanagement  of  the  estate  or  other- 
wise, endangering  the  trust  fund  or  property  in  his  possession. 
The  trustee,  in  all  cases,  is  required  to  exercise  tlie  greatest  care 
and  diligence  in  the  preservation  and  management  of  the  trust 
estate  placed  under  his  supervision.  In  many  cases  his  duties  are 
delicate,  and  not  free  from  obligations  of  the  most  sacred  fidu- 
ciary character,  where  the  law  requires  strict  fidelity  and  the  ut- 
most good  faith,  as  in  cases  of  express  trusts  where  the  donor 
himself  has  b}^  his  act  imposed  upon  the  trustee  duties  and  obli- 
gations peculiarly  exacting.  Assuming  duties  of  this  character 
by  the  trustee  in  its  very  nature  would  dictate  the  most  strict  ac- 
countability on  his  part  both  in  relation  to  the  donor  and  donee, 
or  cestui  que  use^  and  courts  of  equity  have  jealously  guarded 
and  protected  the  interests  of  all  parties. 

Heceiverships,  as  aj)])licable  to  trust  property  and  trustees,  usu- 

539 


540  RECEIVERSHIPS. 

ally  occur  in  connection  with  express  and  implied  trusts  growing 
out  of  the  relationship  of  executors  and  administrators,  testanieut- 
ary  trusteeships,  guardianships,  connnittees  of  lunatics,  and  other 
fiduciary  relationships  created  by  statute,  and  by  deeds  and  agree- 
ments of  the  parties.  Courts  of  equity  have  at  all  times,  owing 
to  the  peculiar  nature  of  their  remedies  and  their  adaptability  to 
trust  relationships,  been  the  special  forum  for  relief  in  matters  of 
this  character,  and  the  law  of  receivership  has  became  interwoven 
with,  and  an  element  in,  the  general  jurisprudence  on  the  subject, 
though  not  to  the  same  extent  as  in  som.e  other  branches  of  equity 
jurisdiction  for  the  reason  that  trustees  of  all  kinds  have  been 
especially  subject  to  the  control  and  direction,  restraint  and  guid- 
ance of  courts  of  equity,  and  for  the  additional  reason  that  trus- 
tees, as  a  rule,  are  selected  by  the  party  creating  the  trust,  and 
therefore  are  presumed  to  have  been  placed  in  their  positions  for 
some  special  fitness  and  qualification,  or  by  reason  of  some  espe- 
cial confidence  reposed  in  them,  which  courts  are  extremely  slow 
to  interfere  with. 

§  306.    Receiver  in  lien  of  trustee. 

(a)  When  appointed. 

In  this  class  of  cases  the  appointment  of  a  receiver  in  lieu  of  a 
trustee  rests  in  the  sound  judicial  discretion  of  the  court,  as  in 
the  appointment  of  receivers  generally.'  As  a  general  rule  it 
may  be  stated  that  the  court  has  power  to  appoint  a  receiver  in 
lieu  of  a  trustee  : 

(i)  Where  the  trustee  has  misappropriated  or  lost  the  trust 
property ;  ^  or 

(2)  Where  fraud  is  charged  and  shown ;  *  or 

'  Janeway  v.  Green,  16  Abb.  Pr.  215,  distinct  from  his  individual  funds  and 

note.  safely  deposit  the  same  in  some  bank 

*  Oilderaleeve  v.  Lester,  68  Hun,  532.  or  otlier  like  place  for  safe  keeping, 

A  special  receiver  of  the  assets  of  to  the  injury  or  great  risk  of  injury 

an  insolvent  firm,  assigned  to  a  trustee  to  the  beneficiaries,  or  that  he  is  wast- 

for  the  benefit  of  creditors,  may  be  ap-  ing  or  misappropriating  such  fund  or 

pointed  and  required  to  duly  admin-  a  material  part  thereof,  or  that  there 

ister  the  same  under  the  directions  of  is  danger  of  such  misappiopriation. 

a  court  of  equity,  where  it  is  made  to  Wagner  v.  Cuen  ( W.  Va.)  23  S.  E.  735. 

appear   that  such  trustee  is  violating  *Vernon  v.  Kimie,  2  U.  C.  Jur.  40. 
his  duty  to  keep  the  trust  property 


RECEIVERSHIP  OVER  TRUST  PROPERTY  541 

{S)  "Where  the  trustee  has  failed  to  obey  an  order  to  paj'  over 
money  dne  from  him  in  respect  to  an  alleged  breach  of  trust; '  or 
{4)  Where  a  bill  is  filed  to  wind  up  an  illegal  trust;'  or 

(5)  Where  it  is  necessary  to  prevent  a  transfer  of  property  held 
in  trust/ 

(6)  And  it  is  not  necessary  in  all  cases  to  allege  and  prove 
fraud  or  misconduct  on  the  part  of  the  trustee,  in  order  to  secure 
the  appointment  of  a  receiver  in  trust  matters.  Thus,  where 
coupon  bonds  or  other  property  not  ear-marked  with  the  trust 
are  placed  in  the  hands  of  a  de  facto  trustee  or  custodian,  by  the 
agreement  of  the  cestuis  que  trustent,  and  they  become  dissatis- 
fied and  file  a  bill  for  accounting  and  distribution,  and  where 
there  is  protracted  litigation  between  the  parties  in  interest,  and 
tiie  trustee,  though  denying  any  danger  to  the  trust  fund,  is  anx- 
ious to  l)e  relieved  from  a  troublesome  and  thankless  duty,  the 
court  may  appoint  a  receiver/ 

(7)  And  where  the  purposes  of  a  trust  agreement  have  failed, 
a  certificate  holder  in  such  trust  lias  a  right  to  demand  that  the 
affairs  should  be  wound  up,  and  his  interest  protected,  and  in 
such  a  case  it  is  proper  for  the  court  to  appoint  a  receiver,  upon 
the  application  of  the  certificate  holder,  although  the  property 
may  be  in  the  hands  of  parties  of  the  highest  standing  for  busi- 
ness capacity  and  integrity  of  character/ 

{8)  Where  there  are  conflicting  claimants  of  a  trust  fund  who  are 
prosecuting  separate  suits  in  the  same  court,  and  a  receiver  is  ap- 
pointed in  one  suit,  his  appointment  will  inure  to  the  benefit  of 
the  plaintiff  in  the  other  suit,  if  upon  the  adjudication  it  is  ascer- 

'  Coney  v.  Bennett,  54  L.  J.  Ch.  1130;  "  I  cannot,  therefore,  but  think  such 

Leather  v.Zert//ie.v,  Weekly  Notes, 1882,  a  course  is  not  only  demanded  by  law 

71;  Whiteley  v.  Learoyd,  56  L.  T.  846.  but  it  is  to  the  best  interest  of  all  con- 

*  Cameron  v.  Uavemeyer,  25  Abb.  N.  cerned, — for  the  public,  because  it  will 
C.  438.  free  the  corporations  composing  the 

^  Lutt  V.  Grimont,  17  111.  App.  308.        trust  from  their  illegal  relations  with 

*  Fidelity  Ins.  dc  T.  Co.  v.  Ruber,  13  it  *  *  *  ;  for  the  certificate  hold- 
Phila.  52.  ers,  because  it  will  preserve  the  prop- 

''  Cameron  \.  Uavemeyer,  25  Ahh.  N.  erty  and  facilitate  the  speedy  setlle- 

C.  438  (451).     In  this  case  tlie  court  ment    of    the    matter,    either    by    a 

had  declared  the  trust  agreement  void  reorganization,  if  practicable,  or  a  di- 

as  creating  a  vast  mouoi)oly,  and  so  vision  of  tlie  property." 
against  public  policy.    The  court  say: 


542 


RECEIVERSHIPS. 


tained  that  tlie  plaintiff  in  the  latter  suit  has  a  superior  right  to 
the  trust  fund.' 

(9)  If  the  trustee  mixes  the  property  with  his  own  it  is  not 
Butticient  liroimd  for  the  appointment  of  a  receiver,  in  the  al)- 
sence  of  further  proof  of  danorer  resulting  from  such  act.' 

AVliere  property  is  conveyed  to  a  trustee  for  the  lienetit  of  the 
grantor's  wife,  and  at  her  death  in  ti'ust  for  her  children,  with 
power  to  rent  or  sell,  in  the  discretion  of  the  trustee,  on  a  bill 
Hied  by  the  infant  cestuis  que  trnstent  for  the  removal  of  the 
trustee  and  for  a  receiver,  tiie  court  will  not,  in  the  absence  of 
proof  of  an  abuse  of  discretion,  appoint  a  receiver. 

{10)  When  a  receiver  of  trust  property  has  been  appointed,  it 
is  proper  for  the  court  to  continue  him  on  the  expiration  of  the 
trust,  if  the  persons  who  are  entitled  to  the  possession  as  tenants 
in  common  disagree  among  themselves,  and  there  is  no  prospect 
that  they  can  act  harmoniously.' 

{11)  In  a  suit  to  compel  a  trustee  to  account  for  a  trust  fund 
which  he  should  pay  over  to  the  beneficiary,  but  which  he  I'etains 
because  of  an  alleged  claim  against  the  beneficiary  for  a  breach 
of  contract,  a  receiver  may  be  properly  appointed.* 


'  Beverley  v.  Brooke,  4  Gratt.  187. 

For  a  case  in  which  the  allegations 
of  the  bill  were  held  insufficient  to 
warrant  the  court  in  taking  properly 
from  the  hands  of  trustees  and  placing 
it  in  the  custody  of  a  receiver,  see 
Pyles  V.  Riverside  Furniture  Co.  30  VV. 
Va.  123  (145). 

"^Orphan  Anylum  v.  McCartee,  Hopk. 
Ch.  429.  In  this  case  a  bill  was  tiled 
by  a  legatee  under  a  will  against  trus- 
tees to  obtain  the  benefit  of  the  devise, 
and  also  for  Ihe  appointment  of  a  re- 
ceiver. The  court  held  that  the  ques- 
tion of  the  legality  of  the  devise  was 
resting  in  equilihrio,  and  could  not  be 
considered  in  the  motion;  that  the 
mixing  of  the  trust  funds  with  his 
own  was  of  itself  no  ground  for  the 
appointment;  that  in  the  absence  of 
danger  this  was  no  breach  of  duly; 
and  that  there  was  no  case  in  which 
the  court  appointed  a  receiver  merely 


because  the  measure  could  do  no 
harm,  and  still  less  where  the  trustee 
was  such  under  the  appointment  of  a 
testator.  In  a  case  where  the  trust 
fund  is  not  in  danger,  the  court  will 
refuse  to  appoint.  Richards  v.  Bar- 
rett, 5  111.  App.  510.  It  is  the  peril  of 
the  trust  fund  alone  that  moves  a 
court  to  dispossess  a  trustee  from  the 
exercise  of  his  legal  rights  over  the 
trust  fund,  and  unless  such  peril  is 
shown  by  specific  allegations,  sup- 
ported by  clear  proof,  the  court  will 
not  interfere.  Fort  Payne  Furnace 
Oo.  V.  Fort  Payne  Coal  &  I.  Co.  96 
Ala.  473;  Sims  v.  Adams,  78  Ala.  395; 
iSitnmons  Hardware  Go.  v.  Waibel,  1  S. 
D.  488.  11  L.  R.  A.  267;  Phelan  v. 
Eaton,  3  Vict.  Rep.  13. 

^Ball  V.  Tompkins,  41  Fed.  Rep. 
486. 

^  Hagenbeck  v.  Har/enbeck  Zoological 
Arena  Co.  59  Fed.  Rep.  14. 


RECEIVERSHIP  OVER  TRUST  PROPERTY.  543 

(b)  When  not  appointed. 

The  court  will  not  interfere  on  application  to  have  a  receiver 
appointed  for  a  trust  estate  while  chancery  proceedings  are  pend- 
ing for  the  removal  of  a  trustee,  (i)  unless  a  very  strong  case  is 
made  out ;'  nor  (^)  where  money  due  a  judgment  debtor  is  in 
the  hands  of  a  bailee  '^  nor  {3)  where  complainant's  debt  had  at 
first  been  charged  against  the  trustee  individually  and  not  as 
trustee,  even  if  the  trustee  is  personally  insolvent  ;^  nor  [If)  in 
case  of  a  foreign  corporation,  where  its  property  is  in  the  hands 
of  trustees  appointed  under  the  statutes  of  a  foreign  state  ;*  nor 
(J)  where  property  is  in  the  hands  of  a  trustee  for  husband  and 
wife,  under  the  terms  of  a  marriage  settlement  ;*  nor  {6)  where  a 
contract  is  held  by  a  trustee  for  the  benefit  of  several  persons,  on 
the  application  of  a  cestui  que  trust,  having  but  a  small  interest 
in  the  profits,  where  the  appointment  would  operate  to  deprive 
the  contractors  of  money  sufficient  to  perform  the  contract,  and 
the  trustee  is  pecuniarily  responsible  and  not  guilty  of  a  breach 
of  duty  involving  moral  turpitude/ 

(7)  Where  trustees  have  a  discretion  in  regard  to  the  doing  or 
not  doing  of  a  particular  thing,  as  in  the  payment  of  interest,  it 
is  improper  for  the  court  to  make  an  order  which  will  take  from 
the  trustees  this  discretion.  Thus,  where  trustees  under  a  will 
were  directed  to  set  apart  and  invest  a  sum  of  money,  and  were 
authorized  in  their  absolute  discretion  from  time  to  time,  and  at 
such  time  or  times  as  they  should  think  proper,  to  pay  or  apply 
the  whole  or  any  part  of  the  income  to  or  for  the  benefit  of  the 
judgment  debtor,  in  such  a  manner  and  in  all  respects  as  they 
should  think  proper,  the  money  will  not  be  ordered  paid  to  the 
I'eceiver.' 

§  307.     Fraudulent  assignments. 

The  appointment  of  a  receiver  in  equitable  proceedings  insti- 
tuted for  the  purpose  of  setting  aside  assignments  made  for  the 
l>enefit  of  creditors  where  fraud  is  alleged  and   shown  in  the 

^  Poythress  v.  Poi/thress,  16  Ga.  406.  '  Whiiaker  v.  Cohen,  69  L.  T.  451. 

'^Morris  v.  Taylor,  33  L.  R.  Ir.  14.  ^Devlin  v.  Hope,  16  Abb.  Pr.  314. 

"  Hatcher  V.  Mnssey,  Q%G:&.  &Q.  ''Queen    v.    Lincobnliire    &    Dixon 

*  Fenton   v.  Lumbermans'   Bank,    1  County  Judge,  L.  R.  30  Q.  B.  Div. 

Clarke,  Ch.  386.  167. 


544  RECEIVERSHIPS. 

transaction,  is  frequent,  but  in  such  case  tlicre  must  be  proof  of 
insolvency  of  tiie  assi^^'iiec  and  such  a  state  of  facts  shown  as 
renders  it  probable  that  the  property  will  be  disposed  of  in  fraud 
of  creditors'  ri<^lits,'  but  if  it  be  shown  tiiat  the  assignee  is 
solvent  and  the  fraud  is  denied  by  the  answer  a  receiver  will 
not  be  appointed  pending  the  litigation,"  This  doctrine  is 
based  upon  the  ])rin('i[)le  already  stated  that  courts  are,  at 
best,  slow  to  interfere  with  tiie  possession  of  a  trustee  apparently 
in  the  lawful  custody  of  property  charged  with  a  trust,  in  a  mat- 
ter of  assignnuMit  recognized  by  law,  and  wliere  the  assignor  has 
a  right  to  dispose  of  his  property  in  such  manner  as  shall  seem  to 
him  best,  subject  only  to  the  rights  of  bona  tide  creditors  therein. 

§  308.     Testamentary  trustees. 

There  are  many  cases  in  which  a  receiver  will  be  appointed  to 
take  the  place  of  trustees  appointed  under  a  will,  as  where  some 
of  the  trustees  refuse  to  act  and  all  the  parties  are  before  the 
court  consenting  to  the  appointment ;'  or  where  some  of  the 
trustees  are  dead,  and  the  others  refuse  to  act  ;*  or  where  the 
trustee  becomes  insolvent,  and  misapplies  the  property  or  its  pro- 
ceeds, or  otherwise  diverts  the  income  or  appropriates  the  same 
to  his  own  use  ;^  or  suffers  leasehold  property  to  become  forfeited 

^Ellett  V.  Neioman,  92  N.  C.  519.  la  ference  of  the  court  is  necessary  to  pro- 

this  case  an  action  was  brought  to  set  tect  the  property  iu  question  pending 

aside    an    assignment    alleged  to  be  the    controversy."     Ciiing  Parker  v. 

fraudulent  and  void  as  to  creditors  Grammer,    Phiil.    Eq.    28;    Craycroff 

wlien  it  appeared  that  there  was  rea-  v.  Morehend.  67  N.  C.  422;  Morris  v. 

sonablc  ground  to  apprehend  that  the  Willard,  84  N.  C.   293;  Levenson  v, 

goods  involved  in  the  action  might  be  Elson,  88  N.  C.  182. 

disposed   of   fraudulently   before  the  "^LevenHon  v.  Elson,  supra. 

case  could  be  tried  upon  its  merits,  ^Brodie    v.    Barry,    3    Meriv.  695, 

and    thus  render  a  judgment    inef-  citing  Beaumont  v.  Beaumont,  not  re- 

fectual.     The   court  say:    "The   au-  ported. 

tbority  of  the  court  to  preserve  prop-  *  McUasker  v.  Brady,  1  Barb.  Ch. 
erty,  the  subject  of  liligiition,  pending  329.  This  was  a  bill  for  partition,  al- 
the  action,  until  final  judgment,  and  legiug  the  invalidity  of  a  will,  where 
then  to  apply  it  as  justice  may  require,  one  trustee  died  and  the  other  two  re- 
is  too  manifest  to  admit  of  question,  fused  to  act,  Cf.  King  v.  Donnelly,  5 
and  such   authority    should  be  exer-  Paige,  46. 

cised  when  it  appears  that  there  is  rea-  *See  Albright  v.  Albright,  91  N.  C. 

sonable    ground    to   believe  that  the  220,   where   the  testator   conveys  his 

plaintiff  may  recover,  and  the  inter-  property  andretains  nothing  subject  to 


RECEIVERSHIP  OVER  TRUST  PROPERTY 


545 


for  nonrepair  of  the  premises;"  or  wliere  a  trustee  fails  to  pay  money 
due  from  liini  pursuant  to  an  order  of  court ;'  or  loans  the  trust 
funds  contrary  to  the  express  conditions  of  the  trust  instrument;' 
or  withholds  the  trust  funds  from  those  entitled  thereto."  In  all 
cases,  however,  the  appointment  of  a  receiver  rests  in  the  sound 
judicial  discretion  of  the  court,  under  all  the  circumstances  of  the 


case. 


§  309.     Infants'  estates. 

As  early  as  1727,  tlie  Parliament  of  England,  sitting  as  a  court 
of  appeals,  held  that  where  a  testator  by  will  named  his  widow 
as  guardian  of  his  minor  children  it  was  beyond  the  power  of  the 


execution.  Ladd  y. Harvey,  21  N.  H. 
514.  See  J/afone  v.Buice,  GO  Ga.  152,as 
to  iiisolveucy.  But  the  mixing  of  the 
funds  with  his  own  in  the  absence  of 
danger  is  not  sufficient.  Orpluin  Asy- 
lum V.  McCartee,  Hopk.  Ch.  439. 

^Re  Fowler,  L.  R.  16  C^h.  Div.  723. 
"  It  is  made  the  duly,"  says  the  chan- 
cellor, "of  trustees  of  leasehold  prop- 
erty to  keep  it  free  from  forfeiture  out 
of  the  rents,  if  no  other  fund  is  ap- 
plicable." 

"^Re  Coney,  L.  R.  29  Ch.  Div.  993.  In 
this  case  the  trustee  had  absconded; 
and  it  was  decided  upon  the  authority 
of  Leathes  v.  Leathes,  Weekly  Notes, 
1882,  p.  71,  and  based  as  to  general 
power  under  the  Judicature  Act  of 
1873.  §  25,  subs.  8. 

^ North  Carolina  R.  Co.  y.  Wilson,  ^\ 
N.  C.  223.  In  this  case  the  trustee 
loaned  part  of  the  funds  to  a  firm  of 
which  he  was  a  member,  which  subse- 
quently failed;  and  it  was  held  that 
the  trustee's  insolvency  and  unsuccess- 
ful management  of  his  own  business 
might  be  considered  in  passing  upon 
the  question. 

*JIagen.beck  v.  IJagenbeck  Zoological 
Arena  Co.  59  Fed.  Rep.  14.  In  this  case 
the  trustee  and  complainant  had  en- 
tered into  an  agreement,  and  the 
trustee  refused  to  account  because  of 

35 


an  alleged  breach  of  the  contract. 
The  court  says:  "The  defendants 
have  no  right  in  law  to  arbitrarily 
seize  upon  that  which  belongs  to  an- 
other, even  to  secure  a  liquidation  of 
their  supposed  damages." 

*In  Ladd  v.  Harvey,  21  N.  H.  514,  the 
court  say:  "Where  there  is  some  evil 
actually  existing,  or  some  evidence  of 
danger  to  the  property  upon  the  filing 
of  the  answer,  a  receiver  will  be  ap- 
pointed. Hngonin  v.  Basely,  13  Ves. 
Jr.  105.  So,  where  before  answer 
there  is  evidence  that  the  property  is 
in  danger  from  insolvency  actually 
existing  or  expected.  Middleton  v. 
Dodswell,  13  Ves.  Jr.  266.  And  a  re- 
ceiver will  be  appointed  before  an- 
swer where  justice  requires  it.  Duck- 
worths. 7Yafford,18Ves.jT.283.  The 
exercise  of  the  power  to  appoint  a  re- 
ceiver must  depend  upon  sound  dis- 
cretion, and  be  a  case  in  which  it  must 
appear  fit  and  reasonable  that  some  in- 
different person  under  approved  se- 
curity should  receive  and  distribute 
the  issues  and  profits  for  the  greater 
securities  of  all  the  parlies  concerned. 
Verplank  v.  Caines,  1  Johns.  Ch.  57. 
A  receiver  is  proper  if  the  fund  is  in 
danger,  and  this  principle  reconciles 
the  cases  found  in  the  books.  Orplian 
Asylum  v.  McCartee,  Hopk.  Ch.  435." 


546 


RECEIVERSHIPS. 


court  of  chancery  to  change  the  will  of  the  testator  in  this  regard, 
in  the  absence  of  proof  of  misbehavior  on  the  part  of  such  testa- 
mentary guardian.'  It  has  remained  the  hiw,  supported  by  reason 
and  autliority,  from  that  time  to  this,  that  where  a  trustee  has 
been  appointed  by  a  testator  as  executor  or  as  guardian,  the  court, 
in  the  absence  of  strong  proof,  will  not  interfere  with  such  selec- 
tion by  the  appoiiitmcnt  of  a  receiver.'^  But  where  it  is  shown 
that  the  executor  has  absconded  and  that  there  is  danger  to  the 
estate  a  receiver  will  be  appointed;'  or  if  he  is  incompetent  and 
waste  is  likely  to  follow.*  Where  a  receiver  has  been,  appointed  for 


'  Dillon  V.  Lady  Mount  CashcU,  4 
Bro.  C.  P.  306. 

'  Middleton  v.  Dodmell,  18  Ves.  Jr. 
268.  In  this  case  Lord  Erskine  said: 
"  It  is  for  the  testator,  not  the  court, 
to  say  in  whom  the  trust  for  admin- 
istration of  the  effects  shall  be  re- 
posed." Cf .  Stairley  v.  Babe,  McMuU. 
Eq.  21. 

»  Pitdier  v.  Hellier,  Dick.  580.  So 
also,  in  Browell  v.  Reed,  1  Hare,  434, 
it  was  held  that  in  case  of  miscon- 
duct a  receiver  might  properly  be 
appointed,  but  not  because  one  of 
several  trustees  had  disclaimed,  or 
was  inactive,  or  had  gone  abroad. 

Where  a  receiver  was  appointed  to 
take  charge  of  an  infant's  estate  and 
invest  the  same,  and  report  to  the 
court  annually,  and  he  deposited  a 
portion  of  the  money  in  a  bank  in 
another  state  to  his  credit  as  receiver, 
on  which  deposit  he  was  paid  interest 
by  the  bank,  which  afterwards  failed, 
he  was  liable  for  the  loss,  as  he  had 
failed  to  report  to  the  court  the  man- 
ner in  which  he  had  invested  the  in- 
fant's estate,  although  he  had  acted 
in  the  best  faith.  State,  Collins,  v. 
Qooch,  97  N.  C.  186. 

*  Stairley  v.  Rahe,  McMull.  Eq.  22. 
In  this  case  the  executrix  had  mar- 
ried an  impecunious  husband  who 
was  manifestl}'^  incompetent  to  man- 
age the  trust  in  a  judicious  manner, 
and  the  estate  was  likely  to  be  wasted 


or  diminished  through  neglect  or 
ignorance.  It  has  been  held  in 
Temple  v.  Williams,  91  N.  C.  82,  that 
where  a  receiver  is  appointed  in  lieu 
of  a  guardian  removed,  he  is  not  in- 
vested with  the  powers  of  a  guardian, 
but  acts  under  the  control  of  the 
court  until  another  guardian  is  ap- 
pointed. Where  there  had  been  sev- 
eral trustees,  one  of  whom  was  dead, 
one  abroad,  and  the  business  fell  ex- 
clusively on  one,  and  application  was 
made  for  a  receiver,  the  acting  trustee 
consenting,  a  receiver  was  appointed. 
Tidd  V. Lister, 6  Madd.  438.  Cf .  Browell 
V.  Reed,  1  Hare,  434.  Where  two  are 
appointed  and  one  declines  to  act, 
the  court  will  appoint  a  receiver  on  be- 
half of  an  infant  ces<i<^■  que  trust,  with 
liberty  to  either  of  the  trustees  to 
offer  himself.  Tail  v.  Jenkins,  1 
Younge&C.  Ch.  491.  It  is  not  proper 
to  appoint  the  next  friend  of  infant 
as  receiver.  {Stone  v.  Wishart,  2  Madd. 
64);  nor  is  it  proper  to  appoint  a  trus- 
tee and  executor  receiver. 

V.  JoUand,  8  Ves.  Jr.  72.  Cf .  Sykes  v. 
Hastings,  11  Ves.  Jr.  363;  Sutton  v, 
Jones,  15  Ves.  Jr.  584.  Lord  Eldon, 
in  Sykes  v.  Hastings,  supra,  says; 
"  The  appointment  of  a  trustee  as  re- 
ceiver is  extremely  rare;  and  only 
where  he  will  act  without  emolument. 
*  *  *  The  principle  of  the  court  is 
that  the  trustee  shall  not  be  receiver 
if  any  other  can  be  procured."' 


RECEIVERSHIP  OVER  TRUST  PROPERTY.  547 

the  benefit  of  two  infant  tenants  in  common  he  will  not  be  dis- 
char^'ed  upon  one  of  the  infants  becoming  of  age. 

§  310.     Lunatics'  estates. 

Pending  an  application  to  determine  the  lunacy  of  a  person  an 
ad  interim  receiver  may  be  appointed  with  power  to  take  posses- 
sion of  the  estate  on  giving  bond,  and  also  with  leave  to  be 
appointed  ad  litem  in  actions  pending  against  such  alleged 
lunatic'  But  the  court  in  making  such  appointment  will  not 
select  the  solicitor  of  the  lunatic,  even  where  it  is  stated  that  no 
one  else  is  willing  to  accept;'  nor  a  master  in  chancery,  if  his 
accounts  are  to  be  passed  upon  by  another  master,"  On  the  death 
of  a  lunatic  the  office  of  the  committee  ceases,  and  the  court 
possesses  only  power  to  compel  him  to  account  and  deliver 
possession  of  the  property  to  the  persons  entitled  thereto.  In  the 
meantime,  if  there  is  reason  to  apprehend  delay  in  ascertaining 
who  are  entitled  to  the  possession,  a  receiver  may  be  appointed  to 
preserve  the  property,  on  the  application  of  the  parties  in  in- 
terest ;  ^  and  such  receiver  must  account  as  in  other  cases.* 

'  Bmiih  V.  Lyster,  4  Beav.  227.  B.  96;  Atkinson  v.  Hemhmo,  2  Yes.  & 

'  Re  Pountain,  L.  R.  37  Ch.  Div.  609.  B.  85.  Bui  see  Richards  v.   Chave,  12 

In  this  case    the    order    was    made  Ves.  Jr.  462.     Lord  Eldon,  in  AY/i^r  v. 

ex  parte.  King,  supra,  places  the  appointment 

^  Ea?  pa?76  P«nfA:e,  2  Meriv.  452.  on  the  ground  "that   the  property  is 

*  Ex  parte  Fletcher,  6  Ves.  Jr.  427.  in  danger  in  this  sense,  that  it  may  get 

This  was  a  case  for  the  appointment  into  the  hands  of  persons  who  have 

of  a  committee  of  a  lunatic's  estate,  nothing  to  do  with  it."    Cf.  Rendall 

but  the  principle  is  the  same  as  in  v.  Rendall,  1  Hare,  152.     On  the  ap- 

cases  of  receivership.     The  theory  of  pointment    of    an    administrator    or 

the  case  may  be  sound,  but  evidently  executor   by  the    proper    court    the 

its  application  in  many  cases  would  duties    of    the    receiver   thenceforth 

be  a  matter  of  discretion.     Cf.   Re  cease,  and  so  on  the  appointment  of 

Ferriar,  L.  R.  3  Ch.  App.  175.  an    administrator  pendente  lite  as  to 

^  Re  Colvin,  3  Md.  Ch.  278  (288);  personal  property  and  as  well   real 

Ductless  of  JS'orfollc's  Ca.sc.cited  in  Sbel-  estate.     Re  Colvin,  supra. 

ford  on  Lunacy, 210.   CL  King  v.  King,  ^Wing  v.   Ctiarnpion,  1  Tenn.   Ch. 

6  Ves.  Jr.  172;   Edmunds  v.  Bird,  1  515.     In  this  case  it  was  held  that  he 

Ves.  &  B.  88;  Ball  v.  Oliver,  2  Ves.  &  should  account  at  least  once  a  year. 


CHAPTER  XYII. 


MISCELLANEOUS  RECEIVERSniPS. 


§315.  As  between  vendor  and  vendee. 

§  316.  Between  creditor  and  debtor. 

§  317.  In  partition  suits  and  between 
tenants  in  common. 

§  318.  In  suits  for  specific  perform- 
ance. 


§  319.  As  between  lessor  and  lessee. 
~5  320.  In  ejectment  suits, 
p  321.  In  alimony  suits. 
§  332.  For  building  and  loan  associa- 
tions. 
§  323.  Grounds  for  appointment. 


§  315.    As  between  yeiiclor  and  vendee. 

Soinetinies  the  court  is  asked  to  appoint  a  receiver  in  behalf  of 
the  owner  of  real  estate  where  he  has  executed  a  contract  of  sale 
to  a  purchaser,  and  delivered  possession  under  tlie  contract,  and 
there  is  a  default  in  the  payments.  The  action  in  such  case  is 
based  upon  the  plaintiff's  right  to  rescind  the  contract  by  reason 
of  nonpayment,  or  to  have  the  property  sold  in  payment  of  the 
remaining  unpaid  purchase  money,  coupled  with  proof  showing 
insolvency  of  the  purchaser  or  waste  or  other  inadequacy  of  se- 
curity.' But  relief  will  not  be  granted  if  it  appears  that  the  in- 
solvency of  the  ptirchaser  was  known  to  the  seller  when  the  con- 
tract was  made,'^  or  where  the  plaintiff's  right  of  recovery  is  fully 
denied.'  The  same  relief  is  not  granted  as  between  the  seller  and 
purchaser  of  a  stock  of  goods  even  where  insolvency  is  shown, 
unless  there  be  an  express  reservation  of  title  in  the  seller.* 


'A  receiver  of  rents  and  profits  may 
be  appointed  in  an  action  to  foreclose 
a  contract  for  the  sale  of  land  where 
the  land  affords  inadequate  security 
for  the  amount  due,  and  is  rapidly 
depreciating  in  value.  Smith  v.  Kelley, 
31  Hun,  387. 

A  vendor  who  has  sold  land  upon  a 
credit  to  one  who  has  given  notes 
signed,  as  trustee,  for  the  payment 
of  the  purchase  money  in  two  equal 
annual  instalments,  is  not  entitled  to 
have  a  receiver,  upon  failure  to  pay 
one  of  the  instalments  when  due, 
where  it  does  not  appear  that  the  pur- 
chaser or  his  cestui  que  trust  is  less 


solvent  than  at  the  time  of  the  pur- 
chase. Tumlin  v.  Van/torn,  77  Ga. 
315. 

MeCasUn  v.  Slate,  44  Ind.  151; 
Phillips  V.  Eiland,  52  Miss.  721;  Gunhy 
V.  Tho7npson,  56  Ga.  316;  Worrill  v. 
Coker,  56  Ga.  666;  Tufts  v.  Little,  56 
Ga.  139;  Chappell  v.  Boyd,  56  Ga.  578; 
Jordan  v.  Beat,  57  Ga.  602;  Collier  v. 
Sa]}p,  49  Ga.  93. 

^Jordan  v.  Beal,  57  Ga.  602;  Tumlin 
V.  Vanhorn,  77  Ga.  315. 

*  Hughes  v.  Ilatchett,  55  Ala.  631. 

*  The  vendor  of  a  stock  of  goods 
upon  condition  that  tliey  shall  not  be 
removed  from  town,  and  that  the  pro- 


548 


MISCELLANEOUS  RECEIVERSHIPS. 


64y 


§  .316.     Between  creditor  and  debtor. 

On  a  bill  filed  by  a  creditor  to  subject  the  property  of  his 
debtor,  which  has  been  fraudulently  conveyed,  to  tiie  payment  of 
liis  debt,  and  the  insolvency  of  the  fraudulent  purchaser  is  shown, 
a  receiver  may  be  appointed;'  but  such  relief  will  not  probably  be 
granted  if  an  adequate  remedy  at  law  might  have  been  available, 
such  as  attachment.^ 

§  317,    In  partition  suits  and  between  tenants  in  common. 

In  matters  between  tenants  in  common,  where  a  suit  for  parti- 
tion is  pending,  the  appointment  of  a  receiver  has  sometimes  been 
made,  but  the  cases  in  which  such  action  has  been  taken  are  ex- 


ceeds of  sales  shall  be  turned  over  to 
Lira  until  the  balance  of  the  purchase 
price  is  paid,  has,  in  the  absence  of 
an  express  reservation  of  title,  no  such 
interest  therein  as  to  entitle  him  to  a 
receiver  upon  the  failure  of  the  pur- 
chas'.er  to  comply  -with  the  agreement 
as  to  proceeds,  though  the  latter  is  in- 
solvent.    Steele  v.  Aspy,  128  Ind.  367. 

That  he  may  by  stipulation  retain 
title  is  well  settled,  but  it  must  be 
plain  and  express.  Wincliester  Wagon 
Works  &  Mfg.  Co.  v.  Carman,  109 
Ind.  31;  Hodson  v.  Warner,  60  Ind. 
214. 

When  there  is  reasonable  ground  to 
apprehend  that,pending litigation, the 
property  subject  to  litigation  will  be 
disposed  of  fraudulently  or  in  such  a 
way  as  to  deprive  the  complaining 
party  of  the  fruit  of  his  recovery 
when  had,  the  court  will  appoint  a  re- 
ceiver. Ellett  V.  Newman,  92  N.  C. 
519. 

'  A  creditor  who  has  fiied  a  bill  to 
subject  personal  property  fraudu- 
lently disposed  of  by  a  deceased 
debtor  to  the  payment  of  his  debt, 
and  has  caused  process  to  be  served 
thereon,  may  have  a  receiver  of  ihe 
property  if  there  is  a  reasonable  prob- 


ability of  recovery,  and  danger  of  loss 
from  misconduct  or  insolvency  if  it  is 
permitted  to  remain  in  the  possession 
of  the  defendant.  Werborn  v.  Kahn, 
93  Ala.  201. 

^  A  receiver  will  not  be  appointed 
on  application  of  an  attaching  cred- 
itor, in  a  suit  by  him  to  set  aside  a 
fraudulent  conveyance  of  personalty 
by  his  debtor,  where  his  remedy  at 
law  was  lost  by  his  own  laches  in  fail- 
ing to  have  the  attachment  levied 
when  a  regular  and  valid  levy  could 
have  been  made  and  the  property  law- 
fully taken  under  the  writ.  Pearce  v. 
Jennings,  94  Ala.  524. 

In  a  suit  to  set  aside  as  fraudulent 
an  assignment  for  benefit  of  creditors 
and  for  a  receiver  of  the  property,  it 
is  error  to  appoint  a  receiver,  with  in- 
structions to  collect  in  the  assets  and 
deliver  them  to  the  assignees.  Nuas- 
baum  v.  Price,  80  Ga.  205. 

A  creditor  seeking  to  set  aside  con- 
veyances of  land  by  his  debtor  as 
fraudulent  is  not  entitled  to  the  ap- 
pointment of  a  receiver  of  the  rents 
and  profits,  in  the  absence  of  proof 
that  the  grantees  are  insolvent.  Clark 
V.  liaymond,  85  Iowa,  737. 


550 


RECEIVERSHIPS. 


ceedinc^ly  rare.     The  grounds  for  the  appointnient  in  such  eases 
are  usually 

(a)  Where  one  tenant  is  in  possession  and  exchides  his  cotenant 
from  participation  in  the  possession  or  income." 

(b)  "Where  the  tenant  in  j)ossession  is  insolvent  and  refuses  to 
account  to  his  cotenant.^ 

(c)  Where  one  tenant  refuses  to  join  his  cotenant  in  the  execu- 
tion of  necessary  leases  for  the  property  owned  in  coininon,  or 
interferes  in  tlie  collection  of  rents  with  the  tenants  in  possession.^ 

(d)  "Where  the  court  can  see  from  the  showing  made  that  the 
appointment  of  a  receiver  is  required  in  order  to  properly  protect 
the  interests  of  parties.* 


'  Milbank  v.  Revert,  2  Meriv.  405; 
Low  V.  Uolmes,  17  N.  J.  Eq.  148; 
Qoodale  v.  15th  Dist.  Ct.  of  San  Fran- 
cisco, 56  Cal.  36;  Duncan  v.  Campau, 
15  Mich.  415.  But  see  Varnum  v. 
Leek,  65  Iowa,  751.  Cf.  Sandford  v. 
Ballard,  33  Beav.  401-  Vaughan 
V.  Vincent,  88  N.  C.  116. 

^Darcin  v.  \yelh,  61  How.  Pr.  259; 
Parker  v.  Parker,  82  N.  C.  165;  Wil- 
liams V.  Jenkins,  11  Ga.  595;  Stith  v. 
Jones,  101  N.  C.  360;  Thomas  v.  iVaw- 
(ahala  Marble  &  T.  Co.  58  Fed.  Rep. 
485. 

*  In  an  equitable  action  for  the  par- 
tition of  real  estate,  where  the  plain- 
tiff showed  good  reason  to  believe  that 
some  portion  of  the  property  could 
not  be  rented,  in  consequence  of  the 
refusal  of  the  defendant  to  unite  with 
the  other  tenant  in  common  (plaintiff), 
and  that  the  rents  of  other  portions 
which  had  been  rented  could  not  be 
collected  in  consequence  of  her  inter- 
ference,— Held,  that  it  was  proper,  in 
order  to  preserve  the  property  from 
serious  loss,  to  appoint  a  receiver. 
Pignolet  v.  Bushe,  28  How.  Pr.  9. 

Plaintiffs  in  partition,  having  a  right 
to  have  a  receiver  appointed,  cannot 
be  deprived  of  that  right  on  the  ob- 
jection of  a  defendant  because  the  per- 
son claiming  the  rents  is  amply  re- 


sponsible, though  the  defendant  offers 
to  indemnify  against  loss  by  such  col- 
lector, or  to  take  charge  of  the  estate 
and  collect  the  rents  free  of  charge, 
and  give  a  bond  of  indemnity.  Rapp 
v.  ReeMing,  122  Ind.  255, 

Pending  an  application  for  a  parti- 
tion by  one  of  two  tenants  in  com- 
mon there  is  no  ground  for  the  ap- 
pointment of  a  receiver  at  the  request 
of  one  tenant  in  common,  simply  be- 
cause the  other  is  in  possession,  under 
Iowa  Code,  §  2903,  allowing  the 
court,  in  all  civil  actions,  to  appoint  a 
receiver  if  the  interests  of  either  party 
will  be  promoted.  Varnum  v.  Leek, 
65  Iowa,  751. 

*Ames  V.  Ames,  148  111.  321;  Pig- 
nolet V.  Bushe,  28  How.  Pr.  9;  Bowers 
V.  Durant,  2  N.  Y.  S.  R.  127;  Weise 
V.  WeUh,  30  N.  J.  Eq.  431 ;  Duncan  v. 
Campau,  15  Mich.  415.  Cf.  Eoelyn  v. 
Evelyn,  2  Dick.  Ch.  800;  Sandford 
V.  Ballard,  33  Beav.  401;  Hargrave  v. 
Hargrove,  9  Beav.  549;  Smith  v.  Ly- 
ster,  4  Beav.  227;  Rutherford  v.  Jones, 
14  Ga.  521;  Low  v.  Holmes,  17  N.  J. 
Eq.  148;  Street  v.  Anderton,  4  Bro.  C. 
C.  414;  Knowles  v.  Clayton,  2  L.  J. 
Ch.  181. 

Pending  a  suit  for  a  sale  of  land  for 
division  among  cotenants,  equity  will 
not,  by  appointing  a  receiver,  inter- 


MISCELLANEOUS  RECEIVERSHIPS.  551 

§  318.     In  suits  for  specific  performance. 

A  receiver  will  sometimes  be  appointed  in  a  suit  pending  to 
enforce  the  specific  performance  of  a  contract,  where  it  is  neces- 
sary, by  reason  of  insolvency  or  other  good  cause  shown,  in  order 
to  adequately  protect  the  parties.'  And  also  wliere  real  estate  has 
been  sold  and  the  purchaser  is  ])ermitting  the  property  to  go  to  waste 
and  thus  lessening  the  vendor's  security.^  This,  of  course,  is 
based  upon  vendor's  right  to  alien  for  the  unpaid  purchase  money. 

§  319.     As  Ibetween  lessor  and  lessee. 

AVhere  a  party  is  clothed  with  title  and  possession  such  as  are 
conferred  by  a  lease  in  writing  and  is  in  the  enjoyment  of  rights 
apparently  legal  a  receiver  will  not  be  appointed  unless  under 
urgent  and  peculiar  circumstances.  The  plaintiff  must  show  a 
clear  right  in  such  case  or  at  least  such  a  prima  facie  case,  with 
such  attending  circumstances  of  danger  or  probable  loss,  as  will 
move  the  conscience  of  a  chancellor  to  interfere,^ 

§  320.     In  ejectment  suits. 

A  receiver  will  not  be  appointed  in  an  ejectment  suit  between 
the  first  and  second  trials  where  the  first  results  in  a  judgment  in 
favor  of  the   plaintiff,  under  a  statute    providing  for  giving  a 

fere  with  the  lawful  possession  of  one  where  defendant,  who  is  a  nonresident 

of  the  tenants,  who  is  not  shown  to  without  properly  in  the  state  save  the 

dispute  the  title  or  to  disturb  the  pos-  machinery  on  the  land,  is  operating 

session  of  his  cotenants;  especially  if  the  wells  and  selling    the   product, 

there  is  no  sufficient  averment  of  in-  Gallmcay  v.  Campbell,  142  Ind.  324. 
solvency.     Cassetty  v.  Cupjys,  3  Tenn.  A  receiver  may  be  appointed  of  a 

Ch.  524.  fund  arising  from  a  contract  with  the 

A  receiver  of  the  rents  and  profits  United  States  government,  in  a  suit 
of  tenement  houses  will  not  be  granted  to  enforce  specific  performance  of  an 
at  the  suit  of  the  life  tenant  against  a  agreement  by  the  contractor  to  trans- 
remainderman  who,  by  agreement  of  fer  the  checks.  Leonard  v.  Whaley, 
the  parties,  has  been  managing  the  91  Hun,  304;  Taylor  v.  Eckerdey,  L. 
property,  in  the  absence  of  proof  of  R.  2  Ch.  Div.  302.  But  see  Morford 
mismanagement  resulting  to  the  plain-  v.  Ilarnner,  3  Baxt.  391;  Darusmont 
tiff's  injury,  liollwageu  v.  Rollwagen,  v.  Patton,  4  Lea,  597. 
37  N.  Y.  S.  R.  293.  ^  Oibbs  v.  David,  L.  R.   20  Eq.  373; 

'  The  appointment  of  a  receiver  to  Smith  v.  Kclley,   31   Hun,    387;  Phil- 

operate  oil  wells   pending  an  action  lips  v.  Eiland,  52  Miss.  721. 
for  the  specific  performance  of  a  con-  ^  Chicago  &  A.   Oil  cB  Min.  Co.  v. 

tract  to  assign  a  lease  is  authorized  United  Slates  Petroleum  Co.  57  Pa.  83. 


552 


UECEIVEKSHIPS. 


bond  by  tbe  defendant  securing  the  plaintif!  against  all  costs  and 
damages  that  may  be  recovered  against  him,  the  bond  in  snch 
case  being  considered  an  ample  protection  to  the  plaintiff.'  The 
general  rule  is  that  as  between  contestants  over  legal  title  a  court 
of  equity  will  not  interfere  and  aj)point  a  receiver  over  the  in- 
come or  crops."*  There  must  be  strong  grounds  for  relief  shown, 
in  which  the  element  of  danger  of  loss  is  apparent.' 

§  321.     Ill  aliiiioiiy  suits. 

Where  a  deceee  for  alimony  has  been  rendered  a  proceeding 
supplementary  to  execution  may  be  based  thereon,  and  a  receiver 
appointed  over  the  defendant's  effects."  But  independently  of 
any  statutory  provision  a  suit  in  equity  may  be  maintained  to 
compel  the  payment  of  alimony  decreed  to  a  wife.' 


'  A  receiver  to  harvest  and  sell  crops 
will  not  be  appointed,  pending  the 
statutory  new  trial,  in  an  ejectment 
action,  as  the  undertaking  to  pay  all 
costs  and  damages  which  shall  be  re- 
covered in  the  action,  required  by 
Ind.  Rev.  Stat.  1894,  §  1076,  as  a 
condition  of  a  new  trial,  affords  an 
adequate  remedy  at  law  if  damages 
for  conversion  of  the  crops  would  be 
recoverable  in  the  action,  and,  if  not 
recoverable,  the  remedy  would  be  im- 
proper. Stephens  v.  Kaga,  142  Ind. 
523. 

»  Thompson  v.  Sherrard,  22  How. 
Pr.  155,  35  Barb.  593;  Corey  v.  Long, 
12  Abb.  Pr.  N.  S.  427;  People  v. 
New  York,  10  Abb.  Pr.  Ill,  reversing 
8  Abb.  Pr.  7. 

The  refusal  in  such  case  to  grant 
plaintiff  a  receiver  of  the  rents  and 
profits  is  based  upon  the  fact  that  the 
action  of  ejectment  is  not  for  the  un- 
lawful withholding  of  possession,  but 
is  brought  against  the  defendants  as 
trespassers,  and  the  claim  against  de- 
fendants is  for  damage  as  trespassers. 
The  appointment  of  a  receiver  to  re- 
cover damages  in  an  action  of  trespass 
is  unknown  to  the  law.  In  Bateman 
V.  San  Francisco  Super.  Ct.  54  Cal.  285, 


it  is  held  that  a  receiver  in  ejectment 
cases  cannot  be  appointed  under  the 
California  code.  In  lioUins  v.  Henry, 
77  N.  C.  467,  it  is  held  that  where  the 
contest  is  simply  one  over  disputed 
title  to  property,  both  parties  claiming 
the  legal  title,  a  receiver  will  not  be 
appointed  even  where  the  defendant 
is  insolvent.  A  receiver  will  be  ap- 
pointed only  when  the  plaintiff  sets 
forth  an  apparently  good  title,  not 
sufficiently  controverted  by  the  an- 
swer, and  shows  imminent  danger  of 
loss.  Scott  V.  Scott,  13  Ir.  Eq.  212. 
Cf.  Kron  v.  Dennis,  90  N.  C.  327; 
Whitworth  v.  Wofford,  73  Ga.  259;  Da- 
vis V.  Taylor,  86  Ga.  506. 

^Ireland  v.  Nichols,  S7  How.  Pr.  222. 
The  statute  under  which  this  decision 
was  rendered  provided  that  the  plain- 
tiff should  have  damages  for  the  rents 
and  profits  of  the  premises  recovered. 
See,  contra,  Thompson  v.  Sherrard.  35 
Barb.  593.  Cf.  Rogers  v.  Marshall,  6 
Abb.  Pr.  N.  S.  457;  Payne  v.  Atter- 
bury,  Harr.  Ch.  (Mich.)  414;  Frishee  v. 
Timanus,  12  Fla.  300;  Whitney  v.  Buck- 
man.  26  Cal.  447. 

*  Barker  v.  Dayton,  28  Wis.  367, 
5  Barber  v.  Barber,  62  U.  S.  21  How. 
582,  16  L.  ed.  226.    In  Kirby  v.  Kirby, 


MISCELLANEOUS  KECEIVERSH1P3.  553 

^  323.     For  Iniildiiig  and  loan  associations. 

The  rio'ht  of  a  court  of  equity  to  appoint  a  receiver  of  a  build- 
ing and  loan  association  is  well  recognized,  but  the  grounds  upon 
which  it  will  intercede  and  take  the  temporary  niaiiagenient  of  these 
concerns  under  its  control  through  a  receivership  is  not  free  from 
ditiiculties.  The  cor])orate  franchises  of  these  associations,  being 
granted  by  the  state,  are  at  all  times  sul)ject  to  revocation  by  the 
state  for  a  violation  of  the  charter  privileges  granted  in  the  ap- 
propriate actions  therefor,  but  these  proceedings  on  an  action  to 
be  set  in  motion  by  the  state  alone,  wliere  the  public  alone,  as  a 
body,  are  interested,  are  not  available  to  the  individual  for  the 
protection  of  private  rights  and  the  redress  of  private  wrongs. 

The  chief  difficulty  arises  from  the  peculiar  relationship  exist- 
ing in  such  associations  between  the  members  towards  each  other, 
and  the  unique  relationship  of  each  to  the  corporate  entity.  The 
members  are  of  two  kinds,  depositors  and  borrowers,  each  class 
sustaining  peculiar  relations  to  the  other.  They  have  been,  and 
not  inaptly,  termed  corpoi'ate  copartnerships  for  the  reason  that 
the  stockholders  are  in  effect  copartners  in  their  business  i-elations. 
Each  contributes  at  stated  periods  fixed  amounts  as  contributions 
to  a  common  fund  and  this  fund  is  loaned  out,  as  a  rule,  upon 
real  estate  security,  and  repaid  in  instalments  with  interest  and 
premiums,  and  these  are  also  contributions  to  the  common  fund 
for  reinvestment.  The  members  while  called  stockholders  are 
in  fact  qtiasi  partners  in  the  results  of  their  investments.  Owing 
to  the  peculiar  nature  of  the  business  it  is  imperative  that  the 
transactions  shall  be  under  the  supervision  of  a  board  of  directors, 

1  Paige,  261,  the  court  says:  "The  in-  effect  is  Carey  v.  Carey,  2  Daly,  424. 
junction,  receiver,  and  ne  crcat  may  all  In  IIolmeH  v.  Holmes,  29  N.  J.  Eq.  9,  a 
properly  be  made  use  of  to  aid  the  receiver  is  said  to  be  justiliable  if  the 
court  in  doing  justice  between  tlic  par-  defendant  will  not  give  bond,  with 
ties."  So  also  in  Quextel  v.  Questel,  satisfactory  security  for  the  payments. 
Wright  (Ohio)  492,  where  a  husband  Cf.  StiUman  v.  Stillman,  7  Baxt.  169. 
conveyed  his  property  to  his  son  to  It  would  seem  that  a  court  which 
prevent  a  recovery  for  alimony  on  a  renders  a  decree  for  alimony  would 
bill  pending  for  such  purpose  it  was  be  enabled  to  enforce  that  decree  l)y 
held  that  a  court  of  chancery  may  appointing  a  receiver,  if  necessnry, 
properly  enjoin  the  parlies  from  fur-  and  that  no  separate  and  independent 
tlier  changing  the  property,  and  ap-  proceeding  based  on  such  decree  is  re- 
point  a  receiver  to  secure  the  income  quired  unless  it  is  necessary  to  go  to 
to  satisfy  the  alimony.     To  the  same  a  foreign  jurisdiction  to  enforce  it. 


654  RECEIVERSHIPS. 

manai^ing  coinmittee,  or  otlier  body,  Mith  appropriate  officers. 
These  goveriiiii<r  bodies,  under  wliatever  name  designated,  are 
trustees  in  the  strictest  sense  of  the  word,  charged  with  the  man- 
agement of  the  conii^any's  business  in  acconhiuce  witli  tlie  stat- 
utory requirements,  and  the  by-laws,  rules,  and  regulations  adopted 
for  its  management,  and  are  responsible  not  only  for  the  safe- 
keeping of  the  funds  contributed,  l)ut  for  judicious  and  profitable 
investment  tliereof  so  that  the  profits  derived  shall  mature  the 
stock  of  the  members  within  given  periods.  The  investors,  as  a 
rule,  have  small  holdings,  are  often  scattered  over  large  areas  of 
territory,  and  generalh^  from  inexperience  or  situation  are  of 
necessity  expected  to  place  a  large  degree  of  eonfidence  in  the  man- 
aging ofiicers,  and  the  latter  assume  a  corresponding  degree  of 
responsibility  and  accountability.  The  strictness  and  faithfulness 
attaching  to  the  directory  of  the  ordinary  corporation  in  the  man- 
agement of  its  afl:airs  are  redoubled  when  applied  to  the  govern- 
ing board  of  the  building  and  loan  society.  Coupled  with  the 
responsibility  in  the  management  of  these  institutions  is  another 
element  which  renders  the  facilities  for  mismanagement  wide  and 
extended,  and  this  has  caused  the  state  in  many  cases  to  place 
these  societies  under  the  supervision  of  designated  state  ofiicials, 
charged  with  the  duty  of  keeping  the  management  within  the 
statutor}'  requirements,  as  well  as  to  detect  any  evidence  of  neg- 
ligence or  misconduct  on  the  part  of  the  corporate  officials.  Thus 
it  will  be  seen  that  the  inherent  character  of  these  institutions, 
the  attitude  of  the  state  towards  them  in  its  efl;orts  to  shield  their 
members  from  mismanagement,  the  large  and  increasing  number 
of  them,  the  aggregate  volume  of  corporate  funds  seeking  invest- 
ment, and  the  wide  fields  afforded  for  reckless  management  and 
maladministration, — all  render  courts  of  equity  peculiarly  appro- 
priate tribunals  not  only  for  the  prevention  of  loss  and  injury  to 
creditors  and  stockholders,  but  for  settling  and  adjudicating  the 
conflicting  rights  and  interests  of  the  members  in  their  several 
classes,  as  well  as  the  winding  up  and  distribution  of  the  assets 
according  to  the  equities  of  all  parties. 

§  323.     Orounds  for  appointment. 

The  ordinary  and  usual  gi-ounds  upon  which  the  application  for 
a  receiver  in  this  class  of  cases  is  made  is  the  fraudulent  misman- 


MISCELLANEOUS  RECEIVERSHIPS. 


555 


awenient  of  the  aiTairs  of  the  association,  disregard  of  the  cliarter 
and  by-laws,  embezzlement  of  the  officers,  and  insolvency  of  the 
association.' 


'  In  Toicle  v.  American  Blclg.  L.  &I. 
Soc.  60  Fed.  Rep.  131,  a  stockholder 
in  the  association  filed  a  bill  in  behalf 
of  himself  and  all  other  shareholders 
joining  him  upon  which  a  receiver 
■was  appointed  with  the  consent  of  the 
corporation  and  one  of  the  questions 
was  as  to  the  authority  of  the  court  to 
appoint  a  receiver.  The  court  says: 
"The  complainant  is  substiintially 
both  depositor  and  shareholder.  Un- 
der the  constitution  of  the  society  he 
passed  into  the  treasury  periodically 
certain  stipulated  funds.  The  fund 
thus  collected  is  loaned  out  upon  real 
estate  security.  The  interest  of  the 
member  is  not  that  simply  of  a  depos- 
itor in  a  bank  or  a  creditor  of  a  corpo- 
ration. He  holds  no  promise  of  the 
corporation  for  a  return  of  his  fund. 
He  is  a  part  holder  of  the  fund — has 
an  interest  directly  in  the  fund — and  is 
entitled  to  a  proportionate  share  as 
owner  upon  its  distribution.  The 
whole  scheme  of  building  associations 
is  that  of  a  corporate  copartnership 
whereby  are  gathered  into  a  common 
fund  and  loaned  as  such  the  money  of 
many  individuals.  The  interest  of 
each  stockholder  in  the  sums  thus 
collected  and  loaned  is  as  direct  as  if 
no  corporation  intervened.  The  cor- 
poration has  no  function  or  power  ex- 
cept to  loan  out  these  gathered  sums 
and  return  the  avails  thereof  into  the 
hands  of  the  contributors.  If  the 
stockholder  of  a  corporation  or  a  part- 
ner in  copartnership  can  rightfully  in- 
voke the  aid  of  equity  to  administer 
the  assets  of  the  corporation  or  co- 
partnership when  such  power  seems 
essential  to  the  conservation  of  the 
assets  I  can  see  no  reason  why  the 
complainant  is  not  entitled  to  a  like 


aid.  That  the  relief  will  be  afforded 
to  stockholders  and  copartners  upon  a 
proper  showing  is  not  seriously  de- 
nied. The  need  of  such  relief  in 
this  case  seems  to  me  to  be  imperative. 
Tlie  societ}^  I  think,  largely  through 
the  mismanagement  of  its  oflicers,  has 
so  impaired  the  assets  that  there  ap- 
pears to  be  on  hand  less  than  sixty-six 
per  cent  on  a  dollar  contributed. 
There  is  no  claim  that  this  loss  is 
merely  temporary,  or  that  the  con- 
tinuance of  this  society  in  its  present 
management  will  repair  the  evil.  A 
continuance  of  the  organization  would 
simply  be  a  hardship  upon  already  in- 
jured shareholders  and  nothing  in 
their  Interest  can  be  suggested  except 
a  speedy  and  intelligent  collection  of 
the  assets  for  distribution  among  the 
members.  This,  manifestly,  ought 
not  to  be  done  by  the  management 
that  has  brought  about  the  injury  and 
there  is  no  way  pointed  out  for  the 
substitution  of  a  new  management  that 
will  promise  a  better  administration. 
Here  the  debt  is  $000,000  collected 
from  innumerable  sources.  Most  of 
the  contributors  are  among  the  poor, 
people  not  accustomed  to  the  manage- 
ment of  business  affairs.  This  large 
fund  is  scattered  through  five  or  six 
states  and  already  promises  a  return  of 
less  than  sixty-six  per  cent  of  the 
original  advance.  There  is  no  man- 
agement in  power  except  the  discred- 
ited and  distrusted  officers.  Upon 
what  pretext  can  acourtof  equity  close 
its  ears  again.st  the  call  to  take  hold." 
Subsequently  the  same  case  came 
before  the  court  and  is  reported  in  Gl 
Fed.  Rep.  446,  where  the  riglits  of  the 
stockholders  and  the  order  of  distribu- 
tion are  discussed,  c/'.  78  Fed.  Rep. 688. 


556 


RECEIVERSHIPS. 


The  case  of  JToboJcen  BJdg.  Asfio.  v. 
Martin,  13  N.  J.  Eq.  437,  is  devoted 
to  a  discussion  as  to  the  rights  and  in- 
terests of  shareholders  and  the  mort- 
gagors in  the  society  and  the  parties 
and  the  rights  of  adjustment  with  ref- 
erence to  the  peculiar  facts  of  the  case. 

In  FroHtburg  BUIg.  Asso.  v.  Stark,  47 
Md.  338,  application  was  made  by 
stockholders  for  a  receiver  of  the  cor- 
poration alleging  gross  and  fraudu- 
lent misuianagement  of  the  affairs  of 
the  association,  violation  of  its  charter 
and  by-laws  by  the  officers,  embezzle- 
ment by  the  secretary,  misappropria- 
tion by  one  of  the  directors,  and  that 
the  directors  had  refused  to  take  steps 
to  recover  the  amount  due  from  the 
defaulting  officers,  were  doing  business 
without  a  treasurer  and  without  a 
bonded  secretary, and  that  the  corpora- 
tion was  insolvent.  Under  these  alle- 
gations the  court  appointed  a  receiver 
and  the  appointment  was  held  proper 
on  appeal. 

Loic  Street  Bldg.  Asso.  No.  6  v. 
Zticlcer,  48  Md.  448,  was  a  case  adjust- 
ing the  rights  between  the  mortgagor 
and  mortgagee  and  holding  that  the 


mortgagor  could  not  becallcd  upon  to 
contribute  to  the  losses  and  liabilities 
of  the  association. 

In  Christiaris  Appeal,  102  Pa.  184, 
the  court  say  that  the  appointment  of 
a  receiver  to  administer  the  assets  of 
an  insolvent  association  may  be  strictly 
regular,  but  where  the  same  result 
may  be  more  directly,  and  equally  as 
well,  attained  by  an  assignment,  the 
latter  course  should  be  followed. 

y 

FroKtburg  Bldg.  Asso.  v.  Stark,  47 
Md.  338.  In  this  case  there  was  also  an 
allegation  that  the  officers  refused  to 
take  steps  to  recover  the  amount  due 
from  defaulting  officers.  Cf.  Totclev. 
American  Bldg.  L.  &  I.  Sac.  60  Fed. 
Rep.  131. 

Where  the  active  operations  of  a 
company  have  ceased  and  its  affairs 
are  in  course  of  settlement  under  the 
direction  and  control  of  a  court  of 
equity  it  is,  to  all  practical  purposes, 
equivalent  to  a  dissolution  of  the  cor- 
poration. Peters  Bldg.  Asso.  No.  6  v. 
Jaecksch,  57  Md.  198. 

The  court  is  averse  to  appointing  a 
receiver  without  notice.  Frostburg 
Bldg.  Asso.  v.  Stark,  47  Md.  338. 


CHAPTER  XYIII. 


REMOVAL  AND  DISCHARGE  OF  RECEIVER. 


§  330.  Removal  and  discbarge. 

(a)  Notice  of  application. 

(b)  Application  for  removal. 

(c)  Application,      by       whom 

made. 

(d)  Grounds  for  removal. 


(e)  Removal  not  subject  to  ap- 

peal ;  effect  of  appeal. 

(f)  Effect  of  removal  and  dis- 

cliarge. 

(g)  Grounds  for  refusal  to  dis- 

charge. 


§  330.     Removal  and  cliscliarge. 

(a)  Notice  of  application. 
Before  tlie  court  will  entertain  a  notice  to  retnove  or  discharge 
a  receiver,  notice  should  be  given  of  the  intended  application  to 
all  parties  in  interest.  The  action  of  the  court  in  the  appoint- 
ment having  been  in  the  interest  of  all  parties  who  at  the  end  of 
the  litigation  uiiglit  establish  a  right  to  the  property  or  fund,  it 
is  necessary  that  all  should  be  heard  or  have  an  opportunity  to 
be  heard  in  the  matter  of  removal  or  discharge.'    Want  of  notice 


^  Brown  v.  Perry,  1  Ch.  (Ont.)  253; 
Coburn  v.  Ames,  57  Cal.  201. 

A  court  vphich  has  made  an  ancil- 
lary appointment  of  a  receiver  ap- 
pointed in  another  jurisdiction  will 
not  entertain  the  question  of  the  re- 
moval of  such  receiver  for  misconduct, 
but  the  application  should  be  made  to 
the  court  originally  appointing  him. 
Chattanooga  T.  R.  Co.  v.  Felton,  69 
Fed.  Rep.  273. 

A  court  will  entertain  a  motion  to 
discharge,  though  the  order  appoint- 
ing was  made  on  notice.  Sanders  v. 
Christie,  1  Grant  Ch.  (Ont.)  137. 

In  Bruns  v.  Stewart  Mfg.  Co.  31 
Hun,  316,  it  appeared  that  a  new  re- 
ceiver was  substituted  in  tlie  place  of 
a  former  one,  and  it  was  held  that 
where  the  motion  to  vacate  the  order 
had  been  denied,  the  court  could  not, 
upon  objections  by  other  persons,  re- 


move the  receiver  for  different  or 
other  reasons  without  notice. 

In  Attrill  v.  Rockaioay  Beach  Improv. 
Co.  25  Hun,  509,  it  is  held  that  notice 
for  the  removal  of  the  receiver  should 
be  served  upon  all  the  parties  who 
have  appeared  in  the  action. 

In  Young  v.  Montgomery  &  E.  R. 
Co.  2  Woods,  606,  it  is  said  that  no 
court  or  judge  would  order  the  re- 
moval of  a  receiver  ex  parte  without 
giving  them  their  day  in  court.  "No 
matter  what  .showing  the  complain- 
ants may  be  able  to  make  as  to  the  in- 
competency, unfitness,  or  dishonesty 
of  the  receiver,  this  court  cannot  act. 
That  showing  must  be  made  to  the 
court  which  appointed  him." 

It  has  been  held,  however,  that  no- 
tice to  creditors  is  not  required.  New 
York  &  W.  U.  Teleg.  Co.  v.  Jewett,  115 
N.Y.  166. 


557 


558 


RECEIVERSHIPS. 


tlioni;li  in-e^ular  wonUl  probably  not  justify  a  reversal.'  The 
receiver  as  a  rule  is  not  entitled  to  notice,  for  the  reason  that  he 
has  no  intei-est  in  the  subject-matter  of  the  litigation."  If,  how- 
ever, the  removal  is  based  upon  some  act  or  alleged  misconduct  of 
the  receiver,  then  in  such  case  he  is  entitled  to  notice  and  to  know 
the  grounds  upon  which  the  application  is  to  be  based.* 

(b)    ArPLICATION    FOR    REMOVAL. 

If  the  application  for  removal  is  based  upon  the  act  of  the  re- 
ceiver, it  should  be  made  in  the  form  of  a  petition,  setting  forth 
the  facts  upon  which  it  is  based,  so  that  an  issue  may  be  formed,' 
and  the  application  must  be  made  in  apt  time,"  or  at  least  on  con- 


•  Cohurn  v.  Ames,  57  Cal.  201. 

'In  Howard  v.  Lowell  3farh.  Co.  75 
Ga.  825,  it  was  lield  that  an  order  ap- 
pointing a  receiver  may  be  revolced 
•without  notice.  It  is  only  in  cases 
where  the  receiver's  conduct  is  called 
in  question  and  where  it  is  sought  to 
make  him  liable,  or  where  he  is  called 
upon  to  account  or  make  return  that 
he  is  entitled  to  a  notice  or  to  a  hearing. 
He  is  not  entitled  to  a  notice  or  a  hear- 
ing when  the  question  relates  to  the 
necessity  of  his  appointment  or  of  the 
continuance  of  tiie  appointment. 

^  A  motion  to  dismiss  a  receiver  will 
not  be  granted  until  he  has  had  rea- 
sonable notice  in  writing  of  such  in- 
tended motion,  and  the  grounds  upon 
which  his  removal  is  sought  must  be 
specifically  set  out  in  such  written 
notice.  Dotigherty  v.  Jones,  37  Ga. 
348;  Young  \  .Montgomery  <&  E.  B.  Co. 
2  Woods,  606. 

In  Slate,  Pettoiger,  v.  Claypool,  13 
Ohio  St.  14,  the  receiver  being  ap- 
pointed by  statute  by  the  state  officers, 
it  was  held  that  he  was  not  removable 
under  the  statute  at  their  pleasure. 

Where  a  receiver  of  a  corporation, 
pending  an  action  brought  by  him  as 
such,  was  removed,  and  a  successor 
appointed,  and  the  original  receiver 
afterwards  died,  and  siibsequently  the 


second  receiver  was  removed  and  a 
third  appointed, — Held  that  it  was 
proper  to  substitute  the  third  receiver 
as  plaintilT  in  the  action  in  place  of 
the  first.  Sheldon  v.  Adams,  18  Abb. 
Pr.  405,  37  How.  Pr.  179,  41  Barb. 
54. 

*  Where  it  is  necessary,  in  order  to 
obtain  the  desired  relief,  that  an  inter- 
vener obtain  the  vacation  of  an  order 
appointing  a  receiver,  a  summary  pro- 
ceeding by  motion  is  not  the  appro- 
priate remedy,  but  this  should  be  done 
by  a  petition  setting  forth  the  facts 
upon  which  he  relies,  to  which  the 
receiver  may  interpose  an  answer  and 
take  issue.  Jacobson  v.  Landolt,  73 
Wis.  142. 

*If,  during  the  term  of  the  court 
that  appointed  a  receiver,  there  is,  by 
adjournment,  such  an  interval  in  the 
session  as  to  prevent  the  application 
for  his  removal  to  be  made  to  the 
same,  without  causing  injustice  by 
the  delay,  it  is  the  duty  of  the  judge 
at  chambers  to  act  thereon.  Cincin- 
nati, S.  &  C.  B.  Co.  v.  Sloan,  31  Ohio 
St.  1. 

Creditors  of  a  state  bank  who  have 
acquiesced  for  several  months  in  the 
appointment  of  a  receiver  of  the  bank 
on  the  application  of  a  stockholder, 
during  which  time  large  expenses  have 


REMOVAL  AND  DISCHARGE  OF  RECEIVER. 


559 


dition  tliat  the  receiver's  exj^enses  and  compensation  be  paid,' 
and  should  be  made  in  the  court  in  whicli  the  receiver  was  ap- 
pointed/ The  removal  rests  in  the  sound  judicial  discretion  of 
the  court,  to  be  exercised  under  all  the  circumstances  of  each 
particular  case.^ 


been  incurred  in  the  administration  of 
the  receivership,  are  estopped  to  claim 
tlie  illegality  of  the  appointment  where 
it  is  at  most  voidable  only,  and  not 
void.  Dickerson  v.  Cass  County  Bank 
(Iowa)  64  N.W.  395. 

The  court  may  vacate  an  order  ap- 
pointing a  receiver  pending  a  motion 
for  a  new  trial  of  the  case  in  which 
such  appointment  was  made.  Copper 
Hill  Min.  Co.  v.  Spencer,  25  Cal.  11. 

The  court  may,  at  any  time  before 
the  appointment  of  a  receiver,  which 
they  have  directed,  is  consummated, 
revoke  such  appointment  and  appoint 
another.  Siney  v.  New  York  Consul. 
Stage  Co.  18  Abb.  Pr.  435,  28  How. 
Pr.  481. 

'  Where  a  receiver  appointed  in  an 
action  commenced  when  a  former  ac- 
tion between  the  same  parties  and  on 
the  same  subject-matter  was  pending 
in  another  court,  had  expended  mon- 
eys in  the  matter  of  the  receivership, 
— Held,  on  granting  a  motion  to  stay 
proceedings  and  to  vacate  the  order 
for  his  appointment,  that  it  should  be 
done  on  condition  that  his  expenses 
and  compensation  be  paid  by  the 
moving  party.  McCarthy  v.  Peake,  9 
Abb.  Pr.  164. 

'  The  rights  of  one  having  a  judg- 
ment against  another  as  receiver,  with 
a  direction  that  his  claim  be  paid  from 
a  certain  fund  at  that  time  in  the  re- 
ceiver's hands,  cannot,  pending  an 
appeal  from  such  judgment,  be  taken 
away  by  a  judgment  or  direction  in 
another  action  discharging  the  re- 
ceiver, to  which  he  was  not  a  party. 
Woodruff  V.  Jewett,  115  N.Y.  267,  Re- 
versing 37  Hun,  205. 


In  Attvill V.  Rockaway  Bench  Tmprov. 
Co.  25  Hun,  376,  it  is  held  that  a  re- 
ceiver appointed  in  one  judicial  dis- 
trict cannot  be  removed  upon  an  ap- 
plication made  in  another  judicial  dis- 
trict; that  a  receiver  appointed  in  an 
action  should  not  be  removed  without 
notice  of  the  application  to  the  plain- 
tiff at  whose  instance  he  was  ap- 
pointed. 

Proceedings  to  remove  must  neces- 
sarily be  in  the  case  in  which  he  is 
appointed.  Mechanics'  Nat.  Bank  v. 
Landauer,  68  Wis.  44. 

A  mortgagee  in  possession  having 
been  adjudged  to  be  in  i)ossession  as 
sucli,  and  appointed  receiver, — Held 
that  another  judge  should  not  remove 
him  for  any  cause  existing  before  the 
order  of  his  appointment  was  made, 
but  might  control  his  administration 
of  the  trust.  Bolles  v.  Duff,  35  How. 
Pr.  481. 

3  In  Milwaukee  &  M.  R.  Co.  v.  Sout- 
ter,  69  U.  S.  2  Wall.  510,  17  L.  ed. 
900,  it  is  held  that  the  appointment 
or  discharge  of  a  receiver  is  ordina- 
rily a  matter  resting  wholly  within 
the  discretion  of  the  court,  but  is  not 
always  absolutely  so.  That  in  a  fore- 
closure proceeding  where  the  amount 
due  on  the  mortgage  is  a  matter  un- 
settled and  contested,  the  appointment 
or  discharge  of  a  receiver  is  in  the 
discretion  of  the  court  in  which 
the  litigation  is  pending.  When  the 
amount  due  lias  been  passed  upon 
and  fixed  and  the  right  of  the  mort- 
gagor to  pay  settled,  the  court  has  no 
discretion  to  withhold  the  restoration 
of  the  property,  and  the  refusal  to 
discharge  the  receiver  is  a  judicial 


560 


RECEIVERSHIPS. 


(c)  Application,  by  whom  made. 

The  application  for  the  discharge  of  the  receiver  may  be  made 

by  tlie  defendant,  a  stockholder  or  creditor,  or  other  i)arty  in 

interest,  where  a  proper  showing  is  made  and  the  court  is   of 

opinion  the  interests  of  all  concerned  will  be  protected.'     The 


error  which  the  appellate  court  may 
correct.  In  such  case  the  discharge 
is  proper,  even  though  third  parties 
set  up  claims  to  the  road  which  they 
asked  the  receiver  to  provide  for  and 
protect,  but  which  are  disputed  and 
contested.  The  court  will  exercise 
the  power  of  discharging  under  con- 
ditions, such  as  that  of  the  company 
giving  security  to  pay  the  claims  if 
finally  established  as  liens. 

The  exercise  of  the  power  to  re- 
move a  receiver  rests  in  the  discretion 
of  the  court,  aud  is  to  be  governed  by 
the  circumstances  of  each  particular 
case;  and  bias  and  partiality  are  good 
grounds  for  its  exercise.  Detroit  First 
Nat.  Bank  v.  Barnum  Wire  &  I. 
WorkK,  60  Mich.  487,  58  Mich.  124, 
315;  Davis  v.  Gray,  83  U.  S.  16  Wall. 
217,  218,  21  L.  ed.  453;  Merchants  & 
M.  Nat.  Bank  v.  Kent  Circuit  Judge, 
43  Mich.  297. 

A  chancellor  may  in  his  sound  dis- 
cretion refuse  to  terminate  a  receiver- 
ship in  an  action  attacking  an  attach- 
ment, and  to  deliver  the  money  in 
the  receiver's  hands  to  the  attachment 
creditors  who  have  recovered  a  judg- 
ment in  the  attachment  action  pend- 
ing an  appeal  taken  upon  mere  surety- 
ship for  costs  from  a  judgment  in  their 
favor,  where  the  fund  is  large  and 
they  are  nonresidents.  E.t  parte  Hood 
(Ala.)  18  So.  176;  Be  Albert  Average, 
etc.  L.  R.  5  Ch.  A  pp.  597. 

•  Atkins  V.  Waba-sJi,  St.  L.  d  P.  R. 
Co.  29  Fed.  Kep.  161. 

In  an  application  of  the  defend- 
ant to  vacate  and  set  aside  the  ap- 
pointment of  a  receiver  in  an  action 


to  foreclose  a  chattel  mortgage,  the 
court  ordered  the  receiver  to  be  dis- 
charged if  the  defendant  would  exe- 
cute a  bond  to  pay  the  judgment  and 
costs,  which  bond  the  defendant  vol- 
untarily executed,  and  had  restored 
from  the  receiver  all  the  property. 
Such  defendant  cannot  contest  the 
legal  costs  of  the  receiver  or  any 
irregularity  in  his  appointment.  State 
Journal  Co.  v.  Commonwealth  Co.  43 
Kan   93. 

But  where  the  receiver  is  appointed 
under  a  creditor's  bill  filed  in  behalf 
of  all,  the  removal  will  not  be  made 
against  the  consent  of  a  judgment 
creditor,  even  though  a  defendant. 
J^argan  v.  Bowen,  1  Sch.  «fe  Lef.  296; 
Murrough  v.  Trench,  2  Moll.  497.  Cf. 
Be  Association  of  Land  Financiers, 
L.  R.  10  Ch.  Div.  269. 

A  receiver  appointed  on  an  applica- 
tion of  debenture  holders,  with  power 
to  manage  the  business  of  the  cor- 
poration until  the  creditors'  petition 
to  wind  up  is  disposed  of,  should  not 
be  discharged  when  continued  after 
the  making  of  the  winding-up  order, 
because  leave  is  given  to  discontinue 
the  business,  where  interest  on  the  de- 
bentures is  in  arrears,  and  there  is  no 
uncalled  capital,  and  the  assets  of  the 
company  are  not  enough  to  pay  the 
debentures.  Strong  v.  Carlyle  Press 
[1893]  1  Ch.  268. 

In  Fifth  Nat.  Bank  v.  Pittsburg  & 
C.  S.  R.  Co.  1  Fed.  Rep.  190,  it  is 
held  that  the  stockholders  of  the  de 
fendant  railroad  company  cannot 
obtain  the  removal  of  the  receiver  by 
petition    where   it  appears  that   the 


REMOVAL  AND  DISCHARGE  OF  RECEIVER. 


561 


application  has  sometimes  been  entertained  on  behalf  of  the  re- 
ceiver,' but  as  a  rule  his  application  will  not  be  granted.'^ 


corporation  Las  a  regularly  elected 
board  of  directors  and  that  such  board 
is  in  sympathy  with  the  petitioners. 
As  to  the  grounds  upon  which  an 
appointment  of  a  receiver  of  a  bank 
will  be  vacated  on  petition  of  a  credi- 
tor not  a  party  to  the  proceedings  for 
the  appointment,  see  Bowery  Bank 
Case,  5  Abb.  Pr.  415. 

'  The  discontinuance  of  a  suit  in 
equity  for  the  account  and  settle- 
ment of  the  concerns  of  a  copartner- 
ship, does  not  discharge  a  receiver 
appointed  therein;  but  will  entitle 
the  receiver  to  apply  for  his  discharge 
and  exonerate  himself  and  his  sureties, 
unless  the  interests  of  the  defendants 
require  that  he  should  continue  in  the 
receivership  to  protect  their  rights,  in 
which  case  the  defendant  so  pro- 
tected should  be  required  to  file  a  bill 
forthwith  to  settle  his  rights.  ^Yhite- 
side  V.  Pendergnd,  2  Barb.  Ch.  471. 

^  The  receiver  of  a  broken  bank 
will  not  be  discharged  as  a  matter  of 
course  from  his  trust.  He  must 
show  good  cause,  and  his  mere  desire 
to  be  released,  coupled  with  the  fact 
that  the  accounts  are  complicated, 
and  that  much  time  will  be  lost  from 
his  own  business,  will  not  be  good 
cause.  Beers  v.  Chelsea  Bank,  4Edw. 
Ch.  277. 

In  VEngle  v.  Florida  C.  R.  Co.  14 
Fla.  266,  Ihe  defendant  moved  to 
vacate  the  order  appointing  a  receiver, 
to  which  the  plaintill  consented,  but 
the  receiver  objected.  The  court 
held  the  motion  should  have  been  so 
far  as  to  restore  the  property  to  the 
owner,  including  the  receipts  and  dis- 
bursements of  future  earnings.  The 
receiver  should  not  be  heard  in  oppo- 
sition to  this  motion. 

In  Re  Colvin,  3  Md.  Ch.  278,  302, 

36 


the  chancellor  says:     "  But  what  is  it 
to  him  (the  receiver)  what  the  court 
does  with  the  piopert}',  provided  he  is 
discharged  from  his  responsibility  as 
receiver,  and  thnt  he  would  be  so  dis- 
charged by  obeying  the  order  of  court 
cannot   be   questioned.      It  is   more- 
over conceded  that  the   receiver  has 
no  rights  himself,  and  of  course  can- 
not appeal  or  interfere  in  any  way  in 
the  conduct  of  the  cause,  unless  he 
can    be    considered   as    representing 
those  at  whose  instance  he  was  ap- 
pointed.    But  to  view   him  in   that 
light  would  be  to  give  him  a  charac- 
ter inconsistent  with  the  nature  of  his 
office  as  defined  by  Chancellor  Bland. 
How  can  he  be  the  officer  of  the  court 
and  the  hand  of  the  court  and  at  the 
same  time  the  representative  of  the 
interests  of  certain  of  the  parties  to 
the  cause?    The  court  must  act  by  its 
officers  and  agents,    and  there   is  as 
much  propriety  in  calling  the  court 
the    representative    of    any     of     the 
parties  to  the  cause  as  its  agents  and 
officers   who   derive   their    authority 
from  the  court  and  are  removable  at 
its  discretion.     .     .     .     We  hold    it 
therefore  to  be  too  clear  for  doubt 
that  a  receiver  has  no  right  to  inter- 
meddle in  questions  affecting  a  right 
of  the  parties  or  the  disposition  of  the 
properly  in  his  hands;  that  he  cannot 
in  any  sense  or  to  any  extent  be  re- 
garded as  the  representative  of  any 
one   or   more   of   the   parties   to   the 
cause,  and  that  he  must  retire  from 
olfice  and  give  up  the  property  com- 
mitted to  his  custody  whenever   re- 
quired so  to  do  by  the  court;  and  this 
wliether  the  power  to  discharge  may 
be  so  reserved  or  not,  as  was    cor- 
rectly slated  in  the  argument." 


562 


RECEIVERSHIPS. 


(d)  Grounds  for  removal. 
The  cjrounds  upon  which  a  receiver  may  be  removed  are  ex- 
ceedingly numerons  and  varied,  and  in  the  nature  of  things  no 
general  principles  can  be  laid  down  upon  the  subject.  Receivers 
have  been  removed  because  of  collusion  practised  in  the  appoint- 
ment,' where  the  injunction  and  lis  pendens  afford  ample  protec- 
tion," or  M'here  no  property  has  come  into  his  hands  as  receiver,' 
or  where  the  suit  abates  by  reason  of  the  death  of  the  defend- 
ant,* or  where  plaintiff's  indebtedness  has  been  paid,^  or  where 
the  receiver  is  guilty  of  neglect  and  dereliction  of  duty,"  or  where 


'  Wihon  V.  Barney,  5  Hun,  257. 

A  receiver  of  a  corporation  will  be 
discharged  upon  motion  of  the  court, 
upon  its  appearing  that  the  receiver's 
appointment  was  procured  by  collu- 
sion between  the  corporation  and  one 
of  its  creditors,  for  the  purpose  of 
keeping  the  property  of  the  corpora- 
tion from  the  other  creditors.  Snge 
V.  Memphis  &  L.  R.  R.  Go.  18  Fed. 
Rep.  571,  5  McCrary,  613,  125  U.  S. 
361,  31  L.  ed.  694. 

A  receiver  of  a  corporation  ap- 
pointed without  notice  to  the  com- 
pany, upon  a  bill  containing  no  equi- 
ty, by  consent  of  the  president  in 
collusion  with  the  plaintiffs  and  with- 
out bringing  to  tlie  notice  of  the  court 
the  fact  that  he  had  no  authority  to 
give  such  consent,  will  be  discharged 
on  motion.  Walters  v.  Anglo-Amer- 
ican Mortg.  &  T.  Go.  50  Fed.  Rep.  316. 

*  Where  the  objects  of  a  receiver- 
ship may  be  secured  by  continuing 
an  injunction  and  filing  a  notice  of 
lis  pendens,  together  with  a  bond  for 
future  rents  of  the  property,  a  re- 
ceiversliip  may  be  suspended.  Jones 
V.  Smith,  40  Fed.  Rep.  314. 

'A  receiver  into  whose  hands  no 
property  has  come  is  entitled  to  a  dis- 
charge upon  vacation  of  his  appoint- 
ment. People  v.  Bushwick  Chemical 
Co.  45  N.  Y.  S.  R.  329. 

*  Wooda  v.  Creaglie,  1  Hog.  174. 


The  abatement  of  a  suit  in  equity 
does  not  discharge  a  receiver  who 
had  been  previously  appointed.  Mc- 
Cosker  v.  Brady,  1  Barb.  Ch.  329. 

^  Davis  V.  Marlborough,  2  Swanst. 
118;  Tewart  v.  Lawsion,  L.  R.  18  Eq. 
490;  Sankey  v.  O'Maley,  2  Moll.  491; 
Braham  v.  Strathmore,  8  Jur.  567. 
Davis  V.  Dale,  150  111.  2;;9. 

The  payment  of  a  judgment  by  the 
debtor,  after  the  appointment  of  a  re- 
ceiver in  supplementary  proceedings, 
does  not,  ipso  facto,  discharge  the  re- 
ceiver. The  receiver  may  have  a 
claim  for  expenses  incurred  in  the  ex- 
ercise of  his  authority,  which  may  be 
required  to  be  paid  before  the  prop- 
erty held  by  him  can  be  taken  out  of 
his  possession.  Crook  v.  Findley,  60 
How.  Pr.  375. 

^Re  St.  George's  Estate,!,.  R.  19  Ir.  566. 

Where  an  officer  of  a  corporation 
has  been  appointed  receiver,  to  wind 
it  up  as  insolvent,  the  fact  that  in- 
vestigation of  his  conduct  as  such 
officer  is  necessary  is  ground  for  re- 
moving him  from  the  receivership. 
McCttllough  V.  Merchants'  Loan  <&  T. 
Go.  29  N.  J.  Eq.  217. 

If  the  person  appointed  receiver 
absents  himself,  and  fails  to  file  the 
bond  ordered,  the  court  may,  at  its 
discretion,  remove  him  and  appoint 
another.  McCullough  v.  Merchants' 
Loan  &  T.  Co.  supra. 


KEMOVAL  AND  DISCHAEGE  OF  RECEIVER. 


563 


the  appointment  was  improvidently  made,'  or  where  the  receiver 
disobeys  the  orders  of  court,'^  or  there  is  disagreement  between 
joint  recei veers'  or  bitter  opposition  by  some  parties  in  interest,* 
or  even  where  no  unfitness  is  shown  if  the  general  benefit  of  the  com- 
pany will  be  subserved  by  the  removal,*  or  from  interest  and  feelings 
of  the  receiver  towards  the  plaintiff '  or  fraudulent  action  on  his 


'  In  Cratcford  v.  Boss,  39  Ga.  44,  it 
is  held  that  extraordinary  wri(s  and 
remedies  granted  by  a  chancellor  be- 
fore trial  on  the  merits  ought  to  be 
granted  with  caution,  unless  there 
is  immediate  danger  to  the  rights  of 
plaintiff  if  they  be  denied,  and  if  the 
court  become  satisfied  that  the  danger 
does  not  exist,  it  is  his  duty  to  dis- 
charge them.  In  this  case  the  court 
ordered  the  vacating  of  the  order  ap- 
pointing the  receiver. 

In  Ter7'y  v.  Ba/ik  of  Central  Nero 
York,  15  How.  Pr.  445,  the  defendant 
asked  the  court  that  the  order  for  an 
injunction  and  appointing  a  receiver 
be  discharged  and  leave  granted  to 
resume  business   upon   the  grounds: 

(1)  that  the  injunction  was  irregular, 
having  been   granted  without  bond; 

(2)  that  the  statutes  under  which  the 
receiver  had  been  appointed  had  been 
repealed;  and  (3)  that  the  defendant 
was  not  insolvent  within  the  provi- 
sions of  the  statute,  and,  upon  consid- 
eration by  the  court,  the  motion  was 
granted. 

""  Atkinson  v.  Smith,  89  N.  C.  72. 
(Failure  to  account.) 

Upon  an  account  of  assets  collected 
by  a  receiver,  he  was  ordered  by  the 
court  to  pay  the  amount  into  bank. 
Upon  a  second  account  it  was  found 
that  he  had  not  obeyed  said  decree, 
and  also  had  not  given  additional 
sureties  as  commanded, — Held  that 
the  court  might  set  aside  its  former 
decree,  remove  him,  and  direct  him 
to  pay  to  one  appointed  in  his  place 
all  that  he  had   collected,  or   render 


himself  liable  to  an  action.     Shackel- 
ford V.  Shackelford,  32  Gratt.  481. 

Cf.  Re  Tavistock  Iron  Works  Co.  24 
L.  T.  605,  19  Week.  Rep.  672. 

'  Where  two  receivers  of  a  railroad 
company  were  appointed  by  agree- 
ment of  all  parties  interested,  with 
their  offices  a  thousand  miles  apart, 
and  they  subsequently  became  hostile 
to  each  other, — Held  that  both  should 
be  removed,  and  a  resident  of  the 
state  in  which  the  road  mainly  lay, 
who  was  impartial,  should  be  ap- 
pointed. Meier  v.  Kansas  P.  R.  Co. 
5  Dill.  476. 

■*  A  receiver  appointed  by  a  United 
States  court  under  the  belief  that 
substantially  all  interests  affected 
were  united  in  the  application  there- 
for will  be  removed,  where  it  appears 
that  he  is  bitterly  opposed  by  some 
of  the  parties  interested  and  was  nom- 
inated by  the  other  parties,  notwith- 
standing a  receiver  had  also  been  ap- 
pointed by  a  state  court  who  was  a 
partisan  of  the  parties  hostile  to  the 
receiver  in  question.  Wood  v.  Oregon 
Development  Co.  55  Fed.  Rep.  901. 

^  Re  BritisJi  Nat.  L.  Assur.  Asso.  L. 
R.  14  Eq.  493. 

®The  circumstances  in  a  particular 
case  were  held  to  justify  the  removal 
of  a  receiver  of  the  property  of  a  joint 
slock  association,  appointed  in  a  prior 
suit,  and  the  appointment  of  another 
person  in  his  place,  where,  upon  in- 
spection of  the  proceedings  in  the  for- 
mer suit,  and  from  the  evidence  pro- 
duced on  the  application  for  the  ap- 
pointment of  another  receiver,  it  was 


564 


RECEIVERSHIPS. 


part,"  or  where  defendant's  counsel,  though  in  court,  did  not  know 
of  the  appointment.^ 

(e)  Kemoval  not  subject  to  appeal  ;    effect  of  appeal. 

The  removal  of  the  receiver  furnishes  no  ground  of  appeal. 
The  receiver  is  the  mere  officer  of  court  and  his  holding  is  the 
holding  of  the  court  for  the  party  who  may  be  entitled,  and  his 
discharge  is  no  ground  of  appeal.' 

(f)  Effect  of  kemoval  and  discharge. 
"When  a  receiver  has  been  discharged  a  creditor  cannot  there- 
after sue  him  on  a  claim  against  the  property  in  the  hands  of  the 
court,*  though  it  does   not  follow  that  the  company  will  be  re- 


apparent  to  the  court  that  the  trustee 
who  had  been  appointed  receiver  in 
the  former  suit  was,  from  interest  and 
feelings,  adverse  to  the  plaintiff  in 
the  second  action,  and,  for  other  rea- 
sons, an  improper  person  to  act  as  re- 
ceiver in  administering  the  affairs  of 
the  association.  McArdle  v.  Barney, 
50  How.  Pr.  97. 

'An  individual  who  was  appointed 
secretary  of  an  insolvent  savings  bank 
by  its  directors,  and  was  used  by  them 
in  a  month  thereafter  to  make  and 
verify  a  false  statement  declaring  its 
solvency,  and  who  was  named  by 
them  as  its  receiver  in  a  suit  which 
they  caused  to  be  instituted  to  wind 
up  its  affairs,  is  not  a  fit  and  proper 
person  to  execute  such  trust,  and 
should  be  removed  upon  application 
of  the  creditors  of  the  bank.  People 
V.  Third  Ave.  Sav.  Bank,  50  How. 
Pr.  22. 

'Where  a  receiver  was  appointed, 
unobserved  by  the  defendant's  coun- 
sel though  he  was  in  court  for  the 
whole  day  to  oppose  the  motion  for 
the  appointment,  he  was,  on  a  motion 
to  vacate,  considered  as  in  the  same 
situation  as  upon  the  hearing,  for  the. 
first  lime,  of  an  application  for  a  re- 
ceiver. Merchants'  &  M.  Bank  v. 
Griffith,  10  Paige,  519. 


» Waxhi7igton  City  &  P.  L.  R.  Co.  v. 
Southern  Maryland  R.  Co.  55  Md.  153; 
Ellicott  V.  Warford,  4  Md.  80;  Cainv. 
Warford,  7  Md.  283. 

In  a  recent  case  of  Harris  v.  People 
(111.  App.)  13  Nat.  Corp.  Rep.  31,  held, 
where  a  receiver  was  appointed  on 
final  decree  and  the  decree  appealed 
from,  that  the  effect  of  the  appeal  be- 
fore the  receiver  took  possession  was 
to  suspend  his  right  to  possession 
pending  the  appeal,  and  is  based  upon 
the  following  cases:  Boyntonx.  Foster, 
7  Met.  415;  Levi  v.  Karrick,  15  Iowa, 
444;  Turner  v.  First  Nat.  Bank,  30 
Iowa,  191;  Carmichael  v.  Vandebur, 
51  Iowa,  225;  Letcis  v.  Leiois,  20  Mo. 
App.  54G;  Toicnsend  v.  Townsend,  60 
]\Io.  246;  Elgin  Lumber  Co.  v.  Lang- 
man,  23  111.  App.  2o0.  But  see  Penn 
Mat.  L.  Ins.  Co.  v.  Semple,  38  N.  J. 
Eq.  314;  Beard  v.  Arhuckle,  19  W.  Va. 
145;  Ilution  v.  Lockridge,  27  W.  Va. 
428.  The  rule  might  be  otherwise, 
however,  if  the  receiver  was  in  posses- 
sion when  the  appeal  was  taken. 

'' After  a  receiver  has  been  dis- 
charged, a  creditor  cannot  sue  him  on 
a  claind  against  the  property  in  the 
hands  of  the  court.  New  York  &  W. 
U.  Teleg.  Co.  v.  Jeicett,  115  N.  Y.  166. 

After  the  property  is  sold,  pur- 
chased by  mortgage  bondholders,  and 


REMOVAL  AND  DISCHARGE  OF  RECEIVER. 


565 


licved  from  liability,  as  where  the  earnings  during  the  receivei'ship 
have  been  expended  in  betterments.'     The  discharge  does  not 


conveyed  to  the  original  company, 
one  who,  during  the  receivership,  has 
sustained  injury  from  the  negligence 
of  the  receiver's  servants  operating 
the  road  cannot  maintain  an  action 
against  the  receiver  and  the  company. 
Ryan  v.  Hays,  82  Tex.  42;  Interna- 
tional &  G.  If.  B.  Co.  V.  Ormond,  62 
Tex.  274. 

The  discharge  of  a  receiver  pending 
an  action  against  him  will  not  relieve 
the  corporation  represented  by  him 
from  a  liability  on  a  claim  against 
him,  although  it  is  not  prosecuted  by 
intervention  within  the  time  pre- 
scribed by  the  order  for  his  discharge; 
but  the  action  may  proceed  against 
the  corporation,  where  it  is  shown  that 
assets  have  gone  into  its  possession 
which  would  render  it  liable  to  the 
demand  sued  on.  Boygs  v.  Bro'wn,  83 
Tex.  41. 

'Pending  and  undetermined  suits  for 
unliquidated  demands  cannot  be  com- 
puted as  claims  against  a  receiver  of  a 
railroad  company  so  as  to  relieve  the 
company  from  liability,  after  the  re- 
ceiver's discharge,  on  a  cause  of  ac- 
tion which  accrued  during  the  re- 
ceivership, on  the  ground  that  the 
receiver's  liability  for  unadjusted 
claims  exceeds  the  value  of  the  im- 
provements and  betterments  made  by 
him  out  of  the  earnings  coming  into 
his  hands.  Texas  &  P.  R.  Co.  v. 
Bailey,  83  Tex.  19. 

After  the  discharge  of  a  receiver  and 
the  return  of  the  property  to  the 
owner,  all  control  of  the  court  over 
the  property  is  ended;  and  such  con- 
trol cannot  be  retained  by  an  asserted 
reservation  of  the  right  again  to  as- 
sume control.  Texas  P.  R.  Co.  v. 
Johnson,  76  Tex.  421. 

If  the  earnings  of  a  railroad,  of  the 


property  of  which  a  receiver  has 
been  appointed,  are  invested  in  better- 
ments which  are  returned  to  the  com- 
pany at  the  close  of  the  receivership, 
the  company  receives  the  property 
charged  with  the  satisfaction  of  any 
claim  which  the  receiver  ought  to 
have  paid  out  of  the  earnings  during 
the  receivership.  Texas  P.  R.  Co.  v. 
Qviffiii,  76  Tex.  441;  Texas  P.  R.  Co. 
V.  Johnson,  76  Tex.  421. 

Proceedings  against  a  receiver  to 
compel  the  payment  of  money  fall 
with  his  discharge.  New  York  &  W. 
U.  Teleg.  Co.  v.   Jewett,  43  Hun,  565. 

When  a  receiver  appointed  by  a 
Federal  court  resigns  during  the  pend- 
ency of  a  suit  brought  against  him  un- 
der permission  of  the  court  appointing 
him,  it  is  not  necessary  to  obtain  per- 
mission to  prosecute  the  case  against 
his  successor  in  the  receivership.  For- 
dycey.  Dixon,  70  Tex.  694. 

A  railway  company  is  liable  on  a 
cause  of  action  which  accrued  while 
its  road  was  in  the  hands  of  a  re- 
ceiver, who  expended  its  net  earnings 
in  betterments  and  improvements,  and 
upon  whose  discharge  the  railway 
company,  with  all  betterments,  was 
redelivered  into  the  company's  posses- 
sion without  sale.  Te-nis  P.  R.  Co.  v. 
While,  82  Tex.  543;  Te.vm  &  P.  R.  Co. 
V.  Bailey,  83  Tex.  19. 

A  suit  in  the  state  courts  for  dam- 
ages for  personal  injuries  caused  by 
the  negligent  operation  of  a  railway 
while  in  the  hands  of  a  receiver  ap- 
pointed by  a  Federal  court  can  be 
maintained  against  the  company  after 
its  property  has  been  restored  to  it, 
the  current  earnings  having  been  used 
by  the  receiver  in  improving  the  road. 
Texas  &  P.  R.  Co.  v.  Walts  (Tex.)  18 
S.  W.  312. 


566 


RECEIVERSHIPS. 


affect  the  liability  of  the  receiver  concerning  matters  not  em- 
braced in  his  account/  An  order  discharging  a  receiver  and 
ordering  him  to  restore  it  to  one  of  the  parties  does  not  of  itself 
determine  the  riglit  of  possession." 

(g)  Grounds  fok  refusal  to  discharge. 
Where  creditors  have  for  several  months  acquiesced  in  the  ap- 
pointment of  a  receiver  and  have  pursued  their  remedies  tliere- 
iinder,  it  is  too  late  for  them  to  come  into  court  and  undertake  to 
question  the  legality  of  the  appointment  of  a  receiver.^  The  em- 
ployment of  the  judgment  debtor  by  the  receiver  to  collect  a  por- 
tion of  assets  is  not  alone  sufficient  ground  for  a  discharge/  nor  is 
the  fact  that  the  counsel  for  complainant  has  sometnnes  acted  as 


A  railway  company  is  not  liable  for 
the  negligence  of  its  receiver  ipso 
facto,  unless  it  is  alleged  and  proved 
on  the  trial  that  the  earnings  of  its 
road  in  the  receiver's  hands  have  been 
invested  in  betterments  of  the  prop- 
erty, which  was  turned  over  to  the 
company  on  the  termination  of  the  re- 
ceivership. Texas  &  P.  R.  Co.  v.  Huff- 
man, 83  Tex.  286. 

An  action  for  personal  injuries,  on  a 
right  accrued  against  a  receiver  of  a 
railroad  company,  may  be  brought 
against  the  company  when  the  re- 
ceiver has  been  discharged,  and  all 
property,  together  with  the  earnings 
of  the  road  while  in  his  hands,  have 
been  returned  to  the  company.  Texas 
&  P.  R.  Co.  V.  Oeif/er,  79  Tex.  13; 
Texas  P.  R.  Co.  v.  Johnson,  76  Tex. 
421. 

Where  a  railroad  company,  on  re- 
ceiving possession  of  its  road  from  a 
receiver,  executed  a  bond  to  indem- 
nify him  against  all  debts  and  liabili- 
ties incurred  by  him,  in  pursuance  of 
an  order  of  court  which  also  re- 
quired claims  to  be  presented  within 
sixty  days,  it  was  not  bound  to  re- 
deem tickets  issued  by  the  receiver. 
Godfrey  v.  Ohio  &  M.  R.  Co.  116  Ind. 
80. 


Where  nn  action  against  the  re- 
ceiver of  a  railroad  for  damage  to 
freight  caused  while  he  was  operating 
tlie  road  is  continued  after  his  dis- 
charge, a  judgment  against  the  rail- 
road company  is  erroneous,  where  no 
facts  are  alleged  or  proved  making  the 
company  liable  for  losses  during  the 
receiver's  management.  Texas  &  P. 
R.  Co.  V.  Adams,  78  Tex.  372. 

'  Pondir  v.  Netc  York,  L.  E.  &  W. 
R.  Co.  72  Hun,  384. 

2  Marshall  v.  Otto,  59  Fed.  Rep.  249. 

^  Dickerson  v.  Cass  County  Bank 
(Iowa)  64  N.  W.  395.  Upon  a  mere 
formal  motion  to  substitute  one  per- 
son for  another,  as  receiver  in  an  ac- 
tion, though  it  is  founded  by  the  no- 
tice upon  the  pleadings,  decree,  and 
proceedings  in  the  action,  as  well  as 
upon  affidavits,  the  opposing  party 
cannot  question  the  regularity  of  the 
original  order  appointing  such  re- 
ceiver, or  the  proceedings  generally. 
Fassett  v.  TuUmadge,  13  Abb.  Pr.  12. 

^The  employment  of  the  judgment 
debtor,  by  his  receiver,  to  collect  a 
portion  of  theasigned  demands,  is  not 
alone  sufficient  to  require  his  removal 
from  his  trust.  Ross  v.  Bridge,  15 
Abb.  Pr.  150,  24  How.  Pr.  163. 


REMOVAL  AND  DISCHARGE  OF  RECEIVER. 


567 


coansel  for  the  receiver,'  nor  is  relationship,"  nor  mere  disagree- 
ment between  joint  receivers,'  nor  a  new  election  of  officers." 
Bnt  the  lack  of  assets  in  the  receiver's  hands  sufficient  to  pay  his 
compensation  is  not  ground  for  refusal  to  discharge/  He  cannot 
be  retained  merely  to  enable  the  debtor  to  effect  a  settlement 
with  his  creditors/ 


'  The  fact  that  the  counsel  for  the 
plaintiff  has  sometimes  acted  as  coun- 
sel for  the  receiver  is  no  ground  for 
removing  the  receiver.  Bank  of  Mon- 
roe V.  Schevmerhorn,  1  Clarke  Ch.  366. 

^  Relationship  to  a  party  is  not  alone 
a  sufficient  ground  for  the  removal  of 
a  receiver;  at  most,  it  is  but  a  circum- 
stance to  be  taken  into  consideration 
at  the  time  of  making  the  appointment. 
Wetter  v.  Schlieper,  7  Abb.  Pr.  93. 

'A  and  B  were  appointed  joint  re- 
ceivers, under  a  stipulation,  in  an  ac- 
tion for  a  dissolution  of  partnership. 
They  subsequently  applied  for  the  ap- 
pointment of  a  new  receiver  In  their 
place  on  the  ground  that  the  joint  re- 
ceivers could  not  agree  as  to  the  man- 
ner of  carrying  out  their  trust,  from  a 
conflict  of  interest  and  incompatibility 
of  temper.  It  was  shown  that  the 
fund  was  in  danger, — Held  that  these 
were  not  good  grounds  for  removal 
and  appointment  prayed  for,  the  facts 
upon  which  the  relief  was  asked  being 
known  to  the  parties  who  made  the 
stipulation.  Comer  v.  Belden,  8  Daly, 
257. 

^  After  the  corporation  has  been 
placed  in  the  hands  of  a  receiver,  a 
new  election  of  officers  ordered  by 
court  will  not  of  itself  revoke  the  au- 
thority of  the  receiver.  Keokuk  N. 
L.  Packet  Co.  v.  Davidson,  13  Mo. 
App.  5G1. 


'  Upon  an  application  by  parties  in- 
terested for  the  discharge  cf  a  receiver, 
and  one  by  the  receiver  for  the  adjust- 
ment of  his  compensation  and  allow- 
ance of  his  accounts,  both  heard  to- 
gether, the  court  may  grant  the  dis- 
charge, and  determine  the  matter  of 
the  compensation  and  accounts  in  a 
subsequent  order.  Belmont  Nail  Co. 
V.  Columbia  Iron  &  8.  Co.  46  Fed 
Rep.  8. 

Where  a  receiver  has  no  assets  in 
his  hands  it  is  not  error  to  discharge 
him  upon  the  application  of  those  at 
whose  instance  he  was  appointed, 
without  making  payment  of  his  com- 
pensation and  charges  a  condition  pre- 
cedent to  the  discharge.  Belmont  Nail 
Co.  V.  Columbia  Iron  &  8.  Co.  mpra. 

A  receiver  cannot  be  retained  merely 
to  enal)le  him  to  get  assets  into  his 
hands  from  which  to  pay  his  compensa- 
tion and  charges.  Joslyn  v.  Athens 
Cuarh  &  C   Co.  43  Minn.  534. 

If  he  has  no  assets  in  his  hands  he 
may  be  discharged  without  compensa- 
tion. Joslyn  V.  Athens  Coach  &  C.  Co. 
supra. 

*  A  receivership  should  not  be  con- 
tinued and  creditors  enjoined  from 
prosecuting  their  just  claims  for  the 
purpose  of  allowing  the  debtor  to 
effect  a  settlement  with  creditors. 
Hatpin  v.  Mutual  Brew.  Co.  91  11  un, 
220. 


CHAPTER  XIX. 


CLA.TMS  AGAINST  RECEIVERSHIP  FUNDS. 


§  340.  Claims     against     receivership 
funds. 

(a)  Receiver    disinterested    as 

between  claimants. 

(b)  Mu.st  pay  parlies  named. 

(c)  Proof   of  claims;  order  of 

court. 

(d)  Validity  of  claims. 
§341.  Character  of  claims  allowed. 

(a)  Attorney  and  counsel  fees. 


(b)  Personal  property  tax. 

(c)  Surety  not  entitled  when. 

(d)  Creditors  holding  collater- 

als. 

(e)  Operating  expenses. 
(0  Statutory  liens. 

(g)  Judgment  creditors'  liens. 
§  342.   Preferred  claims;   grounds  for 

allowance. 
§  343.  Nature  of  preferred  claims. 


§  B40.     Claims  against  receivership  funds. 

The  claims  presented  to  a  receiver  for  allowance  ont  of  tlie 
receivership  estate  and  funds  are  exceedingly  numerous  and 
varied  in  character,  and  the  scope  of  discussion  in  this  connection 
will  not  be  extended  beyond  the  briefest  statement  of  the  general 
rules  applicable  thereto,  with  a  sufficient  number  of  citations  to 
illustrate  the  subject. 

(a)  The  receiver's  position  of  independence  and  impartiality 
between  all  parties  in  interest,  renders  it  imperative  that  as  to  all 
claimants  he  shall  remain  disinterested  as  between  them.  He  has 
no  discretion  as  to  the  general  application  of  the  funds,  and  holds 
them  strictly  subject  to  the  order  of  the  court,  and  he  must  not 
become  interested  in  any  claim  presented  for  allowance  from  the 
funds  in  his  hands.' 


'  Receiver  may  not  purchase  prop- 
erty connected  with  the  subject  mat- 
ter of  his  receivership.  Ilerrick  v. 
Miller,  123  Ind.  304. 

He  has  no  discretion  in  general  in 
the  application  of  funds  in  his  hands, 
but  holds  strictly  subject  to  the  order 
of  court.  When  ordered  to  pay  a 
claim  he  cannot  oilset  a  claim  due 
him  personally.  Uerriek  v.  Miller, 
supra. 

An  act  of  receiver  in  acquiring  title 


to  properly  in  his  hands  is  absolutely 
void.     Ilerrick  v.  Miller,  supra. 

It  is  no  part  of  his  duty  to  adjust 
the  accounts.  Moretoii  v.  Harley,  2 
W.  &  W.  (E.)  74,  79. 

Claims  presented  to  the  court 
against  a  fund  or  property  in  the 
hands  of  a  receiver  are  properly  re- 
ferred to  him,  to  ascertain  whether 
they  are  just.  Liizenberger  v.  Jarvis- 
Conklin  Trust  Co.  8  Utah,  15. 

It  is  the  duty  of  receivers  of  a  cor- 

568 


CLAIMS  AGAINST  RECEIVERSHIP  FUNDS. 


569 


(b)  lie  must  pay  to  tlie  parties  named  in  the  order  of  distri- 
bution, or  those  authorized  by  power  of  attorney  to  receipt  for 
them.' 

(c)  The  court  by  an  order  may  require  all  creditors  to  prove 
their  claims  before  the  receiver,  or  other  person  desig-nated, 
within  a  period  specified,  and  as  a  rule  those  failini^  to  make  such 
proof  are  debarred  from  participating  in  the  distribution,"  unless 


poratioD  appointed  under  the  statute 
to  allow  only  such  claims  as  are  legal 
and  just  and  which  might  have  been 
recovered  against  the  corporation, 
cither  at  law  or  in  equity.  Ally.  Oen. 
V.  Life  £  F.  Ins.  Co.  4  Paige,  224. 

A  receiver  will  not  be  permitted  to 
contest  a  single  claim  merely  on  ac- 
count of  his  personal  interest  in  it. 
Stanton  v.  Andrews,  18  111  App.  552. 

One  class  of  creditors  cannot  be 
wholly  or  partially  excluded  from 
llieir  proportionate  share  of  assets  by 
reason  of  previous  payments  made 
before  appointment  of  receiver.  Peo- 
ple V.  Universal  L.  Ins.  Co.  42  Hun, 
616;  People  v.  Knickerhocker  L.  Ins. 
Co.  101  N.  Y.  636,  distinguished. 

Failure  of  a  creditor  of  an  insolvent 
bank  to  verify  a  claim  presented  to 
the  receiver  will  not  bar  the  right  to 
sue  on  the  claim  in  the  absence  of  a 
statutory  requirement  that  the  claim 
shall  be  verified.  Arnold  v.  Penn 
(Tex.  Civ.  App.)  32  S.  W.  353. 

'  A  receiver  is  only  justified  in  pay- 
ing money  to  the  person  named  in  the 
order  or  on  his  power  of  attorney. 
An  attorney  has  no  power  to  receipt 
for  money  due  his  client  without  ex- 
press authority.  Be  Broicne's  Estate, 
L.  R.  19  Ir.  183. 

A  receiver  has  no  right  to  pay 
money  to  anyone  except  the  persons 
named,  as  no  one  else  can  give  a  dis 
charge.  The  payment  to  a  solicitor 
of  the  party  entitled  is  not  allowed, 
and  the  receiver  must  account  for  it. 
lad  V.  Kidd,  63  L.  J.  Q.  13.  7:26. 


Where  he  pays  out  money  in  obedi- 
ence to  the  order  of  court  to  parties 
not  entitled  to  it  he  will  be  protected 
and  not  compelled  to  make  restitu- 
tion.     Willis  V.  Sharp,  124  N.  Y.  406. 

'  A  creditor  failing  to  prove  his 
claim  in  the  time  specified  is  debarred 
from  dividends.  R.  I.  Rev.  Stat.  chap. 
237,  §  13. 

Re  Eddy,  15  R.  I.  474.  But  court 
may  extend  time.     Id. 

An  order  of  a  Federal  court  which 
has  appointed  a  receiver  of  a  corpora- 
tion, that  persons  holding  claims 
against  the  receiver  must  present 
them  by  intervention  in  that  court,  is 
void  as  an  attempt  to  destroy  the 
right  to  sue  and  establish  them  in 
any  court  having  jurisdiction,  in 
violation  of  the  act  of  Congress  of 
March  3,  1887.  Te.ms  <&  P.  B.  Co.  v. 
Watts  (Tex.)  18  S.  W.  312;  Texas  P. 
B.  Co.  V.  Johnson,  76  Tex.  421. 

The  claim  of  a  creditor  of  a  cor- 
poration which  has  been  dissolved, 
and  whose  assets  have  been  placed  in 
the  hands  of  permanent  receivers, 
should  be  paid  if  the  receivers  have 
sufficient  assets  in  their  hands,  though 
the  time  to  prove  debts  against  the 
estate  has  expired.  People  v.  Beming- 
ton,  59  Hun,  282,  Aff'd  in  126  N.  Y. 
654,  mem. 

The  receiver  of  an  insolvent  cor- 
poration having  funds  in  his  hands 
must  pay  in  full  the  royalties  on 
patented  articles  manufactured  by 
such  company  under  contract  to  pay 
royalties    on    each    of    such   articles 


570 


RECEIVERSHIPS. 


there  are  sncli  special  ciren instances  as  render  the  application  of 
the  rule  unjust  and  inequitable. 

(d)  Tiie  method  of  dctenniiiinp;  the  validity  of  claims  ai^ainst 
the  receivership  fund  is  usually  determined  in  the  suit  in  which 


manufactured  and  sold,  when  the 
articles  have  been  sold  by  him  after 
his  appointment;  but  for  such  articles 
as  were  sold  before  his  appointmeut 
the  royalties  become  a  general  debt 
of  the  corporation.  Peoiyle  v.  Rem- 
ivgton,  supra. 

Laud  wrongfully  tak^  possession 
of  by  a  receiver  and  returned  to  the 
corporation  after  the  receiver's  dis- 
charge, is  unaffected  by  the  notice  of 
the  receiver  to  prove  claims.  Bloom- 
field  V.  Van  Slike,  107  Ind.  480. 

Although  the  better  practice  is  for 
the  judge  or  court  appointing  a  re- 
ceiver for  a  railroad  to  fix,  at  the  time, 
as  a  condition,  what  debts  and  liabili- 
ties shall  be  made  a  charge  on  the 
property  and  paid  by  him,  such  an 
order  may  be  made  afterwards.  Cen- 
tral Trvst  Co.  V.  St.  Louis,  A.  &  T.  R. 
Co.  41  Fed.  Rep.  551. 

The  receiver  of  a  mutual  benefit  so- 
ciety is  not  authorized  to  allow  claims 
presented  after  the  expiration  of  the 
lime  fixed  by  the  court  for  the  pres- 
entation of  claims;  but  if  there  are 
such  special  circumstances  as,  in  his 
opinion,  make  it  just  that  such  claims 
should  be  allowed,  and  they  will  not 
delay  the  distribution  of  the  assets,  he 
may  make  special  application  to  a 
single  justice,  setting  forth  such  cir- 
cumstances. Fogg  V.  Supreme  Lodge, 
U.  0.  of  0.  L.  159  Mass.  9. 

The  court  will  allow  a  claim  to  be 
presented  to  a  receiver  of  an  insolvent 
corporation  for  an  investigation  of  its 
merits,  after  the  time  limited  by  order 
for  the  presentation  of  claims,  where 
before  the  expiration  of  such  time  suit 
was  brought  on  claim  against  the  re- 
ceiver, during  the  pendency  of  which 


negotiations  for  a  settlement  were  en- 
tered into  with  a  committee  of  cred- 
itors having  charge  of  the  reorganiza- 
tion of  the  corporate  business  and 
with  which  the  receiver  was  in  con- 
stant communication  and  co-opera- 
tion, and  claimant  was  confident  that 
a  satisfactory  settlement  would  be 
made,  and  the  assets  are  still  in  the 
receiver's  hands,  and  no  embarrass- 
ment will  result  in  the  administration 
of  the  trust  against  which  the  re- 
ceiver should  not  have  provided. 
Wall  V.  Young  (N.  J.  Ch.)  23  All.  526. 

When  a  receiver  has  no  actual  no- 
tice of  a  petitioner's  claim,  before 
making  the  second  dividend,  and  has 
reserved  no  fund  applicable  specifi- 
cally to  the  payment  thereof,  it  is 
error  to  require  him  to  pay  such  peti- 
tioner his  proportion  of  such  divi- 
dend. Smith  V.  Manhattan  Lns.  Co. 
4  Hun,  127. 

Where  a  receiver  appointed  on  the 
dissolution  of  a  corporation  advertised 
for  claims,  and  made  personal  service 
of  notice  to  present  claims  upon  the 
plaintiff  in  a  pending  action  against 
the  corporation,  but  who  presented  no 
claim,  the  latter  could  not,  after  the 
receiver  duly  distributed  the  as.sets 
reserving  only  sufficient  to  meet  the 
expenses,  by  making  the  receiver  a 
party  to  his  action,  cast  on  the  latter 
the  cost  of  the  litigation.  Owen  v. 
Kellogg,  56  Hun,  455. 

Where  railroad  property  is  in  the 
hands  of  a  receiver,  an  order  for  re- 
pairs, to  be  paid  for  by  certificates  of 
indebtedness  constituting  a  first  lien 
on  the  road,  can  only  be  made  on  mo- 
tion after  a  proper  investigation  and 
hearing.   Ej: parte  Mitchell,  12  S.  C.  83. 


CLAIMS  AGAINST  RECEIVERSHIP  FUNDS. 


571 


the  receiver  is  appointed,  but  tlie  court  may  exercise  a  discretion 
ill  tliis  matter.' 


'  It  is  within  the  discretion  of  the 
court,  either  to  determine  claims 
against  a  receiver  by  petitions  in  the 
original  action  in  which  he  was  ap- 
pointed or  by  an  independent  suit. 
Bloke  V.  State  Sav.  Bank,  12  Wash. 
619. 

An  application  by  the  assignee  of  a 
certificate  of  sale  under  foreclosure, 
for  the  appointment  of  a  receiver  to 
collect  rents  and  profits  and  apply  the 
same  to  the  payment  of  mortgages, 
may  be  amended  by  setting  up  facts 
entitling  the  plaintiff  to  the  relief 
sought,  after  the  reversal  of  an  order 
appointing  such  receiver,  although 
the  period  of  redemption  has  expired 
in  the  meantime,  where  there  is  a  con- 
troversy between  the  plaintiff  and  the 
mortgagor  over  the  amount  in  the 
hands  of  the  receiver.  Stoffel  v.  Sel- 
lers, 142  Ind.  801. 

A  subsequent  recognition  by  the 
chancellor,  of  attachment  levies  and 
the  lien  created  thereby  on  property 
in  the  hands  of  the  receiver,  is  equiv- 
alent to  previous  permission  to  make 
them,  and  may  render  such  levies 
valid.     Ex  parte  Tillman,  93  Ala.  101. 

A  proceeding  by  the  receiver  of  a 
corporation  dissolved  in  voluntary 
proceedings  for  the  appointment  by 
consent  of  a  referee  to  try  a  claim  re- 
jected by  the  receiver,  is  not  a  "mo- 
tion" within  N.  Y.  Laws  1883,  chap. 
378,  §  8,  requiring  a  copy  of  all  mo- 
tions in  proceedings  for  the  dissolu- 
tion (<f  a  corporation  or  distribution  of 
its  assets  to  be  served  on  the  attorney 
general.  People  v.  American  S.  B. 
Ins.  Co.  14  Misc.  162. 

Where  money  is  placed  in  the  hands 
of  a  receiver  pending  the  litigation, 
the  court  may,  on  the  decision  of  the 
cause,  direct   its  application   on  mo- 


tion. But  the  court  cannot  act  in  this 
summary  manner  where  money  has 
been  paid  over  to  the  defendant  in 
satisfaction  of  an  execution,  by  order 
of  the  judge  granting  the  injunction 
according  to  the  prayer  of  the  bill. 
If  in  such  a  case  the  injunction  bond 
did  not  afford  an  adequate  remedy,  a 
suit  in  chancery  where  the  rights  of 
all  the  parties  could  be  adjusted 
would  be  the  proper  course.  Bank  of 
Mobile  v.  Planters'  &  M.  Bank,  1  Ala. 
109. 

A  court  of  chancery  having  ap- 
pointed a  receiver  of  an  insolvent  cor- 
poration, and  a  person  not  a  party  to 
the  suit  having  presented  a  petition 
setting  up  the  right  to  possession  of 
certain  land  in  the  possession  of  the 
receiver  as  such,  praying  the  court  to 
adjudicate  upon  his  rights  and  to  di- 
rect the  receiver  to  deliver  possession 
to  him,  it  will,  in  the  absence  of 
any  claim  of  right  of  possession  on 
the  part  of  any  other  party  not  be- 
fore the  court,  hear  and  determine  the 
petitioner's  claim,  although  it  is  one 
within  the  jurisdiction  of  a  court  of 
law.  Smith  v.  Perth  Amboy  Brick  Co. 
47  N.  J.  Eq.  442. 

One  not  a  party  to  a  chancery  suit, 
but  with  whom  a  receiver  appointed 
therein,  with  the  consent  of  all  the 
parties,  contracted  a  lawful  debt  in 
the  management  of  the  property  in 
controversy,  mayduringthe  pendency 
of  the  suit  and  after  the  decree  restor- 
ing the  property  to  complainant,  but 
before  the  discharge  of  the  receiver, 
petition  the  court  to  require  the  com- 
plainant to  pay  the  debt  due  him.  or 
that  on  his  failure  to  do  so  the  prop- 
erty be  sold  to  pay  such  debt,  as  the 
decree  of  restoration  does  not  deprive 
the  court  of  authority  to  assume  con- 


572 


RECEIVERSHIPS. 


§  341.     Character  ot*  claims  allowed. 

The  claims  usually  allowed  ag-ainst  a  receiver  and  payable  out 
of  the  funds  in  his  hands  which  are  subject  to  distribution  embrace 
the  following  subjects : 

(a)  Attorney  and  counsel  fees  for  Services  rendered  to  the  re- 
ceiver during  the  receivership,  relating  to  the  receivership  prop- 
erty.' 


trol  of  the  property  for  the  purpose  of 
enforcing  claims  upon  it  whicb  are 
the  result  of  the  court's  own  orders  or 
decrees.  Thornton  v.  Highland  Ave. 
(£  B.  R.  Co.  94  Ala.  353. 

Where  a  receiver  has  not  paid  a 
claim  which  it  is  alleged  comes  within 
an  order  requiring  him  to  pay  it,  and 
the  question  is  presented  to  the  court 
as  to  the  liability  of  the  property  for 
the  claim,  the  court  is  not  foreclosed 
by  the  order,  but  may  determine  the 
extent  of  liability  of  the  property  to 
such  claim,  and  what  its  rights  of  pri- 
ority are.  Louisville,  E.  &  St.  L.  R. 
Co.  V.  Wilson,  138  U.  S.  501,  34  L. 
ed.  1023. 

When  a  receiver  makes  a  settlement 
and  compromise  with  a  general  as- 
signee for  the  benefit  of  creditors  of  a 
corporation  in  another  state  which  is 
ratified  by  the  court,  agreement  be- 
comes in  equity  a  novation  and  the 
obligation  is  thenceforward  a  new  one 
between  the  receiver  and  the  assignee 
and  such  agreement  cannot  be  at- 
tacked by  attaching  creditors.  Kim- 
ball V.  Lee,  40  N.  J.  Eq.  403. 

A  person  not  a  party  is  not  entitled 
on  motion  to  obtain  money  from  the 
receiver  even  if  his  debt  is  payable 
out  of  the  funds  in  the  receiver's 
hands.  Brocklebank  v.  East  London 
R.  Co.  L.  R.  12  Ch.  Div.  839. 

'  Counsel  fees  are  proper  allowances 
to  receiver  for  counsel  employed  by 
him  in  the  discharge  of  his  duties; 
though  it  is  discretionary.  Stuart 
V.  Boulware,  133  U.  S.  78,  33  L.  ed. 


5G8;  Infernal  Improv.  Fund  v.  Oreen- 
oiujh,  105  U.  S.  527.  26  L.  ed.  1157. 
The  fees  are  determined  by  the  cir- 
cumstances of  such  case,  correspond- 
ing with  the  degree  of  responsibility 
and  business  ability  required.  Inter 
nallmiirox).  Fund  v.  Greenough,  supra. 

Services  rendered  by  an  attorney, 
for  an  individual,  in  conducting  pro- 
ceedings against  an  insolvent  insur- 
ance company,  the  proceedings  hav- 
ing for  their  purpose  the  protection 
of  the  general  fund  for  the  benefit  of 
all  concerned,  are  properly  paid  for 
from  theasselsin  the  receiver's  hands. 
At(y.  Gen.  v.  Continental  L.  Ins.  Co. 
62  How.  Pr.  130. 

A  receiver  is  not  entitled  in  his  ac- 
count to  a  credit  for  attorney's  fees 
paid  by  him  for  either  of  the  part- 
ners; but  if,  on  his  final  settlement, 
there  are  suflicieut  funds  in  court  be- 
longing to  the  partner  for  whom  he 
has  paid,  the  court  may  order  him  to 
be  paid  from  them.  Drake  v.  Thyng, 
37  Ark.  228. 

Services  of  an  attorney  employed 
by  the  receiver  of  a  railroad  in  reduc- 
ing the  claim  of  a  lienor  subject  to 
whose  lien  the  road  was  sold,  not 
being  to  keep  the  road  a  going  con- 
cern, are  not  entitled  to  priority  in 
funds  in  the  hands  of  a  receiver  of 
the  company  which  purchased  the 
road,  over  mortgages  executed  by  it, 
although  the  claim  therefor  was  rec- 
ognized by  such  company.  Bound  v. 
South  CaiolinaR.  Co.  51  Fed.  Rep.  58. 

Just  claims  of  employees  of  a  street 


CLAIMS  AGAINST  RECEIVERSHIP  FUNDS. 


573 


(b)  Personal  property  taxes  assessed  against  the  receivership 
property  maturing  while  in  the  receiver's  possession  or  constitut- 
ing a  lien  thereon  when  it  comes  into  his  possession.' 


railroad  company  for  services  ren- 
dered in  operating  the  road  within 
ninety  days  prior  to  the  appointment 
of  a  receiver  are  properly  given  prece- 
dence in  payment  to  a  mortgage  upon 
the  road.  Litzenherger  v.  Jarns-Conk- 
lin  Trmt  Co.  8  Utah,  15. 

An  attorney's  claim  against  a  rail- 
road company  cannot  be  ordered  paid 
out  of  the  earnings  in  the  hands  of  a 
receiver,  or  out  of  the  first  proceeds 
of  sale  under  a  mortgage,  at  least  in 
advance  of  a  final  decree,  although  he 
has  a  lien  on  deeds  of  the  right  of 
way  and  also  has  the  legal  title  to 
depot  sites  for  which  he  has  procured 
deeds.  Pennsylvania  Finance  Co.  v. 
Charlesfon,  C.  &  C.  B.  Co.  46  Fed. 
Rep.  42G. 

A  receiver  should  not  be  permitted 
to  pay  large  sums  to  counsel  for  al- 
leged services,  without  making  the 
nature  and  value  of  the  services  ap 
parent.  Be  Commonwealth  F.  Ins.  Co. 
32  Hun,  78. 

A  general  solicitor  employed  by  the 
two  receivers  of  a  railwa}^  company 
at  a  specified  annual  salary  has  no 
claim  for  services  rendered  by  him 
on  the  fund  transferred  to  the  com- 
pany at  the  close  of  the  receivership, 
where  one  of  such  receivers  notified 
hira  before  such  services  were  per- 
formed that  he  had  abolished  the  of- 
fice of  solicitor,  and  there  is  no  order 
of  court  fixing  a  liability  on  the  fund 
for  such  services  or  approving  the 
action  of  the  receivers  in  fixing  it, 
and  the  claim  was  not  acted  upon  in 
closing  up  the  receivership.  Inter- 
national &  G.  iV".  B.  Co.  V.  Herndon 
(Tex.  Civ.  App.)  33  S.  W.  377. 

An  allowance  cannot  be  made  for 
services  of  the  attorneys  of  a  corpora- 


tion in  resisting  proceedings  to  ap- 
poin^a  receiver,  where  the  officers  of 
the  company  knew  that  it  was  insol- 
vent and  acted  in  bad  faith,  although 
the  attorneys  acted  in  good  faith. 
People  v.  Commercial  Alliance  L.  Ins. 
Co.  91  Hun,  389. 

'  A  tax  bill  against  personalty  which 
has  been  in  the  hands  of  a  receiver 
during  the  time  within  which  a  col- 
lector would  otherwise  have  levied  on 
it  for  taxes  should  be  first  paid  from 
the  proceeds.  George  v.  St.  Louis 
Cable  &  W.  B.  Co.  44  Fed.  Rep.  117. 
Not  so  as  to  taxes  on  real  estates. 

A  tax  bill  against  realty  in  the  hands 
of  a  receiver  will  not  be  paid  out  of 
the  proceeds,  where  a  sale  of  the  prop- 
erty has  been  made  "subject  to  all 
tax  liens,"  as  the  state  has  a  lien  for 
a  tax  paramount  to  all  other  liens,  and 
the  bids  are  presumed  to  have  been 
made  with  reference  to  that  fact. 
George  v.  St.  Louis  Cable  &  W.  B.  Co. 
supra. 

Under  the  Missouri  statutes  the 
state  has  a  paramount  right  to  be  paid 
its  taxes  out  of  assets  in  the  hands  of 
a  receiver,  and  may  enforce  such  taxes 
by  distress.  Hence,  where  the  court 
orders  all  claims  to  be  presented  to 
the  receiver  of  a  savings  bank  within 
a  certain  time,  or  they  will  be  barred, 
it  should  order  the  receiver  to  pay  as- 
sessed taxes  upon  application  of  the 
collector,  although  made  after  the 
time  when  other  claims  are  barred. 
Greeley  v.  Provident  Sav.  Bank,  98 
Mo.  458. 

A  receiver  of  a  corporation  will  not 
be  directed,  before  final  accounting, 
to  pay  the  corporation's  personal  tax, 
although  he  admits  that  he  has  suffi- 
cient funds,  where  there  may  be  prior 


574 


RECEIVERSHIPS. 


(c)  A  surety  who  has  not  paid  the  debt  for  which  lie  is  liable 
as  surety  is  not  entitled  to  prove  his  claim.' 

(d)  A  creditor  holding  collateral  secniaty  niav  prove  his  claim 
without  first  exhausting*  his  collateral,  or  isunendering  the 
same." 

(e)  Operating  expenses.'* 

(f)  Statutory  liens.* 

(g)  Judgment  creditors'  liens.* 

§342.     Preferred  claims;  groiiiicls  for  allowance. 

Where  a  mortgagee  of  a  railroad  asks  the  aid  of  a  court  to 
foreclose  the  lien,  and  for  a  receiver,  the  court  in  its  discretion 
may  require  provision  to  be  made  for  the  payment  of  certain 
classes  of  outstanding  claims,  such  as  rentals,  wages  of  laborers, 
etc.,  as  a  condition  of  issuing  the  order,  from  the  income  during 
the  receivership.     The  reason  for  this  requirement  is  that  the 


liens  for  wages  of  the  corporation's 
employees.  Schenck  v.  Conxumers' 
Cool  Co.  26  Abb.  N.  C  356,  Distin- 
guis^bed  from  Central  Trvxt  Co.  v. 
New  York  Cifij  &  iV.  R.  Co.  110  N.  Y. 
250,  1  L.  R.  A.  2G0;  B£  Babcock,  115 
N.  Y.  450. 

'  A  surely  who  has  not  paid  the 
debt  cannot  jirove  a  claim  against  the 
receiver  of  a  bank,  where  the  debt 
has  once  been  proved  by  the  cred- 
itor. Stewart  v.  Armstrong,  56  Fed. 
Rep.  167. 

Under  the  rule  that  net  earnings, 
while  property  is  in  the  possession  of 
a  receiver  appointed  by  a  court,  may 
be  applied  to  the  payment  of  claims 
having  superior  equities  to  that  of  the 
bondholders,— Held,  that  if  a  balance 
of  salary  due  the  president  of  the  road 
was  a  prior  claim,  he  had  waived  it 
by  ihe  published  annual  report  as  such 
president,  in  which  he  had  put  his 
salary  each  year  among  the  paid  items. 
]f  his  salary  was  not  in  fact  paid  he 
w:isonly  a  general  creditor.  Addison 
V.  Lewis,  75  Va.  701. 

A  claim  of  contractors  for  building 


an  extension  of  the  road  did  not  come 
within  the  rule.  Addison  v.  Lewis, 
sup)'a. 

"A  creditor  of  an  insolvent  corpo- 
ration of  which  receivers  are  appointed 
isentitled  to  a  dividend  upon  his  claim 
without  first  exliausting  collateral  se- 
curity held,  or  surrendering  such 
security  to  the  receivers  to  be  added 
to  the  general  fund  for  distribution. 
Wheeler  v.  Walton  &  W.  Co.  72  Fed. 
Rep.  966. 

3  See  post,  §g  842,  343. 

*  Poland  V.  Lamoille  Val'ei,'  li.  Co.  52 
Vt.  144;  Blair  v.  St.  Louis,  LI.  <&  K. 
B.  Co.  19  Fed.  llap.  861. 

*  A  judgment  creditor  is  entitled  to 
a  priority  as  to  income  derived  by  the 
receiver  from  the  operation  of  the 
road,  or  other  money  in  his  hands  de- 
rived from  the  collection  of  debts  due 
the  corporation;  and  if  the  judgment 
is  against  the  receiver  for  receivership 
indebtedness  for  operating  expenses 
it  may  be  paid  out  of  the  corpus  also. 
Qibei  t  V.  Washington  City,  V.  M.  &  G. 
S.  R.  Co.  33  Gratt.  645;  Turner  v.  In- 
dianapolis, B.  &  W.  R.  Co.  8Biss.  537. 


CLAIMS  AGAINST  RECEIVERSHIP  PUNDS.  575 

mortgagee  in  accepting  his  mortgage  impliedly  agrees  that  the 
current  debts  made  in  the  ordiiiai-y  course  of  business  shall  be 
paid  from  the  current  receipts  before  he  has  any  claim  upon  the 
income. 

In  such  ease,  if  anything  has  been  taken  from  the  current  debt 
fund  and  put  into  the  mortgage  creditors'  fund,  the  court  may 
require,  as  a  condition  of  the  order,  that  the  future  current  re- 
ceipts' shall  be  applied  to  the  payment  of  the  current  debts, 
])efore  payment  of  anything  to  the  mortgagees,  and  this  not- 
withstanding the  mortgage  may  give  a  lien  on  the  profits  and 
income. 

So  a' so  if  it  appears  in  the  progress  of  the  case,  where  no  order 
has  been  made  touching  the  rights  of  such  creditors,  that  interest 
has  been  paid,  additional  equipment  provided,  or  lasting  and 
valuable  improvements  made,  out  of  the  earnings  that  ought  to 
have  been  applied  in  keeping  down  debts  for  labor,  supplies,  etc., 
it  is  within  the  power  of  the  court  to  use  the  income  of  the 
receivership  to  discharge  obligations  which,  but  for  the  diversion 
of  the  funds,  would  have  been  paid  in  the  ordinary  course  of 
business.  Such  an  order  in  effect  restores  the  parties  to  their 
original  equitable  rights. 

And  while  the  above  rule  is  ordinarily  restricted  to  the  income 
of  the  receivership  and  the  proceeds  of  mortgaged  assets  that 
liave  been  taken  from  the  company,  yet  the  rule  may  be  extended 
in  certain  cases  to  the  proceeds  of  sale  of  the  mortgaged  prop- 
erty; as  where,  before  the  appointment  of  a  receiver,  income  ap- 
plicable to  the  payment  of  current  debts  is  taken  for  permanent 
improvements  in  the  fixed  property  or  to  buy  additional  equip- 
ment.' 

The  reasons  for  these  rules  are  that  a  railroad  is  a  public  con- 

'Mr.  Justice  Harlan,  In  Thomas  v.  S.  591,  31  L.  ed.  SS.');  Gilmnn  v.  Illi- 

Peoria  &  II.  I.  E.  Co.  30  Fed.  Rep.  808.  noia  <&  M.  Teleg.  Co.  91  U.  S.  603,  23 

Cf.   Fosdick  V.  Schiil,  99   U.   S.  235,  L.   ed.   405;  Amcricnn  Bridge   Co.  v, 

25  L.  ed.  339;  Miltenberger  v.  Logans-  Ileidelbach,  94  U.  S.  798,  24  L.  ed.  144; 

port,  C.  &  S.  W.  H.  Co.  10(5  U.  S.  286,  Sage  v.  Memphis  cfc  L.  E.  E.  Co.  125  U. 

27   L.    ed.    117;    Unioyi   Trust   Co.  v.  S.  361,  31  L.  ed.  694;  Freedman's  Sav. 

Souther,  107  U.  S.  591,  27  L.  ed.  488;  <&  T.  Go.  v.  Shepherd,  127  U.  S.  494, 

Union,  Trust  Co.  v.  Illinois  M.  E.  Co.  32  L.  ed.  163;  Pennsylvania  Finance 

117U.  S.  434,  29L.  ed.  963;  Burnham  Co.  v.  Charleston,  C.   <&  C.  E.  Co.  48 

V.  Bowen,  111  U.  S.  776,  28  L.  ed.  596;  Fed.  Rep.  188. 
Union  Trust  Co.  v.  Morrison,  125  U. 


576  RECEIVEKSHIPS. 

cern,  and  is  operated  and  kept  in  motion  for  the  benefit  of  stock- 
holders, niortg-age  bondliolders,  and  the  public,  all  of  which  are 
interested  in  it  as  a  going  concern.  The  application  of  these 
equitable  principles  in  favor  of  labor,  supplies,  etc.,  springs  out  of 
and  depends  upon  the  diversion,  for  if  there  has  been  no  diver- 
sion— no  taking  of  funds  justly  belonging  to  one  class  and  apply- 
ing them  to  another — there  can  be  no  application  of  the  rule.  If 
there  are  no  earnings  or  insufhcicnt  earnings  to  meet  expenses, 
and  no  diversion,  then  in  such  case  this  class  of  creditors  have  no 
equities  as  against  the  mortgage  security,  and  are  simple  contract 
creditors.' 

This  rule  cannot  be  extended  beyond  the  equitable  claimants 
mentioned,  and  made  to  apply  to  unsecured  creditors  generally, 
for  such  application  would  be,  in  eii'ect,  confiscation.' 

§  343.     Nature  of  preferred  claims. 

AVhile  it  is  true  that  debts  contracted  by  a  railroad  corporation 
as  a  necessary  part  of  its  operating  exj^enses,  or  for  labor  and 
supplies,  or  for  necessary  equipment  or  improvement  of  the 
mortgaged  property,  are  privileged  debts,  entitled  to  be  paid  out 
of  the  current  income  after  a  mortgage  trustee  or  a  receiver  is 
appointed  in  a  foreclosure  suit,  as  decided  by  the  United  States 
Supreme  Court,^  yet  the  same  court  limited  the  above  rule  to  the 
payment  of  supplies  for  the  machinery  department  furnished 
before  the  appointment  of  the  receiver,  and  refused  to  extend  it 
to  material  furnished  for  construction  purposes,  as  not  based  upon 
any  special  equity."  This  limitation  of  the  rule  does  not  apply  of 
course  where  the  construction  is  made  by  the  receiver.^     As  has 

•  Eneelnnd  v.  American  Loan  d-.  T.  GUy,  TF.  c£  N.  TF.  R.  Co.  53  Fed.  Rep. 

Co.  136  U.  S.  89,  34  L.  ed.  379;  Burn-  182. 

liam  V.  Bowen,  111  U.   S.   776,  28  L.  ^  Posdick  v.  Schall,  99  U.  S.  235,  25 

ed.  596.  L.  ed.  339. 

'^Preference  from  the  assets  may  be  *  Hale  v.   Frost,  99  U.    S.   389,  25 

required  as  to  meritorious  debts  con-  L.  ed.  419. 

tracted  to  create  or  preserve  railroad  *  MtUeubergcr  v.   Logansport,   C.  & 

property,  as  a  condition  of  the  ap-  S.  W.  R.  Co.  106  U.  S.  287,  27  L.  ed. 

poinlment  of  a  receiver  in  an  action  117;  Union  Trtist  Co.  v.  Souther,  107 

to  foreclose  a  mortgage  upon  the  rail-  U.  S.  591.  27  L.  ed.  488;  Union  Trmt 

road,  although  there  has  been  no  di-  Cj.  v.  Illinois  M.  R.   Co.  117  U.  S. 

version  of  the  income  of  the  road.  462,   29  L.   ed.    973;    Huidekoper  v. 

Farmers'  Loan   <Se   T.   Co.   v.  Kansas  Hinckley  Locomotive  Wm'ks,  99  U.  S. 


CLAIMS  AGAINST  RECEIVERSHIP  FUNDS. 


577 


258,  25  L.  ed.  345;  Wood  v.  Guarantee 
Trvst  &  S.  D.  Co.  128  U.  S. 
421,  32  L.  ed.  473.  Cf.  American 
Loan  &  T.  Co.  v.  Eaf<t  &  W.  R.  Co.  46 
Fed.  Rep.  101;  Kneeland  v.  Bass 
Foundry  &  Atach.  Works,  140  U.  S. 
592,  35  L.  ed.  543. 

In  Miltenberger  v.  Logansport,  C  & 
S.  W.  R.  Co.  supra,  the  court,  says  many- 
circumstances  exist  which  may  make 
it  necessary  and  indispensable  to  the 
business  of  the  road,  and  the  preserva- 
tion of  the  property,  for  the  receiver 
to  pay  existing  debts  of  certain  classes 
out  of  the  earnings  of  the  receiver- 
sliip.  or  even  the  corpus  of  the  prop- 
erty under  the  order  of  court,  but  the 
discretion  to  do  so  should  be  exercised 
with  very  great  care.  The  payment 
of  such  claims  prima  facie  stands  on 
a  different  basis  from  the  payment  of 
claims  arising  under  the  receivership, 
while  it  may  be  brought  within  the 
principle  of  the  latter  by  special  cir- 
cumstances. The  probable  results  of 
nonpayment  should  be  taken  into 
consideration,  together  with  the  in- 
terests and  accommodation  of  the 
traveling  public.  Cf.  Wallace  v. 
Uomis,  97  U.  S.  146,  24  L.  ed.  895; 
Barton  v.  Barbour,  104  U.  S.  126,  26 
L.  ed.  672. 

In  Miltenberger  v.  Logansport,  C.  & 
S.  W.  R.  Co.  supra,  the  time  lim- 
ited in  which  the  claims  must  have 
accrued  to  entitle  them  to  priority 
was  fixed  at  ninety  days. 

The  mere  lapse  of  more  than  six 
months  between  the  times  in  which 
the  claims  for  labor  accrued  and  the 
appointment  of  a  receiver,  does  not 
afford  a  sufficient  reason  for  denying 
a  priority  to  which  they  would  other- 
wise be  entitled.  Mcllhenny  v.  Bing, 
80  Tex.  1.  In  this  case  claims  for  board 
furnished  to  laborers  and  operatives 
employed  by  the  insolvent  railroad 
company,    under    an   understanding 

37 


between  the  company,  the  laborers, 
and  boardiug-hoMse  keepers  and  gro- 
cers, that  the  company  was  to  retain 
a  sufficient  amount  out  of  the  wages 
of  the  laborers  to  pay  their  board, 
and  was  to  pay  the  boarding-house 
keepers  and  the  grocers,  the  company 
crediting  the  latter  with  the  amounts, 
were  treated  as  claims  assigned  to  the 
holders  and  were  entitled  to  priority 
over  the  bonded  indebtedness. 

The  fact  that  the  holder  of  claims 
for  laborers'  wages  against  an  in- 
solvent railroad  company  took  in- 
dorsed notes  of  the  company,  was  held 
not  a  waiver  of  the  holder's  right  to 
priority  of  payment  as  against  the 
bonded  indebtedness,  where  in  taking 
the  indorsement  there  was  no  inten- 
tion to  waive  the  lien  against  the 
company. 

Two  claims  against  the  company 
for  coal  furnished  for  the  purpose  of 
operating  its  road,  one  of  which  ac- 
crued a  little  more  and  the  other  a 
little  less  than  six  months  prior  to 
the  appointment  of  a  receiver,  were 
given  a  priority  over  mortgage  bonds. 

Where  a  railroad  has  been  placed 
in  the  hands  of  a  receiver,  wages  of 
employees,  eight  months  overdue, 
were  ordered  to  be  paid  to  such  of 
said  employees  as  were  retained  by 
the  receiver  in  the  employ  of  the 
road;  but  petitions  by  assignees  of 
similar  overdue  wages  for  payment  of 
the  same  were  refused,  tjkiddy  v. 
Atlantic,  M.  &  0.  R.  Co.  3  Hughes, 
320. 

Where  rails  and  supplies  are  fur- 
nished to  a  railroad  company  on  its 
credit,  before  the  appointment  of  a 
receiver,  the  court  will  refuse  a 
petition  for  payment  of  the  same. 
Skiddy  v.  Atlantic,  M.  &  0.  R.  Co. 
supra. 

Creditors  of  a  railroad  company  in 
the  hands  of  a  receiver  in  a  mortgage 


578 


RECEIVERSHIPS. 


been  seen  elsewhere,  the  claims  wliicli  have  priority  over  the  mort- 
gapjo  indebtedness  are  usually  for  labor  and  supplies,  but  may 
include  royalt}'  to  a  mine  owner,'  receiver's  certificates  in  the 
hands  of  innocent  holders  wliere  on  their  face  priority  is  ex- 
pressed,' proper  compensation  to  counsel,"  claims  given  a  priority 


foreclosure  will  be  paid  out  of  its 
earnings  in  preference  to  tlie  mortgage 
only  where  it  has  been  kept  a  going 
concern  by  materials,  supplies,  or 
equipment  in  part,  at  least,  furnished 
by  such  creditors,  and  has  made 
earnings  which  in  whole  or  in  part 
have  been  used  in  payment  of  interest 
or  in  permanent  improvements,  or  in 
some  olher  way  for  the  benefit  of  the 
mortgage  creditors.  Pennsylvania 
Finance  Co.  v.  Charleston,  C.  &  C.  R. 
Co.  48  Fed.  Rep.  188. 

A  court  which  appoints  a  receiver 
of  railroad  property  may  contract 
debts  necessary  for  the  operation  of 
the  road,  either  for  labor,  supplies,  or 
rentals,  and  make  juch  expenses  a 
prior  lien  on  the  property  itself. 
Kneeland  v.  Bass  Foundry  &  Mach. 
Works,  140  U.  S.  592,  35  L.  ed.  543. 

A  court  which  is  administering  a 
railroad  through  a  receiver  will  not 
be  prevented  from  purchasing  rolling 
stock  and  other  material  needed  for 
its  operation,  by  reason  of  agreement 
between  a  third  party  and  the  re- 
ceiver and  bondholders  of  the  road 
that  a  claim  of  such  third  party  is  to 
have  priority  over  all  claims  except 
operating  expenses.  State  v.  East 
Line  &  R.  R.  R.  Co.  (Tex.  Dist.  Ct.) 
48  Am.  &Eng.  R.  Cas.  656. 

Indebtedness  for  necessary  supplies 
for  a  railroad,  which  accrued  before 
the  appointment  of  a  receiver,  can 
seldom  be  allowed  priority  to  the 
mortgage  bonds.  Claims  for  rental 
of  cars,  that  accrued  prior  to  the  re- 
ceivership, should  not  be;  but  claims 
for  rental  of  cars  which  accrued  dur- 


ing the  receivership  and  for  ordinary 
repairs  of  such  rented  cars,  rendered 
necessary  by  his  use  of  the  same, 
where  he  agreed  to  keep  the  cars  in 
repair,  should  be  allowed  such  prior- 
ity. Thomas  v.  Western  Car  Co.  149 
U.  S.  95,  37  L.  ed.  603. 

'  Royalty  accruing  to  a  mine  owner 
from  an  insolvent  mining  company 
while  in  the  hands  of  a  receiver  is  a 
first  charge  on  the  funds  in  his  hands. 
Allison  V.  Coal  Greek  &  N.  R.  Coal  Co. 
87  Tenn.  60. 

^When  receivers'  certificates  payable 
to  bearer  have  all  passed  into  the 
hands  of  third  persons  for  a  valuable 
consideration  those  persons  have  a 
right  to  rely  on  the  promise  of  the 
court  as  to  their  priority,  plainly 
borne  on  their  face,  when  the  consent 
of  the  trustees,  and  thus  of  the  bond- 
liolders,  was  given  to  their  issue. 
Kneeland  v.  Luce,  141  U.  S.  491,  35  L. 
ed.  830. 

The  lien  of  receiv  er's  certificate  is- 
sued upon  a  loan  to  the  receiver,  un- 
der an  order  directing  that  they  con- 
stitute a  first  lien  on  railroad  property 
in  the  possession  of  the  receiver,  is  not 
affected  by  a  mortgage  foreclosure  of 
which  the  holder  had  no  notice,  or  by 
the  fact  that  the  receiver  misappro- 
priated the  money.  Mercantile  Trust 
Co.  V.  Kanaioha  &  0.  R.  Co.  50  Fed. 
Rep.  874. 

^  A  decree  appointing  a  receiver  for 
a  railroad,  and  giving  priority  to 
claims  for  "labor  in  operation  of  the 
road," — Held,  to  include  proper  com- 
pensation for  counsel  to  the  receiver 
for  services  necessary  in  managing  the 


CLAIMS  AGx\INST  RECEIVERSHIP  FUNDS. 


579 


by  statute.'  But  claims  will  not  be  given  a  priority  where  they 
are  collusive  and  detrimental  to  the  trust,  though  for  material," 
or  for  general  construction  account  sold  on  the  credit  of  the  com- 
pany more  than  six  months  prior  to  the  appointment,'  or  for  the 
death  of  an  employee,"  or  for  services  rendered  to  retain  control 
of  a  portion  of  the  road  not  covered  b}^  the  mortgage,"  or  balance 
due  for  compensation  from  a  joint  enterprise  where  the  foreclos- 


road.  Bayliss  v.  La  Fayette,  M.  &  B. 
R.  Co.  9  Biss.  90.  Not  however  if  lie 
is  employed  for  special  purposes. 
Louisville,  E.  <&  St.  L.  R.  Co.  v.  Wihon, 
138  U.  S.  501,  34  L.  ed.  1023. 

'  Laborers  in  the  employment  of  a 
corporation  whose  property  is  put  into 
the  hands  of  a  receiver  Ayho  takes  im- 
mediate possession  thereof,  with  whom 
they  properly  tile  their  claims,  are  not 
required  to  file  claims  with  a  sheriff 
who  had  levied  upon  all  such  prop- 
erty four  days  before  the  appointment 
of  the  receiver,  under  Iowa  Acts,  23d 
Gen.  Assera.  chap.  48,  giving  a  pref- 
erence to  the  laborers  of  a  corporation 
whose  property  is  seized  or  put  into 
the  hands  of  a  receiver,  and  requiring 
them  to  file  such  claim  with  the  officer 
seizing  the  properly  or  with  the  re- 
ceiver. St.  Paul  Title  Ins.  &  T.  Co.  v. 
Diagonal  Coal  Co.  (Iowa)  64  N.  W.  606. 

Past-due  instalments  upon  agree- 
ments for  the  hire  of  rolling  stock  are 
"working  expenses  and  proper  out- 
goings," to  be  first  paid  by  the  re- 
ceiver of  a  railroad  company  out  of 
the  gross  receipts.  Re  Eautei-n  &  M. 
R.  Co.  43  Am.  &  Eng.  R.  Gas.  71.  L. 
R.  45  Ch.  Div.  367. 

"^  VanderbiU  v.  New  Jersey  G.  B.  Co. 
43  N.  J.  Eq.  669. 

^One  who  sells  materials  to  a  rail- 
road compan}'  for  general  construc- 
tion, relying  on  the  credit  of  the  com- 
pany and  obtaining  no  lien  on  its 
earnings  or  property  more  than  six 
months  prior  to  any  receivership,  has 
no  preference  for  payment  out  of  the 


funds  in  the  hands  of  the  receiver  as 
to  mortgage  creditors.  American 
Loan  &  T.  Co.  v.  East  &  W.  R.  Co.  46 
Fed.  Rep.  101. 

One  who  has  sold  necessary  rails 
in  reliance  upon  the  promise  of  the 
compiiny's  officers  that  tliey  should 
be  paid  for  out  of  the  earnings  is  enti- 
tled, in  equity,  to  be  paid  out  of  the 
earnings  in  the  hands  of  a  receiver, 
appointed  in  a  foreclosure  suit  by  the 
second  mortgagees,  in  preference  to 
the  latter's  claims,  but  not  to  those  of 
first  mortgagees  and  other  lienors 
superior  to  the  second  mortgage,  who 
have  only  come  into  equity  by  cross- 
bills after  being  made  defendants. 
Bound  V.  South  Carolina  R.  Co.  47 
Fed.  Rep.  30. 

■*  Liability  for  the  death  of  an  em- 
ployee is  not  included  in  the  operating 
expenses  of  a  railroad  during  the  pe- 
riod of  six  months  before  a  receiver- 
ship, so  as  to  have  preference  over  a 
mortgage  upon  foreclosure.  Farmers" 
Loan  &  T.  Co.  v.  Green  Bay,  W.  &  St, 
P.  R.  Co.  45  Fed.  Rep.  664;  St.  Louis, 
A.  &  T.  H.  R.  Co.  v.  Cleveland,  G.  G. 
<&  I.  R.  Co.  125  U.  S.  658,  31  L.  ed. 
832. 

5  Services  rendered  at  the  instance  of 
a  railroad  company  to  preserve  con- 
trol of  that  portion  of  its  road  not 
covered  by  a  first  lien  cannot  be  con- 
sidered as  services  to  the  holders  of 
bonds  secured  by  that  lien,  so  as  to  be 
entitled  to  be  paid  by  their  receiver. 
Louisville,  E.  &  St.  L.  R.  Co.  v.  Wil- 
son, 138  U.  S.  501,  34  L.  ed.  1023. 


580 


RECEIVERSHIPS. 


lire  is  on  one,'  or  money  loaned  to  the  company,' "  or  rent  for 
leased  lines  of  road  not  part  of  an  entire  i-ailroad  system,'  or  per- 
sonal injuries,*  or  fire  produced  by  a  defective  locomotive/ 


'  Where  two  railroad  companies  had 
the  same  fiscal  agent,  who  received  the 
earnings  of  both,  from  which  pay- 
ments were  made  for  each,  an  account 
being  kept  between  them,  a  balance  of 
such  account  in  favor  of  one  company 
is  not  entitled  to  priority  of  payment 
from  the  proceeds  of  the  foreclosure 
of  a  prior  mortgage  on  the  other,  in 
jircference  to  the  mortgage  bond- 
holders. 3Iorgnn's  Louisiana  &  T.  R. 
it-  S.  S.  Co.  V.  Texan  G.  R.  Co.  187  U. 
S.  171,  34  L.  ed.  625;  Penn  v.  Calhoun, 
121  U.  S.  251,  30  L.  ed.  915;  Knedund 
V.  American  Loan  &  T.  Co.  136  U.  S. 
89,  34  L.  ed.  379;  St.  Louis,  A.  &  T. 
H.  R.  Co.  V.  Cleveland,  G.  C.  &  L  R. 
Co.  125  U.  S.  658,  31  L.  ed.  833. 

'One  who  has  loaned  monry  upon 
corporate  shares,  but  has  not  had  them 
transferred  to  his  name  on  the  books 
of  the  company  until  after  the  death  of 
the  debtor  and  after  a  receiver  of  his 
estate  has  been  appointed  at  the  in- 
stance of  a  creditor,  is  not  entitled  to 
have  transferred  to  him  by  the  re- 
ceiver debentures  issued  to  the  latter 
by  the  company  representing  arrears 
of  dividends  upon  the  stock,  since  the 
receiver  occupies  the  position  of  an  ex- 
ecutor and  the  debentures  are  assets  in 
his  hands.     Re  Hoare  [1892]'3  Ch.  94. 

Morgan's  Louisiana  &  T.  R.  &  8.  8. 
Go.  V.  Texas  G.  R.  Go.  137  U.  S.  171, 
34  L.  ed.  625. 

'For  the  use  of  leased  lines  which 
came  into  the  hands  of  the  receiver  of 
a  railroad  company  (who  is  appointed 
on  its  own  petition)  as  part  of  its  own 
road,  being  subject  to  a  general  mort- 
gage under  the  clause  covering  "after- 
acquired  properly,"  neither  the  agreed 


rental  nor  the  net  earnings  of  such 
lines  during  the  time  they  are  in  the 
receiver's  possession  as  part  of  the  en- 
tire railroad  system  can  be  claimed  by 
creditors  of  such  lines  in  preference 
to  the  general  mortgage  creditors,  al- 
though the  trustee  of  the  former 
might,  under  sanction  of  the  court, 
have  terminated  the  right  of  the  re- 
ceiver by  demanding  possession.  Cen- 
tral Trust  Co.  V.  Wabash,  St.  L.  &  P. 
R.  Co.  46  Fed.  Hep.  26. 

^A  person  receiving  personal  in- 
juries for  which  a  judgment  had  been 
rendered  against  the  mortgagor  rail- 
road company  for  wrong  committed 
before  the  appointment  of  a  receiver 
js  a  general  creditor  and  the  earnings 
of  the  receivership  need  not  be  applied 
first  to  the  payment  of  these  judg- 
ments. Central  Trust  Co.  v.  East 
Tennessee,  V.  cfc  0.  R.  Co.  30  Fed.  Rep. 
895. 

It  is  error  to  direct  a  receiver  to  pay 
debts  out  of  property  in  his  hands, 
even  if  they  are  entitled  to  priority  of 
payment,  until  the  claims  are  reported 
by  a  commissioner  and  allowed  by 
the  court.  Penn  v.  Whitehead,  12 
Graft.  74. 

See  further  as  to  preferred  liens, 
ante,  chap.  XIV. 

'  Damages  to  property  by  sparks 
from  a  defective  locomotive  prior  to 
the  appointment  of  a  receiver  in  fore- 
closure proceedings,  though  subse- 
quent to  the  default  of  the  company 
on  the  mortgage, — Held,  not  to  come 
under  the  head  of  operating  expenses, 
to  be  paid  from  the  earnings  in  the 
hands  of  the  receiver.  Hiles  v.  Case, 
9  Biss.  549. 


CLAIMS  AGAINST  RECEIVERSHIP  FUNDS.  5S1 

§  344.  Where  the  statute  creates  a  lien  in  favor  of  laborers  or 
eupply  men  it  will  be  entitled  to  a  priority  over  the  mortgage 
lien  in  a  foreclosure  proceeding/ 

'  See  ante,  %  276  (dj. 


CHAPTER  XX. 


RECEIVERS'  COMPENSATION. 


§  350.  Compensation. 

(h)  Must  be  reasonable. 

(b)  Fixed  on  commission  basis, 

percentage. 

(c)  Sometimes  a  salary. 

(d)  When     compensation     re- 

fused. 


(e)  When  tobepaidby  plaintiff. 

(f)  Does  not  depend  on  result 

of  litigation. 

(g)  Priority  of  payment  of. 
(b)  Additional  allowances, 
(i)  Statutory  compensation, 
(j)  Order  fixing  not  revoked. 


§  350.  Compensation. 

In  reajard  to  the  compensation  to  be  allowed  to  a  receiver,  there 
are  no  uniform  rules  established  of  universal  application.  JSTor  is 
this  at  all  strange  since  the  duties  to  be  performed  by  receivers 
are  so  varied  and  the  responsibilities  attaching  to  the  office  so 
different  under  the  peculiar  circumstances  of  the  many  cases  that 
arise.  The  following  are  some  of  the  most  general  rules  guiding 
the  courts  in  fixing  the  compensation  of  receivers. 

(a)  The  compensation  must  be  reasonable,  and  its  reasonable- 
ness depends  upon  a  number  of  elements,  such  as  the  time  and 
labor  actually  expended,  the  fair  value  of  such  time  and  labor  to 
be  fixed  by  common  business  standards,  the  degree  of  industry 
and  dispatch  with  which  the  work  is  conducted,  the  compensation 
ordinarily  paid  for  the  transaction  of  similar  business  to  persons 
capable  of  so  doing,  the  responsibilities  attaching  to  the  particular 
office  in  each  case.* 


'  Courts  of  equity  may,  in  the  ab- 
sence of  statutory  rule,  fix  the  com- 
pensation of  their  own  receivers  and 
that  of  counsel  employed  by  them. 
Stuart  V.  Boulware,  133  U.  S.  78,  33 
L.  ed.  568. 

The  reasonableness  of  the  compen- 
sation of  a  receiver  is  exclusively  for 
the  determination  of  the  court.  LicJi- 
tenstein  v.  Dial,  68  Miss.  54. 

An  allowance  of  4<^  as  compensation 
to  a  receiver  is  not  unreasonable, 
where  three  reputable  members  of  the 


bar  testify  that  3^  or  4^  would  be  a 
proper  compensation,  even  though  a 
competent  person  could  have  been 
employed  by  private  contract  for  less 
amount.  The  particular  facts  and 
duties  and  responsibilities  should 
guide.     Lichtenstein  v.  Dial,  supra. 

In  the  absence  of  a  statute,  the  court 
may  allow  reasonable  compensation; 
and  the  order  therefor  is  final  and  ap- 
pealable, and  is  special,  not  governed 
by  the  general  statute  of  appeals. 
Martin  v.  Martin,  14  Or.  165. 


582 


RECEIVERS'  COMPENSATION. 


583 


Notwithstanding  the  statute  au- 
thorizing the  superintendent  of  the 
iusnrance  department  to  fix  the  com- 
pensation of  receivers  of  insolvent  life 
insurance  companies,  the  court  will 
supervise  the  decision  of  the  superin- 
tendent; especially  where  the  super- 
intendent fixes  a  rate  of  allowance 
before  the  completion  of  the  services. 
Alty.  Qen.  v.  North  American  L.  Ins. 
Co.  89  N.  Y.  94. 

The  compensation  of  a  receiver 
should  be  such  as  would  be  reason- 
able for  the  services  rendered  by  a 
person  competent  to  perform  the  duty, 
rather  than  any  fixed  commission. 
Jones  v.  Keen,  115  Mass.  170. 

The  settled  rule  of  the  courts  to  al- 
low to  trustees  only  the  same  com- 
missions as  the  statute  allows  to  ex- 
ecutors and  guardians  for  similar 
services,  is  not  applicable  to  receivers 
appointed  by  the  court  in  actions  pend- 
ing therein.  So  held  of  a  receiver  to 
receive  and  apply  rents  pending  a 
controversy  arising  on  the  probate  of 
a  will.  The  court  by  whom  a  re- 
ceiver is  appointed  has  power  to  de- 
termine the  rate  of  compensation  and 
it  may  be  fixed  with  reference  to  the 
circumstances  of  the  case.  Gardiner 
V.  Tyler,  2  Abb.  App.  Dec.  247. 

A  receiver  of  an  insolvent  savings 
bank  was  allowed  compensation  for 
his  services  to  be  fixed  l)y  considering 
the  responsibility  assumed,  the  skill 
and  labor  expended,  and  the  rate  of 
pay  usually  allowed  for  similar  work; 
and  not  to  be  determined  by  a  per- 
centage on  collections  and  for  com- 
missions for  services  rendered  by  him 
as  broker  in  raising  money  for  mort- 
gage debtors  to  the  bank  to  enable 
them  to  discharge  their  debts.  But 
a  gratuilj'  he  had  paid  to  a  policeman 
for  assisting  in  keeping  order  during 
dividend  payments  was  disallowed. 
Special,  Batik  Comrs.  v.  BVanklin  Sav. 
Inst.  11  It.  I.  557. 


A  receiver  acting  on  a  fixed  com- 
pensation as  the  agent  of  creditors 
and  subsequently  remaining  in  charge 
after  its  purchase  by  the  creditors 
with  the  power  to  sell,  acquires  no 
lien  upon  the  property  or  its  pro- 
ceeds for  his  compensation  and  a 
settlement  between  the  creditors  re- 
leasing the  fund  derived  from  the  sale 
revokes  his  agency.  Itowe  v.  Rand, 
111  Ind.206. 

The  compensation  of  a  receiver  of 
an  insolvent  railroad  company  is  to  be 
regulated  by  his  responsibilities  and 
duties.  Central  Trust  Co.  v.  Wabash, 
St.  L.  &  P.  It.  Co.  32  Fed.  Rep.  187. 
See  Hinckley  v.  Cilrnan,  C.  &  8.  R. 
Co.  100  U.  S.  15:3,  25  L.  ed.  591;  In- 
ternal Improv.  Fund  v.  Oreenough, 
105  U.  S.  527,  26  L.  ed.  1157. 

A  coutt  should  not,  without  evi- 
dence as  to  proper  compensation  in  a 
given  case,  determine  and  award  the 
compensation  to  be  paid  to  a  receiver. 
Heffron  v.  Rice,  40  111.  App.  244. 

Where  a  receiver  resigns  to  suit  his' 
own  convenience,  his  compensation 
may  fairly  be  measured  by  moneys 
actually  received  by  him,  although  he 
has  rendered  services  toward  the  col- 
lection of  other  moneys  that  will  be 
received  by  his  successor,  who  will  be 
entitled  to  claim  commis-sion  on  their 
collection.  People  v.  Mutual  Ben.  Asso. 
39  Ilun,  49;  Re  Commo)iwealth  F.  Ins. 
Co.  32  Hun,  78;  Central  Trust  Co.  v. 
Wabash,  St.  L.  <fc  P.  R.  Co.  32  Fed. 
Rep.  187. 

The  true  rule  in  fixing  the  com- 
pensation of  a  receiver  is  to  look  at 
all  the  circumstances  of  the  case,  the 
amount  of  property  to  be  cared  for, 
the  ditficully  in  reducing  to  posses- 
sion, the  kind  and  character  of  the 
property,  the  amount  of  bond  re- 
quired, the  business  character,  and 
integrity  required  for  the  work,  and 
finally,  the  manner  in  which  the  trust 
has    been    executed,- -and   then    say 


584 


RECEIVERSHIPS. 


(b)  The  court  sometimes,  by  statute  or  b}^  analogy,  fixes  the 
compensation  by  a  per  cent  on  the  amount  of  money  passing 
through  the  receiver's  hands.  In  many  cases  tliis  is  an  equitable 
method  of  arriving  at  a  just  compensation,  particularly  in  cases 
of  bank  receiverships,  and  other  corporations  of  a  somewhat  simi- 
lar nature.' 


what  would  be  a  fair  and  reasonable 
allowance,  keeping  in  mind  that  the 
"laborer  is  worthy  of  his  hire,"  and 
that  extravagance  is  to  be  avoided. 
United  Stcites  v.  Church  of  Jesus  Chrid 
of  L.  D.  8.  6  Utah,  9,  48. 

The  compensation  of  a  receiver  into 
whose  hands  property  of  the  aggregate 
value  of  more  than  $700,000  came, 
of  which  more  than  one  third  was  in 
real  estate,  while  the  cash  and  other 
personal  property  was  acquired  with 
but  little  litigation,  and  his  active  du- 
ties, for  the  most  part,  ceased  at  the 
entering  of  a  final  decree  in  a  suit, — 
was  fixed  for  one  year  at  $10,000. 
United  States  v.  Church  of  Jems  Christ 
of  L.  D.  S.  supra. 

A  receiver  of  a  decedent's  estate, 
whose  application  for  an  order  to  sell 
land  to  puy  legacies  and  debts  is  en- 
tertained, is  entitled  to  a  reasonable 
fee  for  his  services,  which  should  not 
be  estimated,  however,  by  the  charges 
usually  made  for  obtaining  such  or- 
ders, where  the  court  has  required  its 
register,  at  the  expense  of  the  estate, to 
ascertain  and  report  all  claims  against 
the  estate  and  the  receiver's  inventory 
of  the  assets  is  before  the  court. 
Hem-y  v.  Henry,  103  Ala.  583. 

The  appointment  of  a  receiver  of 
an  insolvent  corporation  in  one  court 
while  proceedings  for  such  appoint- 
ment are  pending  in  another  court 
having  jurisdiction  thereof,  although 
irregular,  is  not  void,  and  the  receiv- 
er's lawful  acts  and  contracts  are 
binding  in  the  further  administration 
of  the  assets,  and  he  is  entitled  to  just 


compensation  for  his  services.  North- 
western Iron  Co.  V.  Lehigh  Coal  &  I. 
Co.  (Wis.)  66  N.  W.  515.  Cf.  Schwartz 
V.  Keystone  Od  Co.  153  Pa.  283;  Cen- 
trnl  Trust  Co.  v.  Cincin?iati,  I.  <fe  M. 
R.  Co.  58  Fed.  Rep.  500. 

An  appellate  court  will  not  reverse 
the  lower  court  as  to  compensation 
except  in  a  strong  case.  Heffron  v. 
Rice,  149  111.  216;  Morgan  v.  Hardee, 
71  Ga.  736. 

'  A  receiver  appointed  to  take  the 
rents  and  profits  of  plantations,  will 
be  entitled  to  his  commission  of  5  per 
cent  upon  the  performance  of  his  du- 
ties, however  unimportant  they  may 
be,  and  though  the  plantations  have 
been  managed  solely  by  overseers  ap- 
pointed by  him.  Price  v.  White,  1 
Bail.  Eq.  240. 

A  receiver  is  an  officer  of  the  court, 
and  as  such,  in  the  absence  of  legisla- 
tion, the  court  has  the  authority  to 
determine  his  compensation.  The 
general  mode  of  compensation  is  by  a 
commission  on  the  receipts  and  dis- 
bursements. Magee  v.  Cowperihw'aite, 
10  Ala.  906. 

Five  per  cent  on  receipts  and  2^ 
per  cent  on  disbursements  is  correct, 
as  a  general  rule,  Magee  v.  Cowper- 
thwaite,  supra. 

A  receiver  is  entitled  to  commission 
on  personal  property  which  he  trans- 
fers in  specie;  and  where  he  pays 
monej^  into  the  hands  of  a  moneyed 
corporation  named  in  the  decree,  he 
cannot  make  annual  or  any  rests,  but 
his  commissions  will  be  estimated  on 
the  sum   total  of    the  payments  so 


RECEIVERS'  COMPENSATION. 


585 


made.  A  receiver  may  retain  coun- 
sel of  one  of  the  parties,  to  aid  in  se- 
curing a  fund  for  tlie  benefit  of  all 
parties.  Bennett  v.  Chapin,  3  Sandf. 
673. 

A  receiver  of  a  life  insurance  com- 
pany,— Held,  not  entitled  lo  commis- 
sions on  the  amount  ($398,028.30) 
of  premium  notes  and  loans  on  poli- 
cies outstanding  at  the  time  of  his 
appointment,  and  carried  on  his  books 
as  liens  on  his  policies,  and  not  col- 
lected; the  amount  due  on  each  policy 
being  ascertained  by  deducting  the 
loans  or  premium  notes  standing 
against  it,  and  the  difference  treated 
as  a  debt  due  the  company,  on  which 
dividends  were  computed  by  him. 
Atty.  Oen.  v.  North  American  L.  Ins. 
Co.  26  Hun,  294,  89  N.  Y.  94;  Re  Se- 
curity Life  Ins.  &  A.  Co.  31  Hun,  36. 

Such  receiver  having  advanced 
moneys  to  be  used  in  paying  off  taxes 
on  lands  covered  by  mortgages  be- 
longing to  a  special  fund  in  the  hands 
of  the  insurance  superintendent,  and 
then  Id  process  of  foreclosure, — Held 
that  he  was  not  entitled  to  commis- 
sions on  these  moneys,  which  were 
afterwards  repaid  to  him  on  a  sale  of 
the  [•  •■•rty.  Atty.  Gen.  v.  North 
American  L.  Ins.  Co.  89  N.  Y.  94. 

Commissions  may  be  allowed  the 
receiver,  by  such  superintendent,  on 
the  special  fund  held  by  him  for  the 
company,  and  paid  over  to  the  re- 
ceiver, as  well  as  on  the  general 
assets.  Such  fund  is  also  chargeable 
with  its  proportionate  part  of  the  ex- 
pense of  closing  up  the  business. 
Atty.  Gen.  v.  North  American  L.  Ins. 
Co.  supra. 

All  parties  interested  in  the  fund 
are  entitled  to  notice  of  application  to 
fix  the  commissions.  The  court  may 
review  such  superintendent's  action 
in  fixing  the  receiver's  commissions. 
Atty.  Gen.  v.  Nortlt  American  L.  Ins. 
Co.  supra. 


Owing  to  a  disagreement  as  to  the 
management  of  the  affairs  of  a  sol  ven 
corporation,  a  receiver  was  appointed 
Those  conducting  the  business  contin 
ued  to  conduct  it,  buying  and  selling 
receiving  and   disbursing.      The  re 
ceiver  employed  a  clerk,  whose  com 
peusation  was  agreed   upon   and  al 
lowed,  and  who  reported  daily  to  the 
receiver,    who    visited    the    factory 
nearly  every  day.     The  only  money 
which  actually  came  into  the  hands 
of  the  receiver  was  that  arising  from 
the  final  sale  at  auction  of  the  prop- 
erly.     Held  that  the  receiver  was  en- 
titled to  commissions  only  upon  this 
amount,  not  upon  that  received  and 
disbursed  by  the  managers.    Re  Woven 
Tape  Skirt  Co.  85  N.  Y.  506. 

Proceeds  of  security  deposited  with 
the  superintendent  of  the  insurance 
department  as  a  special  fund  to  secure 
registered  policies  are  assets  in  the 
hands  of  the  receiver  of  an  insolvent 
life  insurance  company,  and  he  is  en- 
titled to  commissions  thereon.  He  is 
not,  however,  entitled  to  commissions 
on  premium  notes  and  loans  made  on 
policies,  such  being  merely  offsets 
against  liabilities.  Re  Woven  Tape 
Skirt  Co.  sujjra;  Atty.  Gen.  v.  North 
American  L.  Ins.  Co.  89  N.  Y.  94. 

A  receiver  of  a  copartnership  is  en- 
titled to  commission  and  expenses  out 
of  the  proceeds  of  book  accounts  of 
the  firm  collected  by  him,  although 
they  were  assigned  to  a  creditor  be- 
fore his  appointment,  and  he  was  noti- 
fied not  to  collect  them.  Kerlin  v. 
Etcen,  149  Pa.  58;  Schwartz  v.  Key- 
stone Oil  Co.  153  Pa.  283. 

Prior  to  the  passage  of  N.  Y.  Laws 
1883,  chap.  378,  the  commissions  of  a 
receiver  of  an  insolvent  life  insurance 
company  were  properly  fixed  by  the 
court  which  appointed  him,  not  ex- 
ceeding, however,  5  per  cent  on  re- 
ceipts and  dishunsements.  Atty.  Gen. 
V.  Guardian  L.  Ins.  Co.  93  N.Y.  631. 


586 


RECEIVERSHIPS. 


(c)  Sometimes  the  court  fixes  the  compensation  by  a  fixed  sal- 
ary by  the  year  or  month,  but  in  sucli  case  tlie  reasonableness  is 
determined  as  in  other  cases,  and  it  may  be  graduated  according 
to  the  duties  performed  in  certain  stages  of  the  receivership.' 


Tlic  5  per  cent  upon  receipts  usu- 
ally allowed  to  a  receiver  will  be  in- 
creased where  unusual  work  is  re- 
quired, or  diminished  where  the 
receipts  are  large  or  the  trouble  of 
collecting  Ihem  is  insigniticant.  Hall 
V.  Slipp,  1  N.  B.  Eq.  37. 

A  receiver  does  not  lose  his  right  to 
commissions  for  carrying  on  the  busi- 
ness at  a  loss  after  he  knows  that  a 
loss  will  accrue,  wliere  no  party  inter- 
ested applies  for  an  order  requiring 
him  to  close  up  the  business.  Filkins 
V.  Adams,  60  III.  App.  410. 

Cf.  Greeley  v.  Provident  Sav  Bank, 
103  Mo.  212;  Mc Arthur  v.  Montclair 
R.  Co.  27  N.  J.  Eq.  77;  Orant  v.  Bry- 
ant, 101  Mass.  5(57;  Karn  v.  Rarer 
Iron  Co.  86  Va.  754. 

'An  allowance  to  a  receiver  of  a 
lumber  company  for  compensation 
for  his  services  in  settling  and  collect- 
ing accounts,  operating  a  sawmill  for 
two  or  three  months,  selling  lumber 
and  stock  of  merchandise,  and  look- 
ing after  litigations,  of  $150  for  the 
first  month,  $400  a  month  for  the 
next  five  months,  and  $300  a  month 
thereafter,  was  reduced  to  $300  a 
month  for  the  whole  time,  in  analogy 
to  prices  theretofore  paid  for  carrying 
on  the  business  and  prices  paid  for 
similar  work,  but  was  not  restricted 
to  the  compensation  of  executors  and 
administrators.  Thompfion  v.  Huron 
Lumber  Co.  5  Wash.  527. 

A  salary  of  $3,000  per  anuum  is  in- 
adequate compensation  for  a  receiver 
who  is  called  upon  to  manage  the  re- 
pairs, preservation,  and  operation  of  a 
long  line  of  railrviad,  and  who  dis- 
burses in  the  period  of  twenty-seven 
and  one  half  months  $1,700,000,  and 


gives  bond  in  the  sum  of  $50,000. 
FarmerH"  Loan  &  T.  Co.  v.  Central  R. 
Co.  2  McCrary,  318. 

But  if  a  person  agrees  to  serve  for 
$3,000  per  annum,  and  enters  upon 
duty  under  an  appointment  fixing  his 
salary  at  that  sum,  a  court  of  equity 
will  not  release  him  from  that  agree- 
ment and  add  to  his  compensation 
unless  it  be  shown  that  his  duties 
proved  to  be  more  arduous  than  he 
or  the  court  expected,  or  that  he  per- 
formed duties  in  addition  to  those 
ordinarily  required  of  a  receiver. 
Farmers'  Loan  &  T.  Co.  v.  Central  R. 
Co.  supra. 

A  receiver  is  not  entitled  to  extra 
pay  for  uniting  the  offices  of  auditor 
and  cashier,  thus  saving  one  salary; 
nor  for  the  disbursement  of  money  in 
payment  of  debts  contracted  by  his 
predecessor,  and  the  like.  Farmers' 
Loan  &  T.  Co.  v.  Central  R.  Co.  supra. 

To  deprive  a  receiver  of  all  com- 
pensation on  account  of  fraud  or  mis- 
conduct, it  must  appear  that  his  ac- 
tion has  been  wilfully  corrupt.  An 
error  of  judgment  is  not  enough. 
Farmers'  fjoan  t&  T.  Co.  v.  Central  R. 
Co.  supra. 

A  receiver  appointed  to  examine 
the  affairs  of  a  savings  bank, — Held, 
to  be  entitled  to  $16,000  for  services 
for  three  years  and  fourteen  days. 
Special  Bank  Comrs.  v.  Cranston  Sav. 
Bank,  12  R.  I.  497. 

Cf.  Pilkington  v.  Baker,  24  Week. 
Rep.  234. 

As  to  the  compensation  of  an  official 
liquidator  being  paid  before  the  costs 
of  winding  up  a  corporation,  see  Re 
Massey,  L.  R.  9  Eq.  367;  Re  Dronjield 
8.  Coal  Co.  L.  R.  23  Ch.  Div.  511. 


RECEIVERS'  COMPENSATION. 


587 


(d)  Circumstances  sometimes  may  be  such  as  to  warrant  the  court 
in  refusing  compensation  to  the  receiver,  as  where  he  neglects  his 
official  duty  resulting  in  loss  to  the  estate,'  or  is  a  ])arty  to  the 
proceeding  and  interested  in  the  property,'^  or  is  a  trustee  of  the 
property/ 

(e)  A  receiver  will  not  be  required  to  serve  without  compensa- 
tion, and  if  the  order  is  revoked  after  his  services  have  been  com- 
menced, as  having  been  erroneously  granted,  the  party  procuring 
the  appointment  must   pay  the  compensation,'  or  where  it  ap- 


'  Neglect  and  misconduct  on  the 
part  of  a  receiver  in  the  discharge  of 
his  trust  will  deprive  him  of  the  right 
to  commissions  by  way  of  compensa- 
tion. Clapp  V.  Clapp,  49  Hun,  195; 
Schwartz  v.  Keystone  Oil  Co.  153  Pa. 
283. 

Cf.  Wliite  V.  Lincoln,  8  Ves.  Jr. 
371 ;  Potls  V.  Leigldon,  15  Ves.  Jr.  278; 
Bristowe  v.  Needham,  9  Jur.  N.  S. 
1168;  Dease  v.  O'Reilly,  2  Con.  &  L. 
441;  Flood  v.  Aldborough,  8  Ir.  Eq. 
103;  Farmers'  Loan  &  T.  Co.  v.  Cen- 
tral R.  Co.  8  Fed.  Rep.  60.  But  see 
Coirdrey  v.  Galveston,  H.  &  H.  R.  Co. 
1  Woods,  331. 

''  A  partner  or  co-owner  who  is  ap- 
pointed receiver  on  his  own  ex  parte 
application,  is  not  entitled  to  compen- 
sation for  his  services.  Brien  v.  Har- 
riman,  1  Tenn.  Ch.  467. 

A  receiver  who  is  an  interested 
party  appointed  by  agreement  of  the 
parties  on  a  representation  to  the  court 
that  the  salary  of  the  former  receiver 
would  thereby  be  saved,  and  who 
made  no  claim  for  compensation  while 
in  otlice,  will  not  be  allowed  any  sal- 
ary, although  when  he  took  the  place 
he  thought  the  estate  would  soon  be 
settled  up  without  much  labor,  but 
■was  disappointed  in  this  respect,  and 
the  court  had  no  notice  of  the  expecta- 
tiOH.     Sleel  v.  Uolladay,  19  Or.  517. 

A  second  mortgagee  improperly 
appointed    receiver  of   the  rents  and 


profits  of  the  mortgaged  property  un- 
der a  first  mortgage  is  not  entitled  to 
compensation  for  services  in  harvest- 
ing and  marketing  the  crops,  and  to 
have  the  remainder  of  the  moneys 
realized  applied  upon  his  debt,  as  such 
moneys  represent  the  earnings  of  the 
property  during  the  time  the  mort- 
gagor was  entitled  to  possession  under 
the  Oregon  statute,  and  equitably  be- 
long to  him.  Thomson  v.  Shirley,  69 
Fed.  Rep.  484. 

2  There  is  no  inflexible  rule  that  a 
trustee  can  be  appointed  receiver  only 
upon  the  condition  of  receiving  no  re- 
muneration, but  the  question  is  within 
the  discretion  of  the  court.  Re  Big- 
nell  [1893]  1  Ch.  59. 

The  fact  that  the  order  appointing 
a  receiver  provides  for  no  remunera- 
tion does  not  preclude  the  court  from 
granting  remuneration.  Bignell  v. 
Chapman  [1892]  1  Ch.  59,  61  L.  J. 
Ch.  334,  66  L.  T.  36,  40  Week.  Rep. 
305. 

*  French  v.  Gifford,  31  Iowa,  428; 
Pitli^field  Nat. 'Bank  v.  Bayne,  140  N, 
Y.  321;  Ferguson  v.  Dent,  46  Fed. 
Rep.  88;  Morse  v.  Hannibal  &  St.  J. 
R.  Co.  72  Mo.  585. 

As  a  rule  the  compensation  of  a  re- 
ceiver is  taxable  to  the  fund  and  not 
to  the  parties  to  the  suit  and  where 
the  appointment  is  mutually  agreed 
upon  and  no  additional  expense  is  in- 
curred by  it  the  mere  fact  that  it  was 


588 


RECEIVERSHIPS. 


pears  that  the  property  belongs  to  third  parties  who  intervene,  and 
not  to  the  defendant. 

(f)  As  a  rnle  the  receiver's  compensation  will  not  be  made  to 
depend  upon  the  result  of  the  litigation  between  the  parties,  and 
even  where  in  the  end  the  title  to  the  property  is  found  to  be  in 
the  defendant  from  whom  the  receiver  takes  it,  nevertheless  he  is 
entitled  to  compensation.  The  court  in  such  case  is  not  to  blame, 
nor  is  the  receiver  who  obeys  its  order,  and  the  property  in  the 
receiver's  hands  is  liable  for  his  compensation,'  and  where  the 
property  has  been  turned  over  to  third  parties  as  the  owners 
the  court  may  order  the  property  back  into  the  receiver's  hands 
for  the  purposes  of  compensation." 

(g)  The  receiver  is  entitled  to  compensation  in  priority  to  re- 
ceiver's certificates  or  claims  of  laborers.^ 


made  upon  the  petition  of  one  party 
does  not  autliorize  the  taxation  of 
compensation  to  such  petitioner.  Jaf- 
fray  v.  Rmb,  72  Iowa,  335. 

Where  at  plaintiiT's  instance  de- 
fendant is  enjoined  from  prosecuting 
his  business  and  dispossessed,  pend- 
ing the  suit,  of  his  property,  which  is 
turned  over  to  a  receiver,  if  he  ulti- 
mately prevails  the  receiver's  com 
pensation  should  ordinarily  be  taxed 
as  costs  against  plaintiff  and  not  al- 
lowed from  the  fund.  St.  Louis  v. 
Si.  Louis  GasUylit  Co.  11  Mo.  App. 
237.  But  see  People  v.  Jones,  83 
Mich.  303;  Tome  v.  King,  64  Md.  1G6. 

As  a  rule  the  compensation  is  pay- 
able from  the  receivership  funds  or 
property.  Wilson  Cotton  Mills  v.  Ran- 
dleman  Cotton  Mills,  115  N.  C.  478; 
Eeise  v.  Starr,  44  111.  App.  406;  Beck- 
with  V.  Carroll,  56  Ala.  12;  Pennayl- 
vania  Oo.  for  Ins.  on  Lives,  etc.  v. 
Jacksonville,  T.  &  K.  W.  R.  Co.  66 
Fed.  Rep.  421. 

'  A  receiver  is  entitled  to  compensa- 
tion from  the  fund  in  his  hands,  with- 
out regard  to  the  result  of  the  litiga- 
tion. Hopfensack  v.  Hopfensack,  61 
How.  Pr.  498. 


Cf.  Radford  v.  Folsom,  55  Iowa,  276. 

A  receiver  of  property  in  contro- 
versy in  an  action  cannot  recover 
judgment  for  his  services  against  all 
the  parties,  by  motion  in  the  original 
suit.  He  is  an  officer  of  the  court  and 
his  compensation  should  be  allowed 
out  of  the  property  in  his  hands,  or 
taxed  as  costs.  Hutchinson  v.  Hamp 
ton,  1  Mont.  39. 

*  Surrender  to  a  third  party  of  prop- 
erty which  the  court  has  placed  in  the 
hands  of  a  receiver  for  preservation 
will  not  destroy  a  lien  which  the  court 
has  decreed  against  it  for  the  payment 
of  the  receiver's  fees;  but  the  court 
may  order  the  properly,  or  the  funds 
into  which  it  has  been  turned,  re- 
stored to  the  possession  of  the  court 
so  that  it  may  be  subjected  to  the  sat- 
isfaction of  such  lien.  Lammon  v. 
Giles,  8  Wash.  Terr.  117. 

^An  allowance  as  compensation  to 
a  receiver  of  a  railroad  and  his  solic- 
itor is  part  of  the  taxable  costs  in  the 
case,  and  as  such  to  be  preferred  to 
the  receiver's  certificates.  Peterbburg 
Sav.  d-  /.  Co.  v.  Delia torre,  70  Fed. 
Rep.  643,  30  U.  S.  App.  504. 

The  fees  of  a  receiver  of  a  corpora- 


RECEINTERS'  COMPENSATION. 


589 


(h)  In  addition  to  the  receiver's  com^^ensation  for  services  he 
is,  as  a  rule,  entitled  to  be  paid  from  the  receiversliip  funds 
(l)  necessary  counsel  fees  for  services  rendered  in  his  behalf  for 
the  benefit  of  the  receivership  estate/  and  legitimate  expenses 
and  costs"  and  (2)    such  additional  allowance  for  extra  services 


tion  should  be  paid  before  claims  of 
laborers  in  the  employ  of  the  corpo- 
ration, under  Iowa  Acts  (23d  Gen. 
Assem.  chap.  48),  making  the  claims 
of  such  laborers  preferred  debts  to 
be  paid  after  first  paying  "all  costs" 
occasioned  by  the  seizure  of  property. 
St.  Paul  Title  Ins.  <&  T.  Go.  v.  Diag- 
onal Coal  Co.  (Iowa)  (54  N.  W.  006. 

'  While  a  receiver  may  employ  coun- 
sel, if  necessary,  and  bind  the  estate 
to  their  payment,  he  cannot  charge 
for  professional  legal  services  rendered 
by  himself.  State  v.  Butler,  15  Lea, 
113. 

A  receiver  cannot  charge  counsel 
fees  for  services  performed  by  him- 
self. Be  Bank  of  Niagara,  6  Paige, 
213. 

And  he  will  not  be  allowed  per  diem 
compensation  for  particular  services, 
or  any  other  allowance,  beyond  his 
commission,  except  attorney's  and 
solicitor's  fees,  if  he  acts  as  such.  Re 
Bank  of  Niagara,  supra. 

A  receiver,  upon  the  passing  of  his 
accounts,  is  not  entitled  to  an  allow- 
ance out  of  a  fund  in  his  hands  as  re- 
ceiver for  counsel  fees  which  he  has 
paid  on  an  unsuccessful  defense  to  a 
suit  brought  against  him  by  the  owner 
of  such  fund,  nor  for  the  expenses  of 
an  unsuccessful  appeal  brought  by 
him  from  the  decree  in  such  suit. 
Utica  Ins.  Go.  v.  Lynch,  2  Barb.  Ch. 
573. 

It  is  improper  for  the  solicitor  of 
the  complainant,  at  whose  suit  a  re- 
ceiver was  appointed,  to  act  as  coun- 
sel for  the  receiver;  and  no  compen- 
sation for  such  services  can  be  paid 


from  the  fund  in  the  receiver's  hands, 
Eeffron  v.  Flower,  35  111.  App  200; 
Baker  v.  Backus,  32  111.  79,  115;  Mer- 
chants' &  M.  Nat.  Bank  v.  Kent  Cir- 
cuit Judge,  43  Mich.  292;  Benneson  v. 
Bill,  62  111.  409. 

Policy  holders  in  an  insolvent  life 
insurance  company  employed  an  at- 
torney to  resist  the  allowance  of  im- 
proper charges  made  by  the  receiver, 
— Held  that  the  attorney's  compensa- 
tion was  not  payable  from  the  assets. 
Atty.  Gen.  v.  Continental  L.  Ins.  Co. 
31  Hun,  623;  Atty.  Gen.  v.  North 
American  L.  Ins.  Co.  91  N.  Y.  57. 
See  also  Laws  of  1883,  §  5,  chap.  378. 

Where  one  of  the  defendants  in  a 
certain  cause  was  charged  by  a  decree 
of  the  court  with  the  collection  of  cer- 
tain policies  of  insurance,  for  the  ben- 
efit of  lienhoklers  upon  the  insured 
property, — Held  that  he  was  author- 
ized to  place  the  matter  at  once  in  the 
hands  of  competent  attorneys,  and  was 
properly  allowed  a  reasonable  amount 
paid  for  their  services,  although  the 
insurance  was  paid  without  litigation. 
Abbott  V.  Downer,  54  Iowa,  687. 

*A  receiver  properly  appointed  is  en- 
tilled  to  hiscostsfor  altendingcourt — 
$40  for  two  days'  attendance.  Lou- 
isville &  St.  L.  R.  Co.  V.  Southworth, 
38  111.  App.  225. 

The  receivers  of  an  insolvent  cor- 
poration were  allowed  their  costs  of 
resisting  in  good  faith  a  claim  of  set- 
off, by  a  debtor  of  the  corporation, 
though  the  set-off  was  finally  allowed 
by  the  court.  Ilolhrook  v.  American 
F.  Ins.  Co.  6  Paige,  220. 

No  part  of  the  expenses  of  a  receiver 


590 


RECEIVERSHIPS. 


rendered  not  anticipated,  but  which  are  for  the  benefit  of  the 
estate.' 

(i)  Where  the  statute  has  fixed  the  com])ensation  for  the  re- 
ceiver tliere  is  no  discretion  as  to  the  amount.'' 


appointed  for  the  benefit  of  an  insolv- 
ent railroad  company  and  its  creditors 
is  chargeable  against  the  property  of 
another  railroad  cf<mpany  leased  by 
the  insolvent  company.  Brown  v. 
Ibledo,  P.  tt-  W.  R.  Co.  35  Fed.  Rep. 
444. 

A  savings  bank  receiver  was  allowed 
IG.OOO  a  year  for  his  services,— Held 
that  he  could  not  charge  the  fund  with 
the  expense  of  unnecessary  clerks,  a 
dally  newspaper,  nor  counsel  fees  paid 
in  resisting  applications  that  he  should 
not  have  opposed;  that  his  individual 
indebtedness  to  the  bank  should  be 
offset  against  the  amount  due  him,  as 
well  as  money  lost  through  his  failure 
seasonably  to  remit  revenue  stamps 
for  redemption,  and  money  lost  by 
having  been  improvidently  lent  by  him 
on  inadequate  security;  but  that  he 
should  be  allowed  for  money  lost 
through  misappropriation  by  the  attor- 
ney who  had  been  employed  by  him 
to  make  collections,  the  attorney  be- 
ing in  good  standing  when  emploj'ed. 
Reunion  Bank,  87  N.  J.  Eq.  420. 

'A  receiver  appointed  to  take  charge 
of  a  large  hotel  property,  pending  a 
suit  for  rescission  of  a  contract  for  its 
sale, — Held, entitled  to  credit  in  his  ac- 
count for  money  paid  by  him  for  in- 
surance on  the  sam^,  although  without 
special  order  from  the  court,  if  the 
court  can  see  that  the  receiver  acted 
in  good  faith  and  under  such  circum- 
stances as  would  have  authorized  an 
order  had  such  authority  been  asked. 
Brown  v.  Hazlelmrst,  54  Md.  26. 

A  receiver  who  performs  duties  ad- 
ditional to  those  ordinarily  required 
may  be  entitled  to  extra  allowance. 


Thompson   v.  Willamette  S.  M.   L.  & 
Mfg.  Co.  15  Or.  604. 

Unlesshe  voluntarily  performs  siioh 
duties,  or  was  not  required  to  perform 
the  same.  Tliomfpmn  v.  Willamette  8. 
M.  L.  &  Mfg.  Co.  supra. 

A  receiver  will  not  be  allowed  addi- 
tional compensation  for  himself  and 
counsel  where  the  compensation  al- 
ready made  is  sufficient,  taking  into 
consideration  the  services  rendered 
and  the  circumstances  of  the  case,  but 
refusal  will  be  made  subject  to  the 
right  to  apply  for  services  rendered 
and  expenses  incurred  after  the  date 
of  the  decree.  Montgomery  v.  Peters- 
burg Sav.  &  I.  Co.  70  Fed.  Rep.  746,  30 
U.  S.  App.  511. 

A  receiver  of  an  estate  appointed 
by  an  order  fixing  his  compensation 
at  $100  per  month  is  not  entitled  to 
additional  compensation,  where  the 
gross  amount  of  assets  realized  by  him 
is  only  $10,000,  and  he  is  allowed  r^. 
liberal  amount  for  counsel  fees.  Henry 
v.  Henry,  103  Ala.  582. 

2  Re  Woven  Tape  Skirt  Co.  85  N.  Y. 
506. 

Chapter  378,  §  2,  Laws  of  1883,  has 
no  application  to  receivers  appointed 
and  who  have  entered  upon  the  dis- 
charge of  their  duties  before  the  pas- 
sage of  the  act.  The  law  is  prospective 
only.  People,  Neiocomb,  v.  McCall,  94 
N.  Y.  587. 

N.  Y.  Laws  1883,  chap.  378.  in  ref- 
erence to  receivers'  fees,  applies  only 
to  receivers  of  corporations  appointed 
in  proceedings  in  bankruptcy,  not  to 
a  receiver  in  foreclosure  proceedings, 
the  fees  of  whom  are  regulated  by  N. 
Y.  Code,  §  3320.     United  States  Trust 


RECEIVERS'  COMPENSATION. 


591 


(j)  The  order  fixins;  compensation  cannot  be  revoked,  after  the 
terra  of  court  has  expired,  for  mere  error.' 


Co.  V.  New  York,  W.  8.  &  B.  R.  Co. 
101  N.  Y.  478.  Cf.  Atty.  Gen.  v. 
Ouardian  L.  Ins.  Co.  93  N.  Y.  631; 
Atty.  Gen.  v.  Noi'fh  American  L.  Ins. 
Co.  89  N.  Y.  94,  29  Hun,  207. 

The  act  of  1821,  South  Carolina, 
regulating  the  fees  of  receivers,  ap- 
plies to  all  receivers,  vfhether  officers 
of  court  or  otherwise.  Massey  v. 
Massey,  1  Cheves,  Eq.  159. 

By  the  fair  construction  of  2  N.  Y* 
Rev.  Stat.  93,  §  58,  allowing  commis- 
sions to  executors,  etc.,  for  "receiving 
and  paying  out"  moneys,  a  receiver 
is  entitled  to  one  half  of  the  specified 
rates  for  receiving,  and  one  half  for 
paying  out. 

He  is  also  entitled  to  be  repaid 
actual  disbursements,  prudently  made 
or  incurred,  in  the  case  of  the  trust 
property.  Howes  v.  Davis,  4  Abb. 
Pr.  71. 

As  to  compensation  in  New  York, 
see  Laws  of  1883,  chap.  378,  §  2,  Code 
Civ.  Proc.  §  3320. 

'  A  motion  to  set  aside  for  mere 
error  a  final  decree  fixing  and  allow- 
ing the  compensation  of  a  receiver  of 
an  insolvent  corporation,  and  counsel 
fees  and  other  charges  and  expenses 
of    administration,   cannot    be  made 


after  the  term  of  court  at  which  the 
decree  was  rendered,  although  no  no- 
tice was  given  to  certain  parties  inter- 
ested, as  every  party  to  such  proceed- 
ing is  chargeable  with  notice  of  such 
action  of  the  court.  Clements  v.  Em- 
pire Lumber  Co.  96  Ga.  319. 

A  receiver  of  a  corporation  is  enti- 
tled to  compensaiion  out  of  the  funds 
which  come  into  his  hands  as  receiver, 
although  his  appointment  is  revoked 
on  appeal,  both  in  the  absence  of  a 
statute  on  the  subject  and  under 
Sayles'  Tex.  Civ.  Stat.  Supp.  art. 
1466,  providing  that  all  moneys  that 
come  into  the  hands  of  a  receiver  as 
such  shall  be  first  applied  to  the  "pay- 
ment of  all  court  costs  of  the  suit." 
Espuella  Laud  &  C.  Co.  v.  Bi?idle(Tex. 
Civ.  App.)  32  S.  W.  582. 

A  master  in  chancery,  acting  as  re- 
ceiver, acts  in  a  distinct  character,  and 
is  entitled  to  compensation  as  re- 
ceiver. Arthur  v.  Master  in  Equity,  1 
Harp.  Eq.  47. 

Compensation  of  receivers  of  an  in- 
solvent railroad  corporation, — deter- 
mined, with  reference  to  the  circum- 
stances of  the  particular  case.  Ma- 
Arthur  V.  Montclair  B.  Co.  27  N.  J. 
Eq.  77. 


CHAPTER  XXL 


REPORTS,  ACCOUNTS  AND  DISTRIBUTION. 


§  355.  General — Reports  and  accounts. 
§  356.  Rules  applicable  to. 

(a)  Must  be  to  court  appointing. 

(b)  Reference  to  master. 

(c)  Objections  to  master's  find- 

ings. 

(d)  Objections  to  master's  find- 

ings and  exceptions. 

(e)  Appeal  not  allowed  as  a  rule. 

(f)  Effect  of  approval. 
§  357.  Order  of  distribution. 


§  358.  What   embraced    in  order  of 
distribution. 

(a)  Attorney's  fees. 

(b)  Notes    secured    by    invalid 

mortgage. 

(c)  Debts  due  contractors. 

(d)  Rents  and  profits. 

(e)  Expenses  and  advancements. 

(f)  Money  paid  by  sureties. 

(g)  When  on  judgments. 

(h)  Where  collaterals  are  held. 


§355.    General — Reports  and  acconnts. 

It  is  tlie  duty  of  the  receiver  to  raport  to  the  conrt  from  time 
to  time  the  condition  of  his  accounts,  so  that  at  all  times  all  par- 
ties in  interest  may  have  official  information  as  to  tlie  true  con- 
dition of  affairs,  and  this  should  be  done  without  an  order  of 
court  requiring  him  to  do  so.  Being  an  officer  of  court,  a  great 
degree  of  strictness  is  required  of  him,  and  the  funds  in  his 
possession  being  trust  funds,  the  utmost  .care  must  be  exercised 
in  reference  to  their  disposition  and  his  accountability  therefor. 
A  proper  accounting  from  time  to  time,  as  well  as  his  final  report, 
renders  it  incumbent  on  the  receiver  to  carefully  inventory  the 
estate,  property,  goods,  and  effects  of  every  nature  that  come  to 
his  hands.  Nothing  but  the  most  general  rules  in  regard  to  the 
receiver's  reports  and  accounts  can  be  laid  down,  owing  to  the 
infinite  variety  of  receivership  property  coming  into  his  hands, 
and  the  varied  duties  pertaining  thereto  under  the  direction  of 
the  court.  Besides,  the  practice  is  by  no  means  uniform  in  the 
different  courts. 

The  disbursements  made  by  a  receiver,  for  which  the  court 
■will  allow  him  in  his  accounts,  have  been  fully  considered  in 
chapters  relating  to  powers  and  liabilities  of  receivers  and  no 
good  purpose  can  be  served  by  a  recapitulation  in  this  connection.' 

•  See  chapters  III.  and  VIII.;  also  claims  against  receivership  funds,  ante. 

592 


EEPORTS,  ACCOUNTS  AND  DISTRIBUTION. 


593 


§  356.     Rules  applicable  to. 

(a)  The  receiver  is  responsible  only  to  the  court  appointing 
him,  and  cannot  be  required  to  turn  over  the  i"eceivership  prop- 
erty or  funds  upon  the  order  of  another  court.  He  must  make 
his  reports  to,  and  his  accounts  are  to  be  adjusted  only  by,  the 
court  of  his  appointment.' 

(b)  The  usual  and  appropriate  practice  is  to  refer  the  receiver's 
accounts  to  a  master  to  be  passed  upon,  and  when  passed  by  the 
master  are  confirmed  by  the  court  on  the  presentation  of  the 
master's  report,  unless  objections  and  exceptions  are  filed  by 
the  parties  havino;  a  right  to  be  heard  in  opposition  thereto.  The 
court  may  consider  the  rules  and  principles  adopted  by  the 
master  in  passing  the  accounts,  and  if  erroneous  may  refer  the 
matter  back  to  the  master  for  a  restatement  of  the  account  in 
accordance  with  its  directions,  but  camiot  be  expected  to  review 
the  account  item  b}'  item.° 

(c)  It  is  necessary,  if  exception  is  taken  to  the  action  of  the 
master  concerning  the  account,  to  point  out  specifically  the  items 
to  which  error  is  assigned,  and  the  objections  should  be  sufficiently 
specific  so  that  the  court  may  readily  see  the  force  of  the  objec- 
tion.' 


'•  Mabry  v.  Harrison,  44  Tex.  286; 
Mufgrove  v.  Nash,  3  Edw.  Ch.  172; 
Conkling  v.  Butler,  4  Biss.  22. 

*  A  receiver  as  well  as  the  master  is 
an  officer  of  the  court,  and  slates  his 
own  accounts  and  submits  them  to 
the  master  for  inspection,  under  the 
order  of  the  court,  the  master  acting 
in  the  place  of  the  court  in  a  judicial 
rather  than  in  a  ministerial  capacity. 
Exceptions  to  the  master's  report  do 
not  lie  in  such  cases,  though  if  any- 
erroneous  principle  be  adopted  in 
allowing  a  receiver's  account,  the 
court,  on  petition,  will  refer  the  mat- 
ter back  for  correction.  It  is  the 
duty  of  the  court  to  review  the  prin- 
ciples and  rules  adopted  by  the  master 
in  allowing  the  accounts,  rather  than 
to  examine  the  items  in  detail,  or  the 
evidence  on  which  they  were  founded. 

38 


Cowdrey  v.  Galveston,,  H.  &  H.  R.  Co. 
1  Woods,  331.  Am.  T.  &  S.  Bk.  v. 
Frankeiitlml,  55  III.  App.  400. 

Cf.  Browerv.  Brower,  2  edw.  Ch.62I. 
Objection  to  the  master's  report  must 
be  by  a  party  to  the  suit.  People  v. 
Volumhia  Car  !>pring  Co.  12  Hun,  585; 
Schenck  v.  Ingraham,  5  Hun,  307.  In 
New  York  the  account  may  be  sent  to 
a  referee  for  passing.  People  v.  Knick- 
erbocker L.  Ins.  Co.  31  Hun,  G22. 

=*  Heise  v.  Starr,  44  111.  App.  406. 
The  objection  must  be  made  at  the 
time  of  the  allowance  or  within  such 
time  as  the  court  may  allow  for  such 
purpose.  Terry  V.  Dubois,  32  Week. 
Kep.  415.  Cf.  Farmers'  Loan  &  T. 
Co.  V.  Central  R.  Co.  1  McCrary,  332. 

Where  a  receiver  files  exceptions 
of  fact  to  the  auditor's  report  on  his 
account,  he  is  entitled  to  a  jury  to 


594:  RECEIVERSHIPS. 

(d)  Fairness  to  the  master  and  to  the  receiver  requires  that 
objections  be  tiled  before  the  master  in  order  that  he  may  liave 
an  opportunity  for  correction  and  that  additional  evidence  may 
be  furnished  by  the  receiver  if  necessary.'  The  liearing  before 
the  court  is  upon  exce})tions  filed. 

(e)  As  a  rule,  an  appeal  by  the  receiver  will  not  lie  from  an 
order  approving  a  receiver's  account  and  directing  him  to  turn 
over  the  receivership  funds,  except  for  error  as  to  the  amount  to 
be  turned  over.' 

(f)  If  the  receiver's  accounts  have  been  approved  and  he  has 
been  discharged  by  the  court  no  further  incpiiry  will  be  permitted 
as  to  his  management.' 

§  357.    Order  of  distribution. 

The  distribution  of  the  receiversliip  funds,  ^?cw<f^;i^<?  lite  or 
final,  presupposes  an  order  of  court  authorizing  it,  and  also  the 
amount  and  pro  rata  share  to  each  party  entitled  thereto  if  the 
indebtedness  is  not  paid  in  full.  The  order  of  course  is  based 
upon  accuj-ate  information  of  the  net  amount  to  be  distributed 
and  the  amount  of  indebtedness  upon  which  the  distrilnition  is  to 
be  applied.  The  order  of  distribution,  whether  interlocutory  or 
final,  is  subject  to  modification  and  correction  by  the  court,*  and 
unless  for  good  reason  to  the  contrary,  should  be  to  all  the  credi- 
tors alike.* 

pass  upon  them.      Akers  v.  Veal,  66  the    merits.    By  on   v.    Thomas,    104 

Ga.  303.  Ind.  59. 

'  Coicdrey  v.  Galveston,  II.  <fi  H.  li.  Where    the    settlement    has    been 

Co.  1  Woods,  331.  made  and  order  entered  requiring  the 

'  Hinckley  v.   Gilman,   C.  &  S.  R.  receiver  to  pay  out  more  money  than 

Co.  94  U.  S.  467,  24  L.  ed.  166;  IIo^o  he  has  in  his  hands  the  order  may  be 

v.  Jones,  60  Iowa,  70.     Of  course  the  modified  and  the  mistalvc  corrected, 

decree  to  be  appealable  must  be  final.  Byon  v.  Thomas,  supra. 

Bochat  V.    Qee,  91  Cal.  355;    Illinois  ^  In  the  absence  of  good  reason  to 

Trust  &  Sat.  Bank  v.  Pacific  R.  Co,  the  contrary,  proportionate  payment 

99  Cal.  407.  should   be  made  to  all  creditors  en- 

2  Lehman  v.    McQiiown,    31    Fed.  titled  to  share  in  a  fund  in  the  hands 

Rep.  138.  of  a  receiver.     Qirard  L.  Ins.  A.  & 

*  An  interlocutory  order  directing  a  2'.  Co.  v.  Cooper,  51  Fed.  Rep.  332, 

receiver  to  pay  out  more  money  than  4  U.  S.  A  pp.  631. 

is  in  his  hand  will  be  modified,  and  A  receiver  appointed  in  a  suit  to 

the  application  for  its   modification  foreclose  a  mortgage  made  by  a  cor- 

may  be  heard  in  a  summary  way  on  poralion,    under    allegations    of    the 


REPORTS,  ACCOUNTS  AND  DISTRIBUTION. 


595 


The  order  to  a  receiver  to  pay  over  funds  in  his  liands  is  based 
upon  notice  to  the  receiver  and  served  upon  him,  or  in  his 
absence  upon  his  attorney,'  and  may  be  granted  on  affidavits.' 
The  order  for  distribution  is  usually  made  upon  final  hearing,' 
though  if  substantial  distribution  can  be  made  it  should  not  be 
delayed  because  of  a  pending  controversy  over  a  small  amount,* 
and  when  made  is  final  and  conclusive  as  to  all  claims  filed  and  duly 
passed  upon,^  but  in  all  cases  before  an  order  for  distribution  is 
made  the  funds  must  be  in  court/ 

§  358.    What  embraced  in  order  of  distribution. 

(a)  Attorney's  fees. 
In  the  order  of  distribution  in  addition  to  the  ordinary  credit- 


latter's  insolvency,  discontinuance  of 
business,  and  necessity  of  the  ap- 
pointment to  secure  the  application  of 
the  rents  and  profits,  should  not,  upon 
the  mortgage  being  held  an  illegal 
preference,  be  directed  to  pay  in  full 
the  judgments  of  the  intervening 
creditors  who  attacked  the  mortgage, 
but  the  fund  should  be  distributed 
among  all  the  corporate  creditors. 
Thompson  v.  Huron  Lumber  Co.  4 
Wash.  600. 

A  receiver  of  a  bank  which  had 
collected  notes  and  drafts  of  anotlier 
bank  may  be  compelled  to  pay  the 
same  in  full  with  interest  and  not 
pro  rata.  Tlwmpaon  v.  Gloucester 
City  Sav.  Inst.  (N.  J.)  8  Atl.  97. 

'  Notice  of  an  order  to  a  receiver  to 
pay  over  funds  served  in  his  absence 
on  his  attorney, —  Held,  sufHcicnt. 
Jennings  v.  Sinipwn,  12  Neb.  55b. 

*  Ex  parte  affidavits,  whether  pre- 
viously filed  in  the  case  or  not,  may 
be  considered  on  a  motion  to  dispose 
of  property  remaining  in  the  hands  of 
a  receiver  after  the  dismi.ssal  of  the 
bill.    Warren  v.  Bunch,  80  Ga.  124. 

*  A  receiver  appointed  pendente  lite 
cannot  be  directed  to  pay  claims  out 
of  the  moneys  coming  into  his  liands, 
before  the   final   hearing,  except  by 


consent  of  all  parties.  Forsaith  Mach. 
Co.  v.  Hope  Mills  Lumber  Co.  109  N.C. 
576. 

*  Where  substantial  distribution  of 
a  fund  in  a  receiver's  hands  for  the 
settlement  of  a  partnership  can  be 
made,  such  distribution  should  not 
be  delayed  because  of  a  pending  con- 
troversy concerning  an  outstanding 
claim  for  a  small  amount.  Trayhcrn 
V.  Mechnnics'  JSfat.  Bank,  57  Md.  590. 

*  The  functions  of  a  receiver  in 
proceedings  to  enforce  statutory  liens, 
to  preserve  the  property  and  security 
p)endente  lite,  end  with  a  sale  of  the 
property  under  order  of  the  court, 
and  payment  of  the  full  claims  of  the 
creditors,  reported  to  the  date  of  sale 
and  duly  passed  upon;  and  it  is  error 
at  the  next  term  of  court,  to  which 
by  stipulation  his  reports  were  con- 
tinued for  consideration,  to  decree 
that  moneys  expended  by  him  after 
the  sale  shall  be  a  lien  on  the  prop- 
erty, antedating  the  decree  under 
which  it  was  sold.  Bassick  Min.  Co. 
v.  Schoolfield,  15  Colo.  376. 

*  Receivers  will  not  be  instructed 
as  to  the  distribution  of  funds  until 
they  have  them  in  court.  Strauss  v, 
Carolina  Interstate  Bldg.  &  L.  Asso. 
117  N.  C.  308,  30  L.  R.  A.  693. 


596 


RECEIVERSHIPS. 


ors,  the  receiver  may  be  directed  to  pay  attorney's  fees  when  he 
is  employed  by  direction  of  the  coui't,  or  the  necessity  of  his 
employment  established  prior  to  the  granting  of  the  order.' 
"Where  the  court  passes  upon  the  question  of  the  amount  to  be 
paid  as  attorney's  fees,  and  the  attorney  is  lieard  upon  the  matter, 
tlie  order  is  conclusive  and  binding  upon  him  and  is  a  bar  to  a 
subsequent  action  by  him  therefor.''  But  it  seems  tliat  before 
fees  can  be  alloAved  to  counsel  there  must  be  a  contract  for  his 
services,  express  or  implied ;  a  mere  volunteer  in  receivership 
matters  is  not  sufficient.*  It  has  also  been  held  that  services  ren- 
dered for  a  corporation  before  the  appointment  of  a  receiver  are 
not  entitled  to  priority  over  the  mortgage  bondholders,  though 
their  services  were  valuable  to  that  company  and  established  the 
validity  of  its  bonds."     But  where  the  attorney  is  employed  at  a 


•A  receiver  employing  counsel  to 
advise  hira,  without  express  authority 
from  the  court,  will  not  be  allowed 
counsel  fees  on  settlement  unless  he 
establishes  the  necessity  therefor. 
Terry  v.  Martin  (N.  M.)  33  Pac.  157. 

The  court  should  not  direct  a  re- 
ceiver to  pay  his  attorney  more  than 
the  attorney  himself  asks  for  in  his 
petition,  even  though  there  be  evi 
dence  justifying  a  larger  charge. 
Richter  v.  Schroeder,  110  111.  112. 

^  The  decision  of  a  court  on  settle- 
ment of  a  receiver's  accounts  as  to 
compensation  to  be  paid  to  an  attor- 
ney employed  by  him  without  special 
agreement  as  to  the  amount  to  be  paid 
him,  where  the  attorney  was  notified 
and  appeared,  and  was  heard  in  re- 
spect to  the  claim,  is  conclusive  against 
the  attorney  and  a  bar  to  a  subsequent 
action  by  him  against  the  receiver  per- 
sonally. Walsh  V.  Baymond,  58  Conn. 
251. 

An  order  directing  the  payment  by 
a  receiver,  out  of  a  fund  in  his  hands, 
of  the  solicitor's  fees  of  a  parly  to  liti- 
gation concerning  it,  before  the  right 
of  that  party  to  any  portion  of  the 
fund  has  been  established,  is  errone- 


ous. Doane  v.  Corbin,  44  111.  App.  468; 
Coates  V.  Cunningham,  80  111.  467. 

*  An  allowance  out  of  funds  in  the 
hands  of  a  receiver  will  not  be  made 
to  one  rendering  services  availed  of 
by  counsel  for  the  receivers  and  use- 
ful to  the  latter  in  litigation,  when 
such  services  were  not  rendered  in 
pursuance  of  any  contract,  express  or 
implied,  and  the  receivers  made  a  con- 
tract with  him  when  his  services  were 
needed  by  them  in  other  matters.  Be 
Whittemore,  157  Mass.  46.  It  was  also 
held  in  this  case  that  counsel  was  not 
entitled  to  compensation  by  reason  of 
laches. 

''  Attorneys  who  act  for  a  railroad 
corporation  two  years  before  the  ap- 
pointment of  a  receiver  in  mortgage 
foreclosure,  and  by  whose  services 
town  bonds  voted  in  aid  of  the  com- 
pany were  declared  valid  and  given  a 
value,  are  not  entitled  to  have  the  lien 
of  the  mortgage  displaced  in  their  fa- 
vor so  as  to  give  them  priority  in  the 
funds  in  the  hands  of  the  receiver,  al- 
though such  services  secured  the 
means  for  constructing  the  road  and 
added  to  the  value  of  the  property 
covered  by  the  mortgage.     Pennsyl- 


REPORTS,  ACCOUNTS  AND  DISTRIBUTION. 


597 


fixed  salary,  he  is  entitled  to  a  preference  as  an  employee,  but 
not  if  the  services  were  before  the  construction  of  the  road.' 
Funds  wron<rfully  paid  to  receiver's  attorneys  will  be  required  to 
be  paid  back  hy  the  latter/ 

(b)    JSTOTES    SECURED    BY    INVALID    MORTGAGE. 

Kotes  secured  by  a  mortgage,  where  the  mortgage  is  subse- 
quently declared  invalid,  will  not  be  ordered  to  be  given  up  and 
sold  by  the  receiver  where  the  purpose  is  to  place  them,  subject 
to  process  of  a  state  court,  in  favor  of  certain  creditors.^ 


vania  Finance  Co.  v.  OJiarleston,  C.  & 
C.  R.  Go.  52  Fed.  Rep.  678. 

'  An  attorney  employed  by  a  rail- 
road company  at  a  fixed  salary  is  an  em- 
ployee entitled  to  share  in  the  income 
realized  by  a  receiver  appointed  in  a 
mortgage  foreclosure  under  an  order 
providing  for  the  payment  of  all  em- 
ployees; but  where  the  services  ren- 
dered by  him  were  before  the  con- 
struction of  the  road  he  is  not  entitled 
to  share  in  the  proceeds  of  sale  al- 
though the  income  fails.  Pennsylva- 
nia Finance  Co.  v.  Charleston,  C.  &  C. 
B.  Co.  52  Fed.  Rep.  526. 

A  receiver  will  not  be  compelled  to 
pay  counsel  of  a  creditor  of  the  cor- 
poration whose  property  is  in  his 
hands,  for  services  in  procuring  an  or- 
der for  payment  by  the  receiver  of 
the  sum  due  under  a  contract  with  the 
corporation,  although  such  creditor  is 
preferred  in  having  a  right  to  posses- 
sion of  property  in  the  hands  of  the 
receiver  unless  such  sum  is  paid,  and 
the  claim  of  such  creditor  is  undis- 
puted, since  there  is  no  duty  on  the 
part  of  the  receivers  to  proceed  afflrm- 
atively  and  procure  the  allowance  of 
claims  against  them.  Central  2'rust 
Co.  v.  Valley  R.  Co.  55  Fed.  Rep.  903. 
The  cases  of  Philadeiphia  Invest.  Co.  v. 
Ohio  (&  N.  W.  R.  Co.  46  Fed.  Rep. 
696,  and  Easton  v.  Houston  &  T.  C.  R. 
Co.  40  Fed.  R.*p.  189,  distinguished. 


"^  A  court  receiver  who,  while  a  fund 
erroneously  ordered  to  be  paid  over  to 
him  for  distribution  is  in  his  posses- 
sion, pays  out  a  portion  of  it  in  good 
faith  under  the  court's  direction,  will 
be  protected  to  that  extent;  but  attor- 
neys to  whom  any  portion  of  the 
money  has  been  paid  as  fees  will  be 
required  to  pay  it  back  to  him,  and 
upon  receipt  thereof  he  will  be  di- 
rected to  pay  it  to  the  party  entitled 
thereto.  Re  Home  Provident  Safety 
Fund  Asso.  129  N.  Y.  288. 

^  Notes  and  a  mortgage  owned  by  a 
railroad  company  of  which  a  receiver 
has  been  appointed  with  the  consent 
of  all  parties  in  interest  after  the  mort- 
gage, is  held  invalid,  and  of  whose 
property  inventoried  by  the  receiver, 
including  such  notes  and  mortgage,  a 
sale  has  been  decreed  upon  the  same 
consent,  will  not,  although  illegally 
taken  possession  of  by  the  receiver, 
be  ordered  to  be  given  up  and  not  sold 
by  him,  on  the  application  of  the  cred- 
itors who  joined  in  such  consent,  in 
order  to  enable  the  latter  to  subject 
them  to  process  upon  judgments  ob- 
tained in  a  state  court.  Farmers'  Loan 
&  T.  Co.  v.  San  Diego  Street  Car  Co. 
49  Fed.  Rep.  188;  Qumhel  v.  Pitkin, 
124  U.  S.  131,  31  L.  ed.  374.  Cf.  Lowe 
V.  Stephens,  66  Ga.  007,  as  to  effect  of 
filing  a  general  creditor's  bill  upon  a 
pending  attachment. 


5y6 


RECEIVKltSHil^d. 


(c)  Dkbts  due  contractors. 
Contractors  upon  a  contract  partially  completed  at  the  time  of 
grantiiiii'  a  receiversliip  are  entitled  to  be  paid  the  contract  price 
nj)  to  the  time  they  are  directed  by  the  receiver  to  cease  work- 
inu-.' 

(d)  Rents  and  profits. 

Rents  collected  by  a  receiver  npon  mortgaged  property  pend- 
ing a  suit  in  which  the  first  mortgagee  is  a  ]xirty  and  who  subse- 
qnently  brings  a  suit  to  foreclose,  are  properly  payable  to  the  first 
mortgagee  if  there  is  a  deficiency  as  to  the  first  mortgage.'' 
Where  rent  notes  are  given  to  a  receiver  for  premises,  pending  an 
action  in  relation  to  the  title,  and  the  maker  is  subsequently  de- 
creed to  be  the  owner,  they  should  be  canceled.' 

(e)  Expenses  and  advancements. 

Where  plaintiff  pending  suit  advances  money  to  pay  taxes  in 
an  action  to  remove  a  cloud  from  the  title,  he  is  entitled  to  be 


1  Contractors  to  erect  a  building  for 
a  railroad  company  which  goes  into 
the  hands  of  receivers  are  entitled  to 
the  contract  price  up  to  the  time  they 
are  directed  by  the  receivers  to  cease 
work.  Oirard  L.  Ins.  A.  &  T.  Co.  v. 
Cooper,  51  Fed.  Rep.  333,  4U.  S.  App. 
631. 

'  Cincinnati  Nat.  Bank  v.  Tilden,  50 
N.  Y.  S.  R.  366. 

A  receiver  was  in  possession  of  a 
wharf  and  of  the  adjacent  land,  hav- 
ing taken  possession  thereof  from  the 
defendant,  and  received  money  from 
the  use  of  the  entire  premises,  the 
adjacent  land  only  was  adjudged  to 
belong  to  plaintiff, — Held  that,  upon 
discharge  of  the  receiver,  it  was  error 
to  direct  that  the  whole  of  the  money 
be  paid  to  plaintiff.  Coburn  v.  Ames, 
57  Cal.  201. 

*  Where  a  receiver  was  appointed 
in  an  action  to  determine  rights  to 
land,  on  the  ground  that  the  contract 
therefor    had    been   rescinded,    rent 


notes  given  by  the  plaintiff  to  the  re- 
ceiver for  rents  pending  the  action 
should  be  canceled  and  possession  re- 
stored to  him  if  he  is  adjudged  to  be 
the  owner.  The  defendant  can  have 
no  claim  to  the  rents  in  such  a  case. 
Morgan  v.  Oliver,  11  Ky.  L.  Rep.  513. 

A  court  of  chancery  will  not  order 
a  receiver  of  the  rents  and  profits  of 
real  estate  to  pay  over  or  account  for 
them  to  a  party  whose  claim  is  not  a 
charge  upon  the  land.  Baltimore  v. 
Chase,  2  Gill  &  J.  376. 

In  Pacific  R.  Co.  v.  Wade,  91  Cal. 
449,  13  L.  R.  A.  754,  it  was  held  that 
the  amount  to  be  paid  for  the  joint 
use  of  a  street  railway  track  in  the 
hands  of  a  receiver  may  be  deter- 
mined by  the  court  on  a  petition, 
where  the  statutes  give  the  right  to 
such  use  on  payment  of  one  half  the 
cost  of  construction;  and  there  is  no 
right  to  a  jury  on  the  ground  that  it 
involves  the  exercise  of  the  right  of 
eminent  domain. 


REPORTS,  ACCOUNTS  AND  DISTRIBUTION. 


599 


reimbursed  upon  a  dismissal  of  his  bill.'  As  elsewhere  seen  a  re- 
ceiver bj  direction  of  the  court  may  incur  such  expenses  as  are 
required  for  the  preservation  of  the  receivership  proper ty." 

(f)  Money  paid  by  sdreties. 
Sureties  havins^  paid  money  for  the  use  of  a  corporation,  grow- 
ing out  of  appeal  bonds  given  in  condemnation  proceedings  are 
entitled  to  be  paid  from  the  proceeds  of  sale  in  a  foreclosure  pro- 
ceedinir.' 


•Where  plainlifiF,  on  a  bill  to  re- 
move a  cloud  from  a  title,  paid  the 
taxes  pending  the  suit,  where  the  re- 
ceiver should  have  paid  the  taxes  from 
rents  collected,  upon  his  bill  bting 
dismissed  is  entitled  to  reimburse- 
ment from  the  funds  in  the  receiver's 
hands.     Wicks  v.  Sears,  4  Lea,  298. 

A  court  of  chancery  may  incur  such 
expenses  as  are  necessary  for  the  pre- 
servation of  a  railroad  in  its  custody, 
after  the  company  owning  the  road 
has  forfeited  its  charter,  when  its  in- 
come is  sufficient  bj'  creating  liens 
through  the  issue  of  receivers'  certif- 
icates, which  displace  pre  existing 
liens.  State  v.  East  Line  &  R.  li.  R. 
Co.  (Tex.)  48  Am.  &  Eng.  R.  Cas.  656; 
Union  T.  Co.  v.  Illinois  Midland  R. 
Co.  117  U.  S.  455,  29  L.  ed.  970. 

A  receiver  of  a  street  i  ail  way  com- 
pany appointed  in  a  suit  to  foreclose 
a  mortgage  will  not  be  directed  to 
pay  out  moneys  in  his  hands  for  pav- 
ing the  street  between  and  along  the 
tracks,  where  no  lien  exists  therefor, 
although  there  be  a  specific  contract 
by  the  company  to  make  such  pay- 
ment. Union  Loan  &  T.  Co.  v.  Sonth- 
ern  Calif ornia  Motor  Road  Co.  49  Fed. 
Rep.  267. 

On  petition  that  the  receivers  of 
mortgaged  railroad  property  be  or- 
dered to  pay  the  expense  of  certain 
negotiations  for  a  purchase,  it  appear- 
ing that  there  was  no  surplus  money 
In  the  receiver's  hands,   and   that  it 


was  not  absolutely  certain  that  the 
negotiations  would  be  successful, — 
Held  that  the  petition  should  be  re- 
fused. Central  Truxt  Co.  v.  Wabash, 
St.  L.  &  P.  R.  Co.  25  Fed.  Rep.  69. 

"  At  the  final  settlement  of  the  ac- 
counts of  the  receivers  of  an  insol- 
vent corporation,  the  court  refused  to 
inquire  into  and  reduce  the  master's 
taxed  bill  of  fees  for  services  in  the 
case,  which  had  been  paid  by  the  re- 
ceivers, and  for  which  they  had  a 
receipt.  Re  Bank  of  Niagara,  6  Paige, 
213. 

A  receiver  of  a  railroad  company 
will  not  be  authorized  to  pay  expenses 
incurred  by  a  committee  appointed  to 
reorganize  a  road,  under  an  order  au- 
thorizing the  pledge  of  securities  by 
the  company  for  money  to  be  bor- 
rowed to  relieve  it  from  its  financial 
embarrassment  at  a  time  when  no 
creditors  had  sought  to  foreclose  any 
liens,  leaving  such  expenses  to  be 
subsequently  passed  upon  by  the 
court,  where,  since  such  order,  a  bill 
to  foreclose  a  mortgage  has  been  filed, 
and  the  receivership  extended  thereto 
and  modified  so  as  to  enable  the  mort- 
gagee to  reach  equitable  assets  through 
the  receivership,  and  other  creditors 
have  intervened  and  filed  collateral 
proceedings  upon  liens,  and  such  par- 
ties are  not  before  the  court  upon  tlie 
application.  Clarke  v.  Central  R.  & 
Blqi.  Co.  54  Fed.  Rep.  556. 

*  Sureties  on  appeal  bonds  given  on 


600 


KECEIVERSIIIPS. 


(g)  When  on  judgments. 

A  receiver  will  not  be  required  to  pay  a  judgment  claimed  to 
be  a  prior  lien  until  there  lias  been  a  full  bearing  of  all  parties 
as  to  priority.' 

(h)  Where  collaterals  are  held. 

Where  collaterals  are  held  by  a  national  bank  dividends  are  to 
be  paid  to  the  holder  of  such  collaterals,  after  deducting  the 
amounts  collected  on  the  collaterals,  after  the  maturity  of  the  loan 
and  before  the  proof  of  the  claim,  but  without  deducting  collec- 
tions made  after  proof  of  claim.* 


appeal  from  judgments  rendered  in 
condemnation  proceedings,  wlio  were 
forced  to  pay  for  the  riglit  of  way 
over  the  appellee's  lands  because  the 
railroad  was  in  a  receiver's  hands 
when  the  bonds  were  enforced  against 
them,  are  entitled  to  be  repaid  out  of 
the  proceeds  of  a  mortgage  foreclosure 
sale  of  the  road.  Rome  &  D.  R.  Co. 
V.  Sibert,  97  Ala.  393. 

'  Where  funds  are  in  the  hands  of 
a  receiver,  a  creditor  in  a  judgment 
at  common  law  cannot  obtain  a  rule 
against  the  receiver  for  the  payment 
of  the  judgment  in  full,  without  a 
full  hearing  of  all  parties  as  to  the 
priority  of  all  claims.  Lowe  v.  Step- 
hens, 66  Ga.  607. 

A  receiver  will  not  be  required  to 


pay  the  full  amount  of  the  claim  of 
an  attaching  creditor  until  the  latter 
shows  that  he  has  by  his  attachment 
acquired  a  lien  upon  sufficient  goods 
to  pay  the  whole  amount  of  his  claim. 
Qlines  v.  Supreme  Sitting,  0.  of  I.  H. 
50  N.  Y.  S.  R  743. 

A  receiver  of  a  partnership  will 
not  be  directed  to  pay  out  of  the  as- 
sets a  judgment  recovered  upon  a 
partnership  indebtedness  after  he  took 
possession,  where  the  estate  is  insol- 
vent or  there  is  nothing  in  the  nature 
of  the  claim  of  the  creditor  which 
should  entitle  him  to  priority  over 
other  creditors.  Hoerle  v.  Mcllliargy, 
29  Jones  &  S.  184. 

5  Chemical  Nat.  Bank  v.  Armstrong, 
50  Fed.  Rep.  798. 


CHAPTEE   XXII. 


PRACTICE  AND  PLEADING. 


§  370.  General.  §  396. 

§  371.   Suit  pending. 

§  372.  Prayer  for  receiver.  §  397. 

§373.  Necessary  parties;  allegations. 

§  374.  Notice  of  application.  §  398. 

§  375.  At  wLat  stage  of  suit  applica- 
tion made.  §  399. 

§  376.  When  application  granted  be-  §  400. 
fore  answer. 

§  377.  Bond  of  receiver  required.  §  401. 

§  378.  Effect  of  giving  bond.  §  402. 

^  379.  Form  of  bond.  §  403. 

§  380.   How  liability  enforced.  §  404. 

g  3-Jl.  The  order  appointing.  §  405. 

g  382.  Scope  of  order.  §  406. 

§  383.  Findings  embodied  in  order.  §  407. 

I  384.  Affldavits,     when     basis     of  §  408. 

order.  i^  409. 

§  385.  Reference  to  master  or  referee.  §  410. 

§  386.  Examination  of  debtor  under 

code  proceedings.  §  411. 

§  387.  Statutory  proceedings.  §  412. 

§  388.  National  banks. 

§  389.  Mortgage  foreclosures.  §  413. 

§  390.  Suits  by  receiver. 

§391.  In  what  name  to  sue.  §414. 

§  392.  Necessary  allegations.  §  415. 

§  393.  Form  of  allegations. 

§  394.  Limitations  on  power  to  sue.  §  416. 

§  395.  Suits  against  receiver  ;    leave  §  417. 

to  sue.  §418. 


Actions  against  receiver  under 
void  appointment. 

Form  of  judgment  against  re- 
ceiver. 

Proceedings  in  original  cause 
when. 

Right  of  set-off. 

Petition  of  receiver  for  au- 
thority. 

Application  for  directions. 

Receiver  as  manager. 

Interpleader  by  receiver. 

Possession  as  to  third  parties. 

Acts  outside  of  receiver's  duty. 

When  receiver  refuses  to  act. 

Leave  to  compromise. 

Power  to  enforce  assessments. 

Leave  to  sell. 

Leave  to  contract  debts  and 
liens. 

Leave  to  issue  certificates. 

Trust  property  held  by  re- 
ceiver. 

Effect  of  receiver's  discharge 
pending  action. 

Order  of  discharge. 

Conflicting  claims;  how  deter- 
mined. 

Receiver's  accounts. 

Appeal  by  receiver. 

Deed  by  receiver. 


§  370.    General. 

Owing  to  the  dissimilar  systems  of  practice  existing  under  the 
prevaiUng  methods  of  administering  equity  jurisprudence  in  the 
several  states  of  the  United  States,  tlie  limits  of  this  work 
preclude  any  attempt  to  enter  into  the  details  of  sucii  practice 
even  as  to  the  single  subject  of  receiverships.  The  modification 
of  the  equity  practice  by  statute  in  most  of  the  states,  as  well  as 
in  England,  has  rendered  much  of  the  earlier  practice  in  both 

601 


602  RECEIVERSHIPS. 

countries  inapplicable  to  the  present  order  of  tliin^-s,  and  has  been 
prolific  in  pi-oducing  the  lack  of  harmony  in  the  procedure  as  ad- 
ministered in  the  various  jurisdictions  of  this  country.  Experi- 
ence teaches  that  it  is  beyond  the  power  of  man  to  construct  a 
code  of  procedure,  even  upon  a  single  branch  of  the  subject  suffi- 
ciently broad  and  comprehensive  to  embrace  all  the  phases  of  the 
subject  as  they  present  themselves  in  courts  of  justice.  This  lim- 
itation results  in  repeated  amendments  as  exigencies  arise,  chang- 
ing the  mode  of  procedure  to  the  supposed  recpiirements.  These 
moditications  result  in  revisions  from  time  to  time,  and  thus  we 
have  a  practice  constantly  changing,  which  is  rendered  still  more 
unstable  and  uncertain  by  the  judicial  construction  and  judicial 
attempts  to  arrive  at  the  legislative  meaning  as  embodied  in  the 
various  statutes,  amendments,  and  modifications.  The  decisions, 
even  of  the  same  court,  are  often  whody  irreconcilable  with  each 
other,  owing  to  the  fact  that  they  are  under  statutes  dissimilar  in 
their  nature  and  application.  There  are  to  be  found  many  cases 
upon  a  given  topic  that  apparently  are  general  in  their  nature  and 
yet  upon  a  careful  examination  are  local,  being  based  upon  a  stat- 
ute. This  is  said  not  by  way  of  criticism  but  as  a  prelude  to  the 
subject  under  consideration,  much  of  which  is  subject  to  stat- 
utory^ influence. 

There  are,  however,  a  few  principles  which  lie  at  the  founda- 
tion of  the  practice  in  so  far  as  receivership  matters  are  con- 
cerned, that  are  so  general  in  their  nature  that  they  may  properly 
be  considered  in  this  connection,  and  it  is  hoped  ma}"  be  of  some 
service  to  the  practitioner,  subject,  nevertheless,  to  the  caution 
embraced  in  the  preceding  section.     They  follow. 

§  371.     Suit  peiidiuff. 

Except  in  one  or  two  unimportant  cases  it  is  preliminary  and  a 
prerequisite  to  the  appointment  of  a  receiver  in  any  of  the  sev- 
eral proceedings  in  which  such  action  is  asked  that  there  shall  be, 
at  the  time,  a  suit  or  proceeding  pending  in  which  the  court  is 
asked  to  make  the  appointment.' 

'  Baker  v.  Backus,  32  111.  79;  Jones  Pa.  310;  French  v.  Gifford,  30  Iowa, 

V.  Schall,  45  Mich.  379;  Merchants'  d  148;    Harwell  v.    Potts,    80    Ala.    70 

M.  Nat.  Bank  v.  Kent  Circuit  Judge,  Hardy   v.    McClellan,,    53   Miss.    507 

^6 'bUch.  2,^2;  Oravenstine'a  Appeal,  4:^  Pressley   v.    Harrison,    102    Ind.    14 


PRACTICE  AND  PLEADING. 


603 


§  372.     Prayer  for  receiver. 

The  bill  or  petition  must  eoiitain  a  prayer  for  the  appointment 
of  a  receiver,  or  at  least  such  a  state  of  facts  alleged  and  shown 
on  the  hearing  as  will  justify  the  court  in  making  the  appoint- 
ment on  proper  application  as  part  of  the  general  relief  asked.' 

§  373.     Necessary  parties ;  allegations. 

The  person  or  corporation  in  custody  of  the  property  over 
which  the  receivership  is  asked  to  be  extended,  or  to  whom  the 
property  belongs,  is  a  necessary  party  to  the  suit  or  proceeding. 
The  allegations  are  to  be  set  forth  in  the  bill  or  complaint  in  clear 
and  unequivocal  language,  and  the  necessary  allegations  vary 
with  each  particular  kind  of  proceeding  under  which  the  remedy 
is  sought.'^ 

§  374.     Notice  of  application. 

Except  in  cases  of  the  gravest  emergency,  notice  must  be  given 
to  the  person  or  corporation  from  whom  the  possession  or  cus- 
tody is  to  be  taken  by  the  proposed  receivership,^  and  if  there  is 
such  an  emergency,  or  other  excuse,  for  not  giving  notice,  tlie 


Jones  V.  Bank  of  Leadville,  10  Colo. 
464;  Guy  v.  Donk,  47  Kan.  2.36;  Gold 
Hunter  Min.  &  S.  Co.  v.  Ilollemdn,  2 
Idaho,  839;  Davis  v.  Flagstaff  Silver 
Min.  Co.  2  Utah,  91. 

See  also  §  13,  ante. 

'  Laddv.  Harvey,  21  N.  fl.  514;  Au- 
gusta Ice  Mfg.  Co.  v.  Gray,  60  Ga.  344; 
Connelly  v.  Dickson,  76  lud.  440;  Cly- 
burn  V.  Reynolds,  31  S.  C.  91;  Shan- 
non V.  Banks,  88  Va.  338. 

^  Dale  V.  Kent,  58  Ind.  584;  Baker 
V.  Backm,  32  III.  79. 

3  Vosltell  V.  Hynson,  26  Md.  83;  Nus- 
baum  V.  Stein,  12  Md.  315;  Blondheim 
V.  Moore,  11  Md.  365;  Howe  v.  Jones, 
57  Iowa,  130;  Bisson  v.  Curry,  35 
Iowa,  72;  French  v.  Gifford,  30  Iowa, 
148;  Moi'itz  v.  Miller,  87  Ala.  331; 
Thompson  v.  Tower  Mfg.  Co.  87  Ala. 
733;  Crowder  v.  Moore,  52  Ala.  220; 
Meridian  News  &  Pub.    Co.  v.  Diem, 


70  Miss.  695;  Buckley  v.  Bnldwin,  69 
Miss.  804;  Whitehead  v.  Woolen,  43 
Miss.  523;  Buffnerv.  Mairs,  33  W.  "Va. 
655;  Fricker  v.  Peters,  21  Fla.  254; 
Slate  V.  Jacksonville,  P.  &  M.  R.  Co. 
15  Fla.  201 ;  People  v.  Albany  &  S.  R. 
Co.  55  Barb.  369;  Verplanck  v.  Mer- 
cantile Lis.  Co.  2  Paige,  438;  People  v. 
Albany  &  S.  R.  Co.  1  Abb.  Pr.  N.  S. 
265,  Athimed  in  57  N.  Y.  161;  Field 
V.  Ripley,  20  How.  Pr.  26;  Simmons  v. 
Wood,  45  How.  Pr.  268;  People  v. 
O'Brien,  111  N.  Y.  1,  2  L.  R.  A.  255; 
Cook  V.  Detroit  &  M.  R.  Co.  45  Mich. 
453;  Cleveland,  C.  C.  d  I.  R.  Co.  v. 
Jewett,  37  Ohio  St.  649;  Fredenheimv. 
Rohr,  87  Va.  764 ;  Rogers  v.  Dougherty, 
20  Ga.  271;  Lammon  v.  Giles,  3  Wash. 
Terr.  117;  Grandin  v.  La  Bar,  2  N. 
D.  206;  Haas  v.  Chicago  Bldg.  Soc.  89 
111.  498.  See  also  §  5  ^f  d,  ante;  and 
§  13,  note  1,  ante. 


C04  RECEIVERSHIPS. 

facts  which  constitute  sucli  eiiiergeDcy  or  excuse  must  be  alleged 
and  sliowu.     Conclusions  are  not  sufficient.' 

§  375.     At  wlijit  stage  of  suit  application  made. 

As  a  general  rule  the  receiver  is  applied  for  and  the  appoint- 
ment made  in  an  interlocutory  proceeding  in  the  case,  though 
sometimes  he  is  appointed  on  the  hearing  or  even  subsequent  to 
the  granting  of  the  decree  if  the  circumstances  warrant  it." 

§  376.     When  application  granted  before  answer. 

The  appointment  of  a  receiver  may  be  made  before  the  de- 
fendant has  filed  his  formal  answer  in  the  case,  but  it  is  usually 
done  where  the  urgency  is  clear,  or  where  the  defendant  by 
counter-affidavits  has  set  up  his  defense,,  upon  the  questions  em- 
braced in  the  application.  It  must  be  a  strong  case,  and  there 
must  be  a  clear  case  of  fraud  or  danger.' 

§  377.    Bond  of  receiAer  reijuired. 

Except  where  otherwise  directed,  before  the  receiver  will 
be  permitted  to  enter  upon  the  performance  of  his  official  duties 
he  will  be  required,  usually  by  order  of  court,  to  give  bond  con- 
ditional for  the  faithful  performance  of  his  duties  as  receiver, 
with  security,  to  be  approved  by  the  court,  or  the  clerk  if  so 
directed.'' 

§  378.    ElBTect  of  giving  bond. 

The  giving  of  a  bond  being  usually  required  by  the  order,  and 

'la  order  to   procure  the  appoint-  BoUins,  851^. C. 'i85;  Buffne?-v.  Mairs, 

ment  without  notice  the  facts  which  33  W.  Va.  65j;  Maynard  v.  Railey,  2 

are  relied  on  as  constituting  an  excuse  Nev.  313;  Frlcker   v.  Peters,  21  Fla. 

must  be  stated.     General  allegations  254. 

are  insufficient.     Darcin  v.  Wells,  61  '  See  §  12,  Tf  b,  note  1,  ante;   also 

How.  Pr.  259;  Blondhelmv.  Moore,  11  §  22,  note  2,  ante. 

Md.  365;  Wabash  R.  Co.  v.  Dykeman,  The  appointment  maybe  even  after 

133  Ind.  56;  Chicago  &  8.  E.  R.  Co.  v.  decree  in  a  case  of  urgeac3\     Haas  v. 

Cason,  133  Ind.  49;  Lindsay  v.  Amer-  Chicago  Bldg.  Soc.  89  111.  498;  Adkins 

ican  Morig.  Co.  97  Ala.  411;  Morilz  v.  v.  Edwards,  83  Va.  316.     See  also  §  12, 

Miller,  87  Ala.  331 ;  Slate,  Brittin,  v.  1  c,  note  2,  ante. 

iVew  Orfea/i.f.  43  La.  Ann.  829:  Merid-  ^  Johns   v.   Johns,   23   Ga.  31.     See 

tan  News   &   Pub.    Co.    v.    Diem,   70  also  §  12,  ante. 

Miss.  695;  Virginia,  T.  &  C.  Steel  &  I.  *See  §  23,  ante. 
Co.  V.  Wilder,  88  Va.  942;   Young  v. 


PRACTICE  AND  PLEADING. 


605 


the  appointment  being  conditional  thereon,  it  follows  that  upon 
compliance  with  the  order  in  this  res])ect  the  receiver  becomes  an 
officer  of  court,  and  immediately  entitled  to  the  possession  of  the 
receivership  propert)',  and  the  rights  and  interests  of  all  parties 
therein  relate  back  to  the  date  of  granting  the  order.* 

§  379.     Form  of  bond. 

The  almost  uniform  practice  in  appointing  a  receiver  is  to  re- 
quire him  to  give  a  bond  or  undertaking  with  sufficient  securit}', 
the  usual  conditions  of  which,  in  general  terms,  are  to  do  and 
perform  all  such  orders  and  directions  as  the  court  shall  from 
time  to  time  make,  and  faitlifully  discharge  and  perform  all  and 
singular  the  duties  pertaining  to  his  office  as  receiver.  The  bond 
may  be  renewed,  increased,  or  new  bond  required  as  the  court 
may  order." 


'  See  §  23,  note  1,  p.  74,  ante. 

»In  Slate  v.  Gibson,  21  Ark.  140, 
the  condition  of  the  receiver's  bond 
was  if  tlie  said  Edward  A.  Gibson,  as 
receiver,  shall  well  and  faithfully  per- 
form the  trust  and  office  of  receiver  of 
the  stock  and  business  of  the  partner- 
ship effects  of  the  said  tirm  of  F.  A. 
Peterson  &  Co.  and  shall  account  to  the 
said  Union  Circuit  Court  according 
to  law,  then  the  above  obligation  to  be 
void,  else  to  remain  in  full  force. 
Suit  being  brought  upon  the  bond  it 
was  held  that  a  compromise  and  dis- 
missal of  the  bill  did  not  discharge  the 
receiver  from  accountability  to  the 
court,  but  the  receiver  was  not  liable 
to  an  action  on  his  bond  as  receiver 
until  he  had  failed  to  obey  some  order 
of  court  in  relation  to  the  property. 

In  Banks  v.  Potter,  21  How.  Pr.  469, 
it  is  held  that  where  a  receiver  has 
given  ample  security  on  his  first,  ap- 
pointment there  is  no  necessity  in  re- 
quiring him  to  give  security  over 
again  in  every  proceeding  that  may  be 
thereafter  instituted.  He  is  an  officer 
of  court  and  the  administration   must 


necessarily  take  place  under  the  con- 
trol and  direction  of  the  court  appoint- 
ing the  receiver. 

In  Stewart  v.  Johnston,  87  Ga.  97,  an 
order  of  court  requiring  the  receiver 
to  give  anew  bond  in  the  same  amount 
and  conditioned  as  his  existing  bond, 
will  not  operate  after  the  new  bond 
has  been  given  to  discharge  the 
surety  from  the  old  bond  from  lia- 
bility for  future  defaults  of  the  re- 
ceiver, there  being  nothing  in  the 
case  to  indicate  that  the  new  bond 
was  in  lieu  of  the  old  bond,  or  was  in- 
tended as  a  substitute  therefor.  See 
also  Bank  of  Washington  v.  Creditors, 
86  N.  C.  323. 

In  Wabash  R.  Co.  v.  Steicart,  41 
111.  App.  640,  where  a  right  of  action 
existed  against  the  receiver,  it  was 
lield  that  the  liability  continued  again.st 
the  purchaser  who  took  possession  of 
the  property  under  the  decree  which 
provided  that  the  purchaser  should 
pay,  satisfy,  and  fully  discharge  all 
debts  and  liabilities  of  the  receivership 
of  every  kind. 


606 


RECEIVERSHIPS. 


§  380.    How  liability  enforced. 

The  usual  form  of  proceodiiii^  in  order  to  enforce  the  hahility 
on  the  bond  is  to  determine  in  a  proceeding  in  the  original  action 
the  liability  of  the  receiver  upon  his  bond,  and  this  having  been 
ascertained  it  is  usually  followed  by  an  order  requiring  him  to  per- 
form the  order  within  a  specified  time,  and  in  case  of  default 
leave  to  sue  upon  the  bond  be  given.  Suit  on  the  bond  is  main- 
tained by  the  real  party  in  interest.' 

§  381.     The  order  appointing. 

The  order  appointing  a  receiver  varies  with  the  character  of 


'  In  Thomson  v.  MacOregor,  81  N. 
Y.  592.  it  was  held  that  in  the  absence 
of  express  terms  in  the  bond  binding 
the  surety  to  submit  to  the  judgment 
of  the  court,  a  liability  cannot  be  lixed 
upon  the  surely  for  a  failure  of  the 
receiver  to  comply  with  the  order  of 
the  court  directing  him  to  pay  over 
money. 

In  Atkinson  v.  SmitJi,  89  N.  C.  73, 
it  was  charged  that  the  receiver  had 
committed  a  breach  of  trust,  and  the 
court  held  that  the  party  complaining 
must  first  obtain  a  rule  requiring  him 
to  render  an  account,  and,  if  default 
should  be  found,  apply  to  the  court 
for  leave  to  sue  on  his  bond.  The 
court  say  it  may  be  that  in  some  cases 
the  surety  might,  by  order  of  court, 
and  upon  reasonable  notice, be  brought 
into  the  action  in  which  the  receiver 
had  been  appointed  and  proceeded 
against  therein,  but  this  is  not  the 
usual  course  pursued,  if  indeed  it 
could  be  sustained  in  any  case 

In  Bank  of  Washington  v.  Creditors, 
86  N.  C.  323.  it  is  held  that  before  a 
receiver  and  his  surety  could  be  sued 
on  the  bond,  a  default  thereof  must 
be  ascertained, on  a  rule  from  the  court 
appointing,  against  him  to  render  an 
account. 

In  Baker  v.  Bartol,  7  Cal.  551,  the 
defendant  was  appointed  a  receiver 
on  condition  that  he  would  file  a  bond 


to  account,  which  was  done,  and  sub. 
sequently  a  judgment  was  recovered 
against  him  and  demand  made  thereon, 
and  suit  was  brought  by  the  plaintiff 
on  the  bond,  which  was  made  payable 
to  the  people  of  the  state  of  Califor- 
nia. It  was  held  that  the  defendant, 
having  received  the  benefit  of  the 
bond,  was  estopped  from  denying  its 
legality,  and  the  plaintiff  had  a  right 
to  sue,  though  the  bond  was  payable 
to  the  people  of  the  state,  he  being 
the  party  in  interest. 

In  Ludgater  v.  Channell,  3  Macn.  & 
G.  175,  a  balance  was  found  to  be 
due  from  the  receiver  by  the  master, 
after  which  the  receiver  died  without 
payment,  and  a  suit  was  ordered  by 
the  court  upon  the  receiver's  recog- 
nizance against  his  personal  represen- 
tatives and  sureties. 

In  French  v.  Bauchy,  57  Hun,  100, 
the  receiver  died  during  his  receiver- 
ship, and  an  administratrix  was  ap- 
pointed and  no  proceedings  were 
taken  to  compel  an  accounting  by  the 
receiver  or  his  administratrix,  and  it 
was  held  that  an  action  could  not  be 
maintained  against  the  sureties,  until 
an  accounting  in  the  court  of  his  ap- 
pointment was  had. 

Cf.  State  V.  Qibson,  21  Ark.  140; 
Bank  of  Washington  v.  Creditors,  86 
N.  C.  323;  Atkinson  v.  Smith,  89  N. 
C.  73. 


PRACTICE  AND  PLEADING.  607 

the  duties  imposed  upon  him  in  each  particular  case.  Thus  he 
may  he  receiver  of  the  morti;-ai!;ed  property  in  one  case,  or  the 
defendant's  property  generally  in  another;  he  may  be  the  mere 
custodian  and  responsil)le  for  the  safekeeping  merely  in  one 
case,  or  charged  with  not  only  the  custody,  but  the  use  and  oper- 
ation, in  another  ;  he  may  be  responsible  for  the  collection  of  the 
income  'simply  in  one  case,  or  have  an  entire  and  complicated 
railroad  system,  with  its  accompanying  responsibilities  and  duties, 
in  another.' 

§  382.    Scope  of  order. 

The  order  should  be  specific  and  definite  as  to  the  general  pow- 
ers and  duties  of  the  receiver.  This  is  required  for  the  due  pro- 
tection of  the  receiver,  as  well  as  those  with  whom  he  has  deal- 
ings and  is  brought  in  contact  with  in  business  relations.  The 
property  over  which  he  is  i-eceiver  should  also  be  described  with 
sufficient  definiteness  to  be  readily  recognized.  The  order  may 
be  supplemented,  modified,  or  extended,  as  the  exigencies  of  the 
case  and  the  successful  termination  of  the  receivership  business 
may  require.^ 

§  383.     Findings  embodied  in  order. 

The  findings  ot"  the  court  forming  tiie  basis  of  its  action  should 
be  embodied  in  the  oi'der,  or  if  not  specific,  reference  to  the  plead- 
ings, affidavits,  or  evidence  should  be  embodied  in  the  order,  so 
that  the  grounds  upon  which  the  appointment  is  made  are  not 
left  uncertain  and  indefinite.  This  is  particularly  important  in 
cases  where  an  appeal  from  the  order  is  by  practice  or  statute 
permissible. 

§  384.     Afiidavits^  when  luisis  of  order. 

Afildavits  upon  which  the  application  is  made  or  resisted 
slioiild  clearly  and  succinctly  stat(!  the  facts  and  circumstances 
relied  upon  as  a  basis  for  the  action  of  the  court,  and  should  not 

'  See  §  22,  ante.    See  also  Re  Frank-  «  Crow  v.  Wood,  13  Beav.  271 ;  0' Ma- 

tin Bank,  1  Pait^e,  85;  Skiddyv.  Allan-       honey  v.  Belmord,  62  N.  Y.  133;  Mar- 
tic,  M.   <&  0.  E.  Co.  3  Hughes,  334.        tin  v.  Burywyn,  88  Ga.  78. 
In  this  case  are  to  be  found  the  bill,  And  see  ^  22,  a7ite 

order  appointing,  petitions,  and  sup- 
plementary orders  which  may  be 
valuable  for  reference  as  to  forms. 


608  RECEIVERSHIPS. 

be  couched  in  larignage  too  general,  or  be  merely  conchisions  or 
deductions;  and  should  not  be  merely  upon  information  and  be- 
lief, except  perhaps  where  the  application  or  petition  is  tiled  by 
an  oflScer  officially  charged  with  such  duty.' 

§  385.    Kefereuce  to  a  master  or  referee. 

It  was  formerly  the  general  practice,  and  is  still  advisable  in 
some  cases,  particularly  where  fraud  forms  an  element,  to  refer 
the  matter  of  appointment  to  a  master  or  a  referee,  with  instruc- 
tions to  take  testimony  in  relation  thereto  and  report  to  the  court 
his  conclusions  and  recommendations  thereon.  In  such  case  the 
report  must  be  confirmed.^ 

§  386.    Examination  of  debtor  under  code  proceedings. 

In  many  of  the  states  adopting  a  code  procedure  in  proceedings 
supplementary  to  execution,  an  examination  of  the  debtor  is  made 
in  a  summary  manner  before  the  court  in  which  the  judgment  is 
rendered,  or  a  referee  and  the  appointment  is  made  or  refused 
upon  the  basis  of  such  examination.'  Under  the  New  York  Code 
of  Procedure  it  is  held  that  the  appointment  of  a  receiver  is  in- 
herent in  equity,  except  wherein  there  is  a  limitation  in  the  code.* 
In  supplementary  proceedings  in  that  state  the  order  is  usually 
made  upon  proof  of  the  return  of  an  execution  nulla  hona  requir- 
ing the  defendant  to  appear  in  court  in  person  and  be  examined 
with  reference  to  his  property.  If,  upon  examination,  property  is 
discovered,  a  receiver  is  appointed  who,  upon  giving  bond  as  re- 
quired, becomes  vested  with  the  debtors'  assets  and  equitable  in- 
terests, without  conveyance  or  assignment.' 

'  Eearilon    v.    Farmers'   Bank,   81  Clark,  4  Abb.  N.  C.  25.    Application 

Ind.  249;  Oakley  v.  Paterson  Bank,  2  must  be  made  to  the  court,  except  in 

N.  J.  Eq.  173.  supplementary  proceedings,  in  which 

^  Be  Eiifjle  Iron  Workfi,  8  Paige,  385;  case  the  judge  has  power  by  statute. 

1    Smith,  Ch.  Pr.  4i)7;   1  Grant,  Ch.  N.  Y.  Code  Civ.  Proc.  §  2464.    In  this 

Pr.   2G4;    2   Brown,    Ch.    Pr.  ^38;    2  class  of  proceedings  the  court  has  no 

Daniell,  Ch.  PI.  &  Pr.  (Perkins'  ed.)  power  to  delegate  the  appointment  to  a 

chap,  xxxviii.  §  3.  referee.    For  general  forms  relating  to 

^Flint  V.  Webb,  25  Minn.  263.  the  appointment  of  a  receiver  under 

*IIollenbeck  v.  Donnell,  94  N.  Y.  342 ;  New  York  practice.see  2  Abbott's  New 

United  States  Trust  Co.  v.  New  York,  Practice  and  Forms,  p.  143  et  seq. 

W.  S.  &  B.  R.   Co.   101  N.  Y.  483.  ">  Coon^y  v.    Cooney,   65  Barb.   524; 

See  N.  Y.  Code  Civ.  Proc.  §§  1788,  Bostwic.k  v.  Menck,  40  N.  Y.  383;  For- 

1801,"  1817,    1869,    2464;   Palmer  v.  ter  v.  Williams,  9  N.  Y.  142. 


PRACTICE  AND  PLEADING.  GU9 

§  387.     Statutory  proceed iiii^s. 

In  England  and  in  most  of  the  states  in  tins  conntiy  statutes 
have  been  enacted  providing  for  the  appointment  of  receivers 
over  corporations  upon  specified  grounds  and  upon  various  desig- 
nated modes  of  procedure,  sometimes  upon  applications  of  stock- 
holders, creditors,  the  attorney  general,  state  auditor,  governor 
and  other  specified  officers  and  persons.  Under  these  statutes 
courts  proceed  with  great  caution  and  the  application  must  be 
brought  strictly  within  the  statutory  requirements ;  and  will  not 
be  extended  by  implication.  The  reason  for  this  rule  is  based 
upon  the  jurisdictional  fact  that  courts  of  equity,  as  such,  have 
no  power,  independent  of  statute,  to  wind  up  a  corporation  and 
suspend  its  corporate  functions,  and  are  slow  to  appoint  a  receiver 
as  manager  in  lieu  of  the  corporate  authorities  and  thus,  virtually 
and  in  effect,  accomplish  by  indirection  that  which  iliey  have  no 
power  to  accomplish  directly.' 

§  388.     National  banks. 

Under  the  statutes  of  the  United  States  relating  to  national 
banks  the  comptroller  of  the  currency  is  vested  with  power  to 
appoint  receivers  over  such  banks  for  certain  specified  causes 
therein  enumerated.  U.  S.  Kev.  Stat.  §§  5141,  5151,  5191,  5195, 
5201,  5205,  5208,  5238,  5239.  The  power  thus  lodged  with  the 
comptroller  is  not  exclusive,  however,  and  courts  of  equity  upon 
other  grounds  may  appoint  a  receiver,  in  the  absence  of  action  by 
the  former.^ 

§  389.     Mortgage  foreclosures. 

The  power  of  a  court  of  equity  in  foreclosure  proceedings  to 
appoint  a  receiver  is  part  of  the  incidental  jurisdiction  of  such 
courts.  The  basis  for  the  exercise  of  this  power  is  to  l)e  found  in 
tiie  bill  or  petition,  by  which  it  is  to  be  alleged  and  shown  some 
reason  why  tlie  court  should  impound  the  rents  and  profits  of 
the  mortgaged  premises  and  apply  them  in  reduction  of  the  in- 
debtedness secured,  the  interests,  advancements,  and  costs  and 
expenses.  Sometimes  the  mortgage  or  trust  deed  expi-cssly 
pledges  the  rents  and  profits  as  part  of  the  security ;  at  other 

^Bangsv.  Mcintosh,  2?>Pydrh.  rm.  6   Biss,    ,'501;    Klwood    v.    Fint   Nat. 

''Irons  V.  Manufacturem''  Nat.  Dunk,        Bank,  41  Kan.  475. 

39 


610  RECEIVERSHIPS. 

times  the  rents  and  profits  are  taken  as  incidental  to  the  mort- 
gage, in  which  tlie  equitable  right  to  a  receiver  depends  upon 
three  things,  (a)  the  right  of  foreclosure  by  reason  of  default,'  (b) 
inadequacy  of  security  to  pay  the  mortgage  debt,  interest,  and 
costs,^  (c)  the  insolvency  of  the  mortgagor  or  other  person  liable 
to  pay  such  debt,  interest,  and  costs."  Inadequacy  of  security  de- 
pends upon  general  depreciation  in  the  market  and  rental  value 
of  the  property,  waste  of  the  mortgagor,  or  other  party  in  posses- 
sion, destruction  or  partial  destruction  of  the  buildings  by  fire  or 
otherwise,  omission  to  pay  the  taxes,  diversion  of  the  rent,  and 
income  from  the  payment  of  interest,  and  other  causes  by  means 
of  which  the  debt  is  increased  or  the  value  of  the  security  de- 
creased. The  insolvency  of  the  mortgagor,  or  mortgagor  and  his 
grantee,  who  has  assumed  the  payment  of  the  mortgage  debt,  is 
established  by  showing  the  return  of  an  execution  against  them 
nulla  bona,  that  they  do  not  own  property,  liable  to  execution, 
sufiicient  to  pay  the  mortgage  debt.  The  insufiiciency  or  insolv- 
ency may  be  proved  by  a  variety  of  facts  and  circumstances,  none 
of  which  of  itself  niiglit  be  considered  sufficient,  but  taken  to- 
gether establish  the  allegations  in  this  regard.* 

§  390.    Suits  by  receiver. 

The  power  of  the  receiver  to  sue  under  the  direction  of  the 
court  is  a  necessary  incident  to  the  due  j3erf ormance  of  his  duties. 
Occupying  the  place  of  the  person  or  corporation  over  whose 
property  he  is  appointed,  and  succeeding  to  the  rights  of  such 
person  or  corporation,  it  follows  that  his  right  to  recover  is  lim- 
ited to  the  right  such  person  or  corporation  would  have  had  if  no 
receiver  had  been  appointed,  except  in  such  cases  where  the 
receiver  is  the  representative  of  the  creditors,  in  which  case  he 
may  avoid  the  illegal  and  fraudulent  acts  of  the  party  he 
succeeds.* 

'  See  §  173,  IFl"  e,  f,  ante.  itt  v.  Tales,  4  Edw.  Ch.  134:  Jacobs  v. 

2  See  ^  174,  ffl?i^e.  Tur pin,  83  I\\.  42i;    Litchfield  Bank 

«See  §  174,  H  a  2,  ante.  Y.Peck,  29  Conn.  384;  Eastern  Bank  v. 

■•See  general  grounds  for  appoint-  Capron,  22  Conn.  639;  Stokes  v.  New 

ment    in    foreclosure      proceedings,  Jemey  Pottery   Co.  46  N.  J.  L.  237; 

ti§  171,   172,  ante,  and  when  not  ap-  Tuckennan  v.  Brotcn,  33  N.  Y.  297; 

pointed,  §  173,  ante.  Atty.  Gen.  v.  North  American  L.  Ins. 

»  Curtis  V.  Leavitt,  15  N.  Y.  9;  Lean-  Co.  82  N.  Y.  172;  Wdttlesey  v.  Delaney, 


PRACTICE  AND  PLEADING.  till 

§391.     In  what  name  to  sue. 

"Where  authorized  by  statute,  or  bj  the  court  appointing  liim, 
the  receiver  may  sue  in  his  official  name,  and  where  not  so  au- 
thorized he  must  sue  in  the  name  of  the  person  or  corporation  to 
whose  rights  he  has  succeeded,  for  liis  use  as  receiver.' 

§  392.     Necessary  allegations. 

He  must  allege  and  show  (1)  his  appointment  as  receiver,  his 
qualification  to  act  by  giving  the  required  bond  if  so  ordered,  and 
any  other  necessary  prerequisites  to  his  right  of  action  under 
the  statute  or  circumstances  of  the  particular  case ;  (2)  he  must 
also  allege  and  show  a  legal  or  equitable  right  in  himself  to  sue  in 
his  official  capacity  as  the  representative  of  the  parties  in  whose 
interest  the  suit  is  brought  or  that,  Ijut  for  his  appointment,  such 
parties  had  a  legal  or  equitable  cause  of  action  and  right  to  en- 
force such  right." 

§  393.     Form  of  allegations. 

The  necessary  averments  should  be  stated  in  such  clear  and 
specific  form  as  that  issue  may  be  taken  thereon.  The  facts  be- 
ing jurisdictional,  they  should  be  stated  with  such  sufficient  full- 
ness and  clearness  as  will  enable  the  court  to  see  without  infer- 
ence plaintiff's  right  to  recover.^ 

§  394.     Limitations  on  power  to  sue. 

The  receiver's  power  to  sue  is  not   an    unlimited  one  when 

73  N.  Y.  571;  PitUhurg  Carbon  Go.  v.  As  to  suits  where  required  to  bring 

McMillin,  119  N.  Y.  46,  7  L.  R.  A.  46;  in  the  name  of  the  person  or  corpora- 

Williarm  v.  Babcock,    25  Barb.    109;  tion,  see  §   73,  note  3,  p.   161,  ante; 

Curtis  y.  Mcllhenny,  5  J  outs,  Eq.  2i)0;  also  Wilson  v.   Welch,    157    Mass.  77; 

Coope  V.    Bowles,   28    How.    Pr.    10;  Battle  v.  Davis,  GQU'i.G.  252;  Yenger  v. 

Falkenbach  v.  Patterson,  43  Ohio  St.  Wallace,  UFa.2M:  Ilarrell  v.  Kent,ll 

359;  Wardle  v.  Hudson,  96  Mich.  433;  Ind.  602;  Moriarty  v.  Kent,  71  lud. 

State,  Shepard,  v.  Sullivan,  130  Ind.  601;    Garver  v.    Kent,  70   Ind.    438; 

197.     See  also  §  70,  ante.  Manlove  v.  Btirger,  38  Ind.  313:  Har- 

'  See,  as  to  suit  in   his   own   name  land  v.  Bdnkers'   &   M.  Teleg.  Co.  33 

when  authorized  by  court,  §  73,  note  Fed.  Rep.  199.  33  Fed.  Rep.  305. 

1,  p.  161,  ante,  and  note  3,  p.  163,  '^  See  §  71,  an^e. 

ante;  Baker  v.  Cooper,  57  Me.  388.  ^Sce  §^  11,  14,  ante. 

See,  as  to  suit  in  his  own  name  when 
authorized  by  statute,  §  73,  note  2, 
p.  161,  ante. 


612  RECEIVERSPIIPS. 

granted  by  leave  of  court.  lie  ninst  confine  himself  to  such 
remedies  as  the  law  o-ives  touchinjr  the  matter  in  controversy,  and, 
while  the  court  clothes  him  with  power  to  sue,  it  cannot  create  a 
remedy,  or  chanoje  the  remedies  to  suit  his  convenience.  His  suit 
is  legal  or  equitable,  according  to  the  subject-matter.  In  bring- 
ing parties  into  court,  and  his  rights  when  in  court,  are  precisely 
those  of  any  other  person,  and  tlie  proof  required  is  just  as  im- 
perative in  all  respects.  He  is  favored  as  to  possession,  but  other- 
wise has  no  special  privileges.* 

§395.    Suits  against  receiver;  leave  to  sue. 

When  not  otherwise  provided  by  statute,  the  court  will  not,  as 
a  rule,  permit  the  receiver  to  be  sued  without  leave  of  court 
granted  on  petition  filed  for  that  purpose.  The  petition  in  such 
case  must  show  a  good,  or  at  least  a  probable,  cause  of  action,  and 
such  reasons  as  shall  seem  to  the  court  sufficient  that  the  matter 
should  be  passed  upon  by  a  court  of  law  or  other  conrt  than  the 
one  appointing  the  receiver.  The  reasons  for  this  rule  are  that 
the  receiver  is  an  officer  of  court,  and  the  due  and  proper  admin- 

'  In  Harland  v.  Bankers'  &  M.  Teleg.  power  even  under  the  order  of  court 

Co.  32  Fed.  Rep.  305,  it  is  held  that  a  to  bring  an  action  involving  the  title 

receiver   appointed   in  a   foreclosure  to  real  estate  against  third  parties,  or 

proceeding  cannot  maintain  a  bill  for  to  submit  a  controversy  with  third  par- 

an  accounting  for  damages  suffered  ties,  concerning  title  to  real  estate,  and, 

by  the  mortgagor,  growing  out  of  a  without  the  consent  of  the  real  parties, 

breach  of  contract  to  construct  certain  bind  them  by  the  judgment  which  may 

lines  of  telegraph.     Equity  will  not  be  rendered. 

entertain  a  bill  to  try  title  to  property  In   Conley  v.  Deere,  7  Lea,  274,  an 

in  the  possession  of  one  claiming  ad-  action  was  brought  by  the  receiver  to 

versely,  though  the  complainant  seeks  recover  possession  of    certain  goods 

relief  in  the  nature  of  removing  clouds  and  it  was  held  that  replevin  in  a  com- 

upon  title.  mon  law  court  against  the  party  hav- 

In  Tyler  v.  Hamilton,  63  Fed.  Rep.  ing  in  fact  a  superior  right  to  the  pos 

187,  a  receiver  of  a  corporation  in  a  session  of  the  property  could  not  be 

foreclosure  proceeding  was  held  not  maintained.     This  decision  was  based 

competent  to  contest  the  validity  of  on  the  ground  that  a  court  of  law 

leases  executed  by  a  corporation  to  a  should  not  be  called  upon  to  assert 

director  thereof.     In  such  case  he  is  and  indicate  the  dignity  and  jurisdic- 

not  a  representative  of  the  creditors  tion  of  the  court  of  chancery  in  an  ac- 

and  in  equity  not  entitled  to  maintain  tion  of  replevin.    In  a  word,  the  chan- 

the  suit  ag  linst  the  lessee's  rights.  eery  court  having  jurisdiction  should 

In  Caldwell  v.  3fcWhor(er,  Si  Ky.  exercise  such  jurisdiction  if  a  proper 

130,  a  rtceiver  was  held  not  to  have  case  existed. 


PRACTICE  AND  PLEADING. 


613 


istration  of  the  estate  demands  that  he  shall  not  be  harrassed  by 
litigation.  All  reasonable  facilities  for  being  heard  ^wo  interesf^e 
suo  being  afforded  by  the  court  appointing.  In  such  case,  leave 
having  been  granted,  it  is  necessary  to  allege  such  leave,  and  the 
allegation,  as  elsewhere  seen,  is  jurisdictional,  though  the  decisions 
U]wn  the  point  are  not  harmonious.' 


'  In  Keen  v.  Breckenridge,  96  Iiul. 
69,  where  the  complaint  was  filed 
against  a  receiver  in  his  official  ca- 
pacity upon  a  money  demand,  which 
did  not  allege  that  leave  to  bring  suit 
had  been  granted  by  the  court,  was 
held  to  be  bad  upon  demurrer  based 
upon  the  following  cases:  DcGroot 
V.  Jay,  30  Barb.  483;  Higgins  v.  Wright, 
4'i  Barb.  461;  Barton  v.  Barhou7',  3 
MacArth.  212,  36  Am.  Rep.  104;  Bar- 
ton V.  Barbour,  104  U.  S.  126,  26  L.  ed. 
672. 

In  Lehigh  Coal  &  Nav.  Co.  v.  Central 
R.  Co.  38  N.  J.  Eq.  175,  the  petition- 
ers claimed  to  have  furnished  the 
former  receiver  of  an  insolvent  rail- 
road company  with  materials  for  the 
use  of  the  road.  They  applied  for  an 
order  on  the  receiver  for  payment  and 
also  for  an  order  giving  them  leave  to 
sue  him  at  law  for  damages  alleged  to 
have  been  sustained  by  reason  of  the 
nonfulfillment  of  his  predecessor's 
contract  for  materials  similarly  sup- 
plied. The  court  held  (1)  that  the 
court  on  granting  the  petition  would, 
by  a  preliminary  examination  of  the 
transaction,  determine  whether  the 
matter  could  be  disposed  of  in  the 
court  appointing  the  receiver;  and  (2) 
that  the  present  receiver  was  not  lia- 
ble to  a  suit  at  law  on  the  contract  of 
his  predecessor. 

In  Palys  v.  Jewett,  32  N.  J.  Eq.  302, 
it  was  held  that  a  cause  of  action 
Bounding  merely  in  tort  against  a  re- 
ceiver appointed  by  a  court  of  chan- 
cery, might  be  prosecuted  against  the 
receiver  in  an  action  at  law,  but  that 


such  action  could  not  be  brought 
without  permission  of  the  chancellor, 
which  would  be  granted,  unless  the 
claim  preferred  was  manifestly  un- 
founded and  vexatious.  In  this  case 
there  was  an  exhaustive  examination 
of  the  law  in  regard  to  the  trial  of 
questions  of  damages  in  a  court  of 
chancery  to  which  is  a  valuable  note 
by  the  reporter  citing  many  cases 
bearing  upon  the  question. 

In  Hiibhell  v.  Dana,  9  How.  Pr.  424, 
it  was  held  that  leave  to  prosecute  a 
suit  against  the  receiver  should  have 
been  obtained,  but  the  irregularity 
might  be  waived  by  a  general  notice 
of  appearance. 

In  Re  Yoitng,  7  Fed.  Rep.  855,  it  was 
also  held  that,  after  submilling  to  the 
jurisdiction  of  the  court,  it  was  too 
late  to  complain  that  the  bringing  of 
the  suit  without  leave  was  a  contempt. 

In  Elkhart  Car  Works  v.  Ellis,  113 
Ind.  215,  where,  in  an  action  to  quiet 
title,  the  receiver  appeared  and  joined 
issue  without  objecting  that  leave  to 
sue  him  was  not  first  obtained,  was  a 
waiver  of  such  objection.  In  this  case 
the  doctrine  of  Keen  v.  Breckenridge, 
96  Ind.  69,  while  not  overruled,  was 
held  not  to  apply  to  an  action  to  quiet 
the  title  to  real  estate. 

In  Potter  v.  Bunnell,  20  Ohio  St 
150,  it  was  held  that  an  action  for  in- 
juries against  the  receiver,  exercising 
franchises  of  a  railroad,  must  be  de- 
termined by  the  principles  applicable 
to  a  like  action  against  the  company 
when  operating  its  own  road. 

In  Kinney  v.   Crocker,  18  Wis.  75, 


614 


RECElVEKSlllPri. 


suit  was  brouclit  to  recover  for  inju- 
ries to  the  plaintiff  from  the  negli- 
gence of  the  servants  of  the  defendant 
receiver,  while  operating  a  railroad 
under  orders  of  the  United  States  dis- 
trict court.  The  court  say:  "In  all 
such  cases  it  (the  court)  will  some- 
times punish  as  for  a  contempt  in  an 
attempt  to  disturb  the  possession  of 
its  otlicers;  it  will  sometimes  restrain 
Buits  at  law  and  draw  to  itself  all  dis- 
puted claims  in  respect  to  the  subject- 
matter;  and  sometimes  it  will  allow 
the  suits  at  law  to  proceed.  But  in 
all  these  cases  it  is  not  a  question 
whether  equity  will  exercise  its  own 
aclcnowledged  jurisdiction  of  restrain- 
ing suits  at  law  under  some  circum- 
stances and  itself  dispose  of  the  matter 
involved.  It  follows  that,  although 
a  plaintiff  in  such  a  case  desiring  to 
prosecute  a  legal  claim  for  damages 
against  a  receiver  might,  in  order  to 
relieve  himself  from  the  liability  to 
have  his  proceedings  arrested  by  an 
exercise  of  this  equitable  jurisdiction, 
very  properly  obtain  leave  to  prose- 
cute, yet  his  failure  to  do  so  is  no  bar 
to  the  jurisdiction  of  the  court  of  law 
and  no  defense  to  an  otherwise  legal 
action  on  the  trial.  There  can  be  no 
room  to  question  this  conclusion  in 
all  cases  where  there  is  no  attempt  to 
interfere  with  the  actual  possession  of 
property  which  the  receiver  holds  un- 
der the  order  of  the  court  of  chan- 
cery, but  only  obtains  a  judgment  at 
law  on  a  claim  for  damages."  The 
court  of  appeals  of  New  York  in 
Cluiutauque  County  Bank  v.  Bisky,  19 
N.  Y.  369,  expressly  declined  to  follow 
the  doctrines  of  the  United  States  Su- 
preme Court  and  allowed  a  suit  in 
ejectment  to  be  prosecuted  against 
the  receiver  under  a  claim  of  para- 
mount title. 

In  St.  Joseph  <&  D.  C.  B.  Co.  v. 
Smith,  19  Kau.  225,  the  same  principle 
was  held.     It  did  not  appear  in  that 


case  whether  any  leave  was  asked 
or  not.  It  was  held,  however,  that  if 
the  chancery  court  had  desired  to  re- 
strain tlie  prosecution  of  the  action  it 
could  have  been  done,  and  not  having 
been  done,  it  was  presumed  that  it 
was  deemed  wise  to  leave  the  matter 
for  determination  by  the  court  in 
which  the  suit  was  pending. 

It  was  held  in  Barton  v.  Barbour, 
104  U.  S.  126,  26  L.  ed.  672,  that  the 
fact  that  the  receiver  was  in  the  pos- 
session of,  and  operating  a  railroad, 
and  was  conducting  the  business  of  a 
common  carrier,  did  not  take  the  case 
out  of  the  rule  that  he  was  answer- 
able only  to  the  court  which  appointed 
him,  and  could  not  be  sued  without 
its  leave.  The  claim  of  the  plaintiff 
which  was  for  personal  injuries  re- 
ceived while  traveling  on  the  road  op- 
erated by  the  receiver  was  held  to 
stand  precisely  on  the  same  footing 
as  expenses  incurred  in  the  execution 
of  the  trust  and  must  be  adjudicated 
and  satisfied  in  the  same  way. 

In  Brown  v.  Bauch,  1  Wash.  497,  it 
was  held  that  a  receiver  could  not  be 
sued  except  upon  leave  of  the  court 
first  obtained  and  this  leave  was  a  ju- 
risdictional fact  which  could  not  be 
waived  by  the  receiver  and  could  be 
raised  at  any  stage  of  the  case  in  either 
court. 

In  the  following  cases  the  question 
as  to  first  obtaining  leave  of  court  was 
held  not  to  be  a  jurisdictional  fact. 

In  Lyman  v.  Central  Vermont  R. 
Co.  59  Vt.  167,  it  was  held  that  the 
failure  to  obtain  leave  to  sue  the  re- 
ceiver was  not  a  bar  to  the  jurisdic- 
tion of  a  court  of  law  and  no  defense 
to  an  otherwi.se  legal  action.  The 
court  say:  "There  can  be  no  room  to 
question  this  conclusion  in  all  cases 
where  there  is  no  attempt  to  interfere 
with  the  actual  possession  of  property 
which  the  receiver  holds  under  the 
order  of  the  court  of  chancery,  but 


PRACTICE  AND  PLEADING. 


615 


§  396.    Actions  against  receiver  under  void  appointment. 

Where  a  receiver  has  been  appointed  and  the  appointment  is 
void  by  reason  of  the  provisions  of  the  statute  regulatini^  the  ap- 
pointment of  receivers  not  having  been  complied  with,  and  the 
receiver  has  collected  money,  acting  in  the  capacity  of  receiver 
from  tenants  for  rent,  it  may  be  recovered  from  him  in  an  action 
therefor,  by  the  person  entitled  thereto,  and  this  too,  though  he 
might  also  have  an  action  against  the  tenants.'     It  is  probable 


only  an  attempt  to  obtain  a  judgment 
at  law  in  a  claim  for  damages."  This 
decision  is  based  on  Kinney  v.  Crocker, 
18  Wis.  75;  Angel  v.  Smith,  9  Ves.  Jr. 
385;  Chautauque  County  Bank  v.  Ris- 
ley,  19  N.  Y.  369 ;  Camp  v.  Barney,  4 
Hun,  373. 

In  Roxbury  v.  Central  Vermont  R. 
Co.  60  Vt.  131,  an  action  was  held 
proper  against  a  receiver  for  obstruct- 
ing a  crossing,  although  leave  was  not 
obtained  to  bring  the  suit. 

In  Martin  v.  Atchison,  2  Idaho,  590, 
it  was  held  that  a  receiver  cannot  be 
sued  without  obtaining  a  permission 
from  the  court  by  whom  the  appoint- 
ment was  made.  It  is  said  "If  such 
proceedings  can  be  tolerated  then  the 
appointment  of  receivers  by  courts 
would  be  a  useless  ceremony  and  a 
farce.  The  plaintiflFs  are  not  without 
a  remedy  for  they  may  ask  the  court 
to  allow  the  receiver  to  be  made  a 
party  under  such  restrictions  as  the 
court  deems  best  for  the  preservation 
of  the  property,  of  its  own  authority 
and  the  protection  of  its  officers."  The 
decision  is  based  upon  Bario?i  v.  Bar- 
bour, 104  U.  S.  126,  26  L.  ed.  672, 
which  was  founded  on  Davis  v.  Oray, 
83  U.  S.  16  Wall.  203,  21  L.  ed.  447. 

The  case  of  Barton  v.  Barbour,  104 
U.  S.  126,  26  L.  ed.  672,  though  not 
the  first  case,  is  one  of  the  leading 
cases  holding  that  a  receiver  cannot 
be  sued  without  leave  of  the  court  of 
equity  which  appointed  him.     It  is 


held  that  a  suit  brought  without  leave 
to  recover  a  judgment  against  a  re- 
ceiver for  a  money  demand  is  virtu- 
ally a  suit,  the  purpose  of  which  is, 
and  the  efifect  of  which  may  be,  to 
take  the  property  of  the  trust  from  the 
receiver's  hands  and  apply  it  to  the 
payment  of  the  plaintiff's  claim,  with- 
out regard  to  the  rights  of  other  cred- 
itors, or  the  orders  of  court,  which 
is  administering  the  trust  property. 
"We  think  therefore"  the  court  say, 
"that  it  is  immaterial  whether  the  suit 
is  brought  against  him  (the  receiver) 
to  recover  specific  property  or  to  ob- 
tain judgment  for  a  money  demand. 
In  either  case  leave  should  be  first  ob- 
tained." The  decision  is  based  upon 
Wistcall  v.  Sampson,  55  U.  S.  14  How. 
52,  14  L.  ed.  322,  and  Am^s  v.  Birken- 
head Docks,  20  Beav.  332.  In  this  last 
case  Lord  Rommely,  Master  of  the 
Rolls,  said  that  it  was  an  idle  distinc-" 
tion  that  the  rule  forbidding  any  in- 
terference with  property  in  the  course 
of  administration  in  the  court  of  chan- 
cery only  applies  to  property  actually 
in  the  hands  of  the  receiver  and  de- 
clared that  the  rule  applied  to  debts, 
rents,  and  tolls  which  the  receiver  was 
appointed  to  receive. 

'  In  Ilolcombe  v.  Johnson,  27  Minn. 
353,  a  receiver  was  appointed  in  a 
supplementary  proceeding  over  spe- 
cific property  of  the  judgment  debtor 
and  the  order  appointing  the  receiver 
was  subsequently  reversed  on  appeal. 


GIG 


KECElVEKbiliPd. 


tliis  rnlc  would  not  be  ap[)lieal)le  in  a  case  where  the  appointment 
was  only  voidable,  for  in  such  a  ease  the  attack  would  be  colla- 
teral.' An  order  void  for  want  of  jurisdiction  can  be  attacked  in 
any  proceediiio-.'' 


It  was  held  that  the  action  of  the 
lower  court  was  not  void,  but  re- 
mained in  force  until  reversed,  and 
furnished  a  protection  to  the  receiver 
for  acts  done  under  it  in  strict  con- 
formity with  the  rtquirements  of  the 
order  as  long  as  the  order  was  in 
force. 

In  Buckley  v.  Oeorge,  71  Miss.  580, 
it  is  held  that  where  an  order  appoint- 
ing a  receiver  is  appealed  from  and 
a  supersedeas  granted  the  effect  is 
to  retroact  and  suspend  the  order  by 
which  the  receiver  was  appointed  by 
which  there  was  no  longer  any  efficacy 
in  the  decree  to  uphold  the  possession 
of  the  receivers,  and  the  right  of  the 
party  from  whom  the  property  is 
taken  is  revested  in  him.  Cf.  State 
v.  Johnson,  18  Fla.  33;  Blondheim  v. 
Moore,  11  Md.  365;  Everett  v.  Slate, 
McKaig.  28  Md.  190.  See  also  John- 
son V.  Poicers,  21  Neb.  292. 

In  First  Nat.  Bank  v.  United  States 
Encaustic  Tile  Co.  105  Ind.  227,  it  is 
held  that  an  erroneous  appointment 
of  a  receiver  is  not  void,  but  voidable, 
as  where  the  court  had  jurisdiction 
of  the  subject-matter  and  of  the  par- 
ties. Cook  V.  Citizens''  Nat.  Bank,  73 
Ind.  256;  Uoioard  v.  Whitman,  29  Ind. 
557;  Pressley  v.  Lamb,  105  Ind.  171. 

In  O'Mahoney  v.  Belmont,  62  N.  Y. 
182,  it  is  held  that  in  the  matter  of 
the  county  and  a  person  appointed 
receiver  it  is  no  objection  that  the  ap- 
pointment was  void  in  a  case  where 
it  appeared  that  the  receiver  was  ap- 
pointed and  obtained  control  of  the 
fund  without  the  consent,  and  con- 
trary to  the  wishes,  of  the  parties. 

'  In  Commercial  Nat.  Bank  v.  Burch, 


141  111.  519,  it  is  held  that  where  the 
court,  appointing  a  receiver  for  an 
insolvent  corporation,  has  jurisdiction 
of  the  subject-matter  and  of  the  par- 
ties, the  order  appointing  him  cannot 
be  questioned  collaterally,  no  matter 
how  erroneous  it  may  be.  It  cannot 
be  attacked  upon  appeal  from  an  or- 
der refusing  to  give  an  intervening 
petitioner  a  preference  in  payment  on 
his  claim  of  an  equitable  lien  on  the 
assets  of  the  corporation.  See  also 
Richards  v.  People,  81  111.  551;  St. 
Louis  &  S.  Coal  &  M.  Co.  v.  Sandoval 
Coal  &  M.  Co.  Ill  111.  82. 

^  In  the  case  last  cited  the  doctrine  is 
laid  down  that  a  judgment  or  decree 
rendered  where  jurisdiction  is  want- 
ing of  either  the  subject-matter  or 
parties  is  void  and  a  nullity,  and 
all  acts  performed  under  it  are  void 
and  no  right  can  be  devested  by 
it  or  acquired  thereunder.  Cf.  Mul- 
foi'd  V.  Stalzenback,  46  111.  306;  Camp- 
bell V.  McCahan,  41  111.  Ab;  Johnson  v. 
Baker,  38  111.  98;  Chambers  v.  Jones, 
72  111.  275;  Grand  Tower  Min.  &  T. 
Co.  v.  Schirmer,  64  111.  106;  Haywood 
V.  Collins,  60  111.  328;  Chase  v.  Dana, 
44  111.  2%-i;White  v.  Jones,  38  111.  159; 
Curtiss  V.  Broion,  29  111.  229;  Pardon 
V.  Diinre,  23  111.  572. 

Otherwise,  however,  where  there  is 
a  mere  error  or  irregularity.  Adams 
V.  Larrimore,  51  Mo.  130;  Wenner  v. 
Thornton,  98  111.  156;  Harris  v.  Les- 
ter, 80  111.  307;TFm5r  v.  Dodge,  80  111. 
564;  Hernandez  v.  Drake,  81  111.  34. 
Cf.  Neeves  v.  Boos.  86  Wis.  313;  Stan- 
ley y.  National  Union  Bank,  115  N.  Y. 
122;  Qreenawalt  v.  Wilson,  52  Kan. 
109. 


597. 


PRACTICE  AND  PLEADING. 

Form  of  judgment  against  Receiver. 


€17 


Wliere  the  liability  of  a  receiver  in  his  official  capacity  is  es- 
tablished, it  is  in  effect  a  liability  in  rem  against  the  receivership 
property  or  fund,  and  the  order  of  court  requires  the  judgment  to 
be  satisfied  out  of  such  property  or  fund  according  to  the  equities 
therein  as  finall}^  established.' 

§  398.     Proceedings  in  original  cause  i\  lien. 

It  rests  in  the  sound  judicial  discretion  of  the  court  whether  it 
will  permit  suit  to  be  brought  against  the  receiver,  or  compel  the 
applicant  to  come  in  by  petition  in  the  cause,  and  there  determine 
in  an  appropriate  proceeding,  by  jury,  reference  to  the  master, 
referee,  or  otherwise,  the  rights  of  the  party  whether  they  relate 
to  questions  of  fact  or  damages.  Such  proceedings  are  in  effect 
separate  proceedings,  subject  to  appeal." 


In  Texas  <&  P.  R.  Co.  v.  Oaij,  86 
Tex.  571,  25  L.  R.  A.  52,  the  court 
exhaustively  discusses  the  question  of 
jurisdiction,  not  only  as  between 
courts,  but  also  as  to  what  constitutes 
jurisdiction  over  the  subjoct-malter, 
as  well  as  jurisdiction  over  the  parties 
to  the  suit,  and  also  holds  that  a  re- 
ceiver appointed  under  a  void  order 
must  be  deemed  to  have  been  simply 
the  agent  of  the  railway  company 
over  whose  property  he  was  appointed, 
and  it  is  liable  for  injuries  resulting 
from  his  management  of  the  railway 
to  the  same  extent  and  in  the  same 
manner  as  if  such  receiver  were  made 
agent  in  the  ordinary  course  of  busi- 
ness; and  the  same  rule  applies  where 
the  receiver  is  appointed  by  collusion, 
in  such  case  he  beiug  treated  as  the 
agent  of  the  parties  procuring  the  ap- 
pointment. 

'  In  Farmers'  Loan  &  T.  Co.  v.  Cen- 
tral R.  Co.  7  Fed.  Rep.  537,  the 
discharge  of  a  receiver  was  held  to  be 
a  bar  to  an  action  brought  against 
him.      The  company   to   whom    the 


property  is  turned  over,  however,  is 
liable,  if  received  by  it  subject  to 
claims  of  the  receiver.  The  court 
says:  "If  the  receiver  had  been  dis- 
chiirged  and  the  property  turned  over 
to  the  new  company  unconditionally 
and  without  reservation  I  am  at  a  loss 
to  see  what  legal  remedy  claimants 
without  established  liens  shall  have, 
but  the  court  did  not  in  this  case  so 
turn  over  the  property.  It  would 
have  been  a  most  unwise  and  unjust 
proceeding  to  have  done  so,  leaving 
just  claims  and  liabilities  incurred  by 
a  receiver  of  its  own  appointment, 
without  any  provision  whatever  to 
enforce  them."  Any  demand  against 
the  receiver  which  the  claimant  has 
a  right  to  establish  as  a  lien  against 
the  receivership  property  may,  by 
leave  of  court,  be  presented  in  the 
original  case. 

2  In  Jordan  v.  Wells,  3  Woods,  527, 
it  was  held  that  a  receiver  ought  not 
to  be  sued,  unless  a  petition  for  leave 
has  been  filed  which  slates  a  prima 
facie  case  against  him. 


618 


RECElYERaHLPS. 


§  399.     Rig:ht  of  sot-off. 

The  equitable  rio'lit  of  set-oflf  is  recoo;nized  in  all  proceedings 
by  the  receiver,  on  tlie  ground  that  he  talves  the  receivcship 
property  subject  to  all  equities  against  it.' 

§  400.     Petition  of  receiver  lx)r  authority. 

Except  where  power  is  given  to  the  receiver  in  the  order  of 
ajipointnient  or  by  statute,  the  proper  practice  is  for  the  receiver 
to  apply  by  petition  to  the  court  for  specific  authority  and  direc- 
tion in  all  matters  involving  his  official  action  and  duty  where  the 
result  of  his  action  may  seriously  aifect  the  receivership  property 
or  fund.  The  interest  of  the  parties  and  his  responsibility  to  the 
court  require  this.  In  such  case  the  order  of  court  is  based  upon 
the  petition  and  should  so  recite.' 


'  In  Newcomb  v.  Almy,  96  N.  Y, 
308,  it  appeared  that  when  the  plain- 
tiff was  appointed  a  receiver  of  an 
insurance  company,  the  company 
held  certain  claims  against  the  de- 
fendant and  the  defendant  held  en- 
dowment policies  against  the  com- 
pany which  were  not  yet  matured. 
In  an  action  upon  the  claims  against 
the  defendant  brought  by  the  receiver 
it  was  held  that  the  defendant  was 
not  entitled  to  set  off  the  reserve 
value  of  the  policies.  This  decision 
is  based  upon  the  principle  that  the 
money  was  not  due  to  the  policy 
holder  in  such  a  sense  that  he  could 
avail  himself  of  itas  a  set-off;  but  in 
People  V.  Security  L.  Ins.  &  A.  Co.  78 
N.  Y.  114,  it  was  held  that  the  holder 
of  an  unmatured  life  policy  was  a 
creditor  and  entitled  to  share  with 
other  creditors  in  the  assets;  that  he 
was  not  regarded  as  a  partner  of  the 
company;  that  he  was  damaged  by 
the  insolvency  of  the  company,  and 
in  ascertaining  the  amount  of  dam- 
age resort  could  be  had  to  the  tables 
used  in  life  insurance  business,  and 
where  the  receiver  held  the  notes  of 
Buch  a  policy  holder  in  part  payment 


of  premiums,  it  is  proper  to  offset 
the  amounts  due  on  such  notes  against 
the  value  of  the  policies  and  pay  a 
dividend  upon  the  balance  only. 

In  Com.  v.  Slice  &  Leather  Dealers' 
F.  (&  M.  Ins.  Co.  112  Mass.  131,  the 
property  of  an  insurance  company 
had  been  sequestered  and  placed  in 
the  hands  of  a  receiver,  and  it  was 
held  that  the  amount  of  loss  before 
that  time  sustained  under  the  policy 
of  the  company  could  be  set  off 
against  the  debt  from  the  assured  to 
the  company,  even  where  the  com- 
pany held  collateral  security. 

In  Scammon  v.  Kimball,  92  U.  S. - 
862,  23  L,  ed.  483,  a  person  having  a 
set-off  against  a  corporation  adjudi- 
cated a  bankrupt,  has  a  right  to  such 
set-oft'  against  the  assignee  equally 
available  to  him  as  a  company. 

In  Eiighitt  v.  Hayes,  136  N.  Y.  163, 
it  is  held  that  the  insolvency  of  one 
party  and  the  appointment  of  a  re- 
ceiver does  not  destroy  the  equitable 
right  of  set-off  which  otherwise  ex- 
isted prior  to  the  appointment. 

^  See  §  25,  p.  83,  note  2,  ante;  People 
V.  St.  Nicholas  Bank,  76  Hun,  522; 
Missouri  P.  E.  Co.  v.  Texas  &  P.  R. 


PRACTICE  AUD  PLEADING.  619 

§  401.     Application  for  directions. 

The  receiver,  beini^  an  officer  of  the  court  and  at  all  times  sub- 
ject to  its  orders  and  directions,  has  an  undisputed  right  to  apply 
to  the  court  for  instructions  concerning  the  receivership  interests 
in  his  charge,  and  for  the  safekeeping  of  which  he  is  responsible, 
and  especially  so  where  there  are  conflicting  interests,  rights, 
liens,  and  other  matters  about  which  future  contests  may  arise.' 

§  402.     Receiver  as  manager. 

Where  tlie  receiver  is  also  manager,  usually  in  the  matter  of 
railways,  and  M'here  the  scope  of  duties  pertaining  to  the  receiver- 
ship is  compreheiKsive  and  involved,  greater  latitude  is  allowed 
the  receiver,  and  his  discretionary  powers  necessarily  largely 
increased,  but  in  such  case  the  order  should  be  correspondingly 
latitudinous,  so  as  to  afford  ample  protection  where  his  action  is 
called  in  question.  It  will  be  found  much  easier  to  fortify  his 
action  in  advance  by  general  or  special  orders  than  to  justify 
his  action  afterwards  when  called  in  question.* 

§  403.     Interpleader  l)y  receiver. 

Where  two  parties  claim  the  same  property  or  fund  in  the 
hands  of  a  receiver,  it  is  proper  for  the  receiver  to  iile  a  bill  of 
interpleader  and  compel  them  to  determine  as  to  each  other  which 
has  a  superior  right.^ 

Go.  31  Fed.  Rep.  864;  Re  Van  Alien,  in  the  case  before  us,  it  is  in  danger 

37  Barb.   225;   Cammack  v.  Johnson,  through  his  own  error  of  being  un- 

2  N.  J.  Eq.  103.  fairly  distributed." 

'  In  Si/iith  V.  New  York  Consolidated  *  Central  Trust  Go.  v.  Ohio  G.  R. 
Stage  Co.  28  How.  Pr.  377,  the  court  Co.  23  Am.  &  Eng.  R.  Cas.  666;  Jack- 
say:  "The  court  has  sanctioned  the  son  v.  De  Furest,  14  How.  Pr.  81; 
practice  of  the  receiver  to  asli  for  in-  Allen  v.  Hawley,  6  Fia.  164;  Heather- 
structions  regarding  the  receivership  ton  v.  Hastings,  5  Hun,  459;  Marten 
business."  v.  Van  Schaick,  4  Paige,  479;  Leliigh 

In  People,   Atty.    Oen.,  v.  Security  Coal  &  Nav.  Co.  v.  Central  R.  Co.  41 

L.  Ins.   db  A.   Co.  79  N.  Y.  267,  the  N.  .1.  Eq.  107;  Langdon  v.  Vermont  & 

court  say:     "  Since  the  receiver  is  an  C.  R.  Co.  54  Vt.  593;  Clarke  v.  Central 

officer,  or,  as  he  is  sometimes  called,  R.  &  B.  Co.  66  Fed.   Itep.   16;    Piatt 

the  hand  of  the  courl,  it  would  be  v.  Philadelphia  &  R.  R.  Co.  65  Fed. 

singular  if  he  could  not  at  such  stage  Rep.    660;    Continental    Trust    Co,  v. 

go  to  it  with  his  complaint  or  for  in-  Toledo,  St.  L.  &  K.  G.  R.  Co.  59  Fed. 

structions  in  regard   to   any  matter  Rep.  514. 

toiichiug  tlie  fund  placed  in  his  cus-  ^  In  Winfield  v.  Bacon,  24  Barb.  154, 

tody,  and  more  et-fjecially  when,  as  the  receiver  had  a  fund  in  his  hands 


G20 


RECEIVERSHIPS. 


§  404.     Possession  as  to  tliird  parties. 

AVhorc  the  receiver  holds  property,  his  possession  is  the  posses- 
sion of  the  court,  and  any  equitable  rights  therein  claimed  by 
third  parties  nnist  be  asserted  by  petition  and  determined  by  the 
court  appointiui^  the  receiver.  It  is  also  an  equally  well  recog- 
nized rule  that  where  it  is  alleged  and  shown  for  good  cause 
that  property  should  not  pass  to  a  receiver,  the  court  may,  on 
petition,  release  the  same.' 


realized  from  the  sale  of  Land  to  which 
there  were  two  claiinants,  each  of 
whom  had  commenced  a  separate 
action  against  him  regarding  the 
fund,  and  had  obtained  an  injunction 
to  prevent  him  from  paying  it  over. 
In  such  case  it  was  held  that  a  bill  of 
interpleader  by  the  receiver  might  be 
maintained  against  the  rival  claimants 
to  compel  them  to  interplead  and 
settle  the  rights  between  themselves. 

iln  Thompson  v.  McCleary,  159  Pa. 
189,  it  is  held  that  a  creditor  having 
execution  under  a  judgment  should 
apply  to  the  court  which  appointed 
^le  receiver  and  ask  for  a  discharge 
of  the  property  out  of  its  custody  so 
that  he  may  proceed  against  it.  The 
same  doctrine  is  recognized  in  Smith 
V.  Earl  of  Effingham,  2  Beav.  233. 

In  Re  Chriiftian  Jensen  Co.  128  N-. 
Y.  550,  it  was  held  that  when  prop- 
erty had  passed  to  the  actual  posses- 
eion  of  the  receiver  it  could  not,  with- 
out leave  of  the  court  first  obtained, 
have  been  replevied  from  him  in  an 
action  against  him.  The  only  rem- 
edy would  have  been  by  an  action  com- 
menced with  the  leave  of  court,  or  by 
petition  to  the  court  appointing  the 
receiver.  Citing  Noe  v.  Oibson,7  Paige, 
513;  Riggs  v.  Whitney,  15  Abb.  Pr. 
388;  Chautavgue  County  Bank  v.  Ris- 
ley,  19  N.  Y.  369;  Barton  v.  Barbour, 
104  U.  S.  126,  26  L.  ed.  672;  Evelyn 
f.  Leiois,  3  Hare,  472;  Ex  parte  Coch- 
rane, L.  R.  20  Eq.  Cas.  282. 


In  Robinson  v.  Atlantic  &  O.  W. 
R.  Co.  60  Pa.  160,  it  was  held  that 
whether  certain  land  belonging  to  a 
mortgagor  should  pass  into  the  hands 
of  a  receiver  could  be  determined 
only  by  the  court  appointing  the  re- 
ceiver. The  court  say:  "  If  a  cred- 
itor believes  that  the  property  was 
not  legally  mortgaged,  or  for  any 
good  reason  should  not  pass  into  the 
hands  of  the  receiver,  his  duty  is  to 
apply  to  the  court  having  appointed 
the  receiver  to  ask  its  discharge  out 
of  custody,  in  order  that  he  may  pro- 
ceed against  it."  See  also  Re  Day, 
34  Wis.  638.  In  this  case  shingles 
were  lawfully  in  the  possession  of  the 
receiver,  and  the  court  held  if  there 
had  been  a  mistake  in  the  delivery 
and  they  belonged  in  fact  to  another 
party  than  the  debtor,  the  remedy  of 
the  claimant  was  by  application  to 
the  court  for  redress  or  for  leave  to 
sue. 

In  Wiswall  v.  Sampson,  55  U.  S.  14 
How.  52,  14  L.  ed.  322,  it  was  held 
that  where  real  estate  was  in  custody 
of  the  receiver  appointed  by  a  court 
of  chancery,  the  sale  thereof  was  im- 
proper under  an  execution  issued  in 
a  judgment  at  law.  It  is  held  that 
when  a  party  is  prejudiced  by  having 
a  receiver  put  in  his  way,  the  practice 
has  been  either  to  give  him  leave  to 
bring  ejectment  or  permit  him  to  be 
examined  pro  interesse  sua.  If  per- 
sons claim  to    have    prior    legal   or 


PRACTICE  AND  PLEADING. 


G21 


equitfible  interests  to  the  property  in 
the  bands  of  the  receiver,  and  they  de- 
sire to  avail  themselves  of  such  rights, 
they  must  apply  to  the  court  for  pro- 
tection, even  though  their  right  to  the 
pocsession  is  clear;  and  the  same  prac- 
tice applies  where  the  properly  claimed 
consists  of  goods  and  chattels,  or  other 
personalty,  as  to  real  estate.  The  court 
say:  "The  settled  rule,  also,  appears 
to  be  that  where  the  subject-matter  of 
the  suit  in  equity  is  real  estate,  and 
which  is  taken  into  the  possession  of 
the  court,  pending  the  litigation,  by 
the  appointment  of  a  receiver,  or  by 
sequestration,  the  title  is  bound  from 
the  filing  of  the  bill  ;  and  any  pur- 
chaser, pendente  lite,  even  for  a  valu- 
able consideration,  comes  in  at  his 
peril." 

In  this  case  the  court  examined  ex- 
tensively the  English  and  American 
doctrine  in  regard  to  the  possession  of 
the  receiver  and  the  interference  there- 
with and  the  remedies  of  claimants 
thereto. 

In  Rufisell  v.  Eant  Anglian  R.  Co. 
3  Macn.  &  G.  104,  property  in  the 
possession  of  the  receiver  was  seized 
under  execution  on  judgments  against 
the  debtor.  It  was  held  that  the  estab- 
lished rule  was  that  no  party  could 
question  any  order  or  process  of  court 
by  disobedience;  that  it  was  not  com- 
petent for  any  one  to  interfere  with 
the  possession  of  the  receiver  or  dis- 
obey any  order  of  court,  on  the  ground 
that  the  orders  were  improperly  made. 
The  proper  course  to  question  their 
validity  was  open  to  all,  and  this 
course  must  be  pursued.  "It  was 
perfectly  open  to  the  plaintiffs  to  have 
applied  to  the  court  to  be  heard  pro 
interesse  suo,  or  to  have  been  heard  on 
a  summarj  application  for  leave  to 
levy  their  execution,  notwithstanding 
the  possession  of  the  receiver." 

In  Porter  v,  Kingman,  126  Mass. 
141,  it  is  held  that  a  person  who  has 


purchased  property  subject  to  a  mort- 
gage given  by  the  ovvner  to  a  bank, 
cannot  maintain  a  bill  in  equity  against 
the  receivers  of  the  bank  for  a  cancel- 
ation of  the  mortgage,  alleging  as  a 
ground  false  and  fraudulent  represen- 
tations of  the  bank,  but  if  he  has  any 
remedy  at  all  he  must  proceed  by 
petition  in  the  court  in  which  the 
receiver  was  appointed.  Equitable 
rights  which  are  contended  as  supe- 
rior to  the  title  made  by  order  of 
court  cannot  be  passed  upon  except 
in  the  cause  in  which  that  title  is  cre- 
ated, and  cannot  be  set  up  in  an  inde- 
pendent suit. 

Cf.  Atlas  Bank  v.  Nahant  Bank,  23 
Pick.  480;  Coiumhiaii  Book  Co.  v.  De 
Golyer,  115  Mass,  67;  Wiswall  v.  Samp- 
son, 55  U.  S.  14  How.  52,  14  L.  ed. 
322;  Noe  v.  Gibson,  7  Paige,  513;  Rob- 
inson V.  Atlantic  <£  G.  W.  R.  Co.  66 
Pa.  160;  Russell  v.  East  Anglian  R. 
Co.  8  Macn.  &  G.  104;  Hills  v.  Parker, 
111  Mass.  508. 

In  Columbian  Book  Co.  v.  De  Golyer, 
115  Mass.  67,  it  was  held  that  before 
property  of  a  corporation  in  the  hand? 
of  a  receiver  could  be  taken  from  such 
receiver  and  applied  to  the  payment 
of  creditors,  a  petition  in  equity  in  the 
cause  in  which  the  receivers  were  ap- 
pointed was  necessary. 

In  Hills  v.  Parker,  111  Mass.  508, 
an  action  of  replevin  was  maintained 
against  an  agent  of  the  railroad  com- 
pany, whose  property  was  in  the  handa 
of  receivers,  without  obtaining  leave 
of  court,  where  it  appeared  that  the 
corporation  had  no  interest  in  the 
property  replevied,  although  it  was  in 
use  by  the  receiver.  It  was  held  that 
leave  to  bring  an  action  would  be 
granted  by  a  court  of  chancery  as  of 
course,  unless  it  was  clear  that  there 
was  no  foundation  for  the  claim. 
The  appointment  of  receivers  entitle 
them  to  the  protection  of  the  court  as 
to  the  property  they  were  directed  to' 


622 


RECEIVERSHIPS. 


§  405.    Acts  outside  of  receiver's  duty. 

Where  the  receiver  cominits  acts  outside  of  the  line  of  duty,  as 
where  he  takes  and  holds  possession  of  property  not  included  in 
the  order  of  appointment  and  to  which  the  debtor  never  had  title, 
he  is  not  entitled  to  the  protection  of  the  court,  is  a  trespasser  and 
liable  as  such.  He  is  not,  however,  a  trespasser  if  he  takes  pos- 
session of  property  under  an  improvident  order  of  court,  or  at 
least  not  Hal)le  for  damage.' 

§  406.     When  receiver  refuses  to  act. 

When  a  receiver  fails  to  prosecute  officers  of  a  corporation 
for  neglect  of  duty  or  illegal  acts  the  right  of  action  is  in  the 
party  interested  making  the  receiver  a  defendant.* 


take  possession  of,  but  does  not  extend 
to  property  not  embraced  in  the  de- 
cree and  of  which  the  debtor  never 
had  any  title.  Parker  v.  Browniiuj,  8 
Paige,  388;  Paige  v.  Smith,  99  Mass. 
395;  Leighton  v.  Harwood,  111  Mass. 
67. 

In  Atlas  Bank  v.  Nnhant  Bank,  23 
Pick.  480,  it  appeared  thai  attach- 
ment suits  were  brought  against  an 
insolvent  bank,  and  the  receivers  filed 
a  petition  praying  that  the  attachment 
might  be  dissolved  and  the  respond- 
ents be  restrained  from  other  attach- 
ments; that  the  petition  was  a  distinct 
proceeding,  unconnected  with  the 
original  suit  against  the  bank,  and 
was  held  to  be  irregular,  but  that  the 
receivers  were  entitled  to  proceed  in 
a  summary  mode,  by  a  petition  filed 
in  the  original  suit,  to  obtain  a  deci- 
sion of  the  court  upon  the  rights  of 
attaching  creditors,  and  that  a  supple- 
mental bill  was  not  necessary. 

'  In  Ft.  Wayne,  M.  &  C.  R.  Co.  v. 
Mellett,  93  Ind.  535,  it  was  held  that 
where  a  receiver  was  in  possession  of 
land  under  decree  of  the  circuit  court 
of  the  United  States  no  action  could 
be  maintained  in  the  state  courts  to 
recover  possession  thereof.  In  such 
case  the  court  which  holds  by  its  re- 


ceiver is  the  only  court  to  try  the 
question  of  title. 

In  Staples  v.  May,  87  Cal.  178,  it  is 
held  that  if  the  receiver  appointed  in 
a  mortgage  foreclosure  works  ores  in 
lands  of  the  mortgagor,  which  are  not 
included  in  the  mortgage  foreclosed, 
he  becomes  liable  as  a  trespasser  for 
the  net  proceeds  of  the  ore  extracted 
and  the  general  creditors  of  the  mort- 
gagor may  avail  themselves  of  such 
liability  by  proceedings  supplemental 
to  execution. 

In  Kenney  v.  Ranney,  96  Mich.  617, 
it  is  held  that  a  receiver  should  see  to 
it  that  he  sells  none  but  the  property 
covered  by  the  mortgage  under  the 
order  of  court,  for  its  sale,  and  an  ac- 
tion of  trover  will  lie  against  him  for 
the  value  of  other  property  held  by 
the  mortgagor  as  bailee  and  delivered 
by  him  to  the  receiver  without  demand 
and  without  order  of  court.  Cf.  Oib- 
bonsY.  Faricell,  63  Mich.  344;  Pingree 
V.  Detroit,  L.  &  N.  R.  Co.  66  Mich. 
148;  Allen  v.  Kiiiyon,  41  Mich.  281; 
Scudder  v.  Anderson.  54  Mich.  122; 
Hake  v.  Buell,  50  Mich.  89;  Daggett 
V.  Davis,  53  Mich.  35;  Qutsch  v.  Mc- 
Ilhargey.  69  Mich.  377. 

5  In  Fisher  v.  Andrews,  37  Hun,  176, 
an  action  was  brought  by  the  plaintiff 


PRACTICE  AND  PLEADING. 


(523 


§  407.     Leave  to  compromise. 

The  court  in  the  interest  of  the  estate  may  antliorize  and  em- 
power the  receiver  to  compromise  disputed  and  doubtful  claims, 
by  receiving  less  than  tlie  amount  due  if  it  shall  appear  expedient 
so  to  do  and  to  the  best  interest  of  creditors,  stockholders,  or  those 
interested.' 

§  408.     Power  to  enforce  assessments. 

The  receiver  of  an  insolvent  mutual  tire  insurance  company  has 


to  recover  a  sum  of  money  due  her  as 
widow  of  a  member  of  a  mutual  bene- 
fit association.  The  action  was  brought 
against  the  trustees  and  receiver.  The 
complaint  alleged  in  substance  negli- 
gence of  the  trustees  and  that  they 
had  converted  and  applied  to  their 
own  use  moneys  collected  under  an 
assessment  for  and  belonging  to  the 
plaintiff  without  right  or  authority. 
It  was  held  that  the  complaint  was 
properly  dismissed  because  of  its  fail- 
ure to  allege  that  plaintiff  had  re- 
quested the  receiver  to  prosecute  the 
defendant  and  that  he  had  refused  to 
do  so,  and  that  she  had  applied  to  the 
court  for  leave  to  sue  the  defendants 
and  that  the  same  had  been  granted 
or  refused.  The  court  say:  "The  re- 
ceiver represents  the  corporation,  and 
also  the  creditors,  and  the  funds  and 
causes  of  action  which  became  vested 
in  him  on  his  appointment  are  in 
custodia  legis  and  should  not  be  di- 
verted and  taken  from  his  hands  or 
placed  beyond  the  control  of  the 
court  whose  duty  it  is  to  see  that  all 
the  funds  of  the  corporation  are  justly 
and  equitably  distributed  among  its 
creditors  and  members.  *  *  *  If  it  had 
been  made  to  appear  that  the  receiver 
was  in  league  with  the  other  defend- 
ants or  had  been  guilty  with  them  in 
misappropriating  the  funds  of  the 
company  that  would  perhaps  be  a  suf- 
ficient excuse  for  not  applying  to  him 
to  prosecute  the  defendants  in  a  proper 


action."  OreaveH  v.  Gouge,  69  N.  Y. 
154;  Brinckerhoff  v.  Bostwick,  88  N. 
Y  52. 

'  In  Monitor  Furnace  Co.  v.  Peters, 
40  Ohio  St.  575,  a  receiver  of  a  cor- 
poration was  appointed  to  administer 
the  estate  for  the  benefit  of  creditors 
and  stockholders.  Before  the  receiv- 
er's appointment  the  company  made 
sale  of  its  real  estate  and  other  prop- 
erty for  the  alleged  purpose  of  de- 
frauding creditors.  Two  years  after 
the  appointment  a  judgment  creditor 
filed  a  bill  for  the  purpose  of  declaring 
the  sale  void  in  the  same  court  that 
appointed  the  receiver,  in  which  the 
stockholders,  receivers,  and  creditors 
were  made  defendants,  and  the  bill 
was  sustained  on  the  ground  that  it 
was  substantially  an  application  to  the 
court  to  direct  the  receiver  to  do  his 
duty  in  the  case  slated.  In  this  case 
the  court  can  make  the  proper  order 
as  effectively  and  justly  as  if  instituted 
by  the  receiver. 

Re  Croton  Ins.  Co.  3  Barb.  Ch.  642, 
a  receiver  of  an  insolvent  corporation, 
on  application,  was  authorized  to  com- 
promise disputed  and  doubtful  claims 
by  the  allowance  of  so  much  of  said 
claims  as  to  him  should  seem  just  and 
equitable  and  to  compromise  with 
debtors  who  are  unable  to  pay  in  full 
upon  receipts  any  part  of  their  debts, 
if  it  should  seem  reasonable  and  for 
the  best  interest  of  creditors. 


624: 


RECEIVERSHIPS. 


power  to  make  an  assessment  upon  the  prcminm  notes  necessary 
to  pay  the  delits  of  the  company  to  the  same  extent  as  possessed  by 
tlie  board  of  directors ;  but  his  power  is  not  more  extensive  than 
that  of  the  board.  In  such  case  his  power  does  not  depend  upon 
ilie  order  of  court  but  the  existence  of  such  facts  and  circum- 
stances as  render  the  assessment  necessary.  He  acts  ministerially 
and  not  judicially,  and  in  enforcing  the  assessment  must  allege 
such  facts  as  would  entitle  the  comjmny  to  sue.' 


'In  Thomas  v.  Whallon,  31  Barb. 
173,  the  receiver  of  a  mutual  insur- 
ance company  in  making  an  assess- 
ment upon  tlie  premium  notes  is  held 
to  be  an  actor  and  his  authority  de- 
pends not  upon  the  order  of  court,  but 
upon  the  existence  of  facts  making 
the  a^essment  necessary  and  proper. 
in  ordering  the  receiver  to  make  the 
assessment  courts  do  not  adjudicate 
upon  the  liability  of  the  company  or 
determine  the  amounts  for  which  as- 
sessments shall  be  made,  at  the  ratio 
of  an  assessment,  but  merely  sanction 
and  authorize  the  acts  of  the  receiver 
who  acts  ministerially  and  not  judi- 
cially. 

In  Williams  v,  Babcock,  25  Barb.  109, 
It  is  held  that  the  receiver  of  a  mutual 
msurance  company,  by  his  appoint- 
ment, has  power  to  make  assessments 
upon  premium  notes  and  determine 
ihe  time  of  payment  in  the  same  man- 
ner as  the  directors  had,  and  is  au- 
thorized to  give  notice  in  the  same 
manner,  but  the  appointment  does  not 
determine  the  amount  of  indebtedness 
or  the  time  of  payment.  If  the  obli- 
gation to  pay  is  determined  by  the 
premium  note  upon  an  assessment  and 
notice,  it  is  the  receiver's  duty  to  pro- 
ceed forthwith  and  make  an  assess- 
ment and  give  the  notice.  This  is  a 
orerequisite  to  an  action  on  the  note; 
otherwise  there  would  be  no  breach 
on  the  part  of  the  maker  and  these 
things  are  necessary  allegations  in  an 
action  against  the  maker. 


In  Einsela  v.  Cataract  City  Bank,  18 
N.  J.  Eq.  158,  it  appeared  that  a  sura 
of  money  was  placed  in  a  bank  as  a 
special  deposit  to  meet  a  contingency 
of  the  bank  which  never  happened, 
and  the  receiver  was  required  to  repay 
the  sum  to  the  depositor. 

In  Wood  v.  Standard  Mut.  L.  8.  Ins. 
Co.  154  Pa.  157,  a  decree  was  rendered 
ordering  the  receiver  to  collect  an  as- 
sessment from  members  of  the  com- 
pany, and  in  such  case  a  liberal  allow- 
ance should  be  made  for  uncollected 
assessments,  expenses,  etc. 

In  Bangs  v.  Duckinfield,  18  N.  Y. 
593,  an  assessment  made  by  a  receiver 
of  a  mutual  fire  insurance  company 
under  an  order  of  court  on  applica- 
tion of  the  receiver  without  notice  is 
held  to  be  upon  the  same  footing  as  if 
made  by  the  board  of  directors  and 
not  conclusive  upon  the  person  as- 
sessed as  a  judicial  determination. 

In  Sands  v.  Sanders,  28  N.  Y.  416, 
it  is  held  that  a  general  assessment  is 
good  by  which  the  receiver  declares 
each  premium  note  is  assessed  to  the 
full  amount  thereof. 

In  Doions  v.  Hajnmond,  47  Ind.  131, 
suit  was  brought  by  a  receiver  of  a 
mutual  fire  insurance  company  to  col- 
lect an  assessment  on  a  premium  note 
and  it  was  held  that  the  complaint 
must  show  on  its  face  that  the  court 
from  which  the  receiver  derives  his  au- 
thority has  determined  the  validity  of 
the  claims  for  which  the  assessment 
is  made.    The  amount  of  claims  which 


PRACTICE  AND  PLEADING. 


625 


409.    Leaye  to  sell. 

Where  leave  is  given  to  the  receiver  to  sell  subject  to  the  order 
of  court,  au  order  of  confirmation  by  the  court  is  necessary  in 
order  to  transfer  the  title.  The  sale  in  such  case  is  conditional 
and  the  purchaser  buys  subject  to  the  condition,  but  as  in  the 
case  of  minors  the  contract  is  enfoi'ceable  against  him.' 

§  410.    Leave  to  contract  debts  and  liens. 

The  receiver  without  leave  of  court  has  no  power  to  create  in- 
debtedness and  charge  the  receivership  property  with  the  payment 
thereof.  The  court  may  in  its  discretion  ratify  tlie  act  of  the  re- 
ceiver afterwards,  in  which  case  the  effect  is  the  same  as  previous 
leave  given.  The  order  and  not  the  act  gives  the  transaction 
validity.  As  to  the  existing  mortgage  liens,  and  the  power  to 
displace  them  by  prior  liens,  the  power  of  the  court  is  limited,  as 
elsewhere  seen,  to  legitimate  operating  expenses.* 


the  receiver  or  court  will  allow  as  just 
demands  against  the  company,  to- 
gether with  any  indebtedness  previ- 
ously allowed  by  the  directors  of  the 
company  as  shown  by  their  books 
must  be  ascertained  before  an  assess- 
ment can  be  made  to  pay  such  in- 
debtedness. 

In  Manlove  v.  Burger,  38  Ind.  211, 
it  is  held  that  under  the  statute  of  In- 
diana the  receiver  of  a  mutual  insur- 
ance company  is  authorized  to  sue  in 
his  own  name  in  bringing  an  action 
against  the  stockholders  of  a  mutual 
insurance  company.  Also,  that  in  an 
action  by  a  receiver  to  recover  assess- 
ments he  must  allege  all  the  facts 
necessary  to  show  a  liability  on  the  pre- 
mium notesand  that  the  claim  for  losses 
had  been  adjusted,  or  were  justly  due 
to  the  parties  making  or  setting  up  the 
claims. 

'  In  Koontz  v.  Northern  Bank,  83  U. 
S.  16  Wall.  196,  21  L.  ed.  465,  it  is  held 
that  if  the  receiver  omit  to  perform  his 
whole  duty  by  which  the  jiarties  arc  in- 
jured,or  if  he  commits  a  fraud  upon  the 
court  and  the  rights  of  third  parties 
40 


have  intervened  to  prevent  the  setting 
aside  of  the  transaction,  the  remedy  is 
against  the  otficer  personally  on  his 
official  bond. 

In  Phelps  V.  Masterton,  3  Robt.  527, 
it  was  held  that  a  receiver  of  a  corpo- 
ration to  which  a  note  was  given,  can- 
not recover  upon  such  note  after  he 
has  sold  the  same  at  public  auction  to 
a  bona  flde  purchaser. 

In  Ilanke  v.  Blattner,  34  111.  App. 
394,  a  receiver  was  held  to  be  author- 
ized to  bring  suit  without  special 
leave  of  court,  under  111.  Rev.  Stat, 
chap.  32,  §  25.  In  this  case  it  appeared 
that  the  receiver  had  made  a  sale  of 
property  pursuant  to  the  order  of 
court,  and  the  purchaser  had  failed 
to  give  a  note  due  for  the  property 
pursuant  to  the  terms  of  sale,  and  suit 
was  brought  therefor. 

*  In  liof/ers  v.  Wendell,  54  Hun,  540, 
an  action  was  brought  to  dissolve  the 
corporation  in  which  a  receiver  was 
appointed,  who  employed  a  person  to 
take  charge  of  the  property  of  the  com- 
pany at  a  designated  place  and  pay 
certain  disbursements  necessary.  This 


626 


RECEIVERSHIPS. 


§  411.    Leave  to  issue  certilicates. 

The  court  may,  however,  under  certain  limitations  and  restric- 
tions, empower  the  receiver  to  issue  receiver's  certiticates  and 
bind  the  receivership  funds  for  their  payment,  but  in  such  case 
express  authority  must  be  given  the  receiver,  and  his  expenditure 
of  the  money  derived  therefrom  or  use  of  the  certiticates  must 
strictly  follow  the  order  and  direction  of  the  court.* 


employment  was  continued  for  some 
time  by  tlie  person  so  employed,  he 
making  reports  to  the  receiver  weekly 
and  drawing  drafts  upon  him  for  vari- 
ous sums  until  the  death  of  the  re- 
ceiver. An  action  was  brought  by  the 
employee  against  the  executor  of  the 
receiver  for  services  and  disburse- 
ments and  it  was  held  that  the  re- 
ceiver assumed  a  personal  liability  on 
account  of  services  and  disburse- 
ments. This  case  is  based  upon  analo- 
gous cases  applicable  to  administra- 
tion and  trustee  matters  as  follows: 

Cf.  ScJmMer  v.  Simon,  101  N.  Y, 
557;  Willis  v.  Sharije,  113  N.  Y.  591; 
Davis  V.  Sforer,  16  Abb.  Pr.  N.  S.  227; 
Ifoyes  V.  Blakeman,  G  N.  Y.  580;  My- 
gatt  V.  Wilcox,  45  N.  Y.  309;  Bowman 
V.  Tallman,  2  Robt.  385;  Peoi)le  v. 
Universal  L.  Ins.  Go.  30  Hun,  142; 
Kedian  v.  Hoyi,  33  Hun,  145;  Bya)i  v. 
Band,  20  Abb.  N.  C.  314;  Fatten  v. 
Royal  Baking  Powder  Co.  114  N.  Y.  4. 

The  principle  upon  which  the  ad- 
ministrator, trustee,  or  receiver  is  held 
liable  in  the  foregoing  cases  is  that 
there  is  no  responsible  principal  back 
of  them  for  whom  they  may  contract 
and  against  whom  the  creditor  may 
force  his  demand.  A  receiver  cannot, 
of  his  own  motion,  contract  debts 
chargeable  upon  the  fund  in  litigation 
and  while  a  court  may  allow  expenses 
incurred  by  a  receiver  for  the  preser- 
vation of  the  property,  it  is  neverthe- 
less the  order  of  court  and  not  the  act 
of  the  receiver  which  creates  the 
charge  and   upon  which  its  validity 


depends.  Vilas  v.  Page,  106  N.  Y. 
451.  Cf.  Wy chuff  v.  Scofield,  103  N. 
Y.  630. 

In  Gowdrey  v.  Galveston,  H.  &  H. 
B.  Go.  93  U.  S.  352,  23  L.  ed.  950,  it 
is  held  that  the  receiver  is  not  author- 
ized, without  previous  direction  of 
the  court,  to  incur  any  expense,  on  ac- , 
count  of  properly  in  his  hands,  be- 
yond what  is  absolutely  essential  to 
its  preservation  as  contemplated  by 
his  appointment. 

In  Ryan  v.  Rand,  20  Abb.  N.  C. 
313,  the  receiver  was  held  personally 
liable  for  fees  of  a  stenographer  em- 
ployed by  him  on  the  ground  that 
there  was  no  authority  from  the  court 
making  the  plaintiff's  demand  a 
charge  upon  the  estate. 

'  In  Union  Trust  Go.  v.  Ghicago  <& 
L.  H.  B.  Co.  7  Fed.  Rep.  513,  under 
a  special  order  of  court,  receivers'  cer- 
tificates were  issued,  placed  in  the 
hands  of  the  payee  for  negotiation  and 
sale,  and  subsequently  were  purchased 
by  the  plaintiff  for  forty  cents  on  the 
dollar,  he  having  notice  of  the  order 
under  which  the  certificates  were  is- 
sued. It  was  held  that  the  purchaser 
took  subject  to  all  equities  between 
the  receiver  and  payee.  The  negotia- 
tion and  sale  of  certificates  is  a  trust 
personally  to  the  receiver  and  he  can- 
not delegate  it  to  another  and  relieve 
himself  from  responsibility. 

In  Bank  of  Montreal  v.  Gldcago,  C. 
<fc  W.  R.  Co.  48  Iowa,  518,  the  re- 
ceiver was  authorized  to  borrow  such 
sums  of  money  as  were  necessary  for 


PRACTICE  AND  PLEADING. 


627 


§  412.  Trust  property  held  by  receiver. 

If  property  is  held  by  a  corporation  in  trust  and  a  receiver  is 
appointed  over  the  corporate  property  the  trust  pro})erty  remains 
impressed  with  the  trust  relationship  and  on  petition  of  the  claim- 
ant will  be  turned  over  to  him  by  order  of  court.  The  conversion 
and  misapplication  by  the  corporation  does  not  alter  the  rights 
of  parties  if  the  property  or  its  proceeds  can  be  traced.' 


the  further  construction,  equipment 
and  final  completion  of  the  road  and 
to  issue  certificates  therefor  and  that 
such  certificates  "whether  for  money 
borrowed,  material  furnished,  labor 
performed  or  on  account  of  contracts 
made  by  him  on  account  of  the  con- 
struction of  the  road"  should  be 
treated  as  a  receiver's  indebtedness 
and  be  a  first  lien  on  the  road.  It  was 
held  that  the  receiver  could  not  i-ssue 
certificates  in  payment  of  material 
until  it  had  been  furnished,  and  hav- 
ing done  so  for  material  contracted  to 
be  delivered,  but  which  in  fact  never 
was,  the  certificates  were  void.  The 
receiver  must  follow  the  directions  of 
the  order  from  which  he  receives  his 
authority. 

In  Chicago  Deposit  Vault  Co.  v.  Mc- 
Nulta,  153  U.  S.  554,  88  L.  ed.  819, 
the  receiver  was  authorized  to  "make 
all  contracts  that  may  be  necessary  in 
carrying  on  the  business  of  said  rail- 
road, subject  to  the  supervision  of 
this  court,"  but  it  was  held  he  had  no 
authority  to  make  a  lease  of  general 
offices  for  a  term  without  authority 
from  the  court  and  to  bind  his  suc- 
cessors and  the  property  therefor  for 
the  term  without  direction  from,  or 
sanction  by,  the  court,  and  the  mere 
fact  that  the  receivers'  accounts 
showed  monthly  the  payment  of  rent 
under  such  a  lease  and  that  that  rent 
was  reasonable,  and  that  the  accounts 
as  rendered  were  passed  by  the  master 
and  reported  to  and  approved  by  the 


court  did  not  amount  to  a  sanction  of 
the  lease  for  the  term. 

'  In  People  v.  Bonk  of  Dansville,  39 
Hun,  187,  it  appeared  that  E  &  Co., 
were  creditors  of  H  and  drew  their 
sight  draft  on  him  payable  to  the  or- 
der of  the  cashier  of  the  bank  of  D 
and  sent  the  same  to  the  bank  for  col- 
lection with  specific  instructions  to 
remit  the  proceeds.  The  draft  was 
paid  in  full  to  the  bank  and  the  bank 
drew  its  own  draft  for  the  amount  of 
the  collection  less  charges  on  a  New 
York  bank  payable  to  the  order  of  E 
&  Co.,  and  forwarded  the  same  to 
them.  E  &  Co.  forwarded  the  draft 
for  collection  and  it  was  returned  dis- 
honored, the  bank  of  D  having  in  the 
meantime  become  insolvent  and  ceased 
to  do  business.  In  this  case  it  was 
held  that  E  &  Co.  were  entitled  to 
the  amount  of  the  draft  so  collected 
by  the  bank  paid  to  it  by  the  receiver 
in  preference  to  the  general  creditors. 
In  such  case,  the  funds  of  the  bank 
being  in  cusiodid  Icgis,  it  was  unneces- 
sary for  the  petitioners  to  file  a  bill 
for  the  purpose  of  establishing  their 
equity;  a  summary  application  by 
petition  was  all  that  was  required. 

In  Chase  v.  Petroleum  Bank,  66  Pa. 
169,  Chase,  having  balances  in  the 
bank,  requested  the  bank  to  pay  a 
debt  for  him,  agreeing  that  the  bal- 
ances should  be  applied  to  the  repay- 
ment. The  bank  paid  the  debt  and 
Chase  gave  his  note  for  the  amount, 
the  balances  to  be  adjusted  in  a  short 


628 


RECEIVERSHIPS. 


time.  In  the  meantime  the  bank 
failed  and  went  into  the  hands  of  a 
receiver  and  it  was  held  that  there 
had  been  an  appropriation  of  the  bal- 
ances to  the  note  and  in  a  suit  by  the 
bank  on  the  note  the  balances  were 
to  be  deducted.  Such  balances  were 
not  subject  to  check  and  could  not 
have  been  attached  by  Chase's  cred- 
itors. 

In  People  v.  Merchants'  &  M.  Bank, 
78  N.  Y.  269,  the  application  of  the 
petitioner  was  required  to  show  and 
trace  into  the  hands  of  the  receiver 
the  money  which  it  was  claimed  was 
a  trust  fund.  It  did  not  appear  that 
there  was  any  actual  setting  apart  or 
appropriation  of  any  specific  fund  or 
property  of  the  bank  or  of  the  drawer 
of  the  check  for  its  payment  and  it 
did  not  appear  that  the  identical  funds 
deposited  were  in  the  possession  of 
the  bank  when  the  check  was  pre- 
sented for  payment.  In  fact  it  was 
conceded  they  were  not.  The  bank 
was  simply  a  debtor  of  the  depositor 
for  the  balance  of  the  deposits  which 
stood  to  its  credit. 

In  Re  Hallett's  Estate,  L.  R.  13  Ch. 
Div.  696,  it  was  held  that  money  held 
by  a  person  in  a  fiduciary  capacity, 
though  not  as  trustee,  and  paid  by 
him  to  his  account  at  his  bank  may 
be  followed  by  the  owner  and  the 
amount  be  made  a  charge  on  the  bal- 
ance in  the  hands  of  the  bank;  that  if 
a  person  holds  money  as  trustee  or  in 
a  fiduciary  character  places  it  to  his 
account  in  his  bank  and  mixes  it  with 
his  own  money  and  afterwards  checks 
out  sums  of  money  in  the  ordinary 
manner,  the  rule  as  to  the  first  draw- 
ings out  of  the  first  payments  does 
not  apply  to  such  case  and  the  drawer 
must  be  taken  to  have  drawn  out  his 
own  money  in  preference  to  trust 
money. 

In  Thuemmler  v.  Barth,  89  Wis. 
381,  a  draft  was  sent  to  another  bank 


for  collection  of  credit.  The  former 
bank's  account  with  the  latter  bank 
was  then  overdrawn,  but  collaterals 
were  held  to  secure  it  against  over- 
drafts. The  draft  was  collected  by 
the  bank  and  the  proceeds  credited  to 
the  bank  making  the  remittance,  and 
it  then  failed.  It  was  held  that  the 
owner  of  the  draft  was  not  entitled  to 
a  preference  of  payment  out  of  the 
assets  of  the  remitting  bank,  the  pro- 
ceeds of  the  draft  not  being  traceable 
into  any  of  such  assets. 

In  Henry  v.  Martin,  88  Wis.  367, 
it  appeared  that  before  the  making  of 
an  assignment  by  an  insolvent  an 
agent  deposited  money  of  his  principal 
therein  in  another  than  his  own  name, 
with  notice  to  the  bank  that  it  be- 
longed to  third  parties.  It  was  held 
that  the  deposit  not  having  been 
a  special  one  and  it  not  being 
claimed  that  any  part  of  the  money 
which  came  to  the  assignee  was  the 
identical  money  deposited,  the  assets 
of  the  bank  are  not  impressed  with 
any  trust  in  favor  of  the  principal  so 
as  to  make  him  a  preferred  creditor. 
The  deposit  created  the  relation  of 
debtor  and  creditor  simply  and  the 
bank  receiving  the  money  was  the 
debtor  and  not  a  bailee.  Cf.  Nono- 
tuck  Silk  Co.  V.  Flanders,  87  Wis.  237; 
McLeod  V.  Evans,  66  Wis.  401. 

In  Carley  v.  Graves,  85  Mich.  483, 
the  facts  stated  were  held  not  to  con- 
stitute the  relation  of  debtor  and  cred- 
itor, but  that  of  trusteeship,  and  the 
funds  were  ordered  to  be  turned  over 
to  the  payee. 

In  Importers'  &  T.  Nat.  Bank  v. 
Peters,  123  N.  Y.  272,  it  appeared  that 
money  was  held  by  a  person  in  a 
fiduciary  capacity  and  was  deposited 
by  him  in  his  general  account  at  the 
bank.  It  was  held  that  the  money 
could  not  be  followed  by  the  owner. 
If  the  owner  pays  it  to  his  account 
with  his  bank  and  mixes  it  with  his 


FUACTICE  AND  PLEADING. 


&Ad 


§  413.    Efl'cct  of  receiver's  discharge  pending  action. 

Where  the  receiver  is  discharged  pending  an  action  against 
him  it  is  a  bar  to  the  fnrther  prosecution  of  the  suit,  and  should 
be  pleaded  by  the  receiver  as  such  bar ;  and  it  seems  that  the  de- 
fense does  not  depend  upon  notice  of  the  application  for  a  dis- 
charge being  served  upon  plaintiff.* 

§  414.     Order  of  discharge. 

In  the  order  of  sale  the  court  has  power  to  protect  the  interests 
of  all  parties  who  have  suits  pending  and  undetermined  at  the 
time  of  the  receiver's  discharge,  and  may  order  a  sufficient  sum 
to  be  reserved  from  final  distribution  to  pa}"  the  claims  if  estab- 
lished, or  may  direct  the  sale  to  be  made  subject  to  such  claims 
and  retain  jurisdiction  to  compel  the  purchaser  to  satisfy  them.^ 


own  money  and  afterwards  draws  out 
some  by  checks  generally,  and  in  the 
ordinary  manner,  the  drawer  of  the 
check  must  be  taken  to  have  drawn 
out  his  own  in  preference  to  the  trust 
money. 

I  In  Brown  v.  Oay,  76  Tex.  444,  it 
is  held  that  where,  pending  suit  for  in- 
juries against  a  receiver,  he  is  dis- 
charged, the  suit  as  to  him  abates  for 
want  of  proper  parties.  Where  the 
receiver  is  discharged  and  the  prop- 
erty all  turned  over  to  the  company 
under  the  order  of  court  this  ends  the 
control  of  the  court  over  the  prop- 
erty. The  custody  of  the  court  went 
with  the  discharge  of  the  receiver. 

Texas  P.  R.  Co.  v.  JoJtnson,  76  Tex. 
421.  In  this  case  it  is  also  held  that 
when  property  is  released  from  the 
custody  of  the  court  it  stands  subject 
to  any  claim  or  charge  that  may  be 
raised  upon  it.  A  suit  for  personal 
injuries  growmg  out  of  the  negligent 
management  of  the  receiver  may  be 
maintained  against  the  railroad  com- 
pany after  the  property  is  restored  to 
it,  where  the  current  earnings  of  the 
road  were  used  by  the  receiver  in  im- 
proving it. 


In  Bond  v.  State,  68  Miss.  648,  the 
discbarge  of  the  receiver  was  held  to 
be  a  bar  to  an  action  by  the  state  tore- 
cover  a  penalty  for  a  failure  to  keep  a 
bulletin  board  showing  the  time  of 
arrival  and  departure  of  trains.  In 
such  case  the  discharge  does  not  abate 
the  suit,  but  it  may  be  prosecuted 
against  his  successor. 

^  In  Schmid  v.  Neto  York,  L.  E.  & 
W.  R.  Go.  33  Hun,  335,  a  similar  doc- 
trine is  held,  in  which  case  the  in- 
debtedness of  the  receiver  was  de- 
clared to  be  a  lien  upon  the  premises 
sold  prior  to  the  mortgages.  The 
court  say:  "  Certainly  the  receiver's 
liability  for  killing  plaintiff's  intestate 
was  a  liability  which  could  be  en- 
forced against  the  receiver  and  the 
property  held  by  him.  The  plaintiff, 
therefore,  has  a  legal  right,  founded 
upon  some  obligation  of  the  promisee, 
and  she  has  a  right  to  adopt  and 
claim  the  promise  to  have  been  made 
for  her  benefit.  She  is  not  a  mere 
stranger."  Cf.  Vrooinany.  2'urner,  69 
N.  Y.  285. 

In  Farmers'  Loan  &  T.  Co.  v.  Cen- 
tral R.  Co.  17  Fed.  Rep.  758,  it  is  held 
to  be  a  proper  exercise  of  chancery 


630 


RECEIVERSHIPS. 


§415.     Conflicting  claims;   how  deterniined. 

Where  a  person  claims  a  superior  legal  or  equitable  rio'ht  to 
the  receivership  property  in  the  possession  of  the  receiver,  tiie 
proper  practice  is  for  him  to  file  a  petition  in  oi'iginal  action  set- 
tiuo-  lip  his  rights  and  have  them  determined  tlierein.  An  inde- 
pendent suit  is  not  proper.  A  court  of  equity,  as  seen  elsewhere, 
is  not  inclined  to  be  drawn  into  a  contest  concerning  purely  legal 
titles,  and  may  direct  an  issne  to  be  tried  by  a  jury,  or  common- 
law  snit  to  be  bronght  for  such  purpose.' 


power  on  surrendering  the  trust  prop- 
erty to  the  purchaser  to  retain  juris- 
diction of  the  original  case  and  the 
authority  to  enforce  the  payments  of 
the  debt  and  liabilities  incurred  by  the 
receiver  in  the  operation  of  the  rail- 
way. There  was  a  condition  in  this 
case  in  the  order  of  confirmation  that 
the  purchaser  should  pay  all  debts  of 
the  receiver  and  all  claims  or  liabili- 
ties pending  in  the  foreclosure  case. 

In  Do/ois  v.Duncan,lQ  Fed.  Rep.477, 
it  is  held  that  after  an  order  discharg- 
ing the  receiver  and  directing  him  to 
turn  over  the  property  in  his  hands  to 
the  defendant  corporation,  which  was 
done,  the  court  could  not,  after  the  ad- 
journment of  the  term  at  which  the 
order  was  made  and  entered  of  record, 
change,  modify,  or  expanil  the  decree 
discharging  the  receiver  and  again  ob- 
tain jurisdiction  over  the  property  and 
funds  which  it  had,  by  its  decree, 
turned  over.  If,  however,  the  decree 
had  provided  that  it  should  be  subject 
to  the  satisfaction  of  all  claims  arising 
while  the  property  was  under  the  re- 
ceiver's control,  the  court  as  a  court  of 
equity,  had  a  right  to  provide  for  the 
payment  of  such  claims  and  retain 
jurisdiction  of  the  cause  to  that  ex- 
tent. 

In  Brown  v.  Wabash  R  Co.  96  111. 
297,  the  deed  of  sale  provided  "  that 
said  estate  and  interest  are  liereby 
charged  with  and  shall  pass  by  virtue 


of  these  presents,  subject  to  the  pay- 
ment of  all  liabilities  incurred  in  re- 
spect to  the  said  railroad  or  its  busi- 
ness by  the  said  receiver."  It  was 
held  that  the  grantee  held  the  property 
subject  to  the  payment  of  such  lia- 
bilities as  the  receiver  had  incurred 
while  he  had  possession  and  control  of 
the  road.  Where  personal  injury  is 
suffered  by  reason  of  the  negligent 
management  of  the  road  by  the  re- 
ceiver, the  party  injured,  or  his  rep- 
resentative, must  first  sue  at  law  and 
settle  the  receiver's  liability  and  the 
amount  of  damages,  and  then  file  a 
bill  in  equity  against  the  grantee  com- 
pany. 

In  Sloa7i  v.  Central  Iowa  R.  Co.  63 
Iowa,  728,  a  railroad  was  operated  for 
a  time  by  a  receiver  and  while  in  such 
management  a  person  suffered  per- 
sonal injuries  and  subsequently  the 
court  ordered  the  railway  to  be  turned 
over  to  the  defendant,  upon  the  condi- 
tion that  it  would  assume  and  pay  all 
liabilities  of  the  receivership.  The 
company  accepted  the  property  with 
the  conditions  attached  and  was  held 
liable  to  the  plaintiff  for  damage.  la 
this  case  the  action  was  brought 
against  the  railroad  company.  Under 
such  circumstances  the  company  can- 
not retain  the  property  and  repudiate 
the  conditions  under  which  it  is  re- 
ceived. 

'In  Van   Rensselaer    v.    Emery,    9 


PRACTICE  AND  PLEADING. 


G3i 


§  416.     Receiver's  accounts. 

The  court  appointing  a  receiver  lias  power  to  require  him  to 
state  his  accounts  whenever,  and  to  sucli  person,  master,  or 
referee,  as  to  the  court  shall  seem  proper.  Such  account  should 
be  full,  complete,  and  definite  and  under  oath,  and  be  accom- 
paTiied  by  vouchers  for  all  expenditures  made.' 


How.  Pr.  135,  where  a  receiver  had 
beau  appointed  in  supplementary  pro- 
ceedings to  enforce  payment  of  a 
judgment  against  partnership  prop- 
erty it  is  held  that  he  ought  not  to  be 
made  a  party  to  an  action  and  an  in- 
junction restraining  him  in  the  dis- 
charge of  his  oiTicial  trust,  but  the 
proper  practice  in  such  case  is,  where 
it  is  desired  to  restrain  the  receiver,  to 
apply  to  the  court  for  instructions. 

In  Porter  v.  Kingman,  126  Mass. 
141,  it  is  held  that  the  purchaser  of  an 
estate  subject  to  a  mortgage  given  by 
a  former  owner  to  a  bank  cannot 
maintain  a  bill  in  equity  against  the 
receivers  of  the  bank  for  a  cancelation 
of  the  mortgage  on  the  ground  that  it 
was  obtained  by  false  and  fraudulent 
representations  of  the  bank,  but  the 
remedy  in  such  case  is  for  the  pur- 
chaser to  proceed  bj'  a  petition  in  the 
cause  in  which  the  receivers  were  ap- 
pointed. Equitable  rights  which  are 
contended  as  superior  to  the  title  of 
the  receiver  cannot  be  set  up  in  an  in- 
dependent suit.  Re  Day,  34  Wis.  G38; 
Robinson  v.  Atlantic  tfe  O.  W.  B.  Co. 
66  Pa.  160. 

'  In  Hayden  v.  Chicago  Title  &  T. 
Co.  55  III.  App.  241,  the  same  doctrine 
is  aflirmed  by  the  court.  Where  the 
accounts  are  not  assented  to,  the  gen- 
eral rule  requires  that  they  should  be 
referred  to  a  master.  Cowdrey  v. 
Galveston,  E.  &  II.  B.  Co.  1  Woods, 
831 ;  Iluling  v.  Farwell,  33  111.  App.  238. 

Without  a  reference,  notice  to  the 
parties  interested  to  attend  liefore  the 
master  must  be  given.     Acme  Copying 


Co.  V.  McLnre,  41  III.  App.  397; 
Strang  v.  Allen,  44  III.  428. 

In  nefi'ron  v.  Rice,  40  III.  App.  244, 
affirmed  in  149111.  216,  the  court  holds 
that  where  accounts  are  presented 
under  decrees  in  equity  a  party  must 
swear  peremptorily  that  he  has  paid 
the  money  in  question,  a  voucher 
must  be  filed  with  the  account,  if 
possible,  and  where  there  are  no 
vouchers  a  positive  verified  state- 
ment should  be  filed  showing  to 
whom,  for  what,  and  when  such  items 
were  paid.  The  burden  of  proving 
improper  conduct  upon  the  part  of 
the  receiver  is  upon  the  party  alleging 
the  same,  and  if  he  does  not  support 
his  charges  they  must  be  dismissed  at 
his  cost.  On  a  reference  before  the 
master  the  receiver  may  be  required 
to  show  fully  how  he  kept  his  funds. 
Hinckley  v.  Gilman,  C.  &8.  B.  Co.  100 
U.  S.  153,  25  L.  ed.  591. 

In  England  the  master's  report 
upon  a  receiver's  account  did  not  re- 
quire conflrmalion  by  the  court,  and 
was  not  subject  to  exceptions.  The 
court  would,  upon  petition  of  any 
person  aggrieved,  review  the  general 
principles  of  law  on  which  the  master 
had  proceeded  in  taking  the  receiver's 
accounts,  and  which  were  alleged  to 
be  erroneous,  but  the  court  would 
not  review  questions  of  fact  as  to  the 
correctness  or  particular  items  in  the 
accounts,  and  tliis  seems  to  be  the  rule 
adopted  in  New  York  and  United 
States  courts.  Broicer  v.  Brower,  2 
Edw.  Ch.  621;  Cowdrey  v.  Galveston, 
II  t(j  //.  B.  Co.  1  Woods,  341. 


632 


RECEIVERSHIPS. 


§  417.    Appeal  by  receiver. 

Tlie  receiver's  ri<^ht  to  appeal  in  all  matters  relatincr  to  his 
official  conduct,  his  accounts  and  oi'dei-s  of  court  relatiiii^  tliereto, 
is  well  established.  In  such  case  he,  in  ellect,  occupies  the  position 
of  a  party  to  a  suit.' 

§  418.    Deed  by  receiver. 

The  receiver's  power  to  execute  a  deed  convejirii^  property 


The  practice  in  Illinois,  New  Jer- 
sey, Rhode  Island,  Alabama,  Indiana, 
Oregon,  and  other  states  conforms  to 
the  Irish  chancery  practice  by  which 
the  courts  will  investigate  the  items 
of  the  receiver's  accounts.  Woolsey  v. 
Cummings  Car  Works,  33  N.  J.  Eq. 
432;  Special  Bank  Comrs.  v.  Franklin 
Inst,  for  Sav.  11  R.  I.  557;  Byon  v. 
Thomas,  104  Ind.  59;  McOee  v.  Cow- 
perthwaite,  10  Ala.  906;  Hooper  v. 
Winston,  24111.  353;  Martin  v.  Martin, 
14  Or.  165. 

The  case  of  Ilcffron  v.  Rice,  40  111. 
App.  244,  wasatlirmed  iu  the  supreme 
court  in  149  111.  216,  where  it  was 
held  that  if  the  receiver's  account 
consists  of  money  items  of  payments 
for  some  of  which  he  took  no  receipts, 
but  books  were  kept  in  which  all 
payments  were  entered,  and  the  pay- 
ments were  such  as  were  incident  to 
the  business  he  was  engaged  in,  and 
the  proof  showed  that  such  items 
were  correctly  copied  from  the  books 
kept  by  the  receiver  and  his  assistants 
and  the  entries  in  the  books  were 
correct,  the  court  will  be  justified  in 
approving  the  account.  It  is  also 
held  that  it  is  the  duty  of  the  receiver 
to  make  out  and  file  with  the  court  in 
which  he  is  appointed  an  inventory 
of  the  property  which  passes  through 
his  hands  so  that  all  creditors  and 
other  persons  interested  may  know 
what  is  receivership  property. 

In  People  v.  Columbia  Car  Spring 
Co.  12  Hun.  585,  it  is  held  that  be- 


fore a  referee  is  appointed  to  pass 
upon  the  accounts  of  a  receiver,  the 
receiver  should  present  to  and  file 
with  the  court  a  full  and  definite  ac- 
count, verified  by  his  oath,  itemizing 
with  particularity  the  various  claims 
made  by  him,  and  the  reference 
should  relate  specifically  to  the  claims 
therein  made.  This  is  necessary  that 
the  parties  affected  by  the  claims  of 
the  receiver  may  have  an  opportunity 
to  determine  whether  they  are  willing 
to  consent  to  the  same  without  refer- 
ence, and  also  to  enable  the  court  to 
see  more  clearly  the  nature  and  extent 
of  the  claim. 

'  In  How  V.  Jones,  60  Iowa,  70,  it  is 
held  that  a  receiver  who  is  the  mere 
custodian  cannot  appeal  from  an 
order  directing  him  to  turn  over  the 
property  in  his  hands.  But  if  the 
order  erroneously  fixes  the  amount  of 
the  property  he  is  entitled  to  appeal. 

In  Fe  Guardian  Sav.  Inst.  78  N.  Y. 
408,  the  surety  for  a  receiver  in  a 
matter  involving  his  accounts  was 
held  to  be  entitled  to  an  appeal. 

In  Akers  v.  Veal,  68  Ga.  302,  the  re- 
ceiver was  held  not  to  be  entitled  to  a 
jury  as  passing  upon  his  accounts, 
but  on  objections  filed  by  creditors 
the  proper  practice  is  to  refer  the 
matter  to  an  auditor,  and  the  receiver, 
if  not  satisfied  with  the  finding  of 
fact,  may  file  exceptions  to  the  audit- 
or's report  and  may  demand  a  jury 
to  pass  upon  such  exceptions. 


PRACTICE  AND  PLEADING. 


633 


sold  bj  him  under  tlie  order  of  court  is  implied  from  the  direct 
power  given,  bat  his  power  to  do  so  is  not  to  be  exercised  until 
the  sale  is  reported  to  the  court  and  has  been  confirmed.' 


'  In  Simmons  v.  Wood,  45  How.  Pr. 
262,  it  is  held  that  no  transfer  of 
the  interest  could  be  made  by  the  re- 
ceiver until  his  report  was  made  and 
an  order  of  confirmation  granted  on 
notice  to  the  parties  who  had  appeared 
in  the  action.  Any  transfers  before 
such  confirmation  would  be  un- 
authorized, and  any  payment  by  the 
purchaser  before  such  time  would  be 
at  the  risk  of  the  purchaser. 

In  Koontz  v.  Northern  Bank,  83  U. 
S.  16  Wall.  196,  21  L.  ed.  465,  it  is  held 


that  it  issufficient  if  the  purchaser  from 
a  receiver  see  that  there  is  a  suit  in 
equity  in  which  the  receiver  was  ap- 
pointed; that  he  was  authorized  to 
sell  the  property;  that  a  sale  was 
made  under  such  authority  and 
confirmed  by  the  court;  and  that  the 
deed  accurately  describes  the  property 
or  interest  sold.  The  authority  con- 
ferred by  the  court  to  the  receiver 
carried  with  it  authority  to  give  to 
the  purchaser  evidence  of  a  transfer 
of  title. 


CHAPTER  XXIII. 

FORMS. 

No.    1.  Complaint  for  dissolution  of  copartnership. 

2.  "  against  insolvent  corporation. 

3.  "  allegation— Copartnership. 

4.  •'  "        — Foreclosure  proceedings. 

5.  «'  against  corporation  for  fraud  and  accounting, 

6.  Affidavit  for  appointment  in  foreclosure. 

7.  "        for  appointment,  general. 

8.  Notice 

9.  Order  appointing  receiver  general. 

10.  "  "                "       — Manufacturing  corporation, 

11.  "  "                "       — Railroad  foreclosure. 

12.  "  "                "                 "                "           Short  form. 

13.  "  "                "                 "                "           Trustees. 

14.  '•  "                "       — Partnership, 

15.  "  "                "       — Joint  business. 

16.  "  "                "       to  manage  mine. 

17.  "  "                "       because  of  misconduct  of  corporate  officers. 

18.  "  "                "       of  specific  personal  property. 

19.  "  "                "       without  prejudice  to  encumbrancers. 

20.  "  "                "        of  rents  and  profits. 

21.  "to  show  cause  why  not  appointed. 

22.  Bond  of  receiver. 

23.  "      "        "        Another  form. 

24.  "      "         "         Short  form. 

25.  Assignment  to  receiver. 

26.  Notice  by  receiver  to  creditors  and  debtors  of  appointment. 

27.  Order  on  creditors  to  exhibit  claims. 

28.  "    appointing  special  commissioner  to  report  claims. 

29.  "  "           commissioner  or  referee  to  report  claims. 

30.  "     to  pay  claims  accruing  prior  to  appointment. 

31.  "     requiring  defendant  to  turn  over  books,  etc. 

32.  Petition  by  receiver  to  compel  delivery  of  assets. 

33.  Affidavit  for  motion  to  compel  tenants  to  pay. 

34.  "        for  order  to  stay  actions. 

35.  Petition  by  receiver  for  leave  to  defend. 

36.  "       by       "         "       "to  settle  traffic  balances. 

37.  Order  to  "        to  settle  traffic  balances. 

38.  "      "  pay  rent. 

39.  Petition  by  receiver  for  leave  to  sell. 

40.  Order  to  "          to  sell 

41.  "    for  sale  of  perishable  property. 

42.  "    confirming  sale. 

634 


FORMS.  635 

43.  Petition  for  order  on  purchaser  to  complete  purchase. 

44.  Order  "  "  "  "  «♦ 

45.  Petition  for  leave  to  employ  counsel. 

46.  Order  granting  "    "        "  " 

47.  Petition  for  leave  to  pay  claims. 

48.  Notice  for  instructions  to  receiver. 

49.  Petition  "  "  "        "        to  pay. 

50.  "        "  "  "         "        "  surrender,  etc. 

51.  Notice  of  petition  for  leave  to  distribute. 

52.  Petition  of  receiver  for  leave  to  account  and  be  discharged. 

53.  Receiver's  account. 

54.  "  "        — Objections  to. 

55.  Notice  of  motion  for  revocation  of  appointment. 

56.  Order  discharging  receiver. 

57.  "    removing  and  appointing  substitute. 

58.  Notice  of  motion  to  discharge. 

59.  Order  to  show  cause  why  should  not  be  discharged. 

60.  Notice  of  motion  for  discharge. 

61.  Order  on  receiver  to  pay  over  funds  to  successor. 

62.  Affidavit  to  show  cause  in  contempt  proceedings. 

63.  "         "  continue  actions  against  receiver. 

64.  Petition  of  receiver  to  be  substituted  in  action. 

65.  Order  on  sheriff  to  withdraw  levy. 

66.  Order  to  receiver  to  sue. 

67.  Complaint  on  receiver's  bond  by  creditor. 

68.  Declaration  on  as.sessment — National  bank. 

69.  "  "  promissory  note —  " 

70.  Petition  of  receiver  of  national  bank  to  compromise. 

71.  Order  on        "         "        "  "      " 

Tlie  following  forms  for  use  in  receivership  cases  are  inserted 
in  response  to  what  lias  seemed  to  be  a  general  demand  of  the  bar 
and  particularly  the  young  and  inexperienced  practitioner,  to 
whom  they  will  probably  be  found  of  most  use.  It  will  be  need- 
less to  say,  however,  as  may  be  said  of  all  forms,  that  they  are  of 
necessity  general,  and  not  to  be  followed  implicitly  in  any  case, 
but  used  merely  as  guides  or  suggestions.  They  must  be  made 
to  conform,  not  only  to  the  usage  and  practice  of  each  particular 
state,  but  to  the  facts  and  circumstances  of  eacli  particidar  case 
or  class  of  cases. 

A  number  of  the  forms  herein  are  taken  by  permission  of  the 
publishers,  Messrs.  Anderson  &  Co.,  from  Loveland's  Forms  of 
Federal  Procedure  and  Thornton's  Indiana  Practice,  Volume  II. 
The  latter  is  particularly  adapted  to  the  code  practice  in  Indiana 
and  other  code  states. 


636  RECEIVERSHIPS. 

We  also  append  liereto  for  reference  a  list  of  works  containing 
approved  forms  in  receivership  matters  for  use  in  New  York  and 
other  states,  valuable  to  those  having  access  thereto. 

Approved  "Works  on  Forms. 

Abbott's  Principles  and  Forms  of  Practice,  vol.  II.,  p.  Ill 
et  seq.  (New  York). 

Barbour's  Chancery  Practice. 

Curtis's  Equity  Precedents,  p.  442  et  seq. 

Daniell's  Chancery  Forms,  pp.  884-907. 

Lansing's  Forms  of  Civil  Procedure, 

Loveland's  Forms  of  Federal  Procedure,  p.  223  et  seq. 

Lesea's  Forms  &  Precedents.     Canadian. 

Seton's  Forms  of  Judgments,  chap.  32.     English. 

Thornton's  Indiana  Practice,  vol.  II.,  p.  1384  et  seq. 

Wilcox's  Forms. 

Wild's  Journal  of  Entries.     Ohio. 

No.  1. 

COMPLAINT  FOR  THE  DISSOLUTION   OF  A  PAET. 
NERSHIP  AND  FOP  A  RECEIYEK' 

(Caption.) 

{Commencement.)     That  on  or  about  the —  day  of ,  189-, 

plaintiff  and  defendant,  by  a  contract  of  copartnership  of  that 
date,  duly  entered  into,  agreed  to  become  partners  for  the  pur- 
pose of  carrying  on  a  business  in  the  city  of  for  a 

period  of years  from  the  date  thereof,  under  the  name  and 

style  of ,  and  to  be   equally  interested    in  the  profits    and 

equally  liable  for  the  losses  of  said  partnership ;  and  the  plaintiff 
files  herewitli,  as  part  hereof,  a  copy  of  their  said  contract  of 
copartnership,  marked  "  Exhibit  A." 

That  by  said  contract,  it  was,  among  other  things,  agreed  that, 
should  either  of  the  partners  use  tlie  partnership  property  except 
for  the  purposes  of  the  partnership,  or  wilfully  neglect  or  refuse 
to  keep  just  and  proper  accounts  of  its  business,  the  other  or 
others  of  the  partners  should  be  at  liberty  at  once  to  dissolve  said 
partnership,  by  giving  to  the  partner  or  partners  so  offending  a 

'  See  ante,  chap.  XV. 


FORMS.  637 

notice  in  writing,  declaring  said  partnership  to  be  dissolved  and 
determined,  (if  not  part  of  express  contract  hut  of  implied 
contract^  so  state.) 

That  under  and  bj  virtue  of  the  said  contract  the  plaintiff  and 
the  said  defendant,  as  partners,  have  carried  on  the  said  business 
in  the  said  city  of for  the  period  tjf years. 

That  the  said  defendant  has  excluded  the  plaintiff  from  all  share 
in  and  control  over  the  partnership  affairs,  and  absolutely  refused 
to  permit  him  to  inspect  the  books  of  account  of  the  partnership, 
and  is  now  engaged  in  sending  parcels  of  partnership  goods  to  be 
auctioned,  where  they  have  been  sold,  and  are  now  selling,  at  a 
great  sacrifice ;  and  are  collecting  debts  due  to  said  firm,  and  in 
man}^  cases  where  those  debts  are  not  yet  due  and  payable,  have 
compounded  with  the  debtors  by  allowing  them  very  great  dis- 
counts for  prompt  payment  thereof,  {Here  set  forth  as  particu- 
larly any  other  grounds  of  violation  of  the  partner slvip  contract 
or  partnership  duty.,  and  conclude  .*) 

Wherefore  the  pl^.intiff  prays  that  a  receiver  may  be  appointed 
to  take  charge  of  all  the  partnership  books  and  papers,  accounts, 
goods  and  effects,  and  to  collect  the  debts  due  thereto,  and  to 
preserve  or  dispose  of  the  same  under  the  direction  of  this  court. 
{Add  tisual  and  necessary  prayer  as  in  other  cases,  post,  Form 
No.  3,  and  for  injunction,  if  desired.) 


No.  2. 

COMPLAINT  AGAINST  INSOLVENT  CORPOKATIOK' 

(Adapted  to  Code  practice.) 

(Caption.) 

Plaintiff  complains  of  the  defendant  and  alleges : 

That  the  defendant,  the Company,  is,  and  for  more  than 

before  the  recovery  of  the  judgment  hereinafter  mentioned 


was,  a  corporation  duly  organized  and  existing  under  the  laws  of 
this  state,  and  its  general  business  is  transacted  and  its  principal 
oflSce  is,  and  was  at  the  time  of  the  commencement  of  this  action, 

located  in  the  city  of ,  county  of ,  and  state  of . 

That  on  the day  of ,  189-,  this  plaintiff  recovered  a 

judgment  against  the  defendant  in  the court  of  this  state  for 

"the  sum  of dollars  and cents,  and  costs  of  suit. 

'  The  statutory  requirements  for  proceedings  of  this  nature  must  be  strictly 
followed.     See  anie,  chap.  XII. 
See  Thornton's  Indiana  Practice. 


038  RECEIVERSHIPS. 

That  an  execution  against  the  defendant  was  duly  issued  on 

said  judgment  to  tlie  slierifl:  of  tlie  county  of  ,  on  the  — 

(Jay  'of  ^- 189-,  and  that  said  execution  has   been   returned 

wholly  unsatisfied.  _       « 

Tiiat  the  said  judgment  and  the  claim  therefor  remain  wholly 
un]iaid. 

That  the  said  defendant  is,  as  the  plaintiff  is  informed  and  be- 
lieves, insolvent,  and  owes  a  large  amount  of  indebtedness  and 
claims  which  it  is  unable  to  pay.  {State  the  facts  constituting 
insolvency.^ 

Wherefore  plaintiff  demands  judgment : 

That  the  property  of  the  defendant  corporation  be  sequestered 
and  distributed. 

That  the  proceeds  thereof  be  justly  and  fairly  distri])uted 
among  the  creditors  of  the  defendant,  including  the  plaintiff",  in 
the  order  and  in  the  proportions  prescribed  by  law  in  the  case  of 
a  voluntary  dissolution  of  a  corporation. 

That  a  receiver  of  the  property  and  effects  of  the  defendant 
corporation  may  be  appointed,  pursuant  to  law,  with  the  usual 
powers  and  authority  conferred  upon  receivers  in  such  cases. 

And  tliat  the  plaintiff  have  such  other  and  further  relief  in  the 
premises  as  may  be  just. 

No.  3. 

ALLEGATION   OF   BILL   OR  COMPLAINT   FOR  RE- 
CEIVER OF  PARTNERSHIP  PROPERTY. 

That  in  pursuance  of  said  partnership  agreement  they  pur- 
chased a  stock  of of  the  value  of dollars,  established 

and  opened  a store  in  said  city,  and  have  maintained  the 

same  hitherto. 

That  plaintiff  and  defendant  no  longer  desire  to  maintain  said 
copartnership,  and  have  dissolved  the  same,  but  are  unable  to 
agree  upon  a  division  of  the  stock  of  goods,  wares  and  merchan- 
dise now  on  hand. 

{Or),  that  the  defendant,  not  regarding  his  duties  as  a 
member  of  said  partnership,  has  converted  to  his  own  personal 
use  and  benefit  a  large  amount  of  the  partnership  accounts,  to 

wit, dollars,  and  has  refused  and  still  refuses  to  account  for 

the  same,  although  the  plaintiff"  has  requested  him  so  to  do. 

{Or,  here  set  forth  any  other  ground  for  which  a  receiver  may 
he  appointed  as  shown  in  chap.  XI.  and  conclude:) 

Wherefore  plaintiff  prays  that  a  receiver  may  be  appointed  to 
take  charge  of  and  sell  said  stock  of  goods,  wares  and  merchan- 
dise (and  "a  decree  dissolving  said  partnership). 


FORMS.  639 


If  it  is  desired  to  have  the  receiver  continue  the  business  as  a 
goins:  concern  it  is  well  to  emhodj  it  in  the  prayer  and  also  show, 
in  partnership  cases,  the  necessity  for  so  doing. 


No.  4. 

ALLEGATION'S  OF  BILL  OR   COMPLAINT   IN   FORE- 
CLOSURE PROCEEDINGS.' 

That  the  mortgaged  premises,  upon  a  sale  thereof  at  public  auc- 
tion, cannot  bring  sufficient  to  satisfy  the  debt  due  the  plaintiff 
with  interest,  costs,  premiums  of  insurance,  and  arrears  of  taxes, 
as  more  fully  appears  by  the  affidavits  of annexed. 

{Oi\  that  said  above-described  premises  are  an  inadequate  security 
for  the  payment  of  the  said  mortgage  indebtedness,  interest,  costs 
and  advancements  and  that  said  inadequacy  exists  by  reason  of 

waste  committed  by  said  mortgagor  (or  grantee)  in  this  ( ) ;  or 

by  reason  of  destruction  or  injury  of  the  buildings  on  said  prem- 
ises by  fire  ;  or  depreciation  in  the  market  and  rental  value  of  said 
premises.) 

That  said  premises  at  the  commencement  of  this  action  were, 
and   ever  since  have  been,  in  the  possession  of  the  defendant 

( ),  above  named,  under  the  conveyance  above  stated,  and  that 

all  persons  in  possession  of  said  premises,  as  tenants  or  otherwise, 
at  the  time  when  this  action  was  commenced,  are  defendants 
herein. 

That  the  said ,  who  is  now  primarily  liable  for  the  debt 

secured  by  mortgage,  as  well  as  the  defendant ,  the  mort- 
gagor and  obligor  in  said  bond,  are  both  pecuniarily  irresponsible 
and  unable  to  pay  the  probable  deficiency  on  the  sale  of  the 
mortgaged  premises,  as  appears  by  the  afiidavit  of  an- 
nexed. 

{Or,  that  said mortgagor  and are  each  insolvent  and 

unable  to  pay  any  deficiency  that  may  be  rendered  against  them ; 
that  judgments  have  been  rendered  against  them,  and  executions 
have  been  issued  thereon  and  returned  unsatisfied  in  whole  or  in 
part  and  still  remain  unsatisfied  ;  or  that  they  own  no  real  or  per- 
sonal property  liable  to  execution  ;  or  any  other  fact  showing  in- 
solvency or  inability  to  pay  a  deficiency  judgment.) 

That  the  said  premises  are  occupied  for  the  purpose  of , 

and  that  the  entire  rentals  and  income  therefrom,  as  your  peti- 
tioner is  infoi'med  and  believes,  amount  to  the  sum  of dol- 
lars annuall}^  and  no  more. 

'  See  ante,  chap.  X. 


640  RECEIVERSHIPS. 

No.  5. 

COMPLAINT  BY  CREDITOR  AGAINST  CORPORA- 
TION FOR  AN  ACCOUNT,  AND  TO  SET  ASIDE 
A  FRAUDULENT  JUDGMENT,  AND  FOR  A  RE- 
CEIVER. 

(Adapted  to  Code  practice.) 
(Caption.) 

{Commencement.)     That  the  {nam,e  of  corporatiori)  is  a  corpo- 
tion  duly  organized  under  the  general  laws  of  the  state  of 


for  the  purpose  of  carrying  on  the  business  of in  said  state. 

That  at  the ,  189-,  terra  of  the court  of  the  state  of 

,  the  plaintiff  recovered  a  judgment  against  said  corporation 

for  the  sum  of  % ,  which  judgment  still  remains  in  full  force 

and  unpaid. 

That  on  the day  of ,  189-,  an   execution   was  duly 

issued  out  of  said  court  against  said  defendant,  and  delivered  to 

the  sheriff  of county,  of  the  state  of ,  commanding  him 

to  levy  the  same  upon  the  goods  and  chattels  of  said  corporation 
and  for  want  thereof  upon  the  lands  and  tenements  of  the  same, 

which  execution   on   the day   of ,   189-,    was   returned 

wholly  unsatisfied.  (  Yary  to  suit  form  of  execution  in  state 
where  used.) 

That  the  defendants  are  directors  of  said  corporation,  and  on 

the day  of ,  189-,  suffered  judgment  to  be  recovered 

against  said  corporation  for  f in  favor  of  {Allege  jparticularly 

t'he  judgment  and  the  facts  which  are  claim^ed  in  rendering  it 
fraudulent.  Or  state  any  other  ground  which  is  a  sujficient 
basis  for  the  action.) 

That  said  corporation  is  insolvent,  and  entirely  unable  to  pay 
its  debts  {or  other  statutory  grounds). 

That  there  is  now  due  from  the  defendant  to  the  plaintiff  on 

liis  said  judgment  the  sum  of  $ ,  with  interest  from  the  

day  of  - — \  189-. 

Plaintiff  therefore  prays  and  asks  that  said  directors  be  required 
to  account  for  the  funds  and  property  of  said  corporation  com- 
mitted to  their  charge,  and  for  all  corporate  property  acquired  by 
themselves  or  lost  by  a  violation  or  neglect  of  their  duty  as  di- 
rectors, and  that  they  be  required  to  pay  all  sums  of  money  found 
due  from  them ;  that  a  receiver  may  be  appointed  to  take  charge 
of  the  property  and  effects  of  said  corporation,  and  that  said  de- 
fendants may  be  enjoined  from  transferring  any  of  the  property 
or  effects  of  said  corporation  until  the  further  order  of  this  court; 
and  that  upon  the  final  hearing  the  said  judgment  be  set  aside. 


FORMS.  641 

and  the  property  sold,  and  the  proceeds  thereof  appHed  to  the 
payment  of  the  plaintiif's  judfyinent ;  and  for  such  other  and 
further  relief  as  justice  and  equity  may  require. 


No.  6. 

AFFIDAVIT  FOR  APPOINTMENT  OF  RECEIYER  IN 
FORECLOSURE  PROCEEDINGS.^ 


(Title  of  Court  and  Action.) 


,  beino;  duly  sworn  on  oath,  says : 

That  he  is  the  (plaintiff)  in  the  above-entitled  action ;  that  this 
action  is  brought  for  the  foreclosure  of  a  mortgage  executed  by 
the  defendant to  secure  the  payment  of  the  sura  of dol- 
lars with  interest,  dated  the day  of and  duly  recorded 

on  the day  of ,  in  the  oliice  of  the  Recorder  of  Deeds 

of  said county  upon  the  premises  therein  described  as  fol- 
lows, to  wit :  said  indebtedness  being  evidenced  by  a  promissory 

note  with  interest  at  the  rate  of ;  that  there  is  now  due  and 

nnjiaid  upon  said  note  and  mortgage  now  owned  by  the  said 
plaintiff  the  sum  of dollars  principal,  and dollars  inter- 
est thereon ;  that  the  plaintiff,  in  order  to  preserve  the  lien  of 
his  mortgage  and  under  the  terms  and  conditions  thereof,  has  ad- 
vanced the  sum  of dollars  as  premiums  for  insurance  upon 

the  buildings  on  said  ^^remises ;  that  tiie  defendants  have  failed 

to  pay  the  taxes  assessed  on  the  said  premises  for  the  year  of , 

amounting  to  the  sum  of dollars  and  that  the  plaintiff  has  paid 

the  said  taxes  pursuant  to  the  terras  and  conditions  of  said  mort- 
gage; that  the  said  mortgaged  premises  are  an  inadequate  security 
for  the  payment  of  the  amount  due  upon  said  mortgage,  ])riiicipal 
and  interest,  and  the  advanceiTents  made  by  plaintiff  for  insurance 
and  taxes  as  above  stated;  that  such  inadequacy  is  caused  by 
{State  whatever  the  grounds  of  inadequacy  are,  such  as  waste,  de- 
crease of  market  and  rental  value,  or  otherwise)  that  the  said 
mortgagor  {and  other  persons  liallefor  the  ijayment  of  the  mort- 
gage  debt )  is  insolvent,  having  no  property  liable  to  execution 
(that  judgments  have  been  rendered  against  said  mortgagor  and 
executions  returned  thereon  no  property  found)  that  said  prem- 
ises, at  the  time  of  the  commencement  of  these  proceedings,  were 

and  are  now  in  the  possession  of ,  defendant  herein,  who  claims 

to  own  the  same  as  ])urchaser  thereof  from  the  said  mortgagor 

nnder  a  deed  of  conveyance  thereof  bearing  date  the day  of 

,  but  which  conveyance  is  subject  to  the  mortgage  sought  to 

'See  ante,  chap.  X. 
41 


642  RECEIVERSHIPS. 

be  foreclosed  herein ;  that  the  rental  value  of  said  premises  will 

not  exceed  the  sum  of dollars  per  annum.     (7/^  the  mortgage 

contains  a  grant  of  the  rents  and  profits  of  the  mortgaged prein- 
ises  state  the  sa^ne  fully  and  particularly,  and  if  there  is  a  clause 
therein  providing  for  the  apjwintment  of  a  receiver,  set  out  such 
clause  hi  the  coords  of  the  mortgage  and  the  defaults  upon  which 
the  appointment  hy  the  terms  of  the  mortgage  is  to  he  hased.) 


No.  7. 

AFFIDAVIT  FOR  APPOINTMENT  OF  RECEIVER  IN 
A  JUDGMENT  CREDITOR'S  ACTION  TO  SEQUES- 
TRATE  CORPORATE   PROPERTY.' 

(Adapted  to  Code  practice.) 
(Caption.) 

,  being  duly  sworn,  says : 

That  he  is  the  plaintiff's  attorney  herein. 

{State  grounds,  as  thus:)  That  judgments  have  been  entered 
acjainst  tlie  defendant  in  various  actions  brought  against  it  in  this 
and  other  courts ;  that  in  some  of  said  actions  executions  have 
been  issued ;  that  other  suits  are  pending  on  simple  contract  debts 
and  on  claims  for  damages  to  a  large  amount,  and  also  an  action 
for  the  foreclosure  of  a  mortgage  made  by  the  defendant  to  the 
Company  in  trust. 

That  the  defendant  is  insolvent  and  unable  to  pay  its  debts,  and 
that  if  a  receiver  is  not  appointed  at  a  very  early  date  there  is 
danger  that  some  of  the  creditors  of  the  defendant  may  obtain  an 
undue  preference. 

That  for  these  reasons  an  order  to  show  cause  is  desired  and 
that  no  previous  application  has  been  made  for  such  an  order. 


No.  8. 

NOTICE  OF  APPLICATION  FOR  THE  APPOINTMENT 
OF  A  RECEIVER.^ 

(Caption.) 

To : 

The  defendant  in  the  above-entitled  cause  is  hereby  notified 

that  on  the day  of ,  189—,  at o'clock  in  the 

noon,  or  as  soon  thereafter  as  counsel  can  be  heard,  the  plaintiff 

'See  ante,  chap.  IX. 

'See  ante,  chap.  I. ;  also  §  374. 


FORMS.  643 

will,  at  the  court-honse  {or  the  judge's  chambers)  in  the  city  of 

,  in  said  county,  make  application  to  the  Honorable (one 

of  the  judges,  or  the  judge  of  the Court),  for  the  appointment 

of  a  receiver  in  said  cause,  to  take  charge  of  and  sell  the  property 
in  controversy.  {Or  state  for  what  j^'^^'^pose  a  receiver  is  to  he 
asked.) 

{If  the  application  is  hased  on  hill  or  petition  filed,  so  state  /  if 
upon  affidavits,  serve  copies  of  same  if  the  ■p>'^<^Gtice  or  rules  of 
court  so  require.  If  the  notice  is  to  refer  the  cause  to  a  master  in 
chancery  or  referee  to  hear  the  application,  take  evidence,  and 
report  his  conclusions.     Yary  notice  to  correspond^ 

Dated  this ,  189—. 


Attorney  for  PIff. 

I  hereby  acknowledge  service  of  the  above  notice  this  — —  day 
of ,  189—. 


No.  9. 
ORDER  APPOmTING  RECEIVER.*     (General  Form.) 
(Title.) 

Come  now  the  parties,  and  upon  reading  and  filing  the  affida- 
vit of ,  verified  tlie day  of  ,  189 —  {or,  after  hear- 
ing the  evidence  of  said  parties),  whereby  it  satisfactorily  appears 
to  the  court  that  {briefly  indicating  the  facts  estahlished)  and  on 

reading  and  filing  proof  of  due  notice  to  the  defendant, ,  of 

this  motion,  and  after  hearing  argument  of  counsel  for  plaintiff, 

and ,  of  counsel  {or,  and  no  one  appearing)  for  the  defendant 

in  opposition,  and  the  court  being  fully  advised  in  the  premises, 

no\v',  on  motion  of ,  attorney  for  j)laintilf,  which  motion  the 

court  now  finds  should  be  sustained  : 

It  is  ordered  and  decreed  that be,  and  hereby  is,  appointed 

receiver  of  {clearly  designating  the  property)  with  the  usual  pow- 
ers pending  this  action  {or  specify  powers). 

That  before  entering  upon  the  duties  of  his  trust  the  said  re- 
ceiver execute  to ,  and  file  with  the  clerk  of  this  court,  a  bond 

with sufficient  sureties  to  be  approved   by  this  court  {or  the 

clerk  if  the  statute  permits  or  the  court  so  directs)  for  the  faitbful 
discharge  of  his  duties  as  receiver,  and  take  an  oatli  to  faitli fully 
perform  his  duties  as  such  receiver. 

'See  ante,  chap.  XL,  §  22;  also  §  381. 


644  KECEIVERSIIIPS. 

No.  10. 

ORDEK  APPOINTING  KECEIVER  FOR  A  MANUFAC- 
TURING CORPORATION.* 

(Caption.) 

Upon  readiiio;  and  filincj  the  verified  bill  of  complaint  in  this 

cause,  together  with  the  verified  affidavits  of and ,  and 

the  exhibits  in  support  thereof,  and  on  motion  of  the  counsel  for 
plaintiff  and  counsel  for  defendant  appearing   and   consenting 

thereto,  it  is  ordered  by  the  court  that ,  of ,  in  the  state 

of ,  and ,  of ,  in  the  state  of ,  be  and  they  are 

hereby  appointed  receivers  of  this  court  of  all  and  singular  the 

property  of  the Company  of  every  description,  and  all  money, 

claims  in  actions,  credits,  bonds,  stocks,  leasehold  interests  or  oper- 
ating contracts,  and  other  assets  of  every  kind,  and  all  other  prop- 
erty, real,  personal  or  mixed,  held  or  possessed  by  said  company, 
to  have  and  to  hold  the  same  as  ofiicers  of  and  under  the  orders 
and  directions  of  this  court. 

The  said  receivers  are  hereby  authorized  and  directed  to  take 
immediate  possession  of  all  and  singular  the  property  above  de- 
scribed, and  to  continue  the  business  of  said  company,  until  the 
further  order  of  court. 

Each  and  every  of  the  ofiicers,  directors,  agents,  and  employees 
of  said Company  are  hereby  required  and  commanded  forth- 
with, upon  demand  of  the  said  receivers,  to  turn  over  and  deliver 
to  such  receivers  any  books,  papers,  moneys,  deeds,  property, 
or  vouchers  for  the  property,  under  their  control. 

The  said Company  and  its  officers  are  hereby  directed  im- 
mediately to  execute  and  deliver  to  the  said  receivers  deeds  of  all 
real  estate  now  owned  or  possessed  by  said  company,  and  trans- 
fers and  assignments  of  all  their  property. 

Said  receivers  are  hereby  fully  authorized  to  institute  and  pros- 
ecute all  such  suits  as  they  may  deem  necessary,  and  to  defend 
all  such  actions  instituted  against  them  as  such  receivers,  and  also 
to  appear  in  and  conduct  the  prosecution  or  defense  of  any  suits 
against  the Company. 

The  said  receivers  are  hereby  authorized  and  directed  out  of 
the  moneys  coming  into  their  hands  to  pay  and  discharge  all 
amounts  due  to  employees  upon  the  current  pay-roll. 

Each  of  said  receivers  is  required  to  file  with  the  clerk  of  the 
court  within  ten  days  from  date  a  j)roper  bond  with  sureties  to  be 

approved  by  the  clerk  of  this  court,  in  the  penal  sum  of  

dollars. 

'  See  ante,  chap.  II.,  §  22;  also  §  381. 


FORMS.  C45 

All  creditors  of  said Company  are  hereby  enjoined  from 

in  any  way  internieddlino;  witli  the  property  hereby  directed  to 
be  tnrned  over  to  said  receivers;  and  all  officers,  directors,  and 
ai^ents  of  said Company  are  hereby  enjoined  from  interfer- 
ing^ with  or  disposing  of  said  property  of  said Company  in 

any  way,  except  to  transfer,  convey,  and  turn  over  the  same  to 
said  receivers. 


Judffe. 


No.  11. 


OKDER  FOR  APPOmTMENT  OF  RECEIVER  IN  RAIL- 
ROAD FORECLOSURE  WITH  FULL  GENERAL 
POWERS.' 

(Title.) 

{^Recite  hearing  of  court  and  findings^     It  is  ordered  and 

decreed  that be  and  he  is  hereby  appointed  receiver  of  all 

and  singular  the  property  and  franchises  of  the  said  defendant 
mentioned  and  described  in  the  complaint  in  this  action,  and  all 
and  singular  the  appurtenances  in  any  wise  thereto  appertaining, 
and  of  all  record  books,  papers  and  accounts  of  the  said  company 
in  any  wise  appertaining  to  the  business  thereof,  and  necessary  to 
enable  him  to  properly  and  efficiently  perform  the  duties  imposed 
upon  him  by  this  order. 

That  he  give  a  bond  for  the  faithful  performance  of  his  duties 
as  receiver  in  the  premises  in  the  sum  of dollars,  with  sure- 
ties (jointly  and  severally  bound),  to  be  approved  (as  to  form  and 
sufficiency)  by  this  court,  and  that  on  the  hling  of  such  bond  he 
enter  forthwith  upon  the  performance  of  his  duties  as  such  re- 
ceiver. 

And  it  is  further  ordered  and  decreed  that  as  soon  as  may  be 
after  he  shall  have  entered  upon  the  performance  of  his  duties 
the  said  receivei"  shall  make  and  file  with  the  clerk  of  this  court 
a  true,  full  and  complete  inventory  of  all  and  singular  the  prop- 
erty of  the  said  comjiany,  real,  personal  and  mixed,  of  all  which 
he  is  appointed  receiver. 

The  said  receiver  shall  continue  the  operation  of  the  said  road 
in  the  ordinary  and  usual  course  as  the  same  is  now  operated  in 
the  common  carriage  of  freight  and  passengers,  liaving  due  regard 
to  the  public  interest  and  the  accommodation  of  the  public,  and 
keeping  the  premises  and  property,  both  real  and  personal,  in 

•See  aide,  chap.  II.,  ^  22;  also,  chap.  XIV".;  also,  chap.  XXII.,  §  381. 


G46  RECEIVERSHIPS. 

good  condition  and  repair,  to  the  end  that  the  said  road  may  be 
ethciently  operated  with  safety  and  convenience  to  the  pubhc. 
To  the  same  end  lie  shall,  from  time  to  time,  employ  and  dis- 
charge all  needful  laborers,  servants  and  agents,  and  purchase  and 
pay  for  all  such  needful  material  and  supplies  as  may  seem  to  him 
necessary  and  proper  in  the  exercise  of  a  sound  discretion,  vs^ith 
leave  to  apply  to  the  court  from  time  to  time  as  he  may  be  advised 
for  directions  in  the  pi'emises.  He  shall  settle  and  adjust,  accord- 
ing to  usage  and  the  usual  course  of  business,  all  outstanding 
traffic  balances  with  other  railroads,  and  like  balances  from  time 
to  time  as  may  arisCi  And  he  shall  have  power  to  make  all  usual, 
necessary  and  proper  arrangements  for  the  interchange  of  busi- 
ness in  the  way  of  traffic  arrangements.  And  he  shall  have 
power  generally  to  do  and  perform  all  things  usual  and  proper 
according  to  the  rules  and  usages  of  good  railroad  management, 
to  increase  the  business  of  said  railroad,  and  promote  the  con- 
venience of  the  public. 

He  shall  have  power  to  prosecute  and  defend,  without  the 
further  order  of  this  court,  all  existing  actions  by  or  against  said 
company,  and  to  pay  and  defray  the  usual  and  ordinary  expenses 
incident  thereto.  He  shall  have  power  to  commence  and  prose- 
cute any  actions  which  in  the  usual  course  of  business  he  may 
deem  it  proper  and  necessary  to  commence  thereafter,  either  in 
the  name  of  the  said  company  or  in  his  own  name  as  such  receiver, 
as  he  may  be  advised.  lie  shall  have  full  power  to  defend  any 
and  all  suits  that  may  hereafter  be  brought  against  the  said  com- 
pany or  against  himself  as  such  receiver  (by  the  permission  of 
this  court),  and  to  defray  the  necessary  and  proper  expense  of 
such  prosecution  and  defenses.  Pie  shall  do  whatever  may  be 
needful  to  maintain  and  preserve  the  corporate  organization  and 
franchises  of  the  said  company  till  final  judgment  in  this  action, 
and  to  defray  the  necessary  and  proper  expenses  incident  thereto, 
and  in  all  and  singular  the  premises  he  shall  be  subject  to  such 
orders  and  directions  as  this  court  may  from  time  to  time  make, 
and  he  is  authorized  to  apply  from  time  to  time  for  such  orders 
and  directions  as  he  may  be  advised. 

As  soon  as  may  be  reasonably  done,  after  he  sliall  have  entered 
upon  the  performance  of  his  duties,  the  said  receiver  shall  pay 
and  discharge  all  debts  due  from  said  company  to  laborers, 
servants,  agents  and  employees  of  all  kinds  for  services  rendered 
in  and  about  the  operation  of  the  railroads  of  the  said  company, 
and  in  and  about  the  conduct  and  management  of  its  lawful  busi- 
ness. Such  payments  shall  not  embrace  debts  due  more  than 
four  months  prior  to  the  entry  of  this  order  without  the  further 
order  of  this  court  in  the  premises. 

He  shall  in  like  manner  ascertain  the  amount  due  by  the  said 
company,  and   un2)aid,  for  current  materials  and   supplies  pur- 


FORMS.  647 

chased  for  the  use  and  operation  of  the  railroads  of  the  said  com- 
pany within months  prior  to  the  entry  of  this  order,  and  he 

sliall  pay  the  amount  found  to  be  jnstly  due,  but  he  shall  not 
have  power  to  pay  such  debts  of  longer  standing  without  the  fur- 
ther order  of  this  court. 

He  shall  have  power  to  redeem  any  and  all  securities  of  the 
compan}'-,  now  pledged  as  security  for  loans  of  money,  and  if 
needful  shall  have  power  to  borrow  money  for  this  purpose,  and 
he  shall  also  have  power  to  borrow  money  if  needful,  in  his  judg- 
ment, in  order  to  comply  with  the  directions  contained  in  this 
order,  and  so  far  as  may  be  needful  to  pay  for  current  necessities 
for  labor,  and  for  no  other  pui-pose  without  the  order  of  this 
court. 

The  receiver  shall  keep  a  full,  true  and  particular  account  of 
all  his  acts  and  doings  as  such,  of  all  the  property,  rents,  revenues, 
and  incomes,  and  of  all  his  payments  and  disbursements  in  the 
performance  of  the  duties  imposed  by  this  order.  And  he  shall 
once  in  every  three  months,  and  oftener  if  required,  render  to 
this  court,  and  file  with  the  clerk  thereof,  a  true,  full  and  particu- 
lar account  of  all  his  receipts  and  disbursements  in  the  premises. 
He  shall  keep  all  balances  of  moneys  in  his  hands  on  deposit  in 
some  bank  of  approved  credit  subject  to  his  order,  and  he-  shall 
not  pay  out,  but  safely  keep  subject  to  the  further  order  of  this 
court,  all  such  moneys,  except  in  so  far  as  payment  and  dis- 
bursements are  authorized  by  the  terms  of  this  order.  The 
premises  considered,  it  is  further  ordered  that  the  said  defendant, 
the  Company,  be  and  the  said  company  is  hereby  com- 
manded and  strictly  enjoined  not  to  pay,  or  cause  or  permit  to  be 
paid,  any  interest  upon  any  of  the  mortgage  bonds  of  the  said 
company  until  the  further  order  of  this  court  in  the  premises. 

And  the  said  company,  and  each  and  all  of  the  officers  and 
agents  thereof,  are  also  strictly  cominanded  and  enjoined  to  deliver 
up  and  render  to  the  said  receiver,  when  he.  sliall  have  become 
qualified  according  to  the  terms  of  this  order  to  enter  upon  his 
duties  as  receiver,  all  and  singular  the  premises  whereof  he  is 
thereby  appointed  receiver;  and  it  is  further  ordered  that  each  of 
the  said  defendant  trustees  respectively  of  the  mortgages  referred 
to  in  this  action  be,  and  they  hereby  are,  severally  and  respectively 
restrained  and  enjoined  from  commencing  or  prosecuting,  or 
causing  or  permitting  to  be  commenced  or  prosecuted,  any  action 
against  the  said  company,  or  in  any  wise  affecting  the  property 
thereof,  and  from  in  any  wise  interfering  with  the  said  company 
or  the  property  thereof  as  such  trustees  without  the  further  order 
of  this  court. 


648  KECEIVERSHIPS. 

No.  12. 

SHORT  FORM  OF 
ORDER  APPOINTING  RECEIVER  FOR  A  RAILWAY.' 

(Caption.) 

Upon  reading  and  considering  the  verified  bill  in  this  cause, 
together  with  the  evidence  adduced,  on  motion  of  counsel  for  the 
plaintiff,  the  defendant  having  been  duly  notified  to  appear  by  its 

counsel,  it  is  ordered   by  the  court  that be  and  is  hereby 

appointed  receiver  of  this  court  of  all  and  singular  the  property, 

assets,   rights,   and    franchises    of    the  Railway    Company 

described  in  the  bill  of  complaint  herein,  wherever  situated,  in- 
cluding all  the  railroad  tracks,  terminal  facilities,  real  estate,  ware- 
houses, offices,  stations,  and  all  other  buildings  and  property  of 
every  kind  owned,  held,  possessed,  or  controlled  by  said  company, 
together  with  all  other  property  in  connection  therewith,  and  all 
moneys,  choses  in  action,  credits,  bonds,  stocks,  leasehold  interests, 
operating  conti'acts,  and  other  assets  of  every  kind,  and  all  other 
property,  real,  personal,  and  mixed,  held  or  possessed  by  it,  to 
have  and  to  hold  the  same  as  the  officer  of  and  under  the  orders 
and  directions  of  the  court. 

The  said  receiver  is  hereby  authorized  and  directed  to  take 
immediate  possession  of  all  and  singular  the  property  above  de- 
scribed, wherever  situate  or  found,  and  to  continue  the  operation 
of  the  railroad  of  the  said  company,  and  to  conduct  systematically, 
in  the  same  manner  as  at  present,  the  business  and  occupation  of 
carrying  passengers  and  freight,  and  the  discharge  of  all  duties 
obligatory  on  said  company. 

And  said Railroad  Company,  and  each  and  every  of  its 

officers,  directors,  agents  and  employees  are  hereby  required  and 
commanded  forthwith  to  turn  over  and  deliver  to  such  receiver, 
or  his  duly  constituted  representative,  any  and  all  books  of  ac- 
counts, vouchers,  papers,  deeds,  leases,  contracts,  bills,  notes, 
accounts,  money  or  other  property  in  his  or  their  hands  or  under 
his  or  their  control,  and  they  are  hereby  commanded  and  required 
to  obey  and  conform  to  such  orders  as  may  be  given  them  from 
time  to  time  by  said  receiver,  or  his  duly  constituted  representa- 
tive, in  conducting  the  said  railway  and  business,  and  in  discharg- 
ing his  duty  as  said  receiver.  And  they  and  each  of  them  are 
hereby  enjoined  from  interfering  in  any  way  whatever  with  the 
possession  or  management  of  any  part  of  the  business  or  property 

'  See  ante,  chap.  II.,  §  22;  chap.  XIV.;  chap.  XXII.,  §  381. 
Foster's  Federal  Practice. 


FOPtMS.  6i9 

over  which  said  receiver  is  so  appointed,  or  from  in  any  wav  pre- 
venting or  seekino-  to  prevent  the  discharge  of  his  duties  a's  such 
receiver.  Said  receiver  is  hereby  fully  authorized  to  continue 
the  business  and  operate  the  railway  of  said  company,  and 
manage  all  its  property  at  his  discretion  in  such  manner  as  will, 
in  his  judgment,  produce  the  most  satisfactory  results  consistent 
with  the  discharge  of  the  public  duties  imposed  on  said  company, 
and  to  collect  and  receive  all  income  therefrom  and  all  debts  due 
said  company  of  every  kind,  and  for  such  purpose  he  is  hereby 
invested  with  full  power  at  his  discretion  to  employ  and  discharge 
and  fix  the  compensation  of  all  sucli  officers,  counsel,  managers, 
agents  and  employees  as  may  be  required  for  the  proper  dis- 
charge of  the  duties  of  his  trust. 

And  said  receiver  is  directed  to  deposit  the  moneys  coming  into 

his  hands  in  some  bank  or  banks  in  the  city  of , ,  and 

to  report  his  selection  to  the  court. 

Said  receiver  is  hereljy  fully  authorized  and  empowered  to 
institute  and  prosecute  all  such  suits  as  may  be  necessary,  in  his 
judgment,  to  the  proper  protection  of  the  property  and  trust 
hereby  vested  in  him,  and  likewise  defend  all  actions  instituted 
against  him  as  receiver,  and  also  to  appear  in  and  conduct  the 
prosecution  or  defense  of  any  or  all  suits  or  proceedings  now 
pending  in  any  court  against  said  company,  the  prosecution  or 
defense  of  which  will,  in  the  judgment  of  said  receiver,  be  neces- 
sary and  proper  for  the  protection  of  the  property  and  rights 
placed  in  his  charge,  and  for  the  interest  of  the  creditors  and 
stockholders  of  said  company  said  receiver  is  hereby  required 
to  give  bond  in  the  sum  of  one  hundred  thousand  dollars 
($100,000)  with  security  satisfactory  to  this  court,  for  the  faithful 
discharge  of  his  duties,  and  is  also  required  to  make  and  file  full 
reports  in  this  court  quarterly. 

And  the  court  reserves  the  right  by  orders  hereinafter  to  be 
made,  to  direct  and  control  the  payment  for  all  supplies,  materials, 
and  other  claims,  and  to  in  all  respects  regulate  and  control  the 
conduct  of  said  receiver. 


Judge. 

And  tliereupon  came  in  open  court  said ,  and  accepted  such 

appointment,  and  was  thereupon  duly  sworn  according  to  law, 

and  tendered  his  Ijond  as  recpiired  by  said  order,  with and 

as   sureties  therein,   which   bond  is  hereby  approved   and 

accepted. 


650  RECEIVERSHIPS. 

No.  13. 

ORDER  APPOINTING  RECEIVER  ON  FORECLOSURE 
BY  THE  TRUSTEES  OF  A  CORPORATION  MORT- 
GAGE FOR  THE  BENEFIT  OF  BONDHOLDERS.' 

(Title.) 

Upon  reading  and  filino;  the  verified  complaint  (or  bill  of  com- 
plaint) herein,  and  the  affidavit  of ,  verified ,  18D-,  and 

tlie  afildavit  of ,  verified 189-,  and  it  appearincr  that 

by  an  order  of  this  conrt  entered  herein  on  the day  of 

189-, to  show  cause  why  a  receiver  of  all  the  premises  and 

property  described  in  the  complaint  should  not  be  appointed,  with 
the  usual  powers  of  receivers  in  such  cases,  and  with  all  the 
powers  provided  for  in  the  indentures  of  mortgage  set  forth  in 
the  complaint,  and  why  the  plaintiff  should  not  have  other  or 
further  relief  in  the  premises  as  may  be  just ;  togetlier  with  due 
proof  of  tlie  service  of  the  summons  in  this  action  and  said  com- 
plaint, affidavit  and  order,  to  show  cause,  upon  the  said  defendant. 

And  after  hearing ,  Esq.,  of  counsel  for  the  phiintiff,  and 

,  Esq.,  on  behalf  of  the  defendant  in  opposition,  and  on 

motion  of ,  attorney  for  plaintiff,  for  a  receiver  herein,  which 

motion  the  court  now  finds  should  be  granted, 

It  is  ordered  and  adjudged  that be  appointed  receiver  of 

all  the  premises  and  property  described  in  the  complaint,  (or  bill) 
with  the  usual  powers  of  receivers  in  such  cases,  and  with  all  the 
powers  provided  for  in  the  mortgage  or  deed  of  trust  set  forth  in 
the  complaint,  the  property  described  in  said  mortgage  embracing 
all  the  property,  both  real  and  personal,  and  all  the  goods  and 
chattels,  franchises,  privileges,  rights  and  liberties  to  the Com- 
pany, in  any  wise  appertaining  or  belonging,  or  which  it  may  here- 
after acquire  or  in  any  way  become  entitled  to,  together  with  all  and 
singular  tlie  tenements,  hereditaments  and  appurtenances  there- 
unto belonging  or  in  any  wise  appertaining,  and  the  reversions, 
remainders,  rents,  issues  and  profits  thereof,  and  also  the  estate, 
riglit,   title,  interest,    property,    possession,  claim,  and  demand 

whatsoever,  as  well  in  law  as  in  equity,  of  the  said Company, 

of,  in  and  to  the  same,  and  any  and  every  part  thereof,  with  the 
appurtenances. 

'See  ante,  chap.  II.,  §  22;  chap.  XII.;  chap.  XXII.,  §  381. 


FORMS.  651 

No.  14. 

ORDEE  APPOINTING  RECEIVER  OF  PARTNERSHIP 
ASSETS  (SHORT  EORM)  BY  CONSENT.' 

(Title.) 

On  reading  the  complaint  and  answer  herein,  and  the  notice  of 

this  motion,  dated ,  189-  (and  the  consent  of  ,  dated 

,  189-),  and  the  affidavit  of  ,  verified  ,  1S9-,  and 

after  hearing ,  Esq.,  attorney  for  the  plaintiff,  and  the  de- 
fendants appearing  by  {names),  their  attorneys,  and  consenting 
thereto,  it  is,  on  motion  of ,  attorney  for  the  plaintiff : 

Ordered  and  decreed  that is  hereby  appointed,  with  the 

usual  powers  and  duties,  receiver  of  the  copartnership  property, 

assets  and  effects  of  the  firm  of {or,  of  the  late  firm  of ), 

of ,  and  of  the  defendant ■,  as  survivor  of  said  firm,  and 

that  said  receiver,  after  he  shall  have  duly  qualified,  shall  proceed 
forthwith  to  take  possession  of  said  copartnership  property,  and 
the  parties  hereto  and  each  of  them  are  herel)y  directed  to  deliver 
and  transfer  the  same  and  all  the  partnership  books,  papers  and 
effects  to  him ;  and  he  shall  sell  the  same  (subject  to  the  order  of 
the  court)  at  public  or  private  sale,  as  he  shall  deem  most  for  the 
interest  of  the  parties;  and  recover  and  collect  and  reduce  to 
money   the  property,  claims,   demands,    bills,    accounts    and    all 

riglits  of  action  of  said  copartnership  {or,  said ,  as  survivor 

thereof),  and  shall  retain  such  proceeds  subject  to  the  order  of 
this  court. 

(  Where  conveyance  is  necessary,  direct  it^  for  instance,  thus :) 

And,  it  furtlier  appearing    that    the  title  to  the  said  s,  or 

some  of  them,  or  portions  of  them,  stand  in  the  name  of  the  in- 
di\  idual  partners,  of  the  said  firm,  it  is  ordered  that  the  plaintiff' 
and  the  defendants  and  each  of  them  forthwith  convey  to  the  said 
receiver  by  good  and  sufficient  bills  of  sale  and  conveyances,  all 
s  or  interests  in  s,  or  any  other  property  of  the  copart- 
nership standing  in  their  joint  or  individual  names. 

{Directions  as  to  carrying  on  has  mess,  if  desired,  may  he 
thusi)  It  is  further  ordered  and  decreed  that  the  said  receiver 
may  complete  the  unfinished  contracts  of  said  copartnership  if  he, 
in  his  discretion,  shall  deem  it  advisable  so  to  do. 

{Or,  That  the  said  receiver  shall  not  enter  upon  any  now  busi- 
ness, but  shall  i)ut  the  unfinislied  stock  of  said  ])artiiersliip  now 
on  hand  into  marketable  condition  as  speedily  as  possijjk'.) 

{Or,  That  the  said  receiver  be,  and  he  hereby  is,  authorized  to 

caiTy    on    the   said   business   as   lieretofore   carried    on  to 

such  an   extent  only  that  he  may  (charter)  the s  of  said  co- 

'  See  a/tie,  chap.  II.,  ^22;  cbsip.  XI.;  chap.  XXII.,  §  381. 


652  RECEIVERSHIPS. 

partnership  to  other  persons  or  parties  for  liirc  until  sucli  time  as 
the  said s  can  be  sold  to  advantai^e,  with  full  power  and  au- 
thority to  the  said  receiver  to  sell  the  same  upon  such  terms  as 
he  may  deem  proper  and  as  siiall  be  approved  by  this  court. 

{Bond  clmise,  if  security  he  requh'ed.) 

(  Where  order  is  'made  in  anticijjation  of  dissolution,  it  may 
le  directed)  that  said  receiver  shall  not  enter  upon  his  duties  until 
the day  of next. 


No.  15. 

ORDER  APPOINTING  MANAGING   RECEIYER  OF  A 
JOINT  BUSINESS. 

(Title.) 

{Recite  trial  and  findings.)     It  is  ordered  and  adjudged  that 

the  said be,  and  he  hereby  is,  appointed  manager  of  the  said 

business  of ,  and  receiver  of  the  property,  assets,  moneys  and 

matters  pertainins;  to  the  closing  up  of  the  said  business,  upon 
executing  and  filing  a  proper  bond  in  the  penal  sum  of dol- 
lars, with  leave  to  either  party  to  move  an  increase,  if  any  reason 
exist  therefor  at  any  time,  conditioned  for  the  due  and  faithful  per- 
formance of  the  trusts  reposed  in  him  by  this  order,  to  be  ap- 
proved by  this  court,  and  that  upon  such  execution,  filing  and  ap- 
proval the  said be,  and  he  is  hereby  vested  with  the  usual 

powers  of  managers  and  receivers  in  such  cases,  and  with  power 
to  collect,  sue  for  and  recover  the  moneys  and  property  that 
may  pertain  or  belong  to  the  closing  up  of  tlie  said  business, 

including  all  funds  in  the  hands  of  the  defendant -,  (as  acting 

treasurer)  of  the  said ,  and  all  funds  now  in  the  hands  of,  or 

from  time  to  time  becoming  due  from,  the  plaintiff  or  the  said 

,  under  the  said  agreement,  and  which  may  be  necessary  for 

the  payment  of  the  expenses  of  such  closing  up,  and  of  the  losses 

and   other  debts   and  liabilities  of   the  said  ,  or  otherwise 

necessary  to  be  paid  from  time  to  time  in  the  closing  up  of  the 

said  business,  and  that  as  such  manager  and  receiver  the  said 

is  authorized  to  carry  on  the  said  business  by  (collection  of  pre- 
miums, cancelation  of  policies),  adjustment,  payment  and  settle- 
ment of  losses  and  otherwise,  conformably  with  the  orders  and 

directions  of  this  court, ,  189-,  until  the  further  order  of  this 

court. 

And  it  is  further  ordered,  tliat  the  said  receiver,  as  soon  as  may 
be,  shall  make  and  file  with  the  clerk  of  this  court  a  proper  in- 
ventory of  all  the  property  and  assets  now  belonging  or  pertain- 
ina:  to  the  said . 


FORMS.  653 

No.  16. 

ORDER  APPOINTING  MANAGER  OF  A  MINE. 

(Title.) 

{Recite  trial  and  findings.)  It  is  ordered  and  adjudged  that 
be,  and  he  hereby  is,  appointed  mana«2;er  of  all  mining  opera- 
tions to  be  carried  on  in  and  by  the  use  of  the  adit  or  tunnel  men- 
tioned in  the  pleadings  in  this  cause,  and  of  tlie  use  of  the  said 
adit  or  tunnel,  and  of  the  railroad  therein,  and  of  the  use  of  the 
railroad  connecting  the  mine  with  the  public  railroad,  or  used  in 
connection  therewith,  and  of  the  use  of  the  ore  dock,  and  the 
other  implements,  tools  and  property  used  in  opening  and  work- 
ing said  mine  by  said  {names),  and  said  manager  shall  have  power 
to  control  and  manage  the  conduct  of  all  persons  who  shall  con- 
duct or  may  be  employed  in  said  mining  operations  in  conformity 
with  the  principles  declared  by  the  order  made  in  this  cause  be- 
tween {names),  bearing  date  the ,  1S9-,  and  with  the  direc- 
tions of  this  order. 

And  each  of  the  parties  having  been  given  notice  in  writing, 
as  specified  in  the  above-mentioned  order,  that  is  to  say,  the  said 

defendants  and  having  served  upon  and  , 

attorneys  for and  also  for  the Company,  notice  in  writ- 
ing tliat  they  intend  at  once  to  work  and  operate  said  mine  to  the 

full  extent  of  its  capacity,  and  the  said and  the  said  

Compan}^  having  served  upon  said and notices  in  writing 

that  he  and  they  are  able  and  elect  to  furnish  the  said  defendants 

with  the ores  to  which  they  are  entitled  by  the  terms  of  the 

contract  mentioned  in  said  pleadings,  made  by  said Company 

with  said and  dated ,  189-,  direction  is  hereby  given  to  said 

manager  that  said  plaintiffs  shall  forthwith  be  permitted  to  have 
the  exclusive  use  and  possession  of  said  adit  or  tunnel,  and  the 
other  tools,  implements  and  property  used  in  opening  and  work- 
ing said  mine,  for  the  purpose  of  mining  and  making  delivery  to 
said  defendants  of  such  part  of  the  minerals  and  ores  as  they  are 

now  entitled  to  under  said  contract,  bearing  date ,  ]89-;  tiiat 

such  use  and  possession  shall  onlj^  continue  for  such  period  of  time 
as  in  the  judgment  of  the  nuiiuiger  shall  be  reasorial)ly  necessary 
for  the  purpose  of  mining  and  making  delivery  of  said  minerals 
and  ores  ;  and  after  such  j)eriod  has  expired,  the  use  and  ]>osses- 
sion  of  tlic  parties  of  said  adit  or  tuniiel,  and  the  other  imple- 
ments, tools  and  property  used  in  opening  and  working  said 
mine,  shall  be  regulated  and  controlled  by  the  said  maiuiger  in 
conformity  to  the  respective  rights  of  the  parties  therein  and 
thereto  as  defined  and  settled   by  the  order  of  this  court  nuide 

,   181)-,  in  the  cause  wherein  was   plaintiff  and  

were  defendants. 


654  RECEIVERSHIPS. 

And  it  is  fnrtlicr  ordered  that  eitlicr  party  have  the  lil)erty,  on 
reasonable  notice  to  the  attorneys  of  the  opposite  party,  to  apply 
for  further  directions  to  said  manager,  and  to  apply  for  relief 
pending  this  suit,  until  the  determination  of  the  cause  on  final 
hearing.  And  it  is  further  ordered  that  the  compensation  of 
such  manager  shall  be  paid  by  the  parties  equally  while  they 
jointly  occupy  the  adit  or  tunnel,  and  in  the  case  of  exclusive  occu- 
pation by  either,  then  such  party  shall  pay  the  whole. 

No.  17. 

OEDER  GRANTING  INJUNCTION  AND  APPOINT- 
ING RECEIVER  OF  PROPERTY  BECAUSE  OF 
MISCONDUCT  OF  OFFICERS.' 

(Title.) 

Comes  now  the  plaintiff  by  his  attorney,  and  moves  the  court 
that  a  receiver  be  appointed  herein,  wliich  motion  is  supported 

by  the  affidavit  of ;  and  it  appearing  by  the  affidavit  of , 

verified  the day  of ,  189-,  that  due  notice  of  this  motion 

was  served  upon  the  defendants and 

{And  if  an  inju7iction  is  sought,  add:)  and  it  appearing 
{reciting  ground  of  injunction,  and  adding :)  and  the  plaintiff 
having  given  the  (bond  or  undertaking)  required  by  law  in  the 
sum  of dollars  : 

It  is  ordered  and  adjudged  that  ,  of ,  be,  and  hereby 

is,  appointed  receiver  of  {specifying  the  jparticular  jproperty  to  he 
reached,  or,  if  dissolution  or  distribution  of  all  assets  is  sought:) 

the   defendant,  the   Company,  its  stock,   bonds,  property, 

franchises,  contracts,  claims,  demands,  things  in  action  and  effects 
of  every  kind  and  nature,  with  the  usual  powers  and  duties 
according  to  law  and  the  practice  of  this  court. 

That  before  entering  upon  the  duties  of  his  trust,  said  receiver 

execute  to ,  clerk  of  this  court  {where  hy  statute  or  practice 

it  is  proper  to  make  the  hond  to  the  clerk),  and  fie  with  said 

clerk,  a  bond  with  at  least sufficient  sureties,  to  be  approved 

by  this  court,  conditioned  for  the  faithful  discharge  of  his  duties 
as  receiver  {if  dissolution  or  distribution  of  assets  is  sought  add  : 
and  for  the  due  accounting  for  all  moneys  and  property  received 
by  him). 

{For  suspension  of  directors,  when  allowable,  etc.,  add  as 
follows :) 

That  the  defendants  {naming  them)  be,  and  each  of  them  is, 
hereby  suspended  from  his  office,  and  enjoined  and  restrained 
from  doing  or  performing  any  act  or  thing  as  directors  {or  trus- 

'  See  ante,  chap.  II.,  §  22;  chap.  XII. 


FORMS.  C55 

tees),  officers,  assents  or  servants  of  tlie Conipaii}^,  until  the 

fiirtlier  order  of  tliis  court  in  the  premises. 

No.  18. 

ORDER  FOR  APPOINTING  RECEIVER  OF  SPECIFIC 
PERSONAL  PROPERTY.' 

(Title.) 

{Recite  hearing  before  the  court  and  its  findioig.)  It  is 
ordered  and  declared  that be,  and  hereby  is,  appointed  re- 
ceiver of  [the bales  of  cotton  now  on  board  the  ship at 

{describe  the  jprojyerty^  where  located  and  in  whose  2)ossession)] ; 
and  said  receiver  is  hereby  authorized  to  expend  a  sufficient 
sum  of  money  to  insure  the   safe  arrival  of  said   (cotton)  and 

is  directed  to  sell  such  (cotton)  when  the  same  shall  arrive  in , 

and  to  receive  the  money  arising  from  the  sale  thereof,  and  to 
apply  a  sufficient  part  of  such  money  in  repaying  what  he  shall 
expend  in  respect  of  such  insurance  as  aforesaid,  and  in  paying 
all  necessary  and  pro})er  expenses  attending  the  receipt  and  sale 
of  the  said  (cotton)  (and  to  pay  the  surplus  of  such  money  into 
,  in  trust  in  this  cause). 

No.  19. 

ORDER  APPOINTING  RECEIVER  WITHOUT  PREJU- 
DICE TO  THE  RIGHTS  OF  PRIOR  ENCUM- 
BRANCERS AND  WITH  OPTIONAL  LEAVE  TO 
KEEP  DOWN  CHARGES/ 

(Title.) 

(After  recitation  of  finding  and  appointment^  say :)  But  this 
appointment  is  to  be  without  prejudice  to  tlie  riglits  of  any  prior 
encumbrancers  upon  the  said  estates,  who  may  think  proper  to  take 
possession  of  the  same  by  virtue  of  their  respective  securities,  or, 
if  any  prior  encumbrancer  is  in  the  possession,  then  without 
prejudice  to  such  possession ;  and  the  tenants  of  the  said  free- 
hold and  leasehold  estates  are  subject  as  aforesaid  to  attorn  and 

pay  their  rents  in  arrears  and  growing  rents  to  the  said ,  as 

such  receiver,  and  sucli  receiver  is  to  be  at  liberty,  if  he  shall 
think  proper  (but  not  otherwise),  out  of  the  rents  and  prolits  to 
be  received  by  him,  to  keep  down  the  interest  upon  the  prior  en- 
cumbrances according  to  their  priorities,  and  is  to  be  allowed  such 
payments,  if  any,  on  passing  his  accounts. 

'  See  ante,  chap.  II. ,  g  22. 

'See  ante,  chap.  II.,  note  22;  chap.  XII. 


656  RECEIVERSHIPS. 

No.  20. 

ORDER  APPOINTING  PvECEIYEE  OF  RENTS  AND 
PROFITS  IN  FORECLOSURE  OR  OTHER  ACTION 
AFFECTING  REAL  PROPERTY;  WITH  INJUNC- 
TION AGAINST  DEFENDANT.' 

(Title.) 

\_Iiecite  according  to  the  case,  and  recite  also  the  groimd  of 
the  injunction;  for  instance,  thus :  And  it  appearing  that  the 
mortgaged  premises  are  an  inadequate  security  for  the  mortgage 

debt,  and  that  no  one  except  the  defendant  is  personally 

liable  for  the  debt,  and  tliat  he  is  insolvent  and  that  the  defend- 
ants are  about  to  collect  the  rents ;  {and  if  the  injunction  is  other 
than  an  order  to  stay  ■waste  or  other  damages,  or  to  jprotect  the 
receiver,  add :)  and  the  plaintiti:  having  giveu  security  as  required 
by  law.] 

It  is  ordered  and  decreed  that ,  of ,  be,  and  be  hereby  is, 

appointed,  with  the  usual  powers  and  directions,  receiver  (for  the 
benefit  of  the  plaintiff)  of  all  the  rents  and  profits  now  due  and 
unpaid,  or  to  become  due  pending  this  action,  and  issuing  out  of 
the  (mortgaged)  premises  mentioned  in  the  complaint  and  known 
and  described  as  follows :  {descriptio7i.) 

{Direction  to  collect  may  he  as  follows :)  That  said  receiver 
be,  and  he  hereby  is,  directed  to  demand,  collect  and  receive  from 
the  tenant  or  tenants  in  possession  of  said  premises  (or  other  per- 
sons liable  therefor),  all  the  rents  therefor  now  due  and  unpaid 
and  all  rents  hereafter  to  become  due. 

{Direction  that  tenants  pay.)  That  the  tenants  in  possession 
of  such  premises  and  other  persons  liable  to  such  rents  are  hereby 
enjoined  and  restrained  from  paying  any  rent  for  such  premises 
to  the  defendant,  his  agents,  servants  or  attorneys. 

{Direction  to  surrender  possession.)  That  all  persons  now  or 
hereafter  holding  possession  of  said  premises,  or  any  part  thereof, 
and  not  holding  such  possession  under  valid  and  existing  leases, 
do  forthwith  surrender  such  possession  to  said  receiver. 

{Povjer  to  recover  and  protect  possession^  That  the  said  re- 
ceiver be,  and  hereby  is,  authorized  to  institute  and  carry  on  all 
legal  proceedings  necessary  for  the  protection  of  all  premises  de- 
scribed in  the  complaint  or  referred  to  in  this  order,  including 
such  proceedings  as  may  be  necessary  to  recover  possession  of 
the  whole  or  any  part  of  said  premises,  and  to  institute  and  j)ros- 
ecute  suits  for  the  collection  of  rents  now  due  or  hereafter  to  be- 
come due  on  the  aforesaid  premises  or  any  part  thereof,  and  to 

'  See  ante,  chap.  X. 


FORMS.  657 

institute  and  prosecute  summary  proceedings  for  the  removal  of 
any  tenant  or  tenants  or  other  persons  therefrom. 

{Power  to  rent,  insure,  repair,  etc.)  And  said  receiver  is 
hereby  autliorized  from  time  to  time  to  rent  or  lease,  as  may  be 
necessary,  for  terms  not  exceeding  one  year,  any  of  said  premises ; 
and  to  keep  the  property  insured  against  loss  or  damage  by  fire, 
and  in  repair,  and  to  pay  the  taxes,  assessments  and  water  rates 
{in  case  of  ground  rent  and  the  rent  reserved  hy  said  mortgaged 
lease)  upon  said  premises. 

{Power  to  einj)loy  agent.)  And  said  receiver  is  hereby  author- 
ized to  employ  an  agent,  if  he  shall  deem  proper,  to  rent  and 
manage  said  premises,  collect  the  rents  and  keep  the  premises 
insured  and  in  repair,  and  to  pay  the  reasonable  value  for  his 
services  out  of  the  rent  received. 

{Injunction  against  defendant  receiving  rent.)  That  during 
the  pendency  of  this  action  tlic  defendant  and  his  agents  and 
attorneys  be  enjoined  and  restrained  from  collecting  the  rents  of 
said  premises,  and  from  interfering  in  any  manner  with  the  prop- 
erty or  its  possession. 

{Direction  as  to  aj)j)lying  rents,  etc.,  in  foreclosure^  That  the 
said  receiver  retain  the  moneys  which  may  come  into  his  hands 
by  virtue  of  his  said  appointment  until  the  sale  of  the  premises 
mentioned  in  the  complaint  under  the  judginent  to  be  entered 
in  this  action,  and  that  he  then,  after  deducting  his  proper  fees 
and  disbursements  therefrom,  apply  the  said  moneys  to  the  pay- 
ment of  any  deficiency  there  may  be  of  the  said  amount  directed 
to  be  paid  to  the  plaintiff,  in  and  by  the  said  judgment,  and,  in 
case  there  be  no  such  deficiency,  that  he  retain  the  said  moneys 
in  his  hands  until  the  further  order  of  the  court  in  the  premises. 

{Bond  clause.) 

{Leave  for  furtJier  directions.)  That  the  said  receiver  and  any 
party  hereto  may  at  any  time,  on  proper  notice  to  all  parties  who 
may  have  appeared  in  this  action,  apply  to  this  court  for  further 
or  other  instructions,  and  for  furtlier  power  necessary  to  enable 
said  receiver  properly  to  fulfill  his  duties. 

No.  21. 

ORDER  TO  SHOW  CAUSE  WHY  A  RECEIVER  SHOULD 
NOT  BE  APPOINTED  AT  THE  SUIT  OF  THE  PEO- 
PLE OR  A  STOCKHOLDER,  OFFICER  OR  CREDI- 
TOR, FOR  MISCONDUCT  OF  DIRECTORS,  ETC. 

(Title.) 

Comes  now  the  plaintiff ,  by  his  attorney,  and  on  motion, 

supported  by  the  affidavit  of  said ,  moves  for  a  rule  rcquir- 

42 


658  RECEIVERSHIPS. 

ing  the  defendant  to  show  cause  wliy  the  said  individual  defend- 
ants should  not  be  compelled  to  account  for  their  official  conduct 
in  the  uianageinent  and  disposition  of  the  funds  and  property  of 

the  defendant,  the Company,  committed  to  their  charge  as 

officers  thereof. 

And  why  the  defendants  above  named,  and  each  of  them, 
should  not  be  enjoined  and  restrained  from  collecting  or  receiv- 
ing any  debt  or  demand,  and  from  paying  out  or  in  any  manner 
interfering  with  any  money,  property  or  elfects  of  the  defendant, 
the Company,  during  the  pendency  of  this  action. 

And  why  a  receiver  or  receivers  of  the  property  {descrihing  it) 

of  the  defendant,  the  Company,  should   not  forthwith   be 

appointed  by  this  court  with  the  usual  powers  of  receivers  in  like 
cases. 


No.  22. 
BOND  OF  EECEIVER.    (PARTNERSHIP.y 

Know  all  men  by  these  presents,  that  we ,  principal,  and 

and ,  as  sureties,  are  held  and  firmly  bound  unto 


clerk  of  this  court  {or  the  People  of  the  State  of ),  in  the  sum 

of dollars,  for  the  payment  of  which,  well  and  truly  to  be 

made,  we,  and  each  of  us,  bind  ourselves  respectively  and  our 
respective  heirs,  executors  and  administrators,  jointly  and  sever- 
ally, firmly  by  these  presents. 

Sealed  with  our  seals,  and  dated  the day  of ,  189-. 

Whereas,  by  an  order  of  the court  of  bearing  date 

the  day  of  ,  189-,  made  at  the   term  thereof, 

held  on  said  day  at ,  in  an  action  wherein is  plaintiff, 

and and  others  are  defendants,  the  above-bounden was 

appointed  receiver  of  the  partnership  property  and  assets  of  said 
plaintiff  and  defendants : 

Now,  the  condition  of  this  obligation  is  such  that  if  the  above- 
bounden  shall,  according  to  the  rules  and  practice  of  the 

court,  duly  file  his  inventory,  and  annually,  or  oftener  if  there- 
unto required,  duly  account  for  what  he  shall  receive  or  have  in 
charge  as  receiver  in  the  said  cause,  and  pay  and  apply  what  he 
shall  receive  or  have  in  charge  as  he  may  from  time  to  time  be 
directed  by  the  court,  and  do  and  perform  his  oflice  of  receiver  in 
all  things  according  to  the  true  intent  and  meaning  of  the  afore- 
said order ;  (or  anj"  other  and  all  other  orders  of  said  court.) 

{Or,  that  if  the  above-bounden shall  faithfully  discharge 

•See  ante,  chap.  II.,  §  23;  chap.  XXII. ,  §  379. 


FORMS.  659 

his  duties  as  such  receiver  and  shall  duly  account  for  all  moneys 
received  by  him,  and  shall  obey  all  orders  of  said  court;) 

Then  this  obligation  shall  be  void,  otherwise  to  remain  in  full 
force.  (seal.) 

(SEA.L.) 

(seal.) 

Taken  and  approved  this day  of ,  189-. 


Judge. 

No.  23. 

ANOTHEK  FOKM  OF  BOND.' 

Know  all  men  by  these  presents,  that  we ,  principal,  and 

and ,  as  sureties,  are  held  and  firmly  bound  unto  the 


People  of  the  State  of ,  in  the  sum  of dollars,  lawful 

money  of  the  United  States  of  America,  to  be  paid  to  the  People 

of  the  State  of ,  for  which  payment,  well  and  truly  to  be 

made,  we,  and  each  of  us,  bind  ourselves  respectively  and  our 
respective  heirs,  executors  and  administrators,  jointly  and  sever- 
ally, firmly  by  these  presents. 

Sealed  with  our  seals  and  dated  this day  of ,  189-. 

Whereas,  by  an  order  of  this  court  bearing  date  the day 

of ,  at  the term  thereof  held  on  said  day  in  an  action 

wherein was  plaintiff  and was   defendant,  the  above- 

bounden was  appointed  receiver  of  the  property  and  assets 

of  (plaintiff's  and  defendant's  property,  'if  a partnershij)  matter,  or 
whatever  the  facts  may  he). 

Now,  the  condition  of  the  above  obligation  is  such  that  if  the 

said shall,  according  to  the  rules  and  practice  of  this  court, 

faithfully  discharge  his  duties  as  receiver  herein,  obey  each  and 
all  of  the  orders  of  this  court  touching  his  duties  and  administra- 
tion of  said  estate,  and  duly  account  for  what  he  shall  receive  or 
have  in  charge  as  such  receiver,  and  pay  over  and  apply  the  same 
as  directed  by  the  court,  and  perform  the  duties  of  his  office  of 
receiver  in  all  things  according  to  the  true  intent  and  meaning  of 
this  order,  then  this  obligation  shall  be  void,  otherwise  to  remain 
in  full  force  and  effect,  [ff  the  statiUe  presorihes  aforin,  of  bond 
then  in  such  casefoUouo  the  form  of  such  bond  striGtly.) 

(seal.) 

(seal.) 

(seal.) 


See  ante,  chap.  IT.,  §  23;  chap.  XXTT.,  g§  377-380. 


660  .  RECEIVERSHIPS. 

No.   24. 
SHORT  FORM  OF  BOND.* 

Know  all  men  by  these  peesents,  that  we as  principal, 

and  as  surety,  all  of  the  county  of and  state  of  , 

are  held  and  firmly  bound  unto  the  People  of  the  State  of , 

in  the  sum  of  dollars,  for  the  payment  of  which  sum,  well 

and  truly  to  be  made,  we,  and  each  of  us,  bind  ourselves,  jointly 
and  severally,  and  our  respective  heirs,  executors  and  adminis- 
trators, firmly  by  these  presents. 

Signed,  sealed  and  dated  the day  of ,  189-. 

The  condition  of  the  above  obligation  is  such,  that  whereas,  by 

an  order  of  the  court  of  county  sitting  in  chancery, 

made  on  the day  of ,  189-,  in  a  cause  therein  pending, 

wherein is  complainant,  and defendant,  it  was  among 

other  things  ordered,  that  the  above-bounden be  appointed 

receiver  of  all  the  property,  equitable  interests,  things  in  action 
and  cifects  of  the  defendant except  such  as  are  by  law  ex- 
empt, and  tliat  he  be  vested  with  all  the  rights  and  powers  of  a 
receiver  in  chancery,  upon  his  filing  a  bond  for  the  faithful  per- 
formance of  his  duties,  in  the  penal  sum  of dollars,  and  the 

approval  thereof. 

Now,  therefore,  if  the  said shall  duly  account  for  what 

shall  come  to  his  hands  or  control  as  such  receiver,  and  pay  and 
apply  the  same  from  time  to  time  as  he  may  be  directed  by  said 
court,  and  obey  such  orders  as  said  court  may  make  in  relation 
to  said  trust,  and  in  all  respects  faithfully  discharge  the  duties  of 
said  trust,  then  the  above  obligation  to  be  void,  otherwise  to 
remain  in  full  force  and  virtue. 

Approved,  ) (seal.) 

>  (seal.) 

)  (seal.) 


No.  25. 

ASSIGNMENT  (GENERAL)  TO   RECEIVER  OF  PART- 
NERSHIP ASSETS.'' 

This  indenture,  made  the day  of ,  189-,  between 

and ,  heretofore  partners  in  trade,  doing  business  in  the  city 

of ,  under  the  title  of ,  of  the  first  part,  and ,  re- 

•  See  ante,  chap.  II.,  §  23;  chap.  XXII.,  §§  377-379. 
*See  ante,  chap.  II.,  §  22. 


FORMS.  661 

ceiver  of  the  estate  and  effects  hereinafter  referred  to,  appointed 
by  the court,  of  the  second  part,  witnesseth  : 

Whereas,  by  an  order  of  the  said  court  made  at  the term, 

in  an  action  wherein  the  said was  plaintiff  and  the  said 

was  defendant,  the  said  party  of  the  second  part  was  appointed 
such  receiver,  and  has  given  and  filed  the  requisite  bond  pursuant 
to  law  and  said  order ; 

Now,  this  indenture  witnesseth,  that  the  said  parties  of  the  first 
part,  in  obedience  to  the  said  order,  and  in  consideration  of  the 
premises  aforesaid,  and  of  one  dollar  to  them  in  hand  paid  by  the 
said  party  of  the  second  part  at  or  before  the  execution  hereof, 
the  receipt  whereof  is  hereby  acknowledged,  have,  and  each  of 
them  has,  conveyed,  assigned,  transferred  and  delivered  over,  and 
by  these  presents  do,  and  each  of  them  does,  convey,  assign, 
transfer  and  deliver  over,  unto  the  said  party  of  the  second  part, 
under  the  direction  of  the  said  court,  all  and  every  the  stock  in 
trade,  good  will,  estate  real  and  personal,  chattels-real,  moneys, 
outstanding  debts,  things  in  action,  equitable  interests,  property 
and  effects  whatsoever  and  wheresoever,  of  or  belonging  to  the  said 
firm,  or  to  the  said  parties  of  the  first  part  as  partners  therein, 
the  said  firm,  or  they  or  either  of  them  as  such  partners  therein, 
had  any  estate,  right,  title  or  interest  at  the  time  of  the  commence- 
ment of  said  action,  to  wit,  on  the day  of last ;  and  also 

all  deeds,  writings,  leases,  muniments  of  title,  books  of  account, 
papers,  vouchers  and  other  evidences  whatsoever  relating  or  ap- 
pertaining thereto. 

To  have  and  to  hold  the  same  unto  him,  the  said  party  of  the 
second  part,  as  such  receiver  as  aforesaid,  and  to  his  successors 
and  assigns,  subject  to  the  ordei",  direction  and  control  of  the  said 

court.     And  for  better  and  more  effectually  enabling  the 

said  party  of  the  second  part,  his  successors  and  assigns,  to  recover 
and  receive  any  part  of  the  stock,  estate,  book-debts,  property, 
choses  in  action  and  effects  hereby  conveyed,  assigned  and  trans- 
ferred, they,  the  said and  have  made  and  appointed, 

and  by  these  presents  do  make  and  appoint,  the  said  ,  party 

of  the  second  part,  his  successors  and  assigns,  the  attorney  of 
them,  the  said  parties  of  the  first  part,  in  their  names  or  in  his 
own  name,  to  commence,  continue,  discontinue  and  again  bring, 
perfect,  and  carry  out  actions  and  suits  and  special  proceedings 
against  any  persons  or  corporations  for  or  on  account  of  all  or  any 
part  of  the  said  estate,  stock,  property,  book-debts,  choses  in 
action  or  effects. 

In  witness  whereof  tlie  said  parties  of  the  first  part  have  here 
unto  set  their  hands  and  seals  the  day  and  year  first  above  written. 

{Signature.)  (seal.) 
{Acknowledgment.) 


662  RECEIVERSHIPS. 

No.  26. 

I^OTICE  BY  EECEIVER  TO  CREDITORS  AND  DEBT- 
ORS OF  APPOINTMENT  AND  NOTICE  TO  PRE- 
SENT CLAIMS. 

(Caption.) 
to  all  whom  it  may  concern  i 

Notice  is  hereby  given  that  I  liave  been  appointed  by  the 

court  of  the  state  of ,  in  said   action,  receiver  of  the 


Company,  and  of  all  its  property  and  effects,  and  that  I  have  duly 
qualified  as  such  receiver,  and  I  do  require  as  follows: 

1.  All  persons  indebted  to  said  corporation  to  render  an  ac- 
count to  me,  at  my  oflice,  No.  — , street,  in  the  city  of , 

and  county  of ,  in  said  state,  by  the day  of ,  189-, 

of  all  debts  and  sums  of  money  owing  by  them  respectively,  and 
to  pay  the  same  to  me. 

2.  All  persons  having  in  their  possession  any  property  or  ef- 
fects of  said  company  to  deliver  the  same  to  me  by  the  said  day. 

3.  All  the  creditors  of  said  corporation  to  deliver  their  respec- 
tive accounts  and  demands  to  me  by  the  said  day. 

4.  All  persons  holding  any  open  or  subsisting  contracts  of  said 
corporation,  to  present  the  same,  in  writing  and  in  detail,  to  me, 
at  the  place  aforesaid,  on  or  before  the  said  day. 

Dated  this day  of ,  18  9-. 

?^ 
Receiver. 

No.  27. 
ORDER  ON  CREDITORS  TO  EXHIBIT  CLAIMS. 
(Title.) 

It  is  ordered  that  a  notice  be  published,  as  hereinafter  directed, 

requiring  all  the  creditors  of  said Company,  and  all  persons 

having  claims  of  any  kind  against  it,  to  exhibit  the  same  to  said 
receiver,  at  a  place  to  be  speciiied  in  such  notice. 

That  said  notice  be  published  once  a  week  for ,  in  a  news- 
paper published  in ,  and  also  in  a  paper  published  in  the  city 

of . 

No.  28. 

ORDER  APPOINTING   SPECIAL   COMMISSIONER  TO 
HEAR  A^D  REPORT  CLAIMS. 
(Caption.) 

It  is  ordered  by  the  court  that  all  suits  and  proceedings  against 
the  receiver  herein  upon  any  cause  of  action  or  claim  against  the 


FORMS.  GG3 

Company,  accruing  prior  to  the day  of ,  189-,  be 

brought  only  by  intervening  petition  filed  in  this  cause ;  also  that 
no  process  of  attachment  or  execution,  or  other  linal  process 
whatever  be  issued  against  said  receiver  for  any  act  of  his  in  the 

operation  of  the Company,  otherwise  than  upon  leave  granted 

by  this  court  upon  intervening  petition. 

It  is  further  ordered  that be,  and  he  hereby  is,  appointed 

commissioner  of  this  court  to  hear  and.  consider  the  above  claims, 
and  all  other  claims  against  the  receiver  herein,  growing  out  of 
the  business  of  said  company  as  may  be  brought  before  him ; 
and  that  the  said  commissioner  have  power  to  hear  and  consider 
all  such  claims,  and  that  the  receiver  herein  be  directed  to  appear 
before  the  said  commissioner  upon  short  notice  served  upon  said 
receiver,  or  upon  an  agent  authorized  by  him  to  be  served  in  his 
stead,  to  answer  any  claim  filed  with  the  said  commissioner ;  and 
that  said  commissioner  have  the  power  to  take  testimony  and  re- 
port the  same  with  his  findings  to  this  court,  and  that  unless  such 
claimant,  or  receiver,  shall  within  thirty  days  after  the  filing  of 
the  said  report  appeal  from  the  same  to  this  court,  said  report 
shall  at  the  expiration  thereof  become  final ;  and  the  said  re- 
ceiver is  hereby  directed  and  authorized  thereupon  to  pay  out  of 
any  money  coming  into  his  hands  such  amount  or  amounts  as  the 
commissioner  may  award  on  said  claim  or  claims. 

It  is  further  directed  that  said  receiver  do  not  hereafter  in  any 
case  appear  to  answer  any  garnishment  in  any  suit  against  any  of 
his  employees,  but  that  all  claims  against  said  employees  be  pre- 
sented to  the  said  commissioner  hereinbefore  appointed  ;  and  that 
upon  his  notice  of  such  claim  the  said  receiver  shall  forthwith 
notify  said  employee,  and  shall  withhold  from  said  employee, 
from  money  otherwise  due,  a  sufiicient  amount  to  satisfy  said 
clrim,  and  that  upon  order  of  said  commissioner  the  same  shall 
be  paid  either  to  the  said  employee  or  to  the  said  claimant,  as  said 
commissioner  may  direct  and  adjudge. 

Judge. 
No.  29. 

OKDER  APPOINTING  COMMISSIONEPt  OR  REFEREE 
TO  HEAR  AND  REPORT  CLAIMS.     (Railway.) 

(Caption.) 

It   having   been   represented   to   the  court  that  claims  have 

accrued  in against  the  receivers  appointed  and  confirmed  in 

this  case,  growing  out  of  the  operations  of  the  railway  property 
iu for  stock  killed,   personal  injuries,   damages  to  freight, 


664  RECEIVERSHIPS. 

damages  for  short  delivery,  etc.,  and  it  appearing  to  tlie  court 
that  such  claims  will  constantly  accrue  during  the  pendency  of 
the  receivership  in  tliis  case,  and  that  such  claims  should  be 
adjudicated,  settled,  and  paid  without  requiring  the  parties 
interested  therein  to  seek  relief  from  the  court. 

It  is  therefore  ordered  by  this  court  that ,  Esq.,  be  and  he 

is  hereby  appointed  speciil  commissioner  in  chancery  \or  referee, 
as  the  cam  may  he)  for  this  cause ;  and 

It  is  further  ordered  that  all  claims  for  damages  of  every  kind 
that  have  accrued  or  may  accrue  against  the  said  receiver,  grow- 
ing out  of  his  operation  of  the company  in ,  may  be 

filed  and  presented  to  said  commissioner,  who  shall  examine  and 
report  thereon  in  due  course. 

That  the  special  commissioner  {or  referee)  be  and  is  directed 
to  give  reasonable  public  notice  of  this  order,  and  is  authorized 
to  hold  sessions  pending  examination  of  claims  at  such  points  as 
he  may  designate. 

He  shall  report  his  conclusions  to  the  court  from  time  to  time, 
and  such  reports  shall  stand  confirmed,  unless  excepted  to  within 

days  from  the  filing  thereof,  upon  proper  order  entered 

therefor. 

Dated . 


Judffe, 


No.  30. 


ORDER  TO  PAY  CLAIMS  ACCRUING  AGAINST  RAIL- 
WAY COMPANY  PRIOR  TO  THE  APPOINTMENT 
OF  THE  RECEIVER. 

(Caption.) 

It  is  hereby  ordered  that  the  receiver  herein  pay  out  any  funds 

in  his  hands  and  applicable  to  the  business  of  the Company, 

being  operated  by  him  under  the  order  of  the  court  herein,  and 
all  claims  accruing  during  the  period  of  (six  months)  immediately 
prior  to  the  appointment  of  the  receiver  herein,  for  supplies, 
materials,  wages,  salaries,  and  expense  incurred  by  agents  and 
employees,  traffic  balances  with  other  connnon  carriers,  injury  to 
or  loss  of  property  of  shippers  in  transit,  and  for  the  use  of  the 
tracks,  terminals,  or  other  facilities  of  other  railways  used  by  the 
said Railway  Co.  in  the  ordinary  transaction  of  its  business. 

Judge. 


FORMS.  665 

No.  31. 

OKDER  REQUmmO   DEFENDANT   TO   TURN  OYER 
TO  RECEIVER  BOOKS,  PLATS  AND  DEEDS. 

(Caption.) 

At  this  day  the  petition  of  the  receiver  for  an  order  directing 

the  defendant,  the Company,  to  deliver  to  him  certain  deeds, 

records,  plats,  surveys  and  other  mnniments  of  title  to  the  real 
property  in  their  possession  under  the  order  of  this  court  having; 
been  presented  to  this  court,  and  the  court  having  duly  considered 

the  same,  it  is  ordered  that  the  said Coinpany  deliver  to  said 

receiver  all  deeds  of  conveyance,  records,  plats,  surveys  and 
books,  and  all  other  papers  and  muniments  of  title  in  their  posses- 
sion or  under  their  control  pertaining  to  or  affecting  the  title  or 
right  to  the  possession  of  the  real  estate  in  the  possession  of  the 

receiver  under  the  orders  of  the  court,  or  show  cause  on  the 

day  of ,  at  10  A.  M.,  before  me  at  the court-room  in  the 

city  of 


Dated 


Judsre. 


The  foregoing  order  made  absolute,  and  the  receiver  and 

Company  hereby  directed  to  make  schedide,  and  receiver  hereby 
directed  to  receipt  for  same. 

Dated . 


Judffe. 


No.  32. 


PETITION  BY  RECEIYER  TO  COMPEL  THE  PAYMENT 
AND  DELIVERY  OF  SPECIFIC  ASSETS. 

(Caption.) 

To  the Court : 


,  upon  his  oath,  says : 

That  by  an  order  made  in  this  cause,  dated ,  189-,  your 

receiver  was  duly  appointed  as  the  receiver  of  {hrlejii/  indicating 
what). 

That  on  the day  of ,  189-,  your  petitioner,  entered 

into  a  bond  to  the  clerk  of  said  court  (if  given  to  the  clerk),  con- 
ditioned for  the  faithful  discharge  of  his  duties  as  such  receiver, 
and  he  took  the  oath  prescribed  by  law. 

That  (within  the  week  preceding  the  comuiencemeut  of  this 


QQQ  RECEIVERSHIPS. 

action  or  as  tlie  case  may  he)  the  plaintiff  collected  the  following 
sums  of  money  due  and  payable  to  said  firm  from  the  following 
named  creditors : 

{Here  give  particulars.) 

That  said  plaintiff  omitted  to  place  said  money  with  the  other 
moneys  of  said  firm,  namely  :  {describing  thein.) 

That  said  plaintiff'  refuses  to  place  said  sum  of dollars  in 

the  hands  of  your  petitioner,  and  also  refuses  to  deliver  said 
assets  to  him. 

Wherefore,  (etc.,  demand  relief  sucli  as  is  given  hy  an  order 
to  pay  or  deliver). 


No.  33. 

AFFIDAVIT   FOR   MOTION    TO    COMPEL    TENANTS 

TO  FAY. 
(Caption.) 

,  being  duly  sworn,  on  oath  says: 

That  by  an  order  made  in  this  cause,  bearing  date  the day 

of ,  189-,  it  was  ordered  that  the  several  tenants  of  the  lands 

and  premises  in  the  pleadings  mentioned  should  pay  their  rents 
and  arrears  of  rent  to  this  deponent  as  receiver  in  this  cause,  and 
also  their  rents  accruing  thereon  from  time  to  time  as  the  same 
shall  become  due  and  payable. 

That  the  several  persons  whose  names  are  set  forth  in  the 
schedule  annexed  to  this  affidavit,  and  who  are  respectively 
tenants  of  said  lands  and  premises,  as  deponent  believes,  have  not 

paid  rent  to  deponent  {nor,  to ,  the  late  receiver  in  this 

cause  before  his  appointment,  as  deponent  believes ;  or,  as  appears 

by  the  late  receiver's  account,  filed  the day  of ,.  189-, 

in  the  office  of ),  since  his  appointment  as  receiver  in 

this  cause. 

That  the  several  tenants  in  said  ^schedule  named  owe  respec- 
tively, according  to  this  deponent's  knowledge,  calculation  and 
belief  up  to  the  respective  rent  days  specified  in  the  said  schedule, 
the  several  sums  as  set  forth  in  said  schedule,  for  rent  and  arrears 
of  rent  of  their  respective  holdings,  which  sums,  or  any  part 
thereof,  the  said  tenants  so  respectively  owing  the  same,  or  any 
of  them,  have  not  paid  to  deponent,  although  repeatedly  applied 
to  for  that  purpose. 

■  \ 

Kcceiver. 
{Jurat.) 


FORMS.  667 

No.  34. 

AFFIDAVIT  TO   OBTAIN   ORDER   STAYING   OTHER 
ACTIONS  AFFECTING  ASSETS. 

(Ancillary  Receivership.) 
(Caption.) 

,  being  duly  sworn,  says : 

That  he  is  the  plaintiff's  attorney  herein. 

That  this  action  was  brought  for  the  appointment  of  a  receiver 

of  all  the  property  and  assets  of  the Company  in  the  state 

of (ancillary  to  the  appointment  of  a  receiver  of  said  Com- 
pany in  the  state  of ). 

That  on  the day  of  ,  180-,  this  court  duly  made  an 

order,  at  a  special  term  thereof,  appointing receiver  of  all 

the  property  and  assets  of  the  said  Company  within  this  state 
(with  all  the  powers  vested  in  him  as  receiver  by  the  court  of 

,  of  the  state  of  ),  and  that  in  and  by  said  order  the 

officers  and  directors  of  the  defendant  were  enjoined  from  exer- 
cising within  this  state  of ,  any  of  the  privileges  or  franchises 

granted  to  the  said  corporation. 

That  thereafter  the  said  receiver  duly  qualiiied  as  required  by 
law,  and  duly  entered  into  the  possession  of  all  the  property  of 
the  said  company,  including  the  books,  papers  and  vouchers,  and 
is  still  in  possession  thereof. 

That  a  number  of  actions  have  been  commenced  against  the 
said Company,  in  various  parts  of  this  state  since  the  appoint- 
ment of  said  receiver,  and  attachments  in  some  cases  have  been 
levied  upon  its  property. 

That  the  said  Company  is  unable  to  defend  such  actions 

or  any  actions  for  the  following  reasons  : 

First.     That  all  the  books,  papers  and  vouchers  of  the  said 

Company  are  in  the  hands  of  the  receiver,  and  are  being 

actually  used  in  making  up  the  statement  of  said  receiver. 

Second.  Its  officers  and  agents  are  restrained  and  enjoined  by 
said  order  from  exercising  privileges  or  franchises  granted  to  the 
said  corporation,  and  they  are  therefore  restrained  and  enjoined 
from  carrying  on  their  defense  to  any  of  said  actions. 

(Deponent  further  says  that  in  a  proceeding  under  the  insolv- 
ency act  of  the  state  of ,  a  receiver  has  been  duly  appointed 

by  the  court  of ,  of  the  state  of ,  of  the  propei'ty  of  the 

Company,  being  the  same  receiver  appointed  in  this  state, 

and  to  which  receivership  the  appointment  in  this  state  is  ancillary.) 

Deponent  further  says  that  great  embarrassment  is  likely  to 
ensue  to  the  receivership  and  to  the  trust  company  by  reason  of 
the  pendency  of  said  actions.     That  the  jdaintills  in  said  actions 


668  RECEIVERSHIPS. 

threaten  to  enter  judgments  with  costs,  and  that  the  expenses 

will   thereby   be  increased  ;    that  all   the  property  of  the 

Company  being  in  the  hands  of  the  court,  said should  be  re- 
quired to  file  their  claims  in  court  according  to  the  practice  in 
such  case  made  and  provided. 


{Jurat.) 

No.  35. 

PETITION  OF  RECEIVER  FOR  PERMISSION  TO  DE- 
FEND SUITS  AND  COMPROMISE  CLAIMS.* 

(Caption.) 

Tour  petitioner, ,  would  respectfully  sliow  to  your  honors 

that,  prior  to  his  appointment  as  receiver  herein,  certain  suits  had, 

been  brought  against  the Company,  praying  for  damages  to 

persons  or  property  ;  that  under  the  laws  of  the  state  of ,  such 

claims,  when  reduced  to  judgment,  are  liens  prior  in  right  to  the 
mortgage  given  by  the  defendant  upon  its  property,  and  that 

there  are  certain  suits  pending  in  the court  of  the  state 

of . 

Your  petitioner  further  shows  that  such  suits  or  claims  can 
generally  be  compromised  and  adjusted  at  sums  which  it  is  to 
the  interest  of  the  defendant  and  its  creditors  to  promptly  accept, 
thereby  saving  much  cost  of  litigation  and  other  considerable 
amounts  as  compared  with  the  usual  expense  and  the  results  of 
such  litigation ;  and  that  other  of  said  suits  will  have  to  be  de- 
fended by  your  petitioner  as  receiver  at  the  cost  of  the  fund  in 
the  hand  of  your  petitioner. 

Your  petitioner  therefore  prays  that  an  order  of  court  be  made 
herein,  authorizing  your  petitioner  as  receiver  to  appear  and  de- 
fend the  suits  that  have  heretofore,  or  may  hereafter,  be  brought 
in  this  state  against  the  defendant  to  recover  damages  for  inju- 
ries to  persons  or  property,  or  for  any  claim  whatsoever,  and  that 
your  petitioner  be  given  the  right  and  discretion  to  compromise, 
adjust  and  settle  all  suits  or  claims  against  the  defendant  for 
damages  to  persons  or  property,  or  any  claims  arising  in  the  oper- 
ation of  the  road  committed  to  his  charge,  if,  in  the  judgment  cf 
his  counsel,  it  is  proper  to  compromise,  adjust  and  settle  such 
cases  or  claims,  upon  such  terms  as  may  be  agreed  upon  between 
him  and  the  litigants  or  claimants,  and  he  will  ever  pray,  etc. 


Receiver. 
'Loveland's  Forms  of  Fed.  Proc.  No.  303. 


FORMS.  669 

No.  36. 

PETITION  BY  RAILWAY  RECEIYERS  FOR  AUTHOR- 
ITY TO  SETTLE  TRAFFIC  BALANCES.' 

(Caption.) 

Petition  by  the  receivers  for  authority  to  adjust,  settle,  and 

pay   traffic    balances    between    the   Company   and    other 

railroads. 

receivers  of  the Railway,  respectfully  show : 


I.  By  the  decree  made  in  tins  case  on  the day  of , 

and  filed  herein  on  the day  of ,  being  the  decree  ap- 
pointing your  petitioners  receivers,  among  others  the  following 
oi'der  was  made : 

{^^Fifth.  The  matter  of  the  2yay')nent  of  halance  due  or  to  he- 
covie  due  to  other  railroads  or  transportation  companies  grow- 
ing out  of  the  exchange  of  traffic  is  reserved  for  further  orders.''^) 

II.  Since  which  your  receivers  have  taken  possession  of  the 

Railway,  operated  by  your  receivers,  and  other  railways  and 
transportation  companies.  These  traffic  balances  consist  gener- 
ally of : 

First.  Freight  balances,  which  are  amounts  found  to  be  due  as 
between  freight  delivered  to  connecting  lines  by  the Rail- 
way, and  received  from  connecting  lines  by  said  Railway. 

Second.  Ticket  accounts.    These  result  from  the  sale  of  coupon 

tickets  by  the Railway  over  foreign  lines,  and  the  sale  by 

foreign  lines  of  such  tickets  over  the Railway, 

Third.  Mileage  accounts.  These  accounts  comprise  the  mile- 
age of  the  cars  of  other  railway  companies  over  the  line  of  the 
Railway,  and  the  mileage  of  its  cars  over  other  railways. 

These  trafiic  balances  are  sometimes  in  favor  of  one  road,  some- 
times in  favor  of  the  other.  It  is  vitally  necessary  in  the  trans- 
action of  railway  business  that  these  traffic  balances  should  be 
promptly  paid  by  the  respective  railways  at  stated  times. 

III.  There  are  traffic  balances  whicli  will  soon  have  to  be  dis- 
charged arising  out  of  tlie  operation  of  the  railway  in  charge  of 
your  receivers,  which  will  have  to  be  settled,  adjusted,  collected 
or  paid  within  a  short  time,  and  your  receivers  should  have  full 
authority  to  adjust,  settle,  collect,  or  pay  them  according  to  the 
prevailing  usage  existing  among  railway  companies,  so  that  there 
may  be  no  interruption  of  the  relations  between  the  railway  in 
charge  of  your  receivers  and  other  railways  of  the  country. 

Wherefore  your  petitioners  pray  that  an  order  be  entered 
granting  them  authority  to  adjust,  settle,  collect  and   pay  ail 

'  Loveland's  Forms  of  Fed.  Proc.  No.  300. 


670  RECEIVERSHIPS. 

traffic  balances  arisinc;  out  of  the  operation  of  the Railway 

since ,  189-,  and  which  may  hereafter  arise  from  time  to  time. 


Solicitors  for  the  Receivers. 
State  of 


County  of  '' 


1, ,  on  oath,  state  that  I  am  one  of  the  receivers 

of  the Railway  ;  that  I  have  read  the  foregoino;  petition,  and 

that  the  facts  therein  stated  are  true,  as  1  verily  believe. 

Subscribed  and  sworn  to  before  me,  this day . 


[seal.]  Notary  Public. 

No.  37. 

ORDER  AUTHORIZING  RECEIVER  TO  SETTLE  TRAF- 
FIC BALANCES.' 

On  this  day  tlie  petition  of  the  receivers  for  authority  to  adjust, 
settle,  collect,  and  pay  all  traffic  balances  arisinfj;  in  the  operation 

of  the Railway  since ,  189-,  when  the  receiver  took 

possession  of  said  Railway,  having  been  presented  to  the  court, 
and  the  court  having  fully  considered  the  same,  and  being  fully 
advised  in  the  premises,  it  is  ordered  that  the  receivers  be,  and  tliey 
hereby  are,  authorized  to  adjust,  settle,  collect  and  pay  all  traffic 
balances  between  the  railway  in  their  charge  and  other  railroads 
or  transportation  companies  arising  out  of  the  operation  of  the 

Railway  since ,  189-,  and  which  shall  hereafter  arise, 

according  to  the  usual  methods  prevailing  among  the  railroad  and 
transportation  companies  of  this  country. 

Judge. 

No.  38. 
ORDER  TO  PAY  RENT.' 

(Caption.) 

This  da}'  came  the  receiver  and  represented  to  the  court  that 

the  instalment  of  rent  due  to  the Railway  Company,  the 

day  of ,  189-,  under  the  lease  referred  to  in  the  bill 

herein,  has  not  been  paid,  and  that  the  period  of  ninety  days'  grace 

'  Loveland's  Forms  Fed.  Proc.  No.  301. 
*  Loveland's  Forms  Fed.  Proc.  No.  303. 


FORMS.  671 

provided  in  said  lease  will  expire  the day  of ,  189-,  and 

that  said  receiver  expects  to  have  on  hand  sufficient  funds  to  pay- 
said  rental  on  or  before  said  last-named  date,  and  asks  authority 
of  the  court  to  make  such  payment,  and  therefore  it  is  ordered  by 
the  court  that  the  receiver  be,  and  he  hereby  is,  authorized  to  make 
such  j^ayment. 

Judge. 

No.  39. 

RECEIYER'S  PETITION  FOR  LEAVE  TO  SELL. 

(Caption.) 

Your  petition  I'espectfully  represents  that  the  defendant  is 
owner  of  certain  real  property  known  and  described  as  follows : 
{Description  of  the  j^re-mises,  and  also  what  interest  the  defendant 
has,  what  encumbrances  there  are  upon  it,  and  its  value}) 

{State  reasons  for  asking  a  sale,  for  example,  in  creditor'' s  suit 
thus :)     That  your  petitioner  has  found  no  goods  or  chattels  or 

clioses  in  action  of  the  said out  of  which  any  money  can  be 

realized  by  collection,  suit  or  sale ;  and  that  the  said  land  is  the 
only  available  property. 

Wherefore,  your  petitioner  asks  f<^r  an  order  authorizing  him 
as  such  receiver  to  sell  said  land  at  public  sale,  and  convey  all  the 

right,  title  and  interest  of  the  said which  he  has  in  and  to 

said  premises,  and  for  such  other  or  further  order  as  may  be  just 
(and  for  the  costs  of  this  aj)plication). 

No.  ,40. 

ORDER  GIVING  RECEIVER  LEAVE  TO  PAY  SECURED 

CLAIM. 
(Title.) 

It  is  ordered  tliat  said receiver,  as  aforesaid,  be  and  he  is 

hereby  authorized  and  enipowered  to  sell  and  dispose  of  the  said 
{specify  generallij)  hereinbefore  referred  to,  and  fully  described 
and  specified  in  the  said  petition,  at  private  sale,  at  the  best  price 

he  can  obtain  therefor  in  cash,  not  less  than  the  sum  of 

dollars. 

That  out  of  the  proceeds  of  such  sale  he  be,and  he  hereby  is,author- 
ized  and  empowered  to  pay  the  principal   and  interest  due  and 

unpaid  upon  the  said upon  said  articles  in  the  said  petition 

specified,  and  to  cause  the  same  to  be  satisfied  and  discharged, 
retaining  any  balance  of  the  proceeds  of  such  sale  in  his  hands  as 
receiver,  to  l)e  accounted  for,  and  to  abide  the  further  order  and 
decision  of  this  court. 


672  RECEIVERSHIPS. 

That  said  receiver  be,  and  he  hereby  is,  authorized  and  em- 
powered to  sell  and  dispose  of  the  reniainino;  property  and  assets 
now  in  his  custody  undisposed  of,  or  whicli,  at  the  time  of  sale, 
shall  be  in  his  custody  and  control  undisposed  of,  at  public  sale  to 
the  highest  and  best  bidder,  on  due  public  notice  thereof,  and  at 
such  time  or  times  as  he  shall  deem  most  convenient  and  proper 
between  now  and  the day  of next. 


No.  41. 

ORDER  DIRECTING  A  SALE  OF  PERISHABLE  PROP- 
ERTY m  THE  HANDS  OF  A  RECEIVER. 

(Title.) 

Upon  consideration  of  the  petition  or  report  of  the  receiver,  it  is 
ordered  that ,  the  said  receiver,  be,  and  he  hereby  is,  author- 
ized to  sell  the  goods,  wares  and  merchandise  in  the  said  report 

mentioned,  for  cash  (or  on  a  credit  of for  approved  notes,  as 

the  case  may  be)  according  to  the  usual  course  and  manner  of 
selling  goods  at  public  sale. 

Judge. 

No.  42. 

ORDER  CONFIRMING  RECEIVER'S  SALE. 

(Title.) 

{Recite  filing  of  receive!"'' s  report,  loithout  setting  it  out  at 
length.)  It  is  hereby  ordered  that  the  aforesaid  sale  be,  and  the 
same  hereby  is,  confirmed,  and  the  said  receiver  is  hereby  author- 
ized to  convey  to  the  said  purchaser  the  following  described 
property  :  {Insert  description)  and  upon  receiving  from  said  pur- 
chaser the  sum  of  dollars,  the   balance   of   said  purchase 

money,  the  said  receiver  is  hereby  authorized  to  deliver  to  said 
purchaser  a  deed  of  said  property  in  the  usual  form. 

No.  43. 

PETITION  OF  RECEIVER  TO   COMPEL  PURCHASER 
TO  COMPLETE  PURCHASE. 

(Caption.) 

Your  petitioner  respectfully  represents :  {Here  state  circum- 
stances of  sale  of  assets  and  order  of  court  obtained  granting 
leave  to  sell.) 


FORMS.  673 

That,  thereafter,  your  petitioner  served  said witli  a  notice 

that  your  petitioner  was  ready  to  complete  said  transaction. 

That,  thereafter,  said  purchaser  submitted  to  your  petitioner's 
said  counsel  such  papers  as  he  desired  executed  for  a  complete 
transfer  of  said  {yianiing  them),  and  your  petitioner  duly  executed 

and  acknowledged  the  said  ,  and  demanded  the  performance 

of  said  agreement  on  his  part,  but  he  has  hitherto  failed  (and  re- 
fused) to  perform  the  same. 

Wherefore,  your  petitioner  prays  for  an  order  requiring  the 
said  purchaser  to  perform  said  contract  on  his  part  and  to  pay  to 
your  petitioner,  upon  receipt  of  said  assignment  and  other  papers 

for  the  transfer  of ,  the  said  sum  of dollars,  besides  the 

costs  of  this  application. 

No.  44. 

ORDER  THAT  PURCHASER  FROM  RECEIVER 
COMPLETE  HIS  PURCHASE. 

(Title.) 

{Recite  filing  of  petition  for  an  order  and  its  consideration.) 

It  is  ordered  that  the  said  purchaser,  within days  from 

the  service  of  a  copy  of  this  order  upon  him  {or,  on ,  his 

attorney),  perform  the  contract  in  the  said  petition  of  said  re- 
ceiver mentioned,  and  pay  to  said  receiver  or  to  his  attorneys,  in 

performance  of  the  said  contract,  the  sum  of dollars,  besides 

dollars,  costs  of  this  motion. 

No.  45. 

PETITION  OF  RECEIVER  FOR  AUTHORITY  TO  PAY 
COUNSEL  FEES. 
(Caption.) 

Your  petitioner  respectfully  represents  that  he  has  employed 

as  his  attorney  and  counsellor  in  the  above  m.atter ,  and  that 

in  the  course  of  his  business  as  receiver  he  finds  it  necessary  to 
frequently,  and  indeed  almost  constantly,  consult  with  counsel. 

That  your  petitioner  believes  it  will  be  necessary  to  require 
much  of  the  time  of  counsel  until  the  estate  in  his  hands  is  wound 
up,  and  that  in  view  thereof  he  believes  it  for  the  interest  of  tiie 
estate  that  the  employment  of  said  counsellor  should  be  continued, 
and  that  a  projDer  fee  as  retainer  and  on  account  of  his  said  ser- 
vice should  be  now  paid  to  him. 

Wherefore,  your  petitioner  prays  directions  :  1st.  As  to  the  em- 
ployment  of    legal    assistance.     2d.  As    to  the    amount    which 
shall  be  now  paid  to  said  counsel  on  account  of  such  assistance. 
43 


674  RECEIVERSPIIPS. 

No.  46. 
ORDER   SANCTIONING  IIECEIYER'S  EMPLOYMENT 

OF  COUNSEL. 

(Title.) 

{Recite  filing  of  petition  and  consideration. )  It  is  ordered 
tliat  the  acts  of  said  receiver  in  resjiect  to  the  einphjy merit  of  an 
attorney  and  counsellor  be,  and  he  hereby  is,  continued,  and  he  is 
hereby  directed  to  continue  the  same. 

Tliat  the  said  receiver  is  hereby  directed  now  to  pay  said  coun- 
sellor as  retainer  the  sum  of dollars,  and  on  account  of  services 

rendered  by  him  the  sum  of dollars,  out  of  the  moneys  in 

said  receiver's  hands  to  the  credit  of  the  above-entitled  cause. 


No.  47. 
PETITION  BY  RECEIVER  FOR  LEAVE 

TO  PAY  CLAIMS. 
(Caption.) 

Your  petitioner  represents  that  before  his  appointment  as  re- 
ceiver a  jud£:;inent  was  obtained  against  the  defendant  company 

by ,  in  the court,  and  that  an  execution  was  issued  and  a 

levy  made  thereunder  by  the  sheriff  before  his  said  appointment. 
That  the  sheriff  threatens  to  enforce  his  levy  unless  the  amount 

thereof,  with  costs,  amountino;  in  all  to dollars,  be  forthwith 

paid,  and  your  petitioner  is  advised  by  his  counsel  to  settle  the 
same  at  once. 

Wherefore,  your  petitioner  prays  that  he  may  be  auth,orized  to 
pay  said  judgment. 

No.  48. 

NOTICE    OF  MOTION  BY  A  PARTY  TO  THE  CAUSE 

FOR  INSTRUCTIONS  TO  THE  RECEIVER. 

(Caption.) 

To ,  Receiver: 

Please  take  notice  that  the  undersigned  will  move  the  above- 
named  court,  at  the  court-house  in  the  city  of  ,  ,  on 

the  day  of  ,  189-,  at  ■  o'clock  in  the  noon, 

or  as  soon  thereafter  as  counsel  can  be  heard,  for  instructions 
directing  the  receiver  heretofore  appointed  in  this  action  [here 
specify  what  directions  are  sought.,  thus  ,•)  to  proceed  in  the 
further  discharge  of  his  duty  in  disposing  of  the  copartnership 


FORMS.  675 

property  an  J  effectr  ;  and   tliat  he  l)e  autliorized  and  directed  to 
sell  the  entire  stock  in  trade  of  said  copartnership  at  private  sale 
to ,  at  the  sum  agreed  npon,  to  wit :    (etc.,  etc.,  stat- 
ing terms),  and  for  such  other  or  further  order  as  may  be  just. 
Dated ,  1S9-. 


I  hei-eby  acknowledge  service  of  the  above  notice  this 
day  of ,  189-. 


No.  49. 

PETITION  THAT  EECEIVER  BE  INSTEUCTED  TO 
PAY  OYER  A  DEPOSIT  OR  OTHER  FUND  BE- 
LONGING  TO   THE   PETITIONER. 

(Caption.)  » 

To  the Court : 

Your  petitioner  represents: 
That  the Bank  has  been  for  several  years  prior  to  the 


day  of ,  189-,  a  banking  corporation  existing  under  the  laws 

of  this  state,  and  having  its  place  of  business  at . 

That  on  said  last-mentioned  day,  having  theretofore  become 
insolvent,  it  suspended  its  business. 

That  on  the day  of ,  189-, was  duly  appointed 

receiver  thereof  by  this  court,  and  thereafter  dul3''  qualified  as 
such  and  entered  on  the  discharge  of  his  duties,  and  is  now  such 
receiver. 

That  after  said  bank  had  become  insolvent  and  was  known  to 
its  officers  so  to  be,  and  immediately  before  such  suspension,  your 
petitioner,  who  was  then  a  depositor  in  said  bank,  but  was  ignor- 
ant of  such  insolvency,  deposited  with  it  to  be  credited  in  his  ac- 
count {^Describing  the  fund). 

\{0r)  That  prior  to  the  time  of  the  failure  of  the  said 

Bank  your  petitioner  had  sent  notes,  belonging  to  your  petitioner, 

to   it   for   collection,  of  whicli  said  bank    was  to  receive 

dollars,  as  compensation. 

That  said  bank,  as  your  petitioner  is  informed  and  believes, 

prior  to  said ,  189-,   had  collected  a  large  amount  of    said 

notes  so  sent  to  it  for  collection,  and  had  placed  tiie  amount  so 
collected  on  its  books  as  a  fund  belonging  to  your  petitioner,  sep- 
arate and  apart  from  other  funds  in  said  bank.] 

That  the  said  deposit  {or,  the  fund  so  collected,  and  so  set  apart 

on  the  books  of  said Bank  as  belonging  to  your  jx'titioncr), 

remained  there  at  the  time  of  the  appointment  of  said as 


676  KECEIVERSHIPS. 

receiver,  and  is  now  in  the  possession  and  nnder  tlie  control  of 
said  receiver. 

Tliat  prior  to  tlie  niakino;  of  this  petition  your  petitioner  duly 
demanded  of  said  receiver  tlmt  he  pay  said  amount  to  your  peti- 
tioner, but  said  receiver  has  failed  so  to  do. 

■  Wherefore  your  petitioner  aslvs  that  said  receiver  be  directed 
to  deliver  to  your  petitioner  (the  said  money,  or  as  the  case  may 
he),  and  pay  him  the  costs  of  this  motion,  and  for  such  other  or 
further  order  as  to  the  court  may  seem  just. 

No.  50. 

PETITION  THAT  RECEIVER  SURRENDER  POSSES- 
SION, PAY,  ETC.,  OR  THAT  PETITIONER  HAVE 
LEAVE  TO  BE  EXAMINED  INTERES8E  8U0. 

(Caption.) 

To  the Court : 

{State  claim.) 

Wherefore  your  petitioner  asks  that  said  receiver  be  directed  to 
pay  {etc.,  or  deliver,  etc.,  according  to  the  case),  or  that  your  peti- 
tioner be  allowed  to  come  in  and  be  examined  pro  interesse  sua 

as  to  whether  his  riojhts  in  and  to  said are  not  superior  to 

the  rights  of  said  receiver  and  those  whom  he  represents,  and  that 
at  the  close  of  said  examination  the  court  make  such  order  as  to 
the  disposition  of  said as  to  the  court  may  seem  just. 

And  your  petitioner  further  prays  that  he  may  have  such  other 
or  further  relief  as  may  be  just  (together  with  the  costs  of  this 
motion). 

No.  51. 

NOTICE  OF  RECEIVER'S  PETITION  FOR  DIRECTIONS 
AS  TO  DISTRIBUTION. 

(Caption.) 

To : 

Please  take  notice  that  I  shall  apply  to  the court,  at  the 

next  term  to   be  held  at ,  on  the day  of ,  189-,  at 

o'clock  in  the noon,  for  an  order  directing  what  course 

I  am  to  take  in  reference  to  the  uncollected  notes  and  accounts, 
and  the  furniture  in  my  possession,  and  also  for  the  approval  of 
my  accounts  as  receiver,  and  an  order  discharging  me  from  further 
lial)ility,  and  also  for  an  order  determining  your  respective  prior- 
ities, and  my  duties  as  to  paying  your  various  claims  out  of  the 


FORMS.  677 

surplus  that  may  remain  in  my  bands,  or  out  of  any  other  moneys 
tliat  I  may  liave  collected. 

Dated ,  189-.  

Received  service  of  the  above  notice  this day  of . 

189-. 

E"o.  52. 

PETITION"  OF  RECEIVER  TO  BE  ALLOWED   TO   AC- 
COUNT  AND   TO  BE  DISCHARGED. 

(Caption.) 

{Recite  appointTnent.)  That  your  petitioner  has  since  then  per- 
formed the  duties  of  his  office  and  executed  all  the  trusts  of  the 
same,  so  far  as  he  has  been  able  to  do  so,  and  has  collected  all  the 
assets  known  to  him  of  said  corporation  ;  that  he  has  duly  adver- 
tised for  all  claims  against  the  same,  and  discharged  all  claims  pre- 
sented ;  and  that  there  are  no  creditors  of  said  corporation  to  the 
knowledge  of  your  petitioner  {or  state  exceptions^  if  any,  so  that 
the  order  may  7'eserve  them). 

That  according  to  the  accounts  of  your  petitioner  annexed  there 
remain,  after  paying  the  necessary  expenses  and  charges  of  said 
trust,  together  with  a  proper  compensation  to  the  receiver,  no 
assets  of  value  for  distribution  among  the  stockholders  {or  credit^ 
ors  as  the  case  may  he,  or  state  what,  if  any). 

That  no  suits  or  legal  proceedings  iii  respect  to  said  corporation 
or  receivership  property  are  now  pending  to  the  knowledge  of 
your  petitioner ;  nor  does  any  duty  remain  to  be  performed  by 
said  receiver  except  to  have  his  accounts  finally  settled  {or  state 
exceptions,  if  any,  so  that  the  order  may  reserve  them). 

Wherefore  your  petitioner  prays  that  this  court  may  finally  set- 
tle and  allow  his  accounts  as  such  receiver,  and  award  him  suit- 
able compensation  for  the  performance  of  his  said  duties,  and  for 
an  order  relieving  and  discharging  your  petitioner  as  said  receiver, 
and  ordering  his  bond  to  ])e  canceled,  and  for  such  other  and 
further  order  as  may  be  just. 

No.  53. 
ACCOUNT  RENDERED  BY  RECEIVER. 

(Caption.) 

To  the Court: 

I,  the  undei'signed ,  render  the   following  account  of  my 

proceedings  as  receiver  of   the  rents,  issues  uihI    piolits  ol   the 


678  RECEIVERSHIPS. 

premises  described  in  tlie  complaint  herein,  which  are  known  and 
desi<^'nated  as  Nos. '-, street,  in  the  city  of . 

1  was  a])pointed  as  such  receiver  by  an  order  made  and  entered 
in  tlie  above-entitled  action  on ,  189- 

{Shtte  facU  as  to  administraiioti  of  tlie  trusty  so  fa?'  as  mate- 
inal  to  explain  and  justify  the  account^  as  thus :) 

{Agency  for  collection.  I  thereupon  proceeded  to  appoint  an 
agent  for  the  collection  of  said  rents,  under  the  power  vested  in 
me  by  said  order,  and  in  tlie  following  statement   of  my  account 

I  have  credited  myself  with  the  payment  to  said  agent  of 

per  cent  commission  upon  all  the  moneys  collected  by  him  during 
the  continuance  of  my  said  trust.) 

{Sale  of  uncollectible  assets.  After  having  collected  all  the 
collectible  assets  except  a  disputed  claim  on  a  guaranty,  which  by 

leave  of  this  court  I  compi-omised  in  receiving  the  sum  of 

dollars,  the  remainder  of  the  assets  pursuant  to  leave  of  this  court 

first  obtained,  I  sold  at  public  auction  at ,  on  the day  of 

,  189-,  first  giving  due  notice  as  is  required  by  law  in  this 

case  of  execution  sales  (of  personal  property)  by  tlie  sherilf  {or, 
as  was  required  by  said  leave  of  court).  At  such  sale  all  of  said 
property  was  sold  to  the  highest  bidder  for  sums  aggregating 
dollars.) 

{And  so  with  other  transactions.) 

Schedule  A,  hereto  annexed,  contains  a  statement  of  all  the 
moneys  received  or  collected  by  me  or  my  said  agent. 

Schedule  B,  hereto  annexed,  contains  a  detailed  statement  of 
all  moneys  expended  by  me  in  the  execution  of  my  said  trust, 
together  with  the  oliject  of  such  expenditure. 

All  the  receipts,  statements  and  vouchers  hereto  annexed  form 
part  of  this  count. 

I  charge  myself  as  follows : 

Gross  receipts  as  shown  by  Schedule  A  -    -     -    $ . 

I  credit  myself  as  follows : 

Total  expenditures  as  shown  by  Schedule  B  -       $ . 

Leaving  a  balance  of---------    % . 

Which  consists  of  {state  items.,  as  cash  in  a  designated  trust 
company,  or  unrealized  assets,  etc.).,  to  be  distributed,  subject, 
however,  to  the  deduction  of  the  amount  of  my  commission  and 
the  expenses  of  this  accounting. 

The  said  schedules,  which  are  severally  signed  by  me,  are  part 
"T  this  account. 

No.  54. 

OBJECTION  TO  liECElYER'S  ACCOUNTS. 

(Caption.) 

,  a  judgment  creditor  of ,  for  himself  and  others 


FORMS.  C79 

similarly  situated,  malces  the  followinf^  ohjeetions  to  the  accounts 

of ,  receiver  herein,  tiled  the day  of ,  189- : 

{State  them.) 

(1)  That . 

(2)  That . 


1^0.  55. 

NOTICE  OF  MOTION  TO  KEVOKE  APPOINTMENT. 

(Caption.) 

To {receiver): 

{Ohject  of  motion  may  he  stated  thus:)  That  the  said  appoint- 
ment of ,  as  receiver,  may  be  revoked,  and  that  the  court  ap- 
point a  new  receiver  in  this  action,  and  take  the  requisite  security. 

Dated ,  1S9-. 


{Acknowledgment  of  service^ 

No.  56. 
ORDER  DISCHARGING  RECEIVER. 

(Title.) 

It  is   ordered  that ,  receiver  in   this   action,  he,  and  he 

hereby  is,  discharged  from  any  further  duty  and  otiice  as  such 
receiver,  except  as  hereinafter  set  forth. 

That  the  said  receiver  immediately  turn  over  the  possession  of 
the  lands  and  premises  described  in  the  complaint  in  this  action 

{or  otherwise  designate  property)  to  the  defendants and , 

together  witli  all  papers,  leases  and  documents  relating  to  such 
property  or  to  the  tenants  and  terms  of  occupation  thereof  now 
or  hereafter  in  his  possession,  or  in  any  manner  under  his  control, 
and  that  he  pay  to  such  defendants  {as  the  case  mm/  he)  all  moneys 

by  him  collected  since ,  189-,  first  deducting  therefrom  his 

commission  and  other  charges  {if  any)  to  him  by  law  allowed. 

{Reservation  of  liability  of  company  for  U7isettled  claims.) 
It  is  further  ordered  and  decreed  tliat  all  said  claims  pending  in 
this  court,  whether  debts  or  other  liabilities,  shall  be  presented  to 
said Company  for  adjustment  and  settlomciit,  and  said  Com- 
pany is  ordered  to  pay  said  debts,  with  the  costs  and  e.\j)cnses 
allowed  by  law;  and  for  the  purpose  of  enforcing  the  jiaymont 
thereof,  and  if  need  be,  this  court  will  and  does  retain  jurisdiction 
and  full  power  to  enforce  such  payment  and  the  lien  heretofore 
existing,  without  other  action  or  independent  proceedings. 


680  RECEIVERSHIPS. 

No.  57. 

ORDER  REMOVING  RECEIVER  AND   APPOINTING 
SUBSTITUTE. 

(Title.) 

{Recite  petition  and  hearing  to  remove,  if  such  is  the  case.)    It 

is   ordered  that be,  and  he  hereby  is,   removed    from  the 

office  of  receiver  herein  {may  state  ground  if  desired)  and  that 

is  hereby  appointed  receiver  iicrein  with   the  powers  and 

duties  conferred  by  the  order  entered  herein  the day  of , 

189-  {or  may  specify  them). 

{Bond  clause.) 

That  upon  the  filinf^  of  said  bond  so  approved,  in  the  office  of 

the  clerk  of  this  court,  said do  forthwith  deliver  over  to  said 

,  receiver  herein,  all  books,  papers,  evidences  of  debt,  ac- 
counts, notes,  bills,  bonds  and  property  of  all  and  every  descrip- 
tion belong-inf^  to  said  corporation,  which  may  have  heretofore 
come  into  his  hands  as  receiver  herein,  and  conveyed  all  real 

estate  to  said ,  as  receiver  herein,  his   successors  and  assigns 

and   their  heirs,  which   deed  or  deeds  shall  contain  a  covenant 

against  the  act  of  tiie  said •,  and  shall  be  approved  as  to  form 

by  the  judge  of  this  court. 


No.  58. 
NOTICE  OF  MOTION  TO  DISCHARGE  RECEIVER. 

(Caption.) 

You  are  liereby  notified  that  on  the day  of ,  189-,  at 

o'clock  in  the noon,  or  as  soon  thereafter  as  counsel  can 


be  heard,  a  motion  will  be  made  in  the  above  cause  that 
the  receiver  appointed  in  this  action,  be  discharged  ;  and  that  on 
an  accounting  by  him,  and  a  delivery  of  all  property  and  other 
things  held  by  him  as  receiver,  to  be  made  as  the  court  may  di- 
rect, the  bond  entered  into  by  him,  the  said  receiver,  and  his  sure- 
ties, may  be  vacated  (and  that  the  plaintifl:  may  pay  him,  the  said 

receiver,  the  sum  of dollars  due  to  him  by  order  of  the 

court,  dated  the  day  of ,  180-),  and  for  the  costs  of 

this  motion. 

Dated ,  1S9-. 

Receiver. 


FORMS.  681 

No.  59. 

OEDER  TO  SHOW  CAUSE  WHY  EECEIYER  SHOULD 
NOT  BE  DISCHARGED. 

(Title.) 

On  reading  the  petition  and  affidavit  of ,  verified  the 


day  of  ,   189-,   praying  for  the  removal  of  ,  receiver 

herein,  and  on  motion  of ,  attorney  for  said ; 

It  is  ordered  that  the  said herein  sliovv  cause  by  tlie 


day  of ,   189-,  at o'clock  in  the  •  noon,  or  as  soon 

thereafter  as  he  can  be  heard,  why  he,  the  receiver  herein,  should 
not  be  discharged  and  turn  over  the  possession  of  all  the  property 
of  which  he  is  receiver,  and  all  which  has  come  to  his  possession 
as  such,  to  said  defendants,  together  with  all  papers,  leases  and 
documents  relating  to  such  property,  or  to  the  tenants  and  terms 
of  occupation  thereof. 

No.  60. 

NOTICE  OF  MOTION  OR  PETITION  TO  DISCHARGE 
RECEIVER  AS  TO  SPECIFIC  PROPERTY. 

(Caption.) 
To : 

You  are  hereby  notified  that  on  the day  of ,  189-,  at 

o'clock  in  the noon,  that  I  will  file  in  the court, 


in   the  above  proceedings,  a  motion  to  vacate  so  much  of  the 

order  made  the  day  of ,  189-,  for  the  appointment  of  a 

receiver  herein,  as  directs  the  said  receiver  to  take  possession  of 

or  administer  any  property  belonging  to  the  said Company, 

or  to  in  any  manner  take  possession  of  or  to  operate  the  said  line 
of  railroad  built  by  the  said  last-named  railroad  corporation  under 
the  charter  thereof,  or  tiie  equipments  or  assets  thereof,  and  for 
such  other  or  further  order  as  may  be  just  (and  as  will  give  your 

petitioners  the  full  benefit  of  their  rights  as  creditors  of  said 

Company). 

No.  61. 

ORDER    THAT    RECEIVER    PAY    OVER    FUNDS    TO 
HIS  SUCCESSOR. 
(Title.) 

It  is  ordered  that  the  said ,  within days  from  the 

service  upon  him  of  a  copy  of  this  order,  pay  over  to ,  as  re- 
ceiver of ,  the  sum  of dollars,  together  with  tlie  further 

sum  of dollars,  tlie  costs  of  his  motion,  amounting  in  all  to 

the  sum  of dollars. 


682  RECEIVERSHIPS. 

No.  62. 

AFFIDAVIT  TO  OBTAIN  ORDER  TO  SHOW  CAUSE 
WHY  A  REMOVED  RECEIVER  SHOULD  NOT  BE 
PUNISHED  FOR  CONTEMPT  FOR  A  FAILURE  TO 
PAY  OVER  FUNDS. 

STATE  OF  — 


r^  '  >  SS. 
County. 


(Caption.) 


-,  beino;  duly  sworn,  says: 


That  on  the day  of ,  ISO-,  this  affiant  was  appointed 

receiver  in  the  above-entitled  cause  by  the  said  court,  for  and 
instead  of ,  who  had  been  previously  removed  by  said  court. 

That  on  the daj'  of ,  ISO-,  this  affiant  entered  into  a 

bond,  with  sureties,  in  the  sum  of dollars,  conditioned  for 

the  faithful  discharf^e  of  his  duties  as  such  receiver,  which  bond 
was  duly  approved  by  said  court. 

That  by  order  of  said  court  so  removing;  said ,  he,  the  said 

,  was  ordered  and  directed  to  turn  over  to  this  affiant  the 

sum  of dollars  by  the day  of ,  1S9-;  (and  a  certified 

copy  of  said  order  was  served  on  the  said on  the day 

of ,  1S9-.) 

That  on  the day  of ,  189-,  this  affiant  demanded  of 

said payment  to  him  as  receiver  of  the  said  sum  of  

dollars ;  that  said has  not  paid  to  this  affiant  the  said  sum  or 

any  part  thereof,  although  the  time  limited  in  said  order  within 

which  to  pay  the  same  has  expired,  and  that  the  said has 

failed  to  comply  in  every  respect  with  said  order. 


No.  63. 

AFFIDAVIT  FOR  CONTINUANCE  OF  ACTION 
AGAINST  RECEIVER  INSTEAD  OF  AGAINST 
CORPORATION. 

STATE  OF  — 


County.       ^ 


(Caption  in  Original  Action  for  a  Receiver.) 

-,  beino^  duly  sworn,  says: 


That  he  is  the  plaintiff  in  the  action  of against  the 

Company  now  pending  in  this  court. 

That  on  or  about  the day  of ,  189-,  an  action  was 


FORMS.  G83 

commenced   l)y   against   the  Company  in   the 


conrt  {o7'  in  this  court,  tlie  title  wiiereof  is against ),  to 

{here  state  ohject,  showing  that  it  is  not  a  demand  which  requires 
a  sejyarate  trial). 

{State  condition  of  the  cause.) 

That  on  the day  of ,  189-,  deponent  was  served  with 

a  restraining  order  to  show  cause  in  this  action,  brought  by 

against  the  above-named  defendant,  for  the  purpose  of  dissolving 

the  latter  and  for  winding  up  its  affairs,  and  that  on  ,  1S9-, 

the  said  company  was  so  dissolved  by  order  or  decree  of  tiiis 

court,  and  one was  constituted  receiver  of  the  property  and 

effects  of  said  company  with  the  powers  usual  in  sucli  cases. 

That  affiant  believes  it  is  desirable,  from  the  nature  and  im- 
portance of  the  questions  involved,  that  the  action  referred  to 
should  be  continued  by  substituting  the  said  receiver  as  defendant, 
as  proposed  in  said  complaint. 

{If  order  to  show  cause  is  desired,  ash  for  it.) 


No.  64. 

PETITION  BY  EECEIYER  THAT  HE  BE  SUBSTITUTED 
FOR  A  PARTY  IN  AN  ACTION  WHICH  WAS 
PENDING  WHEN  HE  WAS  APPOINTED. 

(Caption.) 

To  the Court : 

Your  petitioner,  upon  his  oatli,  says: 

That  by  order  in  the  above-named  cause,  made  the day  of 

last,  your  petitioner  was  duly  Hpi)c)inted  receiver  of  (brief  1/ 


indicating  what) 

{Or,  were  ajppointed  in  suppletnentary  proceedings  :)     That  on 

the day  of ,  189-,  upon  application  duly  made  by  — — , 

a  judgment  creditor  of  the  above-named ,   in   proceedings 

supplementary  to  execution,  your  petitioner  was,  by  order  of  the 
court,  duly  ap])ointed  receiver  of  the  property  of  said . 

Tliat  thereafter  he  duly  qualiiied  as  such,  and  entered  on  his 
duties  as  such,  and  now  is  such  receiver. 

{Allege  pendency  and  nature  of  action  /  and  of  defense,  if  at 
issue,  and  condition  of  cause  and  other  matters.) 

Wherefore,  your  petitioner  asks  leave  to  prosecute  {or,  dtfeyid) 
said  cause,  and  that  for  that  ])ur])Oso  he  l)c  substituted  as  ]ilaiiitif1-' 
{or,  defendant)  in  place  of  said  {naine)  and  for  such  other  or  fur- 
ther relief  as  may  be  just. 


6S4  KLCElVEKSlllPS. 

No.  G5. 
OEDER  TO  SHERIFF  TO  WITHDRAW  LEVY. 
(Title.) 

It  appearing  by  the  affidavit  of that ,  the  sheriil 

of  tliis  county,  lias  made  a  levy  upon  certain  property  in  the 
hands  of  the  receiver  in  this  action  without  leave  of  court,  it  is 
ordered  that  he  withdraw  the  same  forthwith. 

It  is  further  ordered  that  said  appear  before  this  court 

on  the day  of ,  1S9-,  and  show  cause  why  an  attach- 
ment should  not  issue  against  him  as  for  a  contempt  of  court  in 
making  said  levy. 

No.   66. 
SPECIAL  ORDER  FOR  RECEIVER  TO  BRING   SUIT. 

(Title.) 

It  appearing  to  the  court  that is  indebted  to  the  Com- 
pany, the  defendant  herein,  in  the  sum  of dollars  {or  show 

some  cause  of  action),  the  court,  on  the  application  of ,  re- 
ceiver herein,   authorizes    and    directs    him   to   bring   an    action 

against   the   said for   the    recovery    of   the   said 

dollars,  with  interest  thereon  {or  state  other  ohject  of  the  suit). 

No.  67. 

COMPLAINT  BY  CREDITOR  ON  BOND  OF  RECEIVER 

FOR  FAILURE  TO  PAY  MONEY. 

(Caption.) 

{Commencement.)     That   on   the day  of ?.  189-, 

beg-an  in  the court  of  the  state  of a  suit 


against  the Company  for  the  appointment  of  a  receiver, 

and  such  action  was  thereafter  had  that  the  defendant ,  on 

the day  of ,  189-,  was  appointed  by  said  court  re- 
ceiver of  said Company,  and  on  the day  of , 

189-,  he,  with  his  codefendants  as  sureties,  executed  his  bond,  a 
copy  of  which  is  hereto  annexed,  marked  "  Exhibit  A,"  and 
made  a  part  hereof,  to  the  approval  of  said  court,  and  he  at  once 
entered  upon  his  duties  of  said  trust. 

That  on  the day  of ,  189-,  said was,  by 

an  order  of  said  court,  duly  ordered  to  convert  all  the  property 

of  said Company,  of  whatsoever  kind,  into  money  by  sale 

thereof,  which  he  did  in  due  course  of  time,  receiving  therefor 


FORiMS.  685 

dollars,  and  so  reporting  to  the  conrt,  which   report  was 

duly  approved. 

That  on  the day  of ,  189-,  the  relator  filed  with 

said    receiver  his  claim    for dollars   against    said 

Company,  which  was  duly  allowed  by  said  court  as  a  valid  and 
existing  claim  against  said  trust. 

That  on  the day  of ,  189-,  said ,  as  such 

receiver,  filed  with  the  court  his  final  report  in  the  matter  of  said 
receivership,  which  report,  in  due  course  of  time,  was  duly  ap- 
proved by  said  court. 

That  in  said  report  said  receiver  showed  that  among  the  other 

creditors   of   said Company   the   relator  was  entitled    to 

receive  of  the  funds  of  said  receivership,  as  his  proportionate 

share  thereof,  the  sum  of dollars ;  and  said  receiver  was 

directed  by  said  court  to  pay  said  sum  to  the  relator,  along  with 
the  other  creditors. 

That  on  the day  of ,  189-,  the  relator  demanded 

of  said  ■ the  ]:>ayment  of  said  sum  of dollars,  but  he 

has  failed  and  still  fails  (and  refuses)  to  pay  the  same  (and  has 
converted  said  amount  to  his  own  use  and  benefit). 

{Prayer  and  exhibit.) 


No.  68. 

DECLAEATION"  ON  ASSESSMENT  AGAINST   STOCK- 
HOLDERS OF  NATIONAL  BANKS.' 

CIRCUIT  COURT   OF   THEI 

UNITED  STATES,  I  rn  ,    t^ 

,^  '  Yss.       Term,  A.  D. . 

District  of ,  [  ' 

Division.  J 

,  as  receiver  of  the ,  plaintiff,  by ,  his  attorne3's, 

complains  of ,  defendant,  on  a  plea  that  he  render  to  the 

plaintiff  the  sum  of dollars,  which  he  owes  to  and  unjustly 

detains  from  him. 

For  tliat,  whereas,  heretofore,  to  wit :  on  the day  of , 

A.  D. ,  tlie  National  Bank  was  organized  as  a  na- 
tional banking  association  under  the  laws  of  the  United  States 

with  a  cH])ital  stock  of thousand  dollars  divided  into 

thousand  shares  of  one  hundred  dollars  (§100)  each,  and  the 
Comptroller  of  the  Currency  of  the  United  States  did,  pursuant 
to  law,  on,  to  wit :  the day  of ,  give  to  said Na- 
tional ]3ank  a  certificate  under  his  hand  and  official  seal  that  said 
National  Bank  had  complied  with  all  the  provisions  of  law 


By  permission  of  Messrs.  Duncan  &  Gilbert. 


086  RECEIVERSHIPS. 

required  to  be  complied  with  before  comincncinoj  the  business  of 
bankiii<>;,  and  that  such  association  was  authorized  to  commence 

the  business  of  bankiiiii;,  and  tliereupon  said National   Bank 

did  commence  the  business  of  banking  under  and  in  pursuance  of 
the  laws  of  the  United  States. 

And  the  plaintiff  further  avers  that  on,  to  wit :  the day  of 

,  said National  JBank,  being  then  insolvent,  suspended 

business  and  the  payment  of  its  obligations,  and  afterward,  to  wit: 

on  the day  of ,  one was,  by  the  Comptroller  of  the 

Currency  of  the  United  States,  in  pursuance  of  the  laws  of  the 

United    States,    duly   appointed    receiver   of   said National 

Bank  and  entered  upon  the  discharge  of  his  duties  as  such  re- 
ceiver. 

And  the  plaintiff  further  avers  that  thereafter,  to  wit :  on  the 
day  of ,  it  appeared  to  the  satisfaction  of  the  Comptrol- 
ler of  the  Currency  of  the  United  States  that,  in  order  to  pay  the 

debts  of  said National  Bank,  it  was  necessary  to  enforce  the, 

individual  liability  of  the  stockholders  thereof,  as  prescribed  by 
sections  5151  and  5234  of  the  Revised  Statutes  of  the  United 

States,  to  the  extent  of dollars  upon  each  and  every  share  of 

the  capital  stock  of  said National  Bank  held  or  owned  by 

them  at  the  time  of  its  failure,  and  thereupon  the  said  Compti'ol- 

ler  of  the  Currency  of  the  United  States  did  on,  to  wit :  said 

day  of  ,    make    an    assessment    and  requisition   upon   the 

shareholders  of  the  said National  Bank  for thousand 

dollars,  to  be  paid  by  them  ratably  on  or  before  the day  of 

,  and  did  direct  the  said ,  as  receiver  as  aforesaid,  to  take 

all  necessary  proceedings,  by  suit  or  otherwise,  to  enforce  to  that 
extent  the  said  individual  liability  of  the  said  shareholders. 

And  the  plaintiff  further  avers  that  fhe  defendant,  at  the  time 

the  said National  Bank  suspended  business  and  the  payment 

of  its  obligations  as  aforesaid,  to  wit :  on  the day  of , 

was  the  owner  and  holder  of  shares  of  the  capital  stock  of 

said National  Bank,  by  means  whereof,  and  by  force  of  the 

laws  of  the  United  States,  the  defendant  then  and  there  became 
liable  to  pay  to  the  plaintiff  the  amount  of  said  assessment  and 

requisition  upon  him  as  aforesaid,  being  the  sum  of dollars, 

said  amount  being dollars  upon   each  share  of  the  capital 

stock  of  said National  Bank,  owned  and  held  by  said  de- 
fendant at  the  time  said National  Bank  suspended  business 

and  the  payment  of  its  obligations  as  aforesaid. 

Yet  the  defendant,  thougli  often  requested,  has  not  paid  the 
said  sum  of  money  or  any  part  tiiereof,  to  the  plaintiff,  but  so  to 
do  wholly  refuses,  to  the  damage  of  the  plaintiff',  as  aforesaid,  of 
dollars,  and  therefore  he  brings  his  suit,  etc. 


FORMS.  687 

UaNITED  states  of  AMERICA,  ) 

District  of  ,  >  ss. 

Division.  ) 

beincr  duly  sworn,  on  his  oath   deposes  and  says  tliat  lie  is 


the  receiver  of  the National  Bank,  the  plaintili"  in  the  above 

cause;  that  the  demand  of  the  plaintiff  is  upon  the  cause  of  action 
set  forth  in  the  foregoing  declaration  and  that  there  is  due  to  the 
plaintiif  from  the  defendant  npon  said  cause  of  action,  after  allow- 
ing the  defendant  all  his  just  credits,  deductions  and  set-offs,  the 

sum  of dollars  as  debt  and  interest  on  said  sum  at  the  rate 

of  five  per  cent  per  annum  from  the day  of ,  as  dam- 
ages for  the  detention  thereof. 

Subscribed  and  sworn  to  before  me  this 
day  of ,  A.  D.  — — . 


JS^otary  Public. 

No.  09. 

DECLARATION  ON  PROMISSORY  NOTE. 

.With  Confession  of  Judgment  and  Affidavit  of  Signature. 

DISTRICT  COURT  OF  TllEl 

UNITED  STATES,  I  ,^  rp^,,,.    a    n 

T^  '  y  SS.    ierni,  A.  JJ. . 

District  of ,  | 

Division.  J 


,  Receiver  of  the ,  a  national  banking  asso- 
ciation organized  and  doing  business  under  the  laws  of  the 
United  States,  plaintiff'  in  tliis  suit,  by ,  his  attorneys,  com- 
plains of ,  defendant in  this  suit,  in  a  plea  of  trespass 

on  the  case  upon  promises. 

F    For,  that,  whereas,  the  said  defendant  —  heretofore,  to  wit : 

On  the day  of ,  A.  D.,  — ,  at ,  to  wit :  at  the 

District  of ,  aforesaid,  made promissory  note —  in  writ- 
ing, bearing  date  on  the  day  and  year  aforesaid,  and  then  and  there 

deTivered  the  same  to  said'  the ,  in  and  by  which  said  note — 

said  defendant  l)y  the  name  and  style  of ,  promised  to  pay 

to  the  order  of  said  the ,  after  date,  the  sum  of dollars, 

at  the ,  with  interest  at  the  rate  of per  cent  per  aimum 

after until  paid,  for  value  received.     And  the  said  the , 

to  whom  or  to  whose  order  the  said  note  was  payable,  afterwards, 

to  wit :  on  the  day  of  ,  A.  D. ,  i)ccame  and  was 

insolvent,  and  the  plaintiff"  on  said  day  was  liy  tlic  Comptroller  of 
the  Currency  of  the  United  States  duly  ap[)uinted  and  coniinis- 


688  •  RECEIVERSHIPS. 

sioned  under  the  laws  of  the  United  States  as  Receiver  of  said 

,  by  moans  whereof  and  by  force  of  the  statute  and  laws  of 

the  United  States  in  such  case  made  and  provided  the  said  de- 
fendant—  became  liable  to  pay  to  the  plaintiff  the  said  sum  of 
monev  in  the  said  note —  specified,  accordin*^  to  the  tenor  and 
effect'of  said  note — ,  and  beiuii;  so  liable  the  said  defendant — ,  in 
consideration  thereof  afterwards,  to  -svit :  on  the  same  day  and 
3'ear  and  at  the  place  aforesaid,  undertook  and  then  and  there 
faithfully  promised  said  plaintifl:  well  and  truly  to  pay  unto  the 
said  plaintiff  the  said  sum  of  money  in  the  said  note —  specified, 
according  to  the  tenor  and  effect  of  said  note —  and  the  statute 
and  laws  of  the  United  States  as  aforesaid. 

Yet  the  defendant — ,  although  often  requested,  etc.,  ha —  not 
yet  paid  the  said  sum  of  money  or  any  part  thereof  to  the  said 
plaintiff,  but  so  to  do  ha —  hitherto  wholly  refused  and  still  do — 
refuse,  to  the  damage  of  the  plaintiff  of dollars,  and  there- 
fore he  brings  suit,  etc.                          


DISTRICT  COURT  OF  THEl 
UNITED  STATES, 

District  of , 

Division. 


Plaintiff's  Attorneys. 


-  ss.       Term,  A.  D. 


ais. 


And  the  said defendant —  in  the  above-entitled  suit,  by 

attorney — ,  come —  and  defend — the  wrong  and  injury 


when,  etc.,  and  waive—  service  of  process,  and  say —  that 

cannot  deny  the  action  of  the  said  plaintiff  nor  but  that the 

said  defendant —  did  undertake  and  promise  in  manner  and  form 

as  the  said  plaintiff  has  above  complained  against ,  nor  but  that 

the  said  plaintiff  has  sustained  damages  on  account  of  the  nonper- 
formance of  the  several  promises  and  undertakings  in  the  said 

declaration  mentioned,  including  the  sum  of dollars  for  his 

reasonable  attorneys'  fees  for  entering  up  this  judgment  over  and 
above  his  other  costs  and  charges  by  him  about  his  suit  in  this 

behalf  expended  to  the  amount  of dollars  and cents, 

and  the  said  defendant — ■  further  agree —  that  no  writ  of  error 
or  appeal  shall  be  prosecuted  on  the  judgment  entered  by  virtue 


FORMS.  689 

hereof  nor  any  bill  in   equity  filed   to  interfere  in  any  manner 

with    the    operation    of    said    judo^ment,    and    that  •  hereby 

release —  all  errors  that  may  intervene  in  entering  up  the  same 
or  issuing  the  execution  thereon,  and  consent —  to  an  immediate 
execution  upon  said  judgment. 

Defendant's  Attorneys. 
State  of  — 


County.  [     ' 

,  being  duly  sworn,  on  his  oath  deposes  and  says 

that  he  is  a  resident   of County, ,  and   is   acquainted 

with  the  handwriting  of  ,  whose  name —  — ■  signed  to  the 

annexed  note  and  power  of  attorney  and  that  the  signature —  of 

said to  the  said  note  and  power  of  attorney  —  the  genuine 

signature —  of . 

Subscribed  and  sworn  to  before  me 
this day  of ,  A.  D. 


Notary  Public. 

No.  TO. 

PETITION  OF  RECEIVER   OF   NATIONAL  BANK  TO 
COMPROMISE  WITH  SHAREHOLDER.' 


STATE  OF 
County  of 


ss. 


In  the Court,  thereof. 


In  the  matter  of  the 

National  Bank  of 

In  Liquidation. 


Gen.  No.  ■ 
Term  No. 


To  the  Honorable  Judges  of  said  Court: 

Your  petitioner, ,  receiver  of  the National  Bank  of 

,  respectfully  shows  that  said National   IJank  of  , 

being  a  national  banking  association  duly  organized  under  the 

laws  of  the  United  States,  having  on  or  about  the day  of 

,  A.  D.  ,  become  insolvent,  your  petitioner  was  by  the 

,  Comptroller  of  the  Currency  of  the  United  States,  on  or 

about  the day  of ,  A.  D. ,  duly  appointed  receiver 

of  said National  Baidv  of  ,  and  entered  upon   the  dis- 
charge of  his  duties  as  such  receiver  and  is  still  so  acting. 

'By  permission  of  Messrs.  Duncan  &  Gilbert. 
44 


690  RECEIVERSHIPS. 

Your  petitioner  fnrtlier  shows  to  the  court  that  on ,  upon 

a  proper  accountinjy  made  by  your  petitioner  and  upon  a  vahiation 
of  the  uncollected  assets  remaining  in  the  hands  of  your  peti> 
tioner,  it  appeared  to  the  satisfaction  of  said  Comptroller  of  the 

Currency,  that  in  order  to  pay  the  debts  of  said National 

Bank  it  was  necessary  to  enforce  the  individual  liability  of  the 
shareholders  of  said  baidv  as  prescribed  by  sections  5151  and 
5234  of  the  Revised  Statutes  of  the  United  States,  and  that,  by 
virtue  of  the  authority  vested  by  law  in  the  said  Comptroller  of 
the  Currency,  the  said  Comptroller  of  the  Currency  did  make  an 
assessment  and  requisition  upon  the  shareholders  of  said Na- 
tional Bank  of for thousand  dollars,  to  be  paid  by  them 

ratably  on  or  before  the  day  of  ,  A.  D. ,  and  said 

Comptroller  of  the  Currency  did  make  a  demand  upon  each  and 

every  one  of  said  shareholders  for dollars  upon  each  and  every 

share  of  the  capital  stock  of  said  National  Bank  held  and 

owned  by  said  shareholders,  respectively,  at  the  time  of  the  fail- 
ure of  tiie  said  bank;  and  that  your  petitioner,  as  receiver,  was 
directed  by  said  Comptroller  of  the  Currency  to  take  all  necessary 
proceedings,  by  suit  or  otherwise,  to  enforce  to  that  extent  the 
individual  liability  of  the  said  shareholders. 

Your  petitioner  further  shows  that  — — ,  of  ,  is  a  share- 
holder in  the National  Bank  to  the  amount  of shares 

of  the  par  value  of hundred  dollars,  and  that  there  is  due  to 

your  petitioner,  as  receiver,  the  sum  of hundred  dollars,  with 

interest,  being  the per  cent  assessment  on  the  said shares 

of  stock  standing  in  the  name  of  said . 

Your  petitioner  further  shows  that  he  has  made  diligent  effort 
to  collect  the  amount  due  upon  said  assessment,  but  has  been  un- 
able to  collect  anything  from  the  said . 

Your  petitioner  further  shows  that  he  has  carefully  investigated 

the  financial  standing  of  said ,  and  is  satisfied  that  said  claim 

cannot  l)e  collected  from  said by  means  of  legal  proceedings. 

Your  petitioner  further  shows  that  the  amounts  due  upon  said 
assessments  are  bad  and  doubtful  debts  within  the  meaning  of 
section  5234  of  the  Revised  Statutes  of  the  United  States. 

Your  petitioner  further  shows  that  the  said has  offered 

your  petitioner  the  sum  of hundred  dollars  cash  in  full  settle- 
ment of  all  claims  the  of National  Bank  of ,  or  your  pe- 
titioner, as  receiver  thereof,  may  have  on  account  of  said  assess- 
ment of per  cent  upon  the shares  of  stock  standing  in 

the  name  of  said . 

Your  petitioner  further  shows  that  after  having  fully  consid- 
ered said  proposition  your  petitioner  is  of  the  opinion  that  it  is 
for  the  best  interests  of  the  creditors  and  shareholders  of  said 

National  Bank  of  — — ,  that  your  petitioner  be  allowed  to 

accept  the  offer  of hundred  dollars  cash  of  said ,  in  full 


FORMS. 


691 


settlement  and  compromise  of  said per  cent  assessment,  and 

that  more  money  can  be  realized  upon  said  assessment  on  the  stock 

of  said -,  by  means  of  such  compromise  and  settlement  than 

your  petitioner  would  otherwise  be  able  to  obtain. 

Wherefore  your  petitioner  prays  that  an  order  of  court  may  be 
entered  herein  authorizinojand  directing  your  petitioner  to  accept 
said  ofEer  of hundred  dollars  cash  of  said in  full  settle- 


ment of  said  claim  on  account  of  said 


And  thus  as  in  duty  bound  he  will  ever  pray,  etc. 


per  cent  assessment. 


Receiver  of  the 

By  — 


National  Bank. 


his  Solicitors. 


State  of 
County  of 


ss. 


,  being  duly  sworn,  on  his  oath  says  that  he  is  the  receiver 

of  the National  Bank  of ,  that  he  has  read  the  foregoing 

petition  and  knows  the  contents  thereof,  and  that  the  matters 
and  thino;s  therein  set  forth  are  true  to  the  best  of  his  knowledg-e 
and  belief. 


Subscribed  and  sworn  to  before  me 
this day  of ,  A.  D. 


Notary  Public. 


No.  71. 

ORDER    OF    COURT     AUTHORIZING     C0MPR3]VnSE 
WITH  SHAREHOLDERS. 


STATE  OF 

COUNTV  OF  - 


SS. 


In  the 


Court  thereof. 


In  the  matter  of  the 

National  Bank  of 

In  Liquidation. 


Gen.  No.  - 
Tei'rn  No. 


receiver  of  the 


National  Bank  of 


This  day  comes  — 
-,  by ,  his  attorae_ys,  and  presents  his  ])etition  asking  for 


an  order  of  court  authorizing  and  directing  him  to  settle  and 

compound  for hundred  dollars  cash,  to  l)e  paid  by ,  and 

all  claims  the National  Bank  of ,  or  your  petitioner  as 


692  RECEIVERSHIPS. 

receiver  thereof,  may  have  on  account  of  the per  cent  assess- 
ment made ,  on  the shares  of  tlic  capital  stock  of  the 

National  Bank  standing  in  the  name  of . 

The  court  having  considered  the  said  petition  and  the  evidence 
adduced  in  suppo'rt  thereof,  and  being  fully  advised  in  the 
premises,  finds  that  the  best  interests  of  the  shareholders  and 

creditors  of  the National  Bank  of require  that  such 

compromise  and  compound  should  be  made. 

It  is  therefore  Okdered,  Adjudged  and  Decreed  that  your  peti- 
tioner be,  and  he  hereby  is,  authorized  and  directed  to  compound  and 

settle  for  hundred  dollars  cash,  any  and  all  claims  the 

National  Bank,  or  your  petitioner  as  receiver  thereof,  may  have 

on  account  of  the  said per  cent  assessment  on shares 

capital  stock  of  the National  Bank  standing  in  the  name  of 

and  this  order  is  to  operate  as  a  full  release  of  any  and  all 

claims  your  petitioner  may  have  by  reason  of  said  claim  on 
account  of  said per  cent  assessment. 

Entered  by  Judge j  October  — ,  A.  D. . 


APPENDIX 


OF  RECENT  CASES  DECIDED  OR  REPORTED  SINCE  THIS  WORK 
WENT  TO  PRESS. 


APPOINTMENT  OF  KECEIYEE— liability  for  rent. 

In  Olmstead  v.  Distilling  &  C.  F.  Co.  73  Fed.  Rep.  44,  under 
the  Illinois  Statute  providing  that  corporations  organized  under 
the  general  statute  whose  powers  have  expired  by  limitation  or 
otherwise  shall  continue  their  corporate  capacit^y  for  two  years 
for  the  purpose  of  settling  up  their  affairs,  etc.,  it  was  held  that 
upon  a  judgment  of  ouster  in  quo  ivarranto  jDroceedings  the  cor- 
poration becomes  a  trustee  for  its  creditors  and  stockholder's  so 
that  equity  has  jurisdiction  on  the  gi-ound  of  trust  relationship  of 
a  suit  by  a  stockholder  in  behalf  of  himself  and  other  stockholders 
who  may  join  with  him  for  the  appointment  of  receivers  to  ad- 
minister its  assets  under  proper  averments. 

Even  when  a  receiver  is  appointed  for  the  corporation  upon  an 
erroneous  assumption  of  the  court  that  the  bill  discloses  an  equi- 
table jurisdiction,  such  appointment  cannot  be  questioned  collat- 
erally. 

In  the  above  case,  on  an  intervening  petition  tiled,  Judge  Sho- 
walter  recently  held,  in  an  opinion  not  officially  I'eported,  that  the 
receiver  of  a  corporation  was  not  liable  for  rents  due  upon  leased 
property  held  by  the  corporation  at  the  time  of  his  appointment 
for  a  period  longer  than  two  years  after  the  judgment  of  ouster 
of  the  corporation. 

That  at  the  expiration  of  the  two  years  provided  by  the  statute 
the  corporation  as  an  entity  ceased  to  exist  and  its  leases  fell  with 
the  corporate  existence. 

Same — or  rents  and  profits. 

In  Scott  V.  llotchkiss  (Cal.)  47  Pac.  45,  a  mortgage  provided 
that  in  case  of  foreclosure  a  receiver  might  be  appointed  of  the 
rents  and  protits.     It  was  held  that  in  the  absence  of  the  affidavit 


694  APPENDIX. 

required  in  mortgages  of  growing  crops,  such  mortgage  did  not 
entitle  the  receiver  to  a  crop  growing  on  the  land  in  the  posses- 
sion of  a  tenant,  but  only  to  so  much  thereof  as  was  duly  reserved 
for  rent.  On  an  allegation  that  the  security  was  insufficient  it 
was  held  the  court  was  authorized  to  appoint  a  receiver  in  accord- 
ance with  the  stipulations  of  a  mortgage  as  against  the  claims  of 
a  purchaser  without  notice. 

Same — on  application  of  mortgagee. 

In  Fanners'  Loan  &  T.  Co.  \.' Hotel  Briinsimck  Co.  42  X.Y. 
Supp.  350,  it  was  held  that  where  a  receiver  has  been  appointed 
in  voluntary  proceedings  to  dissolve  a  corporation  the  same  re- 
ceiver should  be  appointed  on  a  subsequent  application  by  the 
holder  of  a  chattel  mortgage  on  the  property  of  the  corporation 
for  the  appointment  of  a  receiver,  unless  it  appears  that  the  liert 
of  the  mortgagee  will  receive  adequate  protection  by  the  order 
already  made. 

Same — on  ex  parte  application. 

In  Pearson  v.  Kendrick  (Miss.)  21  So.  37,  the  Code  required 
the  party  making  an  ex  parte  application  for  a  receiver  to  give 
the  adverse  party  a  bond  conditioned  to  pay  all  damages  that 
might  be  sustained  if  the  appointment  was  revoked  and  providing 
that  such  damages  might  be  recovered  in  the  same  manner  as 
damages  on  an  injunction  bond.  An  order  discharging  the  re- 
ceiver appointed  ex  parte  was  held  to  be  appealable. 

In  the  same  case  it  was  held,  under  §  574  of  the  Code  author- 
izing the  appointment  of  a  receiver  without  notice  and  under 
§  922  permitting  chancellors  of  other  districts  than  that  in  which 
the  suit  is  pending  to  act,  the  appointment  of  a  receiver  by  a 
chancellor  of  another  district  will  be  presumed  to  have  been  made 
upon  a  sufficient  hearing. 

Same — on  application  of  wife. 

In  Murray  v.  Murray  (Cal.)  47  Pac.  37,  it  was  held  that  in  a 
wife's  action  for  maintenance  without  divorce  under  Civil  Code, 
§  137,  where  purely-  legal  proceedings  are  inadequate  the  action 
carried  with  it  the  right  to  have  a  receiver  appointed  nnder 
the  general  provisions  of  Code  Civ.  Proc.  §  564.  The  wife's 
claim  for  maintenance  is  within  the  general  powers  of  a  court  of 


APPENDIX.  695 

equity  to  grant  not  depending  on  a  statute,  and  since  the  plaintiff's 
demand  may  be  cliarged  specifically  upon  the  defendant's  prop- 
erty, described  in  the  complaint,  the  court  had  the  power  to  ap- 
point a  receiver  at  the  beginning  of  the  action.  It  is  also  held 
that  where  the  defendant  is  a  nonresident  by  means  of  the  re- 
ceiver's possession  the  court  acquires  jurisdiction  to  subject  the 
propert}'  seized  to  the  satisfaction  of  its  lawful  judgment. 

Same — in  case  of  insanity. 

In  Re  Hijhart  (X.  C.)  25  S.  E.  903,  it  was  held,  under  the  Act 
of  18S9,  a  receiver  might  be  appointed  for  an  insane  person  ou 
motion,  after  due  and  proper  notice. 

Same — when  valid. 

In  State^  Amsterdamsch  Trustees  Kantoor,  v.  Spokane  Count j/ 
Super  Ct.  (Wash.)  47  Pac.  31,  it  was  held  that  §  326,  subs.  3  and 
5,  of  the  Civil  Code  authorizing  the  appointment  of  a  receiver 
"where  it  appeared  that  the  property  or  fund  in  controversy  is  in 
danger  of  loss  or  removal  or  where  a  corporation  has  been  dis- 
solved, or  is  insolvent  or  in  danger  of  insolvency,  or  has  forfeited 
its  corporate  rights,  a  receiver  could  not  be  appointed  ex imrte  to 
take  charge  of  the  business  of  an  organization  exercising  corpor- 
ate rights  without  authority.  Such  appointment  can  be  made 
only  after  proceedings  under  Code  Proc.  §§  688,  689. 

Same — when  void  for  want  of  bond. 

In  Dreyspring  v.  Loed  (Ala.)  21  So.  73,  where  the  statute  pro- 
vided among  other  things  that  an  order  appointing  a  receiver 
"  must  require  complainant  to  enter  in  a  bond,"  etc.,  it  is  held 
mandatory  and  prohibitory  and  where  the  order  merely  requires 
the  receiver  to  give  bond,  the  appointment  is  void. 

Same — when  void  as  to  parties  in  possession. 

In  JIall  V.  Donovon  (Mich.)  09  N.  W.  643,  an  action  was 
brought  under  the  statute  relating  to  voluntary  assignments  and 
which  authorizes  holders  of  preferred  claims  to  bring  an  action  in 
case  of  fraud  and  apply  for  a  receiver,  an  order  made  pendente 
lite,  appointing  a  receiver  and  requiring  defendants  to  deliver 
to  him  all  property  owned  by  pei'sons  named,  in  possession  of 
other  defendants  as  mortgagees  was  held  to  be  erroneous,  if  not 
a  nullitv. 


696  APPENDIX. 

BOND  OF  RECEIYER— LIABILITY  of  sureties. 

In  Black  v.  Gentery  (N.  0.)  26  S.  E.  43,  it  is  held  that  the  liability 
of  sureties  on  receiver's  bond  is  properly  enforced  in  an  indepen 
dent  action  against  them  ;  that  where  judgnieiit  has  been  recov- 
ered against  the  receiver  he  is  not  a  necessary  i)arty  to  an  action 
against  the  sureties  on  tlie  bond ;  and  in  such  case  it  is  not  neces- 
sary to  allege  leave  of  court  to  sue. 

CERTIFICATE  OF  PECEIVER. 

In  Illinois  Trust  dh  S.  Bank  v.  Pacific  R.  Co.  (Cal.)  47  Pac. 
00,  it  was  held  that  where  the  court,  under  circumstances  appar- 
ently authorizing  its  action,  takes  possession  of  a  street  railway 
through  a  receiver,  certificates  issued  under  the  order  of  the  court 
must  be  regarded  as  valid,  even  though  there  may  have  been  a 
failure  of  jurisdiction  as  to  the  rightful  owner  of  the  road.  It 
will  be  presumed,  in  the  absence  of  evidence  to  the  contrary,  that 
there  was  shown  everything  necessary  to  authorize  the  court  in 
the  issuance  of  certificates.  It  was  also  held  in  the  same  case  that 
an  order  appointing  a  receiver  cannot  be  collaterally  attacked  on 
the  ground  of  failure  of  jurisdiction. 

COMPENSATION  OF  RECEIVER. 

In  Mann  v.  Poole  (S.  C.)  26  S.  E.  229,  it  is  held  that  the  com- 
pensation of  a  receiver  is  in  the  discretion  of  the  court. 

DISCHARGE  OF  RECEIVER— rescinding  order  of  appoint- 
ment. 
On  the  dismissal  of  the  action  in  which  the  receiver  is  appointed 
the  order  appointing  the  receiver  should  also  be  rescinded.    Camp- 
hell  V.  Eversole  (Ky.)  38  S.  W.  486. 

Same — suit  against  company  after. 

Where  a  railroad  company  procures  or  acquiesces  in  the  with- 
drawal of  the  receivership  and  the  discharge  of  the  receiver  and 
the  cancelation  of  his  bond  and  accepts  the  property  of  the  road 
which  has  been  increased  in  value  by  the  receiver,  such  railroad 
may  be  sued  in  assumpsit  on  a  claim  which  was  valid  against  the 
receiver.  Texas  <&  P.  R.  Co.  v.  Manton  (U.  S.  Sup.  Ct.),  Advance 
Sheets,  Feb.  1,  1897,  p.  235. 

Same — what  not  ground  for. 

In  Farmers'  Nat.  Bank  v.  Backus  (Minn.)  G9  N.  W.  638,  in 


APPENDIX.  697 

an  action  to  foreclose  a  mortc;age  a  receiver  was  apjjointed  to 
collect  the  rents  of  niorti^aged  premises  and  apply  them  in  pay- 
ment of  delinquent  taxes  due  on  a  pi-ior  mortgage.  It  was  held 
that  the  fact  that,  pending  the  action,  the  holder  of  the  first  mort- 
gage paid  the  delinquent  taxes,  added  the  same  to  the  amount 
due  on  his  mortgage,  foreclosed,  and  bid  in  property  for  the  full 
amount  due  him,  was  no  ground  for  the  discharge  of  a  receiver. 

LIABILITY  OF  RECEIVER— on  lease. 

Where  there  is  no  act  of  disaffirmance  by  the  receiver  and  he 
continues  to  hold  the  leasehold  property  and  completes  liis  term 
lie  must  pay  the  contract  price  for  rentals.  S_pencer  v.  World's 
Coluriibian  Exj)osition  (111.)  45  N.  E.  250. 

Same — on  note  not  collected. 

In  Neel  v.  Carson  (Ky.)  37  S.  W.  949,  where  there  was 
nothing  to  show  that  the  receiver  had  been  ordered  to  collect  a 
certain  note  and  that  the  maker  had  become  insolvent  and  had 
committed  waste  upon  the  land  held  as  security  for  the  note,  it 
was  held  that  in  the  absence  of  fraud,  the  receiver  could  not  be 
held  liable  for  the  note. 

Same — not  for  wages  formerly  earned. 

In  Franldin  Trust  Co.  v.  Northern  AdirondaGk  li.  Co.  42  N. 
Y.  Supp.  211,  a  receiver  was  appointed  in  an  action  to  foreclose 
a  mortgage  on  a  railroad.  He  paid  out  a  portion  of  the  earnings 
for  repairs,  taxes,  and  in  making  final  payment  on  a  contract 
made  for  the  preservation  and  protection  of  the  property.  It  was 
held  that  the  receiver  was  not  liable  to  the  employees  for  wages 
due  at  the  time  of  his  appointment  where  tlie  order  appointing 
him  made  no  directions  to  pay  such  claims  and  they  are  not  pre- 
sented until  after  the  money  had  been  disbursed.  Laws  of  1885, 
chap.  376,  authorizing  the  receiver  to  pay  certain  wages  for  labor, 
does  not  apply  to  temporary  receivers  for  a  railroad  in  an  action 
of  foreclosure. 

POWER    OF    RECEIVER  — OF   corporation;    liabhjtv    of 

stockholders. 

In  Minneapolis  Basehall  Co.  v.  Ciiij  Bank  (Minih)  69  JN^.  W. 

331,  it  is  held  that  a  receiver  in  an  action  to  sequestrate  the  assets 

of  an  insolvent  corporation   under  Geiu  Stat.  1894,  chap.  74,  has 


G98  APPENDIX. 

no  antliority,  except  as  o-iveii  by  statute,  to  enforce  the  indi- 
vidual liability  of  stockholders. 

Same — to  sell  assets. 

In  Aclierman  v.  Ackernan  (jS^eb.)  G9  N.  W.  388,  where  a 
decree  required  a  receiver  to  sell  assets  of  an  insolvent  iirin  on  a 
day  named  it  was  held  that  the  receiver  had  no  authority  to  sell 
at  a  day  later  than  that  fixed  by  the  court  and  if  lie  did  so  the 
sale  was  void. 

Same — to  sue. 

In  Schultz  V.  Phenix  Ins.  Co.  11  Fed.  Rep.  375,  the  receiver 
of  a  corporation  was  ordered  and  empowered  to  get  in  the  assets 
of  the  company  and  for  that  purpose  to  bring  such  suits  as  might 
be  necessary.  It  was  held  that  the  receiver  could  sue  in  a  Fed- 
eral court  upon  a  contract  for  insurance  made  with  the  company. 

SALE  BY  RECEIVER — LiABiLrrr  of  purchaser. 

A  purchaser  at  a  receiver's  sale  is  estopped  to  deny  liability  for 
the  receiver's  expenses  on  the  ground  that  they  were  made  with- 
out order  of  court.     Ileisen  v.  Binz  (Ind.)  45  JS".  E.  104. 

Same — right  to  withdraw  bid. 

In  Interstate  Nat.  Bank  v.  O'Dioyer  (Tex.)  38  S.  W.  368, 
where  an  order  directed  the  sale  of  property  of  a  corporation  in 
the  hands  of  a  receiver,  provided  that  on  receipt  of  a  certain 
amount  in  cash  the  remainder  might  be  paid  in  approved  claims 
against  the  corporation  and  under  such  order  a  creditor  became  a 
purchaser  of  the  property,  it  was  held  that  the  purchaser  might 
withdraw  his  bid  for  the  property  where  he  acted  with  diligence 
in  ascertaining  the  condition  of  the  property  sold  by  the  receiver, 
and  the  liabilities  thereon. 

SUIT  BY  RECEIVER. 

He  must  show  in  his  complaint  leave  of  court  to  sue.  Rhodes 
V.  Hilligoss  (Ind.)  45  N.  E.  Qm. 

Same — in  supplementary  proceedings. 

In  Tvedt  v.  Mackel  (Minn.)  69  N.  W.  475,  in  a  supplementary 
proceeding  the  receiver  was  held  not  to  have  power  to  assail  con- 
veyances on  the  ground  offered  under  the  allegations  in  the  plead- 
ings.    But  see  Sawyer  v.  Harrison^  43  Minn.  297. 


APPENDIX.  099 

TEMPOKARY  RECEIVERS. 

In  Citizens'  Sav.  Bank  v.  Wilder^  42  N.  Y.  Siipp.  481,  a  tem- 
porary receiver  in  an  action  to  foreclose  a  mortgage,  on  the  ground 
that  service  of  summons  by  pubhcation  had  been  ordered,  was 
held  to  be  entitled  to  the  mortgaged  property,  though  the  service 
by  publication  had  not  been  completed. 

TITLE  OF  RECEIVER. 

In  Price  v.  Forrest  (IN".  J.)  35  Atl.  1075,  a  claim  against  the 
United  States  was  ordered  to  be  assigned  by  a  debtor  to  a  receiver 
in  aid  of  pi'oceedings  instituted  by  a  creditor  to  obtain  satisfac- 
tion of  a  judgment  at  law  recovered  against  the  debtor.  It  was 
held  that  such  an  assignment  to  the  receiver,  or  an  assignment  to 
him  by  operation  of  law  by  virtue  of  his  appointment  as  such  re- 
ceiver, clothed  the  receiver  with  the  right  to  take,  receive,  sue  for, 
and  distribute  according  to  law,  and  the  orders  of  the  court  from 
which  he  derived  the  appointment  was  an  exception  to  the  provi- 
sions of  §  3477  of  the  Revised  Statutes  of  the  United  States. 


INDEX. 


[References  are  to  sections  and  pages  in  body.] 

A. 

ABATEMENT  OF  ACTIONS, 

by  appointment  of  receiver,  §  230,  i,  p.  374. 
See  also  Action  and  Suit. 

ABSCONDING, 

as  ground  for  appointment  of  receiver  in  case  of  partnership,  §  207,  p.  335. 
See  also  Appointment. 

ABSTRACTED  PROPERTY, 

receiver  may  recover,  §  75,  (13),  p.  171. 

See  also  Poweks  of  Receiyer. 

ACCOUNT  OF  RECEIVER, 

duty  to  make  generally,  §  355,  p.  593. 

must  be  to  court  appointing  him,  §  356,  a,  p.  594. 

to  be  passed  upon  by  a  master,  §  356,  b,  p.  594. 

no  appeal  from  order  approving,  §  356,  e,  p.  595, 

approval  of,  §  356,  f,  p.  595. 

rule  of  law  regarding,  §  416,  p.  631. 

form  of,  No.  53,  p.  677. 

ACCOUNTS  OF  TRUSTEE, 

affected  by  appointment  of  receiver,  §  306,  p.  542. 
See  also  Trustees. 

ACCORD  AND  SATISFACTION, 

in  actions  by  receiver,  ^81,  p.  180 
See  also  Defense. 
ACTION, 

abatement  of  by  appointment  of  receiver,  g  330,  i,  p.  374, 
to  quiet  title,  appointme  it  in  §  5,  d,  p.  14. 
See  also  Suit. 

ACTION  AGAINST  RECEIVER, 

leave  of  court  not  required,  §  94,  p.  186. 
is  in  effect  an  action  against  the  funds,  §  95,  p.  190, 
See  also  Suit  against  Receiver. 

ACTION  PENDING, 

a  prerequisite  to  petition  for  receiver,  §  371,  p.  603. 
receiver's  title  in,  §  62,  p.  145. 

ACTS  OF  CONGRESS, 

liability  of  receiver  for  violating,  §  109,  a,  p.  203. 
See  also  Liahimty  of  Receiver. 

701 


702  INDEX. 

[References  are  to  sections  and  pajtcs  in  body.] 

ACTS  ULTRA  VIRES. 

appointment  on  ground  of,  i;  4,  c,  p.  8. 
avoided  by  receiver,  §  76,  p.  173. 

See  also  Corpohations  ond  Juiiisdigtion. 

ADDITIONAL  ALLOWANCES, 

to  receiver's  compensation,  §  350,  h,  p.  590. 

AD  LITEM. 

appointment  of  receiver,  §  310,  p.  547. 

ADMINISTRATOR, 

appointment  of  receiver  in  lieu  of,  §  301,  a,  p.  538. 
when  receiver  will  not  be  appointed  in  lieu  of,  g  301,  b,  p.  533. 
receiver  in  lieu  of,  for  misconduct,  etc.,  §  301,  c,  p.  534. 
receiver  in  lieu  of,  when  no  one  competent  to  act,  §  301,  d,  p.  537. 
See  also  Executous,  etc. 

ADOPTION  OF  LEASE, 

what  amounts  to,  g  123,  p.  221. 

ADVANCES, 

to  be  included  in  order  for  distribution  when,  p  358,  p.  599. 

See  also  Distribdtion,  Powers  of  Receiver,  etc. 

AFFIDAVIT, 

basis  of  order  of  appointment,  §  384,  p.  606. 

form  of,  for  appointment  of  receiver  in  foreclosure.  No.  6,  p.  641. 

for  appointment  of  receiver  in  judgment  creditor's  action,  No.  7,  p.  642. 

for  motion  to  compel  tenants  to  pay.  No.  33,  p.  666. 

to  stay  actions  affecting  assets.  No.  34,  p.  667. 

to  obtain  order  to  show  cause  why  receiver  should  not  be  punished  for 

contempt,  etc..  No.  63,  p.  783. 
for  continuance  of  action  against  receiver  instead  of  corporation. 
No.  63,  p.  782. 

See  also  Forms. 
ALIMONY, 

appointment  of  receiver  in  suits  for,  g  321,  p.  553. 

ALLEGATIONS. 

to  petition  for  receiver,  §  373,  p.  603. 

when  insufficient,  §  10,  c,  p.  28. 

necessary  to  appointment,  §  11,  note,  p.  33. 
in  suit  by  receiver,  generally,  §  393,  p.  611. 

form  of,  ti  393,  p.  611. 
sufficiency  of,  as  excuse  for  notice,  §  5,  d,  note,  p.  20. 
form  of,  for  bill  or  complaint  for  receiver  of  partnership.  No.  3,  p.  638. 

for  bill  or  complaint  in  foreclosure.  No.  4,  p.  639. 

in  complaint  by  receiver,  must  show  leave  of  court  to  sue,  Appx.  p.  G98. 
See  also  Forms. 

ALLOWANCES, 

in  addition  to  receiver's  compensation.  §  350,  b,  p.  590. 


INDEX.  7(»;.i 

[References  are  to  sections  and  pages  in  body.] 
AMENDMENTS, 

to  petition,  when  allowed,  g  10,  c,  p.  28. 
See  also  Petition. 

ANCILLARY  RECEIVERS. 

application  for,  when,  §  10,  e,  p.  29. 
when  appointed,  §  10,  e,  note,  p.  29. 
to  what  court  to  report,  §  10,  e,  note,  p.  29. 

ANNUITANT, 

when  entitled  to  appointment  of  receiver,  §  180,  b,  p.  302. 
appointment  of  receiver  in  case  of  delinquency,  §  4,  c,  p.  8. 

APPEAL, 

from  order  appointing  a  receiver,  §  22,  k,  p.  70;  §  22,  1,  p.  73. 

supersedeas  bond  suspends  receiver,  §  22,  k,  note,  p.  70. 

power  of  receiver  to  take,  §  41,  p.  117. 

receiver  cannot,  from  decree  distributing  assets,  §  22,  1,  p.  73. 

by  receiver,  rule  governing,  §  417,  p.  632.'^ 

effect  of,  §  41,  p.  117. 

as  to  custody,  §  23,  note,  p.  63. 

court  cannot,  in  anticipation  of  judgment,   make  order  continuing 
receivership  pending  appeal,  §  23,  k,  p.  70. 

does  not  suspend  power  of  receiver,  §  358,  e,  note,  p.  84. 
none  from  approval  of  report  and  account,  §  356,  e,  p.  594. 
U.  S.  Supreme  Court  will  not  appoint  receiver  pending,  when,  §  12,  d, 

note,  p.  35. 
from  order  of  removal  of  receiver,  §  330,  e,  p.  564, 

APPELLATE  COURT, 

power  of,  on  appeal,  §  5,  a,  note  1,  p.  12. 
will  not  review  appointment,  §  21,  note,  p.  59. 

^  APPLICATION  FOR  DIRECTIONS, 
by  receivers,  §  401,  p.  619. 

See  also  Instructions. 

APPLICATION  FOR  RECEIVER, 

by  plaintiff  generally,  §  10,  a,  p.  27. 

when  by  defendant,  §  10,  a,  p.  27. 

care  of  court  required  in  granting,  §  10,  b,  p.  27. 

defendant  must  liave  notice,  when,  t^  5,  d,  p.  14. 

notice  of,  when  not  required,  ij  5,  d,  p.  14. 

party  in  posses.sion  must  be  heard,  §  5,  d,  p.  14. 

when  heard  in  vacation,  §  18,  p.  54. 

when  heard  in  chambers,  §  18,  p.  54. 

leave  of  court  necessary  to,  §  93,  p.  183. 

at  what  stage  of  suit  to  be  made,  §  375,  p.  604. 

must  be  in  reasonable  time,  §  10,  c,  p.  28. 

averments  must  be  clear  and  distinct,  ^  10,  c,  p.  23. 

prayer  necessary,  §  10,  c,  p.  28. 

must  show  disinterestedness  of  appointee,  §  10,  d,  p.  23, 


704  INDEX. 

[References  arc  to  sections  and  pages  in  body.] 
APPLICATION  FOR  RECEIVER,  continued. 

statutory  requiicments.  §  387,  p.  609. 

notice  of.  fxcnerally,  ^  374,  p.  603. 

notice  of  application  for  railway,  §  271,  p.  454. 

wlien  granted  before  answer,  g  376,  p.  604. 

effect  of  giving  bond,  §  378,  p.  604. 

of  corporation  by  judgment  creditors,  §  22.'3,  k,  p.  3G3. 

subsequent  receivers — ancillary,  §  10,  e,  p.  29. 

form  of  notice  of,  No.  8,  p.  642. 

See  also  CoMrLAiNT,  Pktition  and  Foums. 

APPLICATION  FOR  DISCHARGE  OF  RECELVER, 
by  whom  to  be  made,  §  330,  c,  p.  560. 

See  also  Discii.\iige  and  Removal. 

APPLICATION  FOR  REMOVAL  OF  RECEIVER, 
by  whom  to  be  made,  §  330,  p.  560. 

See  also  Removal  and  Discharge. 

APPOINTMENT  OF  RECEIVER, 

incident  of  a  chancery  court,  §  7,  p.  2. 

usually  on  interlocutory  order,  §  22,  note,  p.  63. 

statutory,  §  4,  p.  6. 

who  eligible  when  a  party  to  suit,  §  10,  c,  note,  p.  28. 

when  party  entitled  to  possession  incompetent,  §  4,  a,  p.  7. 

in  case  of  infancy,  §  4,  a,  p.  7. 

in  case  of  lunacy,  §  4,  a,  p.  7,  Appx.  p.  695. 

in  case  of  decedent's  estates,  §  4,  a,  p.  7. 

for  disqualitication  of  party,  §  4,  b,  p.  7. 

for  disqualification  of  partners,  §  4,  b,  p.  7. 

for  disqualification  of  tenants  in  common,  §  4,  b,  p.  7, 

in  case  of  claimants  of  legal  title,  §  4,  b,  p.  7. 

in  case  of  trustees,  ^  4,  c,  p.  8. 

in  case  of  executors  and  administrators,  §  4,  c,  p.  8. 

in  case  of  mortgagor  in  possession,  §  4,  c,  p.  8. 

in  case  of  judgment  debtor,  §  4,  c,  p.  8. 

in  case  of  vendee,  §  4,  c,  p.  8. 

in  case  of  specific  performance  of  contract,  §  4,  c,  p.  8. 

in  case  of  delinquent  annuitants,  §  4,  c,  p.  8. 

in  case  of  life  tenants,  g  4,  c,  p.  8. 

in  case  of  waste,  §  4,  c,  p.  8. 

in  case  of  officer's  mismanagement,  §  4,  c,  p.  8. 

in  case  of  assignees,  §  4,  c,  p.  8. 

where  common  law  proceeding  inadequate,  §  4,  d,  p.  9. 

in  creditor's  suits,  §  4,  d,  p.  9. 

in  estates  of  married  women,  §  4,  d,  p.  9. 

in  case  of  insolvent  corporations,  §  4,  d,  p.  9,  Appx.  p.  691. 

after  decree,  when,  §  4,  d,  note,  p.  9. 

when  wrongful,  power  of  court,  §  4,  c,  note  2,  p.  8. 

rules  governing,  §  5,  p.  10. 


INDEX.  705 

[References  are  to  sections  and  pages  in  body.l 
APPOINTMENT  OF  RECEIVER,  continued, 
in  the  discretion  of  the  court,  §  5,  a,  p.  10. 
only  where  plaintiff's  recovery  probable,  §  5,  a,  p.  13, 
not  because  no  injury  will  result,  §  5,  a,  note  2,  p.  13. 
not  unless  danger,  §  5,  b,  note,  p.  12. 
danger  of  property  a  prerequisite,  §  5,  c,  p.  14. 
not  where  remedy  at  law,  §  5,  c,  note,  p.  14. 
plaintiff's  locus  standi,  §  5,  b,  p.  12. 
review  of,  §  5,  a,  note  1,  p.  11. 

defendant  must  have  opportunity  to  be  heard,  ^  5,  d,  p.  14. 
at  what  stage  made,  §  9,  p.  26. 

must  be  suit  pendiug,  §  9,  a,  p.  26;  §  13,  p.  35. 

when  before  answer,  §  9,  b,  p.  26. 

when  after  decree  and  sale,  §  9,  c,  p.  26. 

when  after  appeal,  §  9,  d,  p.  27. 

prior  to  filing  of  bill  a  nullity,  §  9,  p.  26. 

after  decree  when,  §  9,  note,  p.  26. 
obtained  by  collusion,  §  10,  note,  p.  27. 
in  subsequent  suit,  §  10,  c,  note,  p.  28. 
scope  of  bill  or  petition,  §  11,  p.  32. 
grounds  for,  wrongful  appropriation  of  money,  §  11,  note,  p.  33. 

waste  is,  when,  ^  5,  b,  note,  p.  12. 

not  made  if  other  adequate  remedy,  §  11,  note,  p.  32. 

not  made  where  irreparable  injury  from,  §  11,  note,  p.  32. 

not  made  because  most  convenient,  §  15,  f,  note,  p.  44. 
damages  for  wrongful,  §  11,  note,  p.  32. 
time  when  appointed,  §  12,  a,  p.  33. 

not  before  hearing  on  foreign  decree,  §  12,  a,  note,  p.  33. 

not  before  service  in  bankruptcy  case,  §  12,  note,  p.  33. 

not  made  without  notice,  before  time  for  appearance  expires,  §  12,  a, 
note,  p.  33. 

before  time  for  appearance,  irregular,  §  12,  b,  note,  p.  33. 

before  answer,  danger  required,  §  12,  b,  note,  p.  33;  §  9,  b,  p.  26. 
in  case  of  corporation,  §  12,  b,  note,  p.  33. 

when  answer  shows  improperly  revoked,  §  12,  b,  note,  p.  33. 

when  answer  denies  allegations  of  bill,  §  12,  b,  note,  p.  33. 

by  consent,  not  reversed  on  appeal,  §  12,  b,  note,  p.  33. 

after  trial  and  before  decree  when,  §  12,  c,  p.  34. 

when  after  decree,  §  12,  c,  p.  34;  §  12,  d,  note,  p.  35;  g  22,  note,  p.  63. 

after  decree  strong  case  to  be  made,  g  12,  c,  note,  p.  34. 

before  redemption  made,  §  12,  c,  p.  34. 
in  creditor's  suit,  ^  12,  c,  note,  p.  34. 

after  decree  and  an  appeal,  §  12,  d,  p.  35. 

after  appeal  in  probate  of  will,  ^  12,  d,  note,  p.  35. 
not  in  Supreme  Court  of  U.  S.,  §  12,  d,  note,  p.  35. 
refused  if  the  only  property  is  a  decree,  §  13,  note,  p.  35. 
general  rules  governing,  §  14,  p.  37. 
grounds  of  jurisdiction,  generally,  g  15,  p.  37. 

45 


706  INDEX. 

[Roferences  are  to  sections  and  pajrcs  in  body.] 
APPOINTMENT  OE  RECEIVER,  continued. 

grounds  of  jurisdiction,  when  not  entertained  generally,  t^  16,  p.  45. 
caution  required  of  court,  §  15,  a,  p.  38. 
possession  of  properly  not  requisite,  §  12,  b,  note,  p.  33. 
preservation  of  property  necessary,  §  15,  a,  p.  38. 
must  be  danger  of  loss,  §  15,  b,  p.  39. 

refused  if  security  given,  §  15,  b,  p.  39. 

in  case  of  fraud,  §  15,  c,  p.  40. 

in  case  of  insolvency,  §  15,  d,  p.  41. 

plaintilT's  title  must  be  clear,  §  15,  c,  p.  43. 

refused  when  legal  title  alone  involved,  §  15,  e,  p.  43. 

refused  when  remedy  at  law  exists,  §  15,  f,  p.  44. 
effect  of,  generally,  §  7,  p.  23;  §  17,  a,  p.  45. 

as  to  possession,  §  17,  d,  p.  48;  §  44,  p.  122. 

removes  defendant  from  possession,  §  17,  b,  p.  47. 

places  property  in  custodia  legis,  §  7,  a,  p.  23. 

right  to  custody  limited,  §  17,  e,  p.  50. 

as  to  title,  §  17,  d,  p.  48;  §  44,  p.  122. 

as  to  property,  §  17,  h,  p.  53. 

as  to  third  parties,  §  17,  d,  note,  p.  48. 

as  to  liens,  §  44,  p.  122;  §  17,  d,  note,  p.  48. 

as  to  landlord,  t^  17,  d,  note,  p.  48. 

as  to  contracts,  mortgages,  etc.,  §  17,  f,  p.  51. 

as  to  when  receiver's  rights  accrue,  §  17,  g,  p.  53. 

he  cannot  be  sued,  §  7,  b,  p.  23. 

determines  no  rights  and  affects  no  liens,  §  7,  c,  p.  23. 

as  to  courts  of  co-ordinate  jurisdiction,  §  17,  c,  p.  47. 

is  in  nature  of  equitable  execution,  §  23,  note,  p.  73;  §  44,  p.  122. 
court's  exercise  of  jurisdiction,  §  18,  p.  54. 
order  does  not  relate  to  date  as  to  strangers,  §  17,  g,  p.  52. 

erroneous,  protects  receiver,  ^  17,  c,  p.  47. 
conflict  of  jurisdiction,  ^  19,  p.  56. 
scope  of  jurisdiction,  §  20,  p.  58. 
who  to  be  appointed  generally,  §  21,  a,  p.  59. 

competency  required,  §  21,  b,  p.  59. 

must  be  indifferent  person  as  to  all  the  parties,  §  21,  b,  p.  59. 

rests  within  discretion  of  court,  §  21,  b,  p.  59. 

selection  of  the  parties,  §  21,  b,  p.  59. 

English  practice  outlined.  §  21,  b,  p.  59. 
who  incompetent,  §  21,  b,  p.  59. 

appellate  court  will  not  interfere  with,  §  21,  note,  p.  59. 
form  and  scope  of  order,  must  describe  property,  §  22,  a,  p.  63. 

embraces  all  acts  necessary  to  preserve  property,  §  22,  b,  p,  63. 

as  to  custody  of  property,  §  22.  c,  p.  64. 

as  to  third  parties,  §  22,  d,  p.  64. 

relates  from  what  time,  §  22,  e,  p.  65. 

as  to  title,  §  22,  f,  p.  65. 

as  to  assignment  of  property,  §  22,  f,  p.  65. 
when  modified,  §  22,  g,  p.  66. 


INDEX.  707 

[Refei'ences  are  to  sections  and  pages  in  body.] 
APPOINTMENT  OF  RECEIVER,  continued. 

form  and  scope  of  the  order,  effect  of  recitals  in,  §  23,  g,  p.  66. 

collateral  attack,  §  22,  h,  p.  60. 

irregularity  of,  §  22,  i,  p.  68. 

■when  revoked,  §  22,  j,  p.  69. 

effect  of  collusion,  §  22,  j,  p.  69. 

when  improvidently  made,  ^^  22,  j.  p.  69. 

when  court  without  jurisdiction,  §  22,  j,  p.  69. 

when  void,  §  22,  j,  p.  69,  Appx.  p.  695. 

application  to  vacate — when  made,  §  23,  j,  p.  69. 
evidence  of,  §  22,  h,  p.  66. 
collateral  attack,  §  25,  f,  p.  85. 

cannot  be,  when,  §  23,  h,  p.  66. 
parly  consenting  to  cannot  contest,  §  23,  h,  note,  p.  66. 
judgment  creditor  cannot  attack,  ^  23,  h,  note,  p.  66. 
cannot  be  attacked  by  levying  creditor,  ^  22,  h,  note,  p.  66. 
purchaser  cannot  attack  in  absence  of  fraud  or  mistake,  g  22,  h,  note,  p.  66, 
not  attacked  in  matter  of  compensation,  §  22,  h,  p.  66. 
when  not  in  compliance  with  statute  is  void,  §  33,  i,  p.  68. 
void,  may  be  collaterally  attacked,  §  33,  h,  p.  66. 
for  void  order,  §  25,  f,  p.  85. 

not  attacked  in  contempt  proceedings,  §  23,  h,  note,  p.  66. 
void  order  does  not  disqualify  second  appointment,  ^  23,  i,  p.  68. 
not  void  for  want  of  execution  returned  nulla  bona,  ^  33,  i,  note,  p.  68. 
irregular,  §  22,  i,  note,  p.  68. 

of  permanent  receiver  revokes  temporary  appointment,  §  23,  1,  p.  69. 
application  to  vacate  order,  §  23,  j,  p.  69. 

when  order  appealed  from,  §  22,  k,  p.  70.  , 

effect  of  appeal  from  order,  §  33,  1.  p.  73. 
bond  required,  generally,  §  23,  p.  73. 

amount  fixed  by  order,  §  23,  a,  p.  73. 

subject  to  modification,  §  23,  b,  p.  75, 

amount  of,  how  fixed,  g  23,  b,  p.  75. 

to  wuom  given,  g  23,  b,  p.  75. 
revoked  for  want  of  bond,  Appx.  p.  695. 
when  authority  to  sue  denied  receiver  must  prove  such  au- 
thority, ii  71,  note,  p.  158. 
in  supplementary  proceedings,  §  153,  p.  355;  g  157,  p.  261. 

generally,  §  160,  p.  264. 
in  foreclosure  of    mortgage,    generally,    J^    170,  p.  206;    §  173,   p.    207, 
Appx.  p.  694. 

general  rules  applicable  to,  §  178,  p.  299. 

jurisdiction  of  court,  §  176,p.  295. 

practice,  §  389,  p.  609. 
not  in  foreclosure  of  mortgage,  when,  §  173,  p.  278. 
in  foreclosure  absolute  refused  in  England,  §  12,  c,  note,  p.  35. 
scope  of  order  in  foreclosure  proceedings,  i^  176,  p.  295, 
form  of  order  in  railway  foreclosure,  No.  11,  p.  645. 


708  INDEX. 

[References  are  to  sections  and  pages  in  body.] 
APPOINTMENT  OF  RECEIVER,  continued, 
who  entitled  to,  generally,  §  180,  p.  302. 

when  wife  entitled  to,  §  180,  a,  p.  302,  Appx.  p,  694. 

when  annuitant  entitled  to,  §  180,  b,  p.  302. 

when  bondholder  entitled  to,  §  180,  c,  p.  303. 

when  vendor  entitled  to,  §  180,  d,  p.  303. 
in  decedent's  estate,  generally,  §  300,  p.  536. 
on  ex  parte  application,  Appx.  p.  694. 
in  case  of  partnership,  §  190,  p.  305. 

prerequisites  to,  §  193,  p.  309. 

who  to  be  appointed,  ^  194,  p.  311. 

where  a  meral)er  retires,  tj  195,  p.  313. 

when  insolvent  partner  assigns,  t^  196,  p.  315. 

on  dissolution  by  death,  g  197,  p.  316. 

on  application  of  creditor,  §  198,  p.  318. 

on  expiration  of  partnership  agreement,  g  200.  p.  831. 

for  exclusion  of  partner,  §  201,  p.  321. 

for  fraud  by  partner,  §  202,  p.  323. 

for  mismanagement  by  partner,  §  203,  p.  334. 

on  insolvency,  ^  204,  p.  326. 

on  dissolution,  §  205,  p.  329. 

before  dissolution,  §  206,  p.  333. 

lack  of  profits  no  ground  for,  §  305,  p.  333. 

on  miscellaneous  grounds,  §  207,  p.  335. 

epecial  grounds  for  refusal  of,  §  208,  p.  335. 

powers  and  duties  of,  §  209,  p.  336. 

effect  of,  §  310,  p.  338. 

limited  partnership,  generally,  §  199,  p.  319. 
for  corporations,  generally,  §  320,  p.  343. 

statutory  power  of  court  in,  §  321,  p.  345. 

power  of  court  discretionary,  ^  222,  p.  347. 

limitation  of  court's  power,  g  323,  p.  349. 

application,  by  whom  to  be  made  generally,  §  331,  p.  350. 

grounds  for,  generally,  §  335,  a,  p.  335;  §  336,  p.  363. 

fraud  is  ground  for,  when,  §  337,  p.  369. 

on  ground  of  insolvency,  §  328,  p.  367. 

in  foreclosure  proceedings,  §  339,  p.  371. 

effect  of,  g  330,  a,  p.  371. 

his  relationship,  generally,  §  331,  p.  375. 

as  manager,  when,  §  333,  p.  375. 
for  national  banks,  generally.  §  352,  p.  419. 

power  of  comptroller  to  appoint,  generally,  §  353,  p.  435. 

powers  of  governed  by  statute,  §  354,  p.  436. 

title  of  receiver,  generally,  §  355,  p.  439. 

practice,  ^  388,  p.  609. 
for  railways,  generally,  §  371,  p.  454;  §  273,  p.  456. 
for  insolvency,  §  373,  b,  p.  467. 

when  not  appointed,  generally,  §  373,  p.  465. 


INDEX.  I'OO 

[References  are  to  sections  and  pag-es  in  body.] 
APPOINTMENT  OF  RECEIVER,  continued, 
over  trust  property,  generallj',  §  305,  p.  539. 
when  made  in  lieu  of  trustee,  §  3C6,  p.  540. 
ground  for,  lieu  of  trustee,  ^  306,  p.  540. 
when  not  made  in  trust  cases,  §  306,  b,  p.  543. 
form  of  affidavit  for,  in  foreclosure.  No.  6,  p.  641. 

in  judgment  creditor's  action.  No.  7,  p.  642. 
form  of  complaint  for,  in  dissolution  of  partnership.  No.  1,  p.  636. 
as  to  partnership  property.  No.  3,  p.  638. 
against  corporation.  No.  5,  p.  640. 
form  of  notice  of  application  for,  No.  8,  p.  642. 
form  of  order  for,  general,  No.  9,  p.  643. 

in  case  of  manufacturing  corporation.  No.  10,  p.  644. 
for  railway.  No.  11,  p.  645. 
for  railway,  No.  12,  p.  648. 
on  foreclosure  of  mortgage.  No.  13,  p.  650. 
for  partnership,  No.  14,  p.  651. 
to  manage  mine.  No.  16,  p.  653. 
because  of  misconduct  of  officers,  No.  17,  p.  654. 
for  specific  property.  No.  18,  p.  655. 

without  prejudice  to  former  encumbrancers,  No.  19,  p.  055. 
of  rents,  profits,  etc..  No.  20,  p.  656. 
in  cases  of  fraudulent  assignment,  §  307,  p.  543. 
in  lieu  of  testamentary  trustee,  §  308,  p.  544. 
in  infants'  estates,  §  309,  p.  545. 
in  lunatics'  estates,  §  310,  p.  547. 
as  between  vendor  and  vendee,  §  315,  p.  548. 
between  debtor  and  creditor,  §  316,  p.  549. 
in  partition  suits  between  tenants  in  common,  §  317,  p.  549. 
where  tenant  in  common  excludes  cotenant,  §  317,  a,  p.  550. 
where  tenant  in  common  refuses  to  account  to  the  cotenant,  ^  317,  b,  p.  550. 
where  tenant  in  common  will  not  join  in  executing  lease,  §  317,  c,  p.  550. 
necessary  to  protect  cotenant's  interest,  §  317,  d,  p.  550. 
in  suits  of  specific  performance,  §  318,  p.  551. 
as  between  lessor  and  lessee,  §  319,  p.  551. 
in  ejectment  suits,  §  320,  p.  551. 
in  suit  for  alimony,  §  321,  p.  552. 
for  building  and  loan  associations,  §  322,  p.  552. 
ground  for,  over  building  and  loan  associations,  §  323,  p.  554. 
pleading  and  practice  in,  ^  370,  p.  601. 
when  and  how  asked,  §  371,  p.  602. 
prayer  for,  petition  to  contain,  §  372,  p.  603. 
notice  of  application  for,  t^  374,  p.  603. 
when  application  for  to  be  made,  t^  375,  p.  604. 
when  made  before  answer,  §  376,  p.  604 
bond  required,  §  377,  p.  604. 
effect  of  giving  bf>nd,  §  378,  p.  604. 
form  of  the  bond,  g  379,  p.  605. 


710  INDEX. 

[References  are  to  sectiuns  aiul  pajres  in  boily.] 
APPOINTMENT  OF  RECEIVER,  continued. 

pleading  and  practice  in,  affidavit  as  basis  of  order  for,  §  384,  p.  607. 

when  reference  advisable,  §  385,  p.  008. 

Btalutory  proceedings  iu,  Ss  387,  p.  COO, 

scope  of  order,  §  380,  p.  606. 

attack  on  void  order,  §  396,  p.  615. 

ARREST  OF  JUDGMENT. 

what  considered  under,  §  81,  p.  180. 

See  also  Motions  and  Judgment. 

ASSESSMENT, 

receiver's  power  to  enforce,  §  408,  p.  623. 

power  of  receiver  to  make,  §  233,  m,  p.  390. 

power  to  make  depends  on  facts  rendering  it  necessary,  §  71,  note,  p.  158. 

averment  of  liability  of  the  company  required,  §  71,  note,  p.  158. 

complaint  must  aver  a  right  of  action  in  the  receiver,  §  71,  note,  p.  158. 

a  prerequisite  to  liability  of  stockholder,  §  77,  note,  p.  173. 

stockholder  must  be  a  party  to  suit  liable  on  in  Illinois,  §  77,  note,  p.  173. 

ASSETS, 

concealed,  receiver  may  recover,  §  75,  (5),  p.  171. 

suits  by  receivet  of  corporation  to  recover,  §  235,  a,  p.  398. 
See  Powers  of  Receiver. 
ASSIGNEE. 

appointment  of  receiver  in  case  of.  §  4,  c,  p.  8. 
suit  by,  in  foreign  jurisdiction,  §  78,  f,  note,  p.  167, 

ASSIGNEE  FOR   BENEFIT   OF   CREDITORS. 

appointment  of  receiver  in  lieu  of,  when  fraudulent,  §  307,  p.  513. 
See  Appointment  op  Receiver  and  Fraud. 

ASSIGNMENT, 

deed  of,  by  receiver,  §  418,  p.  632. 

to  receiver,  not  required  as  to  real  estate,  §  17,  b.  note,  p.  47. 
court  has  power  to  compel,  §  22,  f,  note,  p.  65. 
how  removed  when  fraudulent,  §  149,  a,  p.  249. 
fraudulent,  appointment  of  receiver  in  case  of.  §  149,  a,  p.  250. 

as  ground  for  creditors' bill,  where  liabilities  fictitious  §  149,  a,  p.  250. 
as  ground  for  creditors'  bill,  where  assets  are  omitted,  §  149,  a,  p.  250. 
where  possession  remains  in  debtor,  §  149,  a,  p.  250. 
for  reservation  in  instrument,  §  146,  a,  p.  250. 
on  terms  of  instrument,  §  149,  a,  p.  250. 
to  receiver  of  partnership.  No.  25,  p.  660. 

See  also  Transfer  and  Reassignments. 
ATTACHMENTS, 

effect  upon  receiver's  possession,  §  43,  p.  121 ;  §  44,  p.  122. 

ATTACK— COLLATERAL, 

upon  action  by  receiver,  §  241,  p.  415. 

on  void  order  of  appointment  §  396,  p.  615. 

See  Appointment,  Discharge,  Etc. 


INDEX.  711 

[References  are  to  sections  and  pages  in  body.] 
ATTORNEYS'  FEES, 

allowance  of,  §  358,  p.  597. 

not  preferred  claim  against  railway,  when,  §  281,  c,  p.  498. 

as  claims  against  receivership  fund,-  §  341,  a,  p.  573. 

included  in  distribution  of  funds,  §  358,  p.  597. 

liability  of  receiver  for,  §  129,  p.  230. 

See  Fees  and  Compensation. 

ATTORNEY  FOR  RECEIVER, 
who  appointed,  |  29,  p.  89. 

AUTHORITY. 

See  Power. 

B. 

BANKRUPTCY, 

of  corporation,  ground  for  appointment  of  receiver 
See  Grounds  and  Insolvency. 

BANKRUPTCY  PROCEEDINGS, 
possession  affected  by,  §  43,  p.  121. 

BANKS— NATIONAL, 

appointment  of  receiver  for,  practice,  §  388,  p.  609. 

See  Appointment  op  Rbceiver  and  National  Banks. 
BILL. 

or  petition,  allegations  of,  §  11,  note,  p.  32. 

for  appointment  of  receiver,  necessary  allegations  in  case  of  insolvency  of 

corporation;  §  228,  p.  370. 
dismissal  of,  does  not  of  necessity  discharge,  §  22,  d,  note,  p.  69. 
leave  of  court  necessary  to  filing,  §  93,  p.  183. 
See  Petition  and  Complaint. 

BOND  OF  RECEIVER, 
generally,  §  23,  p.  73. 

further  requirements  concerning,  §  377,  p.  604. 
required  before  possession  taken,  §  48,  p.  133. 

giving  of  bond  is  a  condition  precedent  to  beginning  suit,  §  44,  note,  p.  122. 
when  approved,  §  23,  b,  note,  p.  75. 
when  not  required,  §  23,  a,  note,  p.  73. 
special  receiver  must  give,  §  23,  a,  note,  p.  73. 
approval  of  nunc  pro  tunc,  §  23,  a,  note,  p.  73. 
presumed  to  have  been  given,  §  17,  g,  p.  52. 
two  bonds  for  two  appointments  of  same  property  not  required,  §  23,  a, 

p.  73. 
when  improperly  filed,  §  23,  a,  note,  p.  73. 
to  whom  given,  §  23,  b,  p.  75. 
amount  to  be  fixed  in  order,  §  23,  b,  p.  75. 
subject  to  modification,  §  23,  b,  p.  75. 
sureties,  who  may  be,  ^5. 23,  b,  note,  p.  75;  §  23,  c,  p.  70. 
how  approved,  g  23,  c,  p.  7G. 


712  INDEX. 

[References  are  to  sections  and  pages  in  body.] 
BOND  OF  RECEIVER,  coutinued. 

sureties,  how  discharged,  §  28,  c,  p.  76. 

liability  of,  where  principal  absconds,  §  23,  c,  p.  76. 
for  money  borrowed  by  receiver,  §  23,  e,  p.  78. 
for  money  in  hands  of  receiver,  §  23,  e,  p.  7iJ. 
how  determined,  §  23,  e,  p.  78. 
how  enforced,  §  380,  p.  606. 
for  interest,  §  23,  e,  p.  78. 
for  costs,  §  23,  e,  p.  78. 
Statute  of  Limitations,  §  23,  d,  p.  77. 
enforcement  incidental  to,  §  18,  note,  p.  54. 
suit  on,  when  brought,  §  23,  d,  p.  77. 
when  suit  maintained  on,  by  receiver,  §  80,  p.  179. 
advantage  taken  if  informal,  by  whom,  §  23,  a,  note,  p.  73. 
may  be  renewed  or  increased,  §  379,  p.  605. 
form  of,  §  379,  p.  605. 
effect  of  giving,  §  378,  p.  604. 
in  supplementary  proceedings,  §  153,  p.  255. 
form  of,  for  receiver  of  partnership,  No.  22,  p.  658. 
for  receiver,  general,  No.  23,  p.  (ioi). 
for  receiver,  short  form.  No.  24,  p.  660. 

BONDHOLDERS, 

rights  of,  to  appointment  of  receiver,  §  180,  c,  p.  303. 

BOOKS, 

order  for  defendant  to  turn  over,  No.  31,  p.  665, 

BREA.CH  OP  COVENANT, 

as  ground  for  appointment  of  receiver,  §  225,  b,  p.  358. 
See  also  Covenant. 

BUILDING  AND  LOAN  ASSOCIATIONS, 

insolvency  of,  ground  for  receiver,  §  228,  p.  367. 
ground  for  appointment  of  receiver  for,  §  323,  p.  554. 
appointment  of  receiver  for,  §  322,  p.  553. 
See  also  Corporation  and  Loan  Companies. 

BUSINESS, 

powers  of  receiver  to  continue,  §  33,  p.  96. 

See  also  Powers  of  Receiver. 

c. 

CAPITAL  STOCK. 

See  Stock  and  Coupokations. 

CARE  OF  COURT, 

in  appointment,  §  10,  p.  27. 

See  also  Duty  and  Jurisdiction. 

CARRIERS. 

See  Common  Carriers. 


INDEX.  T13 

[References  are  to  sections  and  pages  in  body.] 
CAT!  TRUSTS, 

preferential  payment  for,  §  280,  p.  491. 

rental  to  when  contract  price  governs,  §  280,  c,  p.  404. 

rentals  to,  how  determined,  §  280,  c,  p.  494. 

when  vendor  entitled  to  return,  §  280,  d,  p.  494. 

construction  of  contracts  relating  to,  §  281,  b,  p.  499. 

CAUTION— JUDICIAL, 

required  of  court  in  appointment  of  receiver  of  corporation,  §  2C2,  p.  377. 
See  also  Discretion  and  Judicial  Caution. 

CERTIFICATES  OP  RECEIVER, 

generally,  §  287,  p.  522. 
when  valid,  Appx.  p.  696. 
when  void,  §  26,  a,  note,  p.  85. 
power  of  receiver  to  i.ssue,  §  40,  p.  117. 
obtaining  leave  to  issue,  §  411,  p.  626. 

when  a  preferred  claim  against  receivership's  fund,  §  G43,  p.  578. 
See  also  Duties  and  PowEiis. 

CHANCERY  COURT, 

has  no  power  to  litigate  as  to  title,  §  72,  note,  p.  160. 

See  also  Equity  Coukt,  Court,  and  Jurisdiction, 

CHANCERY  POWER, 

in  appointment,  §  4,  b,  p.  7. 

See  also  Jurisdiction,  etc. 

CHANGE  OF  VENUE, 

carries  with  it  appointment  of  receiver,  §  18,  note,  p.  54, 
See  also  Venue. 

CHARTER, 

repeal  of,  ground  for  appointment  of  receiver  of  corporation,  §  225,  f, 

p.  861. 
violation  of,  ground  for  appointment  of  receiver  of  corporation,  §  225,  j, 
p.  362. 

See  also  Ultra  Vires. 

CHATTEL  MORTGAGES, 

illegal  when  avoided,  §  76,  p.  172. 

See  also  Liens  and  Mortgages, 

CHOSES  IN  ACTION, 

receiver's  title  as  to,  generally,  §  64,  p.  146. 

in  case  of  nonresidents,  §  63,  p.  145. 
receiver's  power  to  set  aside  assignment  of,  §  64,  p.  146. 

CIRCULARS  AND  PUBLICATIONS, 
possession  affected  by,  g  43,  p.  121. 

CLAIMANTS, 

of  legal  title,  appointment  of  receiver  in  case  of,  g  4,  b,  p.  7. 


TU  INDEX. 

LReferenccs  are  to  sections  and  pages  in  body.] 
CLAIMS. 

conflicting,  how  determined,  §  415,  p.  630. 

of  mortgagee,  what  claims  are  prior  to  on  receiversliip  fund,  §  342,  p.  574. 

against  receiversliip  fund,  generally,  ^  340,  p.  508. 

receiver  must  be  disinterested  in,  §  340,  a,  p.  5G8. 

must  be  paid  in  the  order  of  distribution,  i^  340,  b,  p.  569. 

must  be  proved  within  lime  allowed  by  court,  §  340,  c,  p.  5G9. 

how  determined,  §  340,  d,  p.  570. 

•what  allowed  as  such.  §  341,  p.  572. 

preferred,  ground  for  allowance  of,  §  342,  p.  574. 

nature  of  those  preferred,  §  343,  p.  576. 

when  not  preferred,  though  of  a  nature  to  be  preferred,  §  343,  p.  579. 
of  surety  when  allowed  from  receivership  fund,  J5  341,  c,  p.  574. 
form  or  order,  appointing  commissioner  for  hearing.  No.  29,  p.  663. 

for  payment  of.  No.  30,  p.  664. 
form  of  petition  for  permission  to  compromise,  No.  35,  p.  608. 

CLASSIFICATION, 

of  receivers,  generally,  §  8,  p.  25. 
CLOUD  UPON  TITLE, 

removal  of,  §  147,  p.  240. 
COLLATERAL  ATTACK, 

oa  order  appointing  receiver,  g  22,  h,  p.  66;  ^  25,  f,  p.  85. 

on  void  order  of  appointment,  ^  396,  p.  615. 

upon  action  by  receiver,  §  241,  p.  415. 
COLLATERALS, 

order  for  distribution  of  funds  concerning,  §  358,  h,  p.  601. 
COLLATERAL  SECURITY, 

claim  of  against  receivership  fund,  §  341,  d,  p.  574. 

COLLECTION, 

of  money,  interference  with  receiver's  possession,  g  47,  p.  132. 

powers  of  receiver  of  national  bank  to  make,  §  254,  p.  426. 
See  also  Powers. 
COLLUSION, 

effect  of  on  order  of  appointment,  g  22,  j,  p.  69. 

ground  for  appointment  of  receiver  in  partnership,  §  207,  p.  335. 

will  destroy  character  of  preferred  claim,  §  343,  p.  579. 
See  also  Fr.\ud. 
COMITY, 

suit  under,  §  73,  f,  note,  p.  167. 

right  to  sue  under,  ^  73,  f,  note,  p.  167. 

as  to  suits  by  receiver,  §  17,  d,  note,  p.  48. 

when  exercised,  §  17,  e,  p.  50. 

interstate,  when  enforced,  §  37,  note,  p.  108. 

of  nations,  as  to  transfer  of  personal  property,  §  37,  note,  p.  108. 

COMMISSION, 

as  a  basis  of  receiver's  compensation,  §  350,  b,  p.  585. 
See  also  Feks  and  Compensation. 


INDEX.  715 

[References  are  to  sections  aud  pages  in  body.] 
COMMON  CARRIER, 

suits  against,  leave  of  court  not  required,  g  94,  p.  187. 
liability  of  receiver  as,  §  109,  p.  203;  §  113,  p.  208. 
liability  of  receiver  of  railway  as,  §  285,  a,  p.  508. 
for  negligence,  §  285,  d,  p.  516. 
for  goods  lost  in  shipping,  §  285,  d,  p.  516. 
See  also  Railways. 

COMMON  LAW  RISK, 

inadequacy  of,  ground  for  appointment,  §  4,  d,  p.  9. 

COMPENSATION  OF  RECEIVER, 

generally,  ^  350,  p.  583. 

must  be  reasonable,  elements  of,  §  350,  a,  p.  583. 
fixed  on  commission  basis,  §  350,  b,  p.  585. 
when  to  be  a  salary,  §  350,  c,  p.  587. 
within  discretion  of  court,  .see  Appx.  p.  696. 
when  court  will  refuse,  §  350,  d,  p.  588. 
when  plaintiff  shall  pay,  §  350,  e,  p.  588. 
does  not  depend  on  result  of  litigation,  ^  350,  f,  p.  589. 
entitled  to  priority  over  certificates  and  labor  claims,  j^  350,  g,  p.  589. 
additional  allowances,  §  350.  h,  p.  590. 
statutory  compensation,  §  350,  i,  p.  591. 
order  fixing,  not  revoked,  ^  350,  j,  p.  593. 
not  allowed,  when,  §  111,  p.  206. 

lack  of,  no  grounds  for  refusal  to  discharge,  §  330,  g,  p.  567. 
COMPLAINT, 

form  of,  for  dissolution  of  partnership  and  for  receiver.  No.  1,  p.  636. 

against  insolvent  corporation.  No.  2,  p.  637. 

allegations  in,  for  receiver  of  partnership  property.  No.  3,  p.  638. 

in  foreclosure,  No.  4,  p.  639. 

by  creditor  against  corporation  for  account,  to  set  aside  judgment,  and 
for  receiver.  No.  5,  p.  640. 

by  creditor  on  bond  of  receiver  for  failure  to  pay  money.  No.  67,  p.  784. 

must  show  leave  of  court  to  sue,  see  Appx.  p.  698. 
See  also  Bill  of  Complaint. 

COMPOUNDING  DEBTS, 

when  to  be  made,  §  28,  note,  p.  88. 

power  of  receiver  of  National  Bank,  §  254,  p.  426. 
See  also  Powkus  of  Rkckiver. 
COMPROMISE, 

power  of  receiver  to  make,  §  28,  p.  88. 

leave  to  receiver  to  make,  §  407,  p.  623. 

power  of  receiver  of  corporation  to  make,  §  233,  d,  p.  383. 

form  of  petition  for  permi8.sion  to  make.  No.  35,  p.  668. 
COMPTROLLER  OF  CURRENCY, 

power  of,  to  appoint  receiver,  §  253,  a,  p.  421. 
for  National  P.ank,  ^  253,  p.  425. 

power  of,  to  deleimiue  liuijilily  of  stockholders  of  bank,  ^  258,  a,  p.  437. 


716  INDEX. 

[References  are  to  sections  and  pases  in  body.] 
CONCEALED  ASSETS, 

receiver  may  recover,  §  75,  (5),  p.  171. 

CONCEALED  PKOPERTY, 

proceediDgs  to  reach,  §  147,  p.  240. 

CONDEMNATION  PROCEEDINGS, 
possession  affected  by,  §  43,  p.  121. 

CONDITIONAL  CONTRACTS. 

receiver's  title  under,  §  60,  p.  143. 

CONDITIONAL  SALE, 

when  construed  as  a  lease,  i^  281,  f,  p.  409. 

of  rolling  stock,  when  fraudulent,  §  281,  f,  p.  499. 

CONFLICTING  CLAIMS, 

how  determined,  ^  415,  p.  630. 

ground  for  appointment  of  receiver  in  trust  cases,  §  306,  p.  541. 

CONFLICT  OF  JURISDICTION, 

in  appointment  of  receiver,  §  19,  p.  56. 

as  between  receiver  of  state  court  and  marshal,  §  19,  note,  p.  56. 
in  appointment  of  receivers  for  corporation,  §  220,  p.  343. 
See  also  .Juhisdiction. 
CONFUSION  OF  GOODS. 

See  Intiskmingling. 
CONSPIRACY. 

will  interfere  with  receiver's  possession,  when,  §  46,  p.  130. 

CONSTRUCTION  OF  CONTRACTS, 

relating  to  rolling  stock,  §  281,  f,  p.  499. 

CONTEMPT, 

when  interference  with  receiver's  possession  is,  ^  45,  p,  126, 

where  forcible  possession  taken,  §  45,  note,  p.  126. 

how  punished,  §  44,  p.  123. 

punishment  for,  before  giving  bond,  ii;  48,  p.  133. 

as  to  persons  not  parties,  §  48,  p.  133. 
power  to  punish  third  parties  for,  §  22,  d,  note,  p.  64. 
proceeding  by  creditor  when  receiver  refuses   to  institute   proceedings, 

§  45,  note,  p.  126. 
of  court,  for  not  obtaining  leave  to  sue  receiver  of  corpor;iliou,  §  242i 

p.  417. 
of  receiver,  for  using  receivership  funds,  §  111,  p.  206. 

CONTESTED  WILLS, 

appointment  of  receiver  in,  generally,  §  300,  b,  p.  527. 
See  also  Appointment  of  Receiver. 
CONTRACTORS, 

debts  of,  to  be  included  in  order  for  distribution,  g  358,  c,  p.  C9&. 

CONTRACTS. 

power  of  receiver  to  perform,  §  35,  p.  102, 
power  of  receiver  to  make,  §  283,  k,  p.  389. 


INDEX.  717 

[References  are  to  sections  and  pages  iu  body.] 
CONTRACTS,  continued. 

by  receiver,  subject  to  modification,  §  34,  c,  p.  101. 

appointment  of  receiver  to  enforce,  §  315,  p.  548. 

liability  of  receiver  of  corporation  for,  §  234,  a,  p.  391. 

conditional,  receiver's  title  under,  §  60,  p.  143. 

construction  of,  relating  to  rolling  stock,  §  281,  f,  p.  499. 

for  sale  of  land,  appointment  of  receiver  to  enforce,  §  315,  p.  548. 

CONVEYANCE. 

by  undue  influence,  receiver  may  avoid,  §  75,  (8),  p.  171. 

proceedings  to  reach,  g  148,  a,  p.  241. 

execution  not  necessary  in  proceeding  to  set  aside  when  fraudulent,  §  148, 

b,  p.  247. 
deed  of,  by  receiver,  §  418,  p.  632. 

See  also  Assignment  and  Transfer. 

CORPORATE  COPARTNERSHIP, 

building  loan  associations  so  termed,  §  322,  p.  553. 

CORPORATE  SECURITIES, 

illegally  transferred,  receiver  may  recover,  §  75,  (9),  p.  171. 

CORPORATION, 

may  apply  for  appointment  of  receiver,  §  224,  g,  p.  354. 
bankruptcy  of,  grounds  for  receiver,  §  225,  g,  p.  361. 
insolvency  of,  as  ground  for  appointing  receiver,  §  228,  p.  367. 
insolvent,  appointment  of  receiver  in  case  of,  §  4,  d,  p.  9. 

form  of  complaint  against,  No.  2,  p.  637. 
receiver  for,  jurisdiction  of  courts  of  equity  to  appoint,  i^  220,  p.  312. 
statutory  pov?er  of  court  in,  §  221,  p.  345. 
limitations  of,  §  221,  p.  345. 

power  of  court  to  appoint  discretionary,  §  222,  p.  347. 
discretionary  power  of  court  to  impose  terms,  §  222,  p.  348. 
power  of  court  to  appoint,  limitation  of,  ^  223,  p.  349. 
when  not  appointed  generally,  §  226,  p.  363. 
must  be  statutory  cause  for  dissolution,  i^  226,  a,  p.  303. 
for  mere  disagreement,  §  226,  b,  p.  364. 
where  reasonable  efforts  for  redress  have  not  been  made,  g  226,  c, 

p.  365. 
where  adequate  remedy  at  lav?,  §  226,  d,  p.  365. 
■where  operating  company  responsible,  §  286,  e,  p.  366. 
where  defendant  is  foreign  corporation  without  property,  §  226, 

f,  p.  36(5. 
where  right  to  possession  in  dispute,  §  226,  g,  p.  366. 
where  right  to  foreclose  not  clear,  §  226,  h,  p.  366. 
wliere  no  danger  of  loss,  g  226,  i,  p.  366. 
where  nothing  to  distribute,  §  226,  j,  p.  366. 
when  claims  relatively  small,  §^  226,  k,  p.  366. 
appoiiiimeut  of,  application,  by  whom  made,  generally,  §  224,  p.  3.'",0 
application  by  creditor  at  large,  i^  224,  a,  p.  351. 
application  by  surety,  g  224,  b,  p.  353. 


?.18  INDEX. 

LUefercnccs  are  to  sections  and  pag'cs  in  body.] 
CORPORATION,  continued. 

receiver  for,  appointment  of,  application  bj'  minority  stockiioldcr,  §  524, 
c,  p.  353. 
application  by  defendant,  §  224,  d,  p.  353. 
application  by  directors,  §  224,  e,  p.  354. 
application  by  judgment  creditors,  §  224,  f,  p.  354. 
application  by  corporation,  §  224,  g,  p.  354. 
application  to  follow  statute  strictly,  §  224,  g,  p.  355. 
application  by  party  not  interested,  §  224,  g,  p.  355. 
grounds  for  appointment  of,  statutory,  §  225,  a,  p.  355. 

default  in  payment  of  mortgage  indebtedness,  g  225,  b.  p.  358. 

breach  of  covenant,  §  225,  b,  p.  358. 

mismanagement  by  officers  and  directors,  §  225,  c,  p.  359. 

insolvency,  §  225,  d,  p.  360. 

refusal  of  officers  to  act,  §  225,  d,  p.  360. 

where  has  been  dissolved,  §  225,  e,  p.  361. 

where  charter  repealed,  §  225,  f,  p.  361. 

bankruptcy,  §  225,  g,  p.  361. 

failure  to  elect  officer,  §  225,  h,  p.  361. 

failure  to  collect  subscriptions,  §  225,  i,  p.  362. 

violation  of  charter  by  majority  of  stockholders,  §  225,  j,  p.  362. 

violation  of  rights  of  minority  stockholders,  §  225,  j,  p.  262. 

on  application  of  judgment  creditors,  §  225,  k,  p.  363. 

when  not  appointed,  where  applicant  is  secured,  §  226,  1,  p.  366. 

none  where  property  in  possession  of  mortgagee's  agent,  §  226,  m, 

p.  366. 
fraud  is,  i^  227,  p.  366. 

fraud  of  officers  and  directors,  g  227,  p.  366. 
fraud  is,  where  plaintiff  has  legid  remedy,  g  227,  p.  367. 
apprehension  of  fraud  not  sufficient,  §  227,  j).  ?,Q7. 
plaintiff  not  to  participate  in  fraud,  §  227,  p.  367. 
insolvency,  as  indicated  by  statute,  §  228,  p.  367. 

a  jurisdictional  fact,  §  228,  p.  369. 

discretion  of  court  in,  §  228.  p.  369. 

power  of  court,  §  228,  p.  369. 

application  by  corporation,  §  228,  p.  370. 

ex  parte  application  not  sufficient,  §  228,  n.  371. 

necessary  allegations,  §  228,  p.  370. 
in  foreclosure  proceedings,  generally,  §  229.  p.  371. 
effect  of  appointment,  liens  remain  unimpaired,  g  230,  p.  371. 

existing  rights  remain  in  statu  quo,  %  230,  a,  p.  371. 

as  to  co-ordinate  courts,  §  230,  c,  p.  372. 

as  to  possession,  §  230,  b,  p.  372. 

as  to  litigation,  §  230,  d,  p.  373. 

as  to  unexpired  leases,  §  230,  e,  p.  373. 

as  to  contract  of  predecessor,  §  230,  f ,  p.  373. 

as  to  revival  of  corporate  powers,  §  230,  g,  p.  374. 

as  to  debtor's  control  of  property,  §  230,  h,  p.  374. 

as  to  abatement  of  actions,  §  230,  i,  p.  374. 


INDEX.  719 

[References  are  to  sections  and  pages  in  bodj-.] 
CORPORATION,  continued. 

receiver  for,  grounds  for  appointment  of,  effect  of  appoiutment,  relatioD 
ship  of  to  the  court,  §  231,  a,  p.  375. 
to  the  corporate  creditors,  §  231,  b,  p.  375. 
to  the  shareholders,  g  231,  b,  p.  375. 
to  the  corporation,  i^  231,  c,  p.  375. 
in  supplementary  proceedings,  fc^  231,  c,  p.  376. 
receiver  for,  as  manager,  v?hen,  §  232,  p.  377. 
powers  and  duties  of,  §  232,  p.  377. 
judicial  caution  required  of  court,  §  232,  p.  377. 
powers  and  duties  of,  generally,  §  233,  p.  380. 
to  borrow  money,  §  233,  a,  p.  380. 
to  purchase  rolling  stock,  §  233,  b,  p.  3S1. 
to  make  repairs,  §  233,  c,  p.  381. 
to  compromise,  §  233,  d.  p.  382. 
to  sue,  g  233,  e,  p.  382. 
to  redeem,  §  233,  f,  p.  387. 
to  pay  taxes,  §  233,  g,  p.  387. 
to  lease,  §  233,  h,  p.  388. 
to  mortgage,  §  233,  i,  p.  388. 
to  invest  receivership  money,  §  233,  j,  p.  383. 
to  contract,  §  233,  k,  p.  389. 
to  s§ll,  §  233,  1,  p.  389. 
to  make  assessments,  §  233,  m,  p.  390. 
to  take  appeal,  §  233,  n,  p.  391. 
liability  of  receiver  for,  generally,  ^  234,  p.  391. 
on  his  contracts,  §  234,  a,  p.  391. 
for  rent,  §  234,  b,  p.  393. 
for  interest,  §  234,  c,  p.  394. 
for  debts  incurred,  §  234,  d,  p.  394. 
for  torts,  §  234,  e,  p.  395. 
for  damages,  §  234,  f,  p.  395. 
for  torts  when  personal,  §  234,  e,  p.  395. 
for  torts  when  official,  ^  234,  e,  p.  395 
its  extent,  §  234,  g,  p.  396. 
for  loss  in  management,  §  234,  h,  p.  393. 
on  orders  of  court,  &^  234,  i,  p.  397, 
-uits  by  receiver  for,  generally,  §  235,  a,  p.  397. 
against  officers,  ^5  235,  a,  p.  397. 

to  recover  property  fraudulently  disposed  of,  §  235,  a,  p.  398. 
to  recover  illegal  dividends,  §  235,  a,  p.  398. 
to  recover  assets,  §  235,  a,  p.  398. 
when  officially,  §  235,  b,  p.  399. 
to  recover  stock  subscriptions,  g  236,  p.  403. 
extent  of  recovery,  §  236,  a,  p.  402. 
excludes  right  of  individual  creditors,  §  2.36,  b,  p.  403. 
collusion  unavailing  against,  §  236,  c,  p.  404. 
extent  of  power,  §  236,  d,  p.  404. 
condition  precedent  to,  §  236,  e,  p.  404. 


720  INDEX. 

[Ilofprcnces  are  to  sections  atul  pages  in  body.] 
CORPORATION,  continued. 

suit  by,  to  recover  stock  subscriptions,  law  liability  enforced,  §  236,  f,  p. 405. 
to  avoid  fraudulent  transfer,  §  337,  p.  406. 

nature  of  decree,  §  237,  p.  406. 
to  recover  illegal  dividends,  §  238,  p.  408. 
leave  of  court  necessary,  when,  §  239,  p.  410. 
when  corporation  foreign,  §  240,  p.  421. 
in  case  of  insolvency,  §  240,  a,  p.  411. 
when  attachment  will  not  lie,  §  240,  b,  p.  412. 
when  title  to  property  is  in  receiver,  g  240,  c,  p.  412. 
when  receiver  in  possession,  §}  240,  d,  p.  413. 
to  recover  insurance,  §  240,  e,  p.  414. 
what  must  be  averred,  §  240,  f,  p.  414, 
collateral  attack  upon.  §  241,  p.  415. 
cannot  be  enjoined,  when,  §  241,  p.  416. 

concerning  land,  must  be  in  jurisdiction  where  land  i3,  §   241,  p. 
416. 
8uit  against,  must  be  by  leave  of  court,  tj  242,  p.  417. 
may  be  restrained,  when,  §  242,  p.  417. 

possession  of.  differs  from  ordinary  receiver,  in  what,  §  242,  p.  416. 
extent  of  receiver's  title  as  to,  §  67,  p.  149. 
foreign,  suit  by  receiver  of,  rule  governing,  §  240,  p.  411. 

in  foreclosure  proceedings.     See  FouECiiOsuKE  and  Mortg.\ge. 

COSTS, 

liability  of  receiver  for,  §  109,  a.  p.  203. 
when  receiver  entitled  to,  §  98,  p.  194. 

See  Compensation  and  Fees. 

COTENANCY, 

appointment  of  receiver  in  partition  suits,  concerning,  §  317,  p.  549. 
See  Tenants  in  Common. 
COUNSEL, 

when  receiver  may  employ,  §  29,  a,  p.  89. 

COUNSEL  FEES. 

See  Attorneys'  Fees. 
COURT, 

contempt  of,  for  not  obtaining  leave  to  sue  receiver  of  corporation,  §  242, 

p.  417. 
discretion  of,  in  appointment  of  receiver  for  insolvent  corporation,  §  228, 

p.  369. 
leave  of,  required  before  suit  brought  by  receiver,  when,  §  239,  p.  410. 
powers  of,  to  make  all  orders  to  preserve  property,  §  22,  note,  p.  63. 
as  to  choses  in  action,  §  63,  p.  145. 
to  compel  assignment,  §  63,  p.  145. 
to  compel  transfer  of  property,  g  72,  note,  p.  160. 
to  appoint  receiver  of  corporation,  discretionary,  §  222,  p.  347. 
to  appoint  receiver  of  corporation  limited,  ^  223,  p.  349. 
in  appointment  of  receiver  for  insolvent  corporation,  §  328,  p.  369. 


INDEX.  721 

[References  are  to  sections  and  pages  in  body.] 
COURT,  continued. 

powers  of,  and  judge  in  vacation,  when  synonymou-,  §  18,  note,  p.  54. 
U.  S.  Supreme  Court  will  not  appoint  on  appeal,  §  13,  d,  note,  p.  35. 
attitude  of,  toward  receivers  of  railways,  §  370,  p.  453. 
of  concurrent  jurisdiction,  rule  as  to  appointment,  §  19,  note,  p.  56. 

See  also  Federal  Court. 

COURTS  OF  EQUITY, 

jurisdiction  of,  to  appoint  receiver  for  corporation,  §  330,  p.  343. 
power  of,  over  receiver  of  National  Bank  appointed  by  comptroller,  §  352, 
c,  p.  434. 

COVENANT, 

breach  of,  as  ground  for  appointment  of  receiver,  §  325,  b,  p.  358. 

CREDITOR  AND  DEBTOR. 

appointment  of  receiver  between,  §  316,  p.  549. 

CREDITORS, 

extent  of  receivers  title  as  to  frauds  on,  §  67,  p.  149. 

leave  of  court  in  case  of  levy,  §  94.  p.  187. 

when  entitled  to  receiver  for  partoership  matters,  ^5  198,  p.  318. 

collusion  with,  ground  for  appointment  of  receiver  in  case  of  partnership, 

§  307,  p.  335. 
foreign,  effect  of  receiver's  possession  against,  §  48,  p.  133. 
priority  of,  in  supplemental  proceedings,  §  159,  p.  263. 

in  supplementary  proceedings,  how  determined,  t^  159,  p.  364. 
judgment,  may  apply  for  receiver  of  corporation,  §  334,  f,  p.  354;  §  235,  k, 
p.  363. 

See  also  Appointment  of  Receiver. 

CREDITORS'  BILLS, 

chancery  jurisdiction  in,  §  146,  p.  335. 

regulation  of,  by  statute,  §  146,  p.  236. 

based  on  inadequacy  of  common  law  remedies,  §  146,  b,  p.  237. 

prerequisites  to  such  proceedings,  §  146,  b,  p.  238. 

inadequacy,  what  is,  §  146,  b,  p.  338. 

necessity  of  judgment,  ^  146,  b,  p.  338. 

necessity  of  execution  and  return,  ^  146,  b,  p.  339. 

judgment,  when  not  required,  ^  146,  b,  p.  339. 

classes  of  creditor's  proceedings,  §  147,  p.  340. 

removal  of  fraudulent  transfer,  §  147,  p.  340. 

to  remove  cloud  upon  title,  §  147,  p.  340. 

to  reach  concealed  property,  §  147,  p.  240. 

to  reach  fraudulent  conveyances,  §  148,  a,  p.  241. 

action  by  judgment  creditors,  ^  148,  a,  p.  241. 

action  by  receiver,  §  148,  a,  j).  241. 

application  of  statute  13  Eliy;.  chap.  5,  and  29  Eliz.  chap.  5,  ^  148,  a,  p.  243. 

to  attack  invalid  mortgage,  <~^  148,  a,  p.  244. 

rule  as  to  execution,  j^  148,  b,  p.  244. 

exceptions  to,  generally,  §  148,  b,  p.  246. 

46 


723  INDEX. 

[Ilcfcrcnces  arc  to  sections  and  pafrcs  in  body.] 
CREDITORS'  BILLS,  continued. 

rule  as  to  executions,  exception  in  case  of  attachment,  §  148,  b,  p.  2-16. 
exception  as  to  practical  utilitj',  §  148,  b,  p.  246. 
exception  in  case  of  fraudulent  conve3ance,  §  148,  b,  p.  247. 
exception  where  judgment  debtor  has  absconded,  §  148,  b,  p.  247. 
exception  in  insolvents' estates,  §  148,  b,  p.  247, 
exception,  where  waived,  §  148,  b,  p.  247. 
judgment,  when  required,  §  148,  b,  p.  248.  , 

jurisdiction  in  matters  of  assignment,  §  149,  a,  p.  249. 
assignments,  when  fraudulent  under,  §  149,  a,  p.  249. 
fraudulent  assignment,  how  removed,  ^  149,  a,  p.  249. 
ground  for,  fraudulent  assignment,  ^  149,  a,  p.  250. 

assignments,  receiver  in,  where  assignee  fails  to  take  possession,  §  149,  b, 
p.  250. 

receiver  in,  mismanagement  by  assignee,  §  149,  b,  p.  250. 
governed  by  chancery  practice,  §  150,  p.  251. 
whom  receiver  represents.  §  150,  p.  251. 
title  of  receiver  in,  §  150,  p.  252. 

fraudulent  transfer,  suit  by  receiver,  when  necessary,  §  150,  p.  252, 
execution,  how  long  retained,  §  151,  p.  252. 

lifetime  of  execution,  §  151.  a,  p.  252. 

life  of  execution,  contra,  §  151,  b,  p.  253. 
practice  in  Code  states,  §  152,  p.  254. 
appointment  of  receiver  in,  generally,  §  153,  p.  255. 

judicial  discretion  of  court,  §  153,  p.  255. 

effect  of  statutory  provisions,  §  153,  p.  255. 

as  affected  b}'  practice  of  court,  §  153,  p.  255. 

nature  of  order,  §  153,  p.  255. 

duties  of  receiver,  ^  153,  p.  255. 

bond  required,  §  153,  p.  255. 
liability  of  surety  of  receiver  in,  §  153,  p.  255. 
liability  of  receiver  to  preferred  payments  under,  §  127,  a,  p.  228, 
receiver's  title  in,  §  153,  p.  255. 
receiver's  functions,  ^  155,  p.  258, 
receiver's  power  in,  §  154,  p,  256. 

as  to  fraudulent  transfers,  §  154,  p.  256, 

giving  bond  required,  §  154,  p.  256. 

as  to  what  property,  §  154,  p.  257. 

as  to  property  in  hands  of  third  person,  ^  154,  p.  257. 

to  attack  title,  §  154,  p.  257. 

as  to  property  in  debtor's  possession,  §  154,  p.  257. 

as  to  trust  property,  §  154,  p.  257. 

as  to  exempt  property,  §  154,  p.  257, 

from  what  date  relates,  §  154,  p.  257. 

trustee  for  creditor,  §  155,  p.  258. 

to  reduce  property  to  possession,  §  155,  p.  259. 

to  set  aside  fraudulent  transfer,  i^  155,  p.  250. 

to  sue  and  be  sued,  §  156,  p,  260. 


]NDEX.  723 

[References  are  to  sections  and  pag-es  in  body.] 
CREDITORS'  BILLS,  continued. 

receiver's  power  in,  as  to  creditors,  §  159,  p.  263. 

in  foreign  jurisdiction,  §  158,  p.  263. 
power  of  court  to  compel  conveyance,  §  154,  p.  257. 
appointment  of  receiver  when  dispensed  witli,  §  15(5,  p.  261. 
order  of  appointment  of  receiver,  effect  of,  §  157,  p.  261. 

eilect  of  reversal,  §  157,  p.  261. 

effect  as  to  title,  §  157,  p.  261;  §  158,  p.  262. 

limitation  of,  §  157,  p.  263. 
creditors  in,  how  made  parties,  §  159,  p.  263. 
priority  of  creditors  in,  generally,  §  159,  p.  203. 

over  purchasers,  §  159,  p.  263. 

when  determined,  §  159,  p.  264. 

as  to  mortgagee,  §  159,  p.  264. 
receiver's  title  thereunder,  §  159,  p.  263. 
appointment  of  receiver  where  title  involved,  §  160,  p.  204. 

where  mortgagee  in  possession,  §  160,  p.  264. 
sale  thereunder,  §  159,  p.  263. 
effect  of  filing  bill  in  lieu  of,  §  154,  p.  256. 

CREDITORS'  LIENS, 

paid  from  receivership  fund,  §  341,  g,  p.  574. 
See  also  Liens  and  Priorities. 

CREDITORS'  PROCEEDINGS, 

when  receiver  appointed  in,  §  4,  d,  p.  9. 

who  receiver  represents  in,  ^  6,  b,  note  3,  p.  23. 

form  of  affidavit  for  appointment  of  receiver  in.  No.  7,  p.  642. 

CREDITORS'  SUITS, 

appointment  of  receivers  in,  §  4,  d,  p.  9. 

CROPS, 

See  Growing  Crops. 
CROSSING, 

See  Railway  Crossing. 

CUSTODY  OF  RECEIVER, 
care  exercised,  ^  6,  c,  p.  23. 

See  also  Possession. 

D. 

DAMAGES, 

resulting  from  death  when  not  a  preferred  claim,  §  343,  p.  579. 

resulting  from  fire  produced  from  defective  locomotive,  when  not  a  pre 

ferred  claim,  §^  343,  p.  579;  §  381,  b.  p.  498. 
liability  of  receiver  of  corporation  for,  §  334,  f,  p.  395. 

DANGER  OF  LOSS, 

as  a  ground  of  appointment  of  receiver,  g  5,  a,  note,  p.  10;  §  15,  b,  p.  39. 
necessary  to  appointment,  §  15,  b,  note,  p.  39. 
arises  from  waste,  misconduct  or  in.solvency,  §  15,  b,  p.  39. 
See  also  Appointment  and  Grounds. 


724  INDEX. 

[References  are  to  sections  and  pages  in  bodj'.] 

DEATH. 

damages  resulting  from,  when  not  a  preferred  claim,  §  343,  p.  580. 

DEBTOR, 

appointment  of  receiver  in  case  of,  §  4,  c,  p.  8. 

extent  of  receiver's  title  as  to,  §  07,  p.  149. 

fraudulent  transactions  of,  how  impeached,  ^5  08,  p.  111. 

DEBTOR  AND  CREDITOR, 

appointment  of  receiver  between,  §  316,  p.  549. 
See  also  ArpoiNTMENT. 
DEBTS, 

obtaining  leave  to  contract,  §  410,  p.  625. 

DECEDENTS"  ESTATES, 

when  receiver  to  be  appointed  for,  §  4,  a,  p.  7. 
generally,  §  300,  a,  p.  526. 
in  contests  over  wills,  §  300,  b,  p.  537. 
in  lieu  of  executors  and  administrators,  §  301,  a,  p.  528. 
misconduct  and  refusal  to  act,  §  301,  c,  p.  534. 
where  no  one  competent  to  act  as  administrator,  §  301,  d,  p.  537. 
when  not  appointed,  §  301,  b,  p.  532. 
See  also  Appointment. 

DECLARATION, 

form  of,  on  assessment  against  stockholder  of  National  Bank,  No.  68,  p.  685. 
on  promissory  note.  No.  69,  p.  687. 
See  Complaint  and  Form. 

DEED  BY  RECEIVER, 

rule  governing,  §  418,  p.  632. 

when  before  confirmation,  effect  of,  §  34,  b,  note,  p.  99. 

DEFENDANT, 

may  apply  for  receiver  of  corporation,  ^  224,  d,  p.  353. 

See  also  Application  for  Receiver  and  Parties. 
DEFENSE, 

to  suit  against  stockholder  of  National  Bank,  §  258,  b,  p.  443. 

DEFINITION, 

of  receiver,  §  3,  p.  3. 

of  receiver's  title,  §  58,  p.  140. 

DIRECTIONS, 

application  by  receiver  for,  §  401,  p.  619. 
See  also  Instructions. 
DIRECTORS, 

may  apply  for  receiver  of  corporation,  §  224,  c,  p.  354. 
suits  against  by  receiver,  for  misconduct,  §  76,  p.  173. 
in  case  of  insolvency,  §  76,  p.  172. 
in  case  of  void  transfers,  §  76,  p.  172. 
to  avoid  illegal  chattel  mortgage,  §  76,  p.  172. 
in  case  of  excess  of  indebtedness,  §  76,  p.  172. 


INDEX.  725 

[References  are  to  sections  and  images  in  body.] 
DIRECTORS,  continued. 

suits  against  by  receiver,  to  recover  assets,  §  76,  p.  172. 

in  case  of  acts  ultra  virea,  §  76,  p.  172. 
of  National  Banks,  liabilities  of,  to  receiver,  g  260,  p.  448. 
See  also  Officers. 

DISBURSEMENTS, 

duties  of  receiver  in  regard  to,  §  355,  p.  593. 

DISCHARGE  AND  REMOVAL  OF  RECEIVER, 

generally,  §  330,  p.  557. 

notice  of  application,  §  330,  a,  p.  557. 

application  for,  §  330,  b,  p.  558. 

in  sound  discretion  of  court,  §  330,  b,  p.  558. 

by  whom  application  for  to  be  made,  §  330,  c,  p.  560. 

grounds  for.  §  330,  d,  p.  562. 

grounds  for  refusal  to  order,  §  330,  g,  p.  566. 

effect  of,  §  330,  f,  p.  564. 

as  to  liability  of  railway  receiver,  §  286,  p.  517. 

pending  action,  g  413,  p.  629. 
upon  approval  of  report  and  account,  §  356,  j,  p.  595. 
on  dismissal  of  action  in  which  appointed,  Appx.  p.  696. 
on  cancellation  of  bond,  Appx.  p.  696. 
what  not  ground  for,  Appx.  p.  696. 

DISCRETION  OF  COURT. 
defined,  §  5,  a,  p.  10. 
to  hear  affidavits,  §  11,  note,  p.  32. 
governs  appointment  of  receiver,  §  5,  a,  p.  10. 
in  appointment  of  receiver  for  corporation,  g  222,  p.  347. 

for  in.solvent  corporation,  g  228,  p.  369. 

over  trust  property,  §  306,  p.  540. 
to  be  exercised  in  removal  of  receiver,  §  330,  b,  p.  558. 
exercised  in  manner  of  determining  claims  against  receivership  funds, 

§  340,  d,  p.  571. 
in  suit  against  receiver,  §  398,  p.  617. 

DISCRETION  OF  RECEIVER, 

as  to  price  to  be  paid,  g  31,  a,  p.  93. 

has  none  in  following  decree,  §  110,  p.  205. 

DISOBEDIENCE  TO  ORDER  OF  COURT, 

a3  ground  for  application  for  receiver  in  lieu  of  trustee,  §  306,  p.  541. 
as  ground  for  removal  and  discliarge  for  receiver,  i;  330,  d,  p.  562. 
See  also  Rkmoval  and  Dischakge. 

DISSENTING  STOCKHOLDERS, 

rights  of,  in  suit  by  receiver  to  collect  illegal  dividends,  §  238,  p.  408. 

DISSOLUTION, 

of  partner.ship,  a  cause  for  appointment  of  receiver,  §205,  p.  329. 

a  ground  for  appointment  of  receiver  for  corporation,  §  225,  e,  p.  361. 


720  INDEX. 

[Ilofercncos  ai'O  to  sections  and  i)aK'os  in  bodj'.] 
DISTRESS  FOR  RENT, 

possession  of  receiver  interfered  willi,  §  43,  p.  131. 
receiver  liable  in,  §  121,  p.  220. 
■wlicn  receiver  may  maintain,  §  80,  p.  179. 

in  Euglanil  tlie  right  to  distrain  does  not  depend  on  leave  to  sue,  §  69, 
note,  p.  153. 

DISTRIBUTION  OF  RECEIVERSHIP  FUNDS, 
general  rules,  §  357,  p.  595. 
what  embraced  in  order  for,  §  358,  p.  590. 
notes  secured  by  invalid  mortgage  not  included  in  order  for,  §  358,  b, 

p.  598. 
debts  due  contractors,  §  358,  c,  p.  599. 
to  include  rents  and  profits,  when,  t^  358,  d,  p.  599. 
order  for,  to  include  expenses  and  advances,  when,  §  358,  e,  p.  599. 

to  include  money  paid  by  sureties,  when,  §  358,  f,  p.  600. 

when  judgment  claimed  to  be  a  prior  lien,  §  358,  g,  p.  601. 

where  collaterals  held,  ^  358,  h,  p.  601. 

DIVIDENDS, 

suits  by  receiver  of  corporation  to  recover  when  illegal,  §  235,  a,  p.  398; 
g  238,  p.  408. 

DUTIES  OF  RECEIVER, 

indiiTerent  as  to  parlies,  §  3,  p.  3. 

in  case  of  partnership,  i^  209,  p.  336. 

as  manager  of  coi'poralion,  §  232,  p.  377. 

for  corporation,  general  rules,  ^  233,  p.  380. 

regarding  trust  properly,  §  305,  p.  539;  §  412,  p.  627. 

relating  to  reports  and  accounts,  §  355,  p.  593. 

when  appointed  in  supplementary  proceedings,  g  153,  p.  255. 

practice  when  exceeded,  §  405,  p.  622. 

practice  on  failure  to  do,  §  406,  p.  622. 

See  also  Functions  and  Powers  of  Receivers. 

E. 

EFFECT  OF  APPEAL, 

from  order  removing  receiver,  §  330,  e,  p.  564. 
See  also  Appeal  and  Removal. 

EFFECT  OF  APPOINTMENT  OF  RECEIVER, 

generally,  §  7,  p.  23. 

places  property  in  custodia  legis,  §  7,  a,  p.  23. 

he  cannot  be  sued,  ^  7,  b,  p.  23. 

determines  no  rights  and  affects  no  liens,  §  7,  c,  p.  23. 

removes  defendant  from  possession,  g  17,  b,  p.  41. 

as  to  title,  g  17,  c,  p.  47. 

as  to  possession,  §  17,  d,  p.  48. 

as  to  custody  limited,  §  17,  e,  p.  50. 

as  to  coQtracts,  mortgages,  etc.,  §  17,  f,  p.  51, 


INDEX.  727 

[References  are  to  sections  and  pnscs  in  body.] 
EFFECT  OF  APPOINTMENT  OF  RECEIVEPv,  coulinued. 
when  receiver's  rights  accrue,  §  17,  g,  p.  52. 
as  to  properly,  §  17,  h,  p.  53. 
as  to  title,  §  44,  p.  122. 
as  to  liens,  §  44,  p.  123. 

EFFECT  OF  RECEIVEPt'S  POSSESSION, 

as  to  secured  creditors,  §  58,  p.  lofi. 

as  to  public  improvements,  §  49,  p.  135. 

as  to  new  business,  §  50,  p.  135. 

as  to  tenants,  §  51,  p.  136. 

as  to  rents,  §  51,  p.  136. 

as  to  set-off,  §  55,  p.  138. 

as  to  exemptions,  §  56,  p.  139. 

as  to  executors  and  administrators,  §  57,  p.  139. 

as  to  title,  §  59,  p.  142. 

See  also  Possession. 
EJECTMENTS, 

possession  of  receiver  interfered  vpith,  g  43,  p.  121;  §  44,  p.  122. 

appointment  of  receiver  in  cases  of,  §  3:20,  p.  551. 

ELECTION  OF  OFFICERS, 

of  corporation,  failure  to  make,  grounds  for  receiver,  g  225,  h,  p.  361. 
See  also  Officers. 

ELIZABETH-STATUTE  OF, 

in  what  states  adopted,  §  148,  a,  p.  243. 

EMERGENCY,  GRAVE, 

as  ground  for  appointment,  g  5,  d,  p.  14. 

See  also  AppointxMent  and  Giiodnds. 

EMPLOYEES  OF  RECEIVER, 

are  officers  of  court  pro  hac  vice,  §  46,  p.  130. 
See  also  Agents. 

EQUITY  COURTS, 

power  to  appoint  receivers,  in  suits  for  alimony,  g  321,  p.  552. 
in  sundry  proceedings,  §  315.  p.  548. 
over  trust  property,  §  305,  p.  539. 
See  also  Courts. 

ESTATES  OF  INFANTS, 

appointment  of  receivers  for,  §  309,  p.  515. 
See  also  Infants. 

ESTATES  OF  LUNATICS, 

when  receiver  appointed  over,  §  310,  p.  547. 
See  also  Lunacy  and  Insamity. 
EVOLUTION. 

of  law  of  receivership,  §  7,  p.  2. 

EXAMINATION, 

of  debtor  in  appointment  of  receiver  in  Code  states,  §  386,  p.  608. 


728-  INDEX. 

[Tteferencos  are  to  sections  and  pages  in  body.] 

EXCEPTIONS, 

to  master's  findings  on  receiver's  report,  ^  n56,  c,  p.  594. 
See  also  Rkport  of  lliiCnivKU. 

EXECUTION, 

levy  of,  leave  of  court,  §  17,  b,  note,  p.  51. 
may  be  a  lien  but  not  levied,  §  17,  d,  note,  p.  48. 
effect  of,  upon  receiver's  possession,  ^  43,  p.  121;  g  44,  note,  p.  122. 
appointment  of  receiver  in  lieu  of,  misconduct  and  refusal  to  act,  g  301,  c, 
p.  534. 

EXECUTORS  AND  ADMINISTRATORS, 

appointment  of  receiver  in  case  of,  §  4,  c,  p.  8. 

appointment  of  receiver  in  lieu  of,  §  301,  a,  p.  528;  §  301,  b,  p.  533. 

when  no  one  competent  to  act,  §  301,  d,  p.  537. 
of  receiver,  liability  of,  how  enforced,  §  135,  p.  233. 

liabilily  of,  generally,  §  135,  p.  233. 
of  stockholders  of  National  Banks,  §  258.  a,  p.  441. 
effect  of  receiver's  possession  as  to,  §  57,  p.  139. 

EXEMPTIONS, 

effect  of  receiver's  possession  as  to,  §  5G,  p.  139. 
claim  for,  when  must  be  made,  §  5G,  note,  p.  139. 

EX  PARTE  APPLICATION, 

when  receiver  granted  on,  §  5,  d,  note,  p.  14. 
void  in  Michigan,  §  13,  note,  p.  35. 

See  also  Application  for  Receiveb. 

EX  PARTE  HEARING, 

receiver  not  appointed  on,  §  5,  d,  note,  p.  14. 

EXPENSES, 

of  operating  railway,  power  of  receiver  to  pay  preferred  claim  based  on, 
§  276,  e,  p.  481. 
power  of  receiver  to  pay  implied  when  ordinarj^,  §  277,  a,  p.  483. 
when  preferred  to  mortgagee's  claim,  t^  342,  p.  575. 
paid  from  receivership  fund,  §  341,  e,  p.  574. 
to  be  included  in  order  for  distribution,  when,  ^  358,  e,  p.  599. 
See  also  Costs. 


F. 

FEDERAL  COURT, 

jurisdiction  of,  in  suit  by  receiver  of  National  Bank,  §  252,  c,  p.  423. 
See  also  Jurisdiction  and  National  Banks. 

FEES  OF  ATTORNEYS, 

liability  of  receiver  for,  §  139,  p.  230. 
not  preferred  claim  against  railway  when,  §  281,  c,  p.  498. 
as  claims  against  receivership  funds,  §  341,  a,  p.  572. 
See  also  Compensation. 


INDEX.  729 

[References  are  to  seotious  and  pages  iii  body.] 
FIDUCIARY  RELATIONSHIP, 

violation  of,  cause  for  receiver,  §  4,  c,  p.  8. 

FILING  EXCEPTIONS, 

to  master's  fiiulings  on  receiver's  report,  i^  356,  c,  p.  594. 
See  also  Pkactice. 
FINDINGS, 

embodied  in  order  of  appointment,  §  383,  p.  607. 
See  also  Forms  and  Practice. 

FIRE,  DAMAGE  BY, 

when  claim  for,  not  preferred,  8  281,  b,  p.  498. 

produced  bj'  defective  locomotive,  when  not  a  preferred  claim,  §  343,  p.  580. 
See  also  Claims  and  Preferred  Claims. 

FORCIBLE  INTERFERENCE, 

possession  of  receiver  disturbed  by,  §  43,  p.  121. 

FORECLOSURE  OF  MORTGAGE, 

appointment  of  receiver  in,  generally,  §  170,  p.  266;  §  389,  p.  609. 
for  corporation,  §  229,  p.  371. 
grounds  for  invoking  jurisdiction,  §  171,  p.  267. 

where  mortgage  provides  for,  §  171,  a,  p.  267. 

where  statute  provides  for,  §  171,  b,  p,  267. 

inadequacy  of  security,  §  171,  c,  p.  267. 

in  case  of  waste,  §  171,  d,  p.  267. 

nonpayment  of  insurance,  171,  d,  p.  267. 

nonpayment  of  taxes,  §  171,  d,  p.  267. 

insolvency  of  mortgagor,  §  171,  c,  p.  267. 
where  mortgage  provides  for,  §  171 ,  a,  p.  266. 
for  statutory  cause,  ^  171,  b,  p.  267. 
for  inadequate  security,  §  171,  c,  p.  267. 
for  insolvency  of  mortgagor,  p.  171,  c,  p.  267. 
for  insolvency  of  grantee  of  mortgagor,  §  171,  c,  p.  267. 
for  waste  by  mortgagor,  §  171,  d,  p.  267. 
for  nonpayment  of  taxes,  §  171,  d,  p.  267. 
for  nonpayment  of  insurance,  §  171,  d,  p.  267. 
for  fraud  or  bad  faith  in  mortgagor,  §  171,  e,  p.  267. 
where  express  grant  or  pledge  of  rents,  §  172,  a,  p.  270. 
where  security  inadequate,  §  172,  b,  p.  272. 
where  trustee  refuses  to  act,  §  172,  c,  p.  276. 
where  there  are  equitable  grounds  for  relief,  §  172,  d,  p.  276. 
where  there  are  statutory  grounds,  §  172,  e,  p.  277. 
where  there  are  special  grounds,  §  172,  f,  p.  277. 
where  contest  over  mortgage  property,  §  171,  g,  p.  277. 
where  grantee  guilty  of  fraud,  §  172,  h,  p.  278. 
where  mortgagee  guilty  of  fraud,  §  172,  h,  p.  278. 
where  mortgagor  is  committing  waste,  §  172,  i,  p.  278. 
where  interest  due  and  unpaid,  §  172,  j,  p.  278. 
receiver  not  appointed  in,  when,  §  173,  p.  278. 
if  right  doul)trui,  §  5,  b,  note,  p.  12. 


ToO  INDEX. 

[Iloforonocs  are  to  soctions  iiiul  passes  in  body.] 
FORECLOSURE  OF  MORTGAGE,  continued. 

receiver  not  appointed  in,  where  plainlilt  has  legal  remedy,  §  173,  p.  278. 
■where  mortgage  gives  no  right,  i^  173,  b,  p.  281. 
•where,  by  statute,  mortgagor  entitled  to  possession,  §  173,  c,  p.  282. 
where  petition  of  plaintiff  denied  by  answer,  §  173,  d,  p.  283. 
where  amount  disputed,  §  173,  e,  p.  283. 
where  insolvency  not  shown,  §  173,  e,  p.  284. 
where  light  of  foreclosure  not  shown,  t^  173,  f,  p.  285. 
where  plaintiff  has  no  equitable  stiyiding  in  court,  t^  173,  g,  p.  286. 
where,  pending  appeal,  the  bond  affords  protection,  §  173,  h,  p.  287. 
where  defendant,  by  deposit  in  court,  secures  plaintiff,  §  173,  i,  p.  287. 
where  properly  is  a  homestead,  §  173,  j,  p.  287. 

where  plaintiff  guilty  of  laches  in  making  application,  §  173,  k,  p.  287. 
appointment  of  receiver  in,  for  inadequacy  of  security  when  property  iu- 
suflicient,  §  174,  a,  p.  287. 
for  inadequacy  of  security,  when  mortgagor  in.solvent,  §  174,  a,  p.  288. 
both  elements  must  be  shown,  §  174,  b,  p.  290. 
presumption  as  to  value.  §  174,  c,  p.  291. 
rule  in  New  Jersey,  §  174,  d,  p.  292. 
rule  in  California  and  other  states,  §  174,  d,  p.  292. 
where  mortgagor  entitled  to  possession,  §  174,  d,  p.  293. 
what  indebtedness  included,  ^  174,  e,  p.  294. 
proof  required,  §  174,  f,  p.  294. 
English  rule,  §  174,  g,  p.  294. 
conflicting  decisions  regarding,  §  175,  p.  294. 
jurisdiction  as  to  property,  ^  170,  p.  295. 
to  be  made,  g  177,  p.  297. 

before  decree,  ^  177,  a,  p.  297. 
after  decree,  §  177,  b,  p.  297. 
general  rules  applicable  to,  i^  178,  p.  299. 
when  mortgagee  appointed,  ^  178,  p.  299. 
allegations  of  petition  for,  regarding  possession,  §  178,  p.  299. 
rights  of  senior  and  junior  mortgagees,  generally,  §  179,  p.  299. 
English  rule,  §  179,  a,  p.  299. 
American  rule,  §  179,  b,  p.  300. 
on  application  of  wife,  §  180,  a,  p.  303. 
on  behalf  of  annuitants,  §  180,  b,  p.  302. 
on  behalf  of  bondholders,  §  180,  c,  p.  303. 
on  behalf  of  vendors,  §  180,  d,  p.  303. 
form,  of  affidavit  for  appointment  of  receiver  in.  No.  6,  p.  641. 
of  bill  in.  No.  4,  p.  039. 

of  order  appointing  receiver  of  rents  and  profits.  No.  20,  p.  656. 
receiver's  custody  only  extends  to  mortgage  property,  ^  17,  h,  p.  53. 
liability  of  receiver  to  preferred  payments  under,  §  127,  b,  p.  228. 
See  also  Mortgage. 

FOREIGN  CORPORATION, 

suit  by  receiver  of,  rule  governing,  §  240,  p.  411. 
See  also  Cokpouation. 


INDEX.  T31 

[References  are  to  sections  and  pages  in  body.] 
FOREIGN  CREDITORS, 

effect  of  receiver's  possession  against,  §  48,  p.  133. 

FOREIGN  STATUTES, 

effect  of  as  to  title  to  personal  property,  §  37,  note,  p.  lOS. 

FORFEITURE  OF  CHARTER, 

when  receiver  appointed  in,  g  4,  d,  p.  9. 

FORMS, 

Approved  works  on,  p.  636. 

FORM  OF  ACCOUNT, 

rendered  by  receiver,  No.  53,  p.  667. 

FORM  OF  AFFIDAVIT, 

for  appointment  of  receiver,  in  judgment  creditor's  action,  No.  7,  p.  643. 

in  foreclosure,  No.  6,  p.  641. 
for  motion  to  compel  tenants  to  pay.  No.  33,  p.  666. 
for  order  to  stay  actions  affecting  assets.  No.  34,  p.  667. 

to  show  cause  why  receiver  should  not  be  punished  for  contempt,  etc.. 
No.  62,  p.  782. 
for  continuance  of  action  against  receiver  instead  of  corporation,  No.  63, 

p.  783. 
of  bill  or  complaint,  for  receiver  of  partnership  property.  No.  3,  p.  638. 
in  foreclosure  proceedings.  No.  4,  p.  639. 
See  also  Affidavit. 

FORM  OF  ASSIGNMENT. 

to  receiver  of  partner,ship.  No.  25,  p.  660. 

FORM  OF  BOND, 

of  receiver,  §  379,  p.  605. 

general  form.  No.  23,  p.  659. 

short  form.  No.  24,  p.  ,660. 
for  receiver  of  partnership,  No.  22,  p.  658. 

FORM  OF  COMPLAINT, 

for  di.ssolution  of  partnership  and  for  receiver.  No.  1,  p.  636. 

against  insolvent  corporation,  No.  2,  p.  637. 

for  receiver  of  partnership  property.  No.  3,  p.  638. 

in  foreclosure,  No.  4,  p.  639. 

by  creditor  against  corporation,  for  an  account,  to  set  aside  judgment,  and 

for  receiver.  No.  5,  p.  640. 
by  creditor  on  bond  of  receiver  for  failure  to  pay  money,  No.  67,  p.  784. 

FORM  OF  DECLARATION, 

on  assessment  against  stockholder  of  National  Bank,  No.  68,  p.  685. 
ou  promissory  note.  No.  69,  p.  687. 

See  also  Comi'LAINT  and  Foum  of  Comi'Laint. 

FORM  OF  JUDGMENT, 

against  receiver,  §  128,  p.  228;  i^  397,  p.  617. 
See  also  Juugmknt. 


732  INDEX. 

[References  are  to  sections  and  pases  in  body.] 

FORM  OF  NOTICE. 

for  application  of  receiver,  No.  8,  p.  642. 

of  appointment  of  receiver  and  to  present  claims,  No.  2f),  p.  GG2. 

of  motion  for  inslructions,  No.  48,  p.  674. 

of  motion  to  revoke  appointment,  No.  55,  p.  679. 

of  motion  to  discharge  receiver.  No.  58,  p.  780. 

of  motion  to  di-scliarge  as  to  specific  properly,  No.  60,  p.  781. 

of  petition  for  distribution,  No.  51,  p.  676. 

FORM  OF  OBJECTIONS, 

to  receiver's  account,  No.  54,  p.  678. 

FORM  OF  ORDER, 

appointing  receiver,  general.  No.  9,  p.  643. 

of  manufacturing  corporation.  No.  10,  p.  644. 

of  railroad  in  foreclosure.  No.  11,  p.  645. 

of  railway.  No.  12,  p.  648. 

on  foreclosure  by  trustee  of  corporation,  No.  13,  p.  650. 

of  partnership,  No.  14,  p.  651. 

to  manage  joint  business,  No.  15,  p.  652. 

to  manage  mine,  No.  16,  p.  653. 

for  misconduct  of  officers.  No.  17,  p.  654. 

of  specific  properly.  No.  18,  p.  655. 

without  prejudice  to  rights  of  prior  encumbrancers.  No.  19,  p.  655. 

of  rents  and  profits  on  foreclosure.  No.  20,  p.  656. 
granting  injunction,  etc..  No.  17,  p.  654. 

to  show  cause  why  receiver  should  not  be  appointed.  No.  21,  p.  657. 
on  creditors  to  exhibit  claims,  No.  27,  p.  662. 

appointing  special  commissioner  to  hear  and  report  claims.  No.  29,  p.  663. 
to  pay  claims,  etc..  No.  30,  p.  664. 
for  defendant  to  turn  over  books,  etc..  No.  31,  p.  665. 
to  settle  traffic  balances.  No.  37,  p.  670. 
to  pay  rent.  No.  38,  p.  670. 

giving  leave  to  pay  secured  claim,  No.  40,  p.  671. 
directing  sale  of  perishable  property.  No.  41,  p.  672. 
confirming  sale,  No.  42,  p.  672. 
to  complete  purchase,  No.  44,  p.  673. 
sanctioning  employment  of  counsel,  No.  46,  p.  674. 
discharging  receiver.  No.  56,  p.  679. 

removing  receiver  and  appointing  substitute.  No.  57,  p.  780. 
to  show  cause  why  receiver  should  not  be  discharged,  No.  59,  p.  781. 
that  receiver  pay  over  funds  to  successor.  No.  61,  p.  781. 
authorizing  compromise  with  shareholders  of  National  Bank,  No.  71,  p.  691. 
to  sheriff  to  withdraw  levy.  No.  65,  p.  684. 
special  to  receiver  to  bring  suit,  No.  66,  p.  684. 

FORM  OF  PETITION, 

for  receiver  in  case  of  partnership.  No.  1,  p.  636. 

for  judgment  against  insolvent  corporation.  No.  2,  p.  637. 

for  receiver  of  partnership  property.  No.  3,  p.  638. 


INDEX.  733 

[References  are  to  sections  and  pages  in  body.] 
FORM  OF  PETITION,  continued, 
in  foreclosure,  No.  4,  p.  639. 
by  creditor  of  corporation  for  an  accotint,  to  set  aside  judgment,  and  for 

receiver.  No.  5,  p.  640. 
to  compel  payment  to  receiver,  No.  32,  p.  665. 

for  permission  to  defend  suit  and  compromise  claim.  No.  33,  p.  668. 
of  receiver  of  National  Bank  for  leave  to  compromise,  No.  70,  p.  689. 
for  leave  to  settle  traffic  balances,  No.  36,  p.  669. 
for  leave  to  sell,  No.  39,  p.  671. 
to  compel  completion  of  purchase.  No.  43,  p.  673. 
for  authority  to  pay  counsel  fees,  No.  45,  p.  673. 
for  leave  to  pay  claims.  No.  47,  p.  674. 
that  receiver  be  instructed  to  pay  deposit.  No.  49,  p.  675. 
that  receiver  surrender  possession,  No.  50,  p.  676. 
for  permission  to  account  and  be  discharged,  No.  52,  p.  677. 
for  substituting  a  party  to  action  pending  when  appointed,  No.  64,  p.  683 

FORM  OF  PRAYER, 

for  receiver,  in  case  of  partnership.  No.  1,  p.  636. 

for  judgment  against  insolvent  corporation.  No.  2,  p.  637. 

for  leave  to  account,  etc.,  No.  5,  p.  640. 

FRAUD, 

will  destroy  character  of  preferred  claims,  §  343,  p.  579. 

extent  of  receiver's  title,  when  as  to  creditors,  §  67,  p.  149. 

by  one  partner,  a  ground  for  appointment  of  receiver,  §  202,  p.  323. 

when  ground  for  appointment  of  receiver,  generally,  §  15,  c,  p.  40. 

for  corporation,  §  227,  p.  366. 

in  lieu  of  trustee,  §  306,  p.  540. 

facts  to  be  stated,  ^  227,  p.  366. 
as  ground  for  removal  and  discharge  of  receiver,  g  330,  d,  p.  o03, 
as  a  ground  for  foreclosure,  §  171,  e,  p.  206. 
petition  to  set  aside  judgment,  because  of,  No.  5,  p.  640. 

FRAUDULENT  ASSIGNMENT. 

when  receiver  appointed  in,  §  307,  p.  543. 
appointment  of  receiver  in  case  of,  g  149,  a,  p.  250. 
as  ground  for  creditor's  bill,  generally,  i^  149,  a,  p.  249. 

where  fictitious  liabilities,  §  149,  a,  p.  250. 

where  assets  are  omitted,  §  149,  a,  p.  250. 

where  possession  remains  in  debtor,  ^  149,  a,  p.  250. 

where  reservations  in  instrument,  §  149,  a,  p.  250. 

on  terms  of  instrument,  §  149,  a,  p.  250. 

IliAUDULENT  CONVEYANCE, 
impeachment  of,  g  38,  note,  p.  111. 
proceedings  to  reach,  ^  148,  a,  p.  241. 
execution  not  necessary  in  proceedings  to  set  aside,  §  148,  b,  p.  217. 

FRAUDULENT  LIENS, 

may  be  removed  by  receiver,  ^  75,  (3),  p.  171. 


734  INDEX. 

[References  are  to  sections  luul  ijiiges  iu  body.] 
FRAUDULENT  TRANSACTIONS, 

of  debtor,  how  impeached,  §  38,  p.  111. 

FRAUDULENT  TRANSFER. 

removal  of,  g  147,  p.  240. 

how  avoided  by  receiver  of  corporation,  §  237,  p.  406. 

receiver's  power  over,  in  supplementary  proceedings,  ^  154,  p.  256. 

FREIGHT, 

liability  of  receiver  for,  g  134,  p.  233. 
See  also  Liability. 

FUNCTIONS  OF  RECEIVER, 
an  officer  of  court,  §  6,  a,  p.  20. 
derived  primarily  from  court,  §  6,  a,  p.  20. 
derived  from  scope  of  order  of  appointment,  §  6,  a,  p.  20, 
derived  from  statute,  when,  §  6,  a,  p.  20. 

to  have  care  and  custody  of  receivership  property,  §  6,  c,  p.  23. 
does  not  represent  plaintiff  merely,  §  6,  b,  note,  p.  21. 
is  trustee  for  all  parties,  §  6,  b,  p.  21. 
not  trustee  for  stranger  to  suit,  iii  6,  b,  p.  21. 
not  to  interfere  with  the  litigation  of  the  parlies,  §  6,  b,  p.  21. 
See  also  Poweus  and  Duties. 

FUNDS  OF  RECEIVER, 

distribution  of,  generally,  §  357,  p.  595. 
what  included  in,  §  358,  p.  5!3G. 

order  for,  when  judgment  claimed  to  be  a  prior  lien,  §  358,  g,  p.  601. 
See  also  Receiyeusuip  Fujsd. 


G. 

GARNISHMENT, 

possession  affected  by,  §  43,  p.  121. 

leave  of  court,  when  required  to  inuintain,  §  94,  p.  187. 

See  also  Attachment. 
GOODS, 

loss  of,  by  receiver  of  railway,  liability  for,  §  285,  d,  p.  516. 

See  also  Liability  of  Receiver. 
GROUNDS, 

for  appointment  of  receiver  for  building  and  loan  associations,  §  323,  p.  554. 

for  removal  and  discharge  of  receiver,  §  330,  d,  p.  562. 

for  appeal,  none  upon  removal  of  receiver,  §  330,  e,  p.  564. 

for  allowance  of  preferred  claim  against  receivership  fund,  §  342,  p.  574. 

for  refusal  to  discharge  receiver,  §  330,  g,  p.  5G6. 

See  also  AproiNTMENT,  Discuarge,  and  Appeal. 

GROWING  CROPS, 

when  receiver  entitled  to,  Appx.  p.  603. 

GROWTH  OF  LAW, 

illustrated  by  law  of  receiverships,  §  1,  p.  2. 


INDEX.  735 

[References  are  to  sections  aud  pages  in  bod3-.] 

H. 

HEARING  OF  CLAIMS, 

form  of  order  appointing  commissioner  for,  No.  29,  p.  6G3, 
See  also  Claims. 

I. 

ILLEGAL  DIVIDENDS, 

suit  by  receiver  of  corporation  to  collect,  |  238,  p.  403. 

ILLEGAL  INTEREST, 

receiver  may  recover,  §  75,  (7),  p.  171. 
See  also  Interest. 
ILLEGAL  JUDGMENT, 

receiver  may  attack,  §  75,  (11),  p.  171. 
See  also  Judgment. 
ILLEGAL   PREFERENCES, 

by  National  Bank  void  under  statutes,  §  259,  p.  445.    , 

IMPROVEMENTS, 

effect  of  receiver's  possession  as  to,  g  49,  p.  1G5. 

INADEQUACY  OF  LEGAL  REMEDY, 

receiver  not  appointed  when  an  adequate  legal  remedy  exists,  g  5,  c,  p.  14. 

INADEQUACY  OF  SECURITY, 

as  ground  for  foreclosure,  generally,  §  171,  c,  p.  267;  §  174,  p.  287;  §  175, 
p.  294. 
INFANT, 

when  receiver  to  be  appointed  for,  §  4,  a,  p.  7;  §  309,  p.  545. 

appointment  of  receiver  for,  suit  pending  not  required,  g  13,  note,  p.  35. 

INFRINGEMENT  OF  PATENTS, 
possession  affected  by,  g  43,  p.  121. 

INJUNCTION, 

granted  pending  notice,  §  5,  d,  p.  14. 

proper  until  notice  given,  g  13,  note,  p.  35. 

against  strikes  under  Interstate  Commerce  Act,  g  46,  note,  p.  130. 

to  restrain  strikes  and  conspiracies,  when  competent,  g  40,  p.  130. 

when  not  competent,  g  46,  p.  130. 
to  prevent  interference  with  receiver's  possession,  g  45,  p.  126;  g  4G,  p.  130. 
will  lie  to  prevent  suit  against  receiver,  when,  g  97,  p.  173. 
when  will  lie  to  prevent  suit  against  receiver  or  corporation,  g  243,  p.  417. 
when  suit  against  other  than  receivership  property,  g  97,  p.  1!»3. 
will  not  lie  to  compel  performance  of  employee's  contract,  g  40,  p.  130. 
will  lie  to  prevent  conspiracy,  g  40,  b,  p.  130. 
when  will  lie  against  receiver,  g  101,  p.  197. 
in  what  court  will  lie  against  receiver,  g  101,  p.  197. 
form  of  order  granting,  for  misconduct  of  otHccrs,  No.  17,  p.  054. 

on  foreclosure.  No.  20,  p.  056. 
as  to  property  in  foreign  jurisdiction,  g  17,  e,  p.  50. 
See  also  Rkbtiiainino  Okuhk. 


736  INDEX. 

[References  are  to  sections  atid  pag-es  in  body.] 
INJURY, 

personal,  liability  of  receiver  for,  §  113,  p.  208. 

when  damage  resulting  from,  not  a  preferred  claim,  §  343,  p.  580. 
irreparable,  as  ground  for  appointment,  ^  5,  d,  p.  14. 
See  also  Damages. 

INSANITY. 

appointment  of  receiver  in  cases  of,  §  310,  p.  547;  Appx.  p.  695. 
See  also  Lunacy. 

INSOLVENCY, 

as  ground  for  appointment  of  receiver,  getierally,  §  4,  d,  p.  9, 
of  railway,  §  17,  d,  p.  48;  §  273,  b,  p.  407. 
of  corporation.  §  225,  d,  p.  360  ;  g  228,  p.  307.. 
on  application  by  corporation,  §  228,  p.  370. 
form  of  complaint  against,  No.  2,  p.  037. 
in  case  of  partnersliip,  §  228,  p.  367. 
need  not  be  proved  if  answer  admits  it,  i^  15,  d,  p,  41. 
need  not  be  found  in  decree,  §  15,  d.  p.  41. 
of  mortgagor,  as  grounds  for  foreclosure,  g  171,  c,  p.  207. 

INSTRUCTIONS, 

application  by  receiver  for,  §  401,  p.  619. 

INSURANCE  COMPANIES,  ' 

insolvency  of,  grounds  for  receiver,  §  228,  p.  367. 
powers  of  receiver  of,  §  408,  p.  623. 
nonpayment  to,  ground  for  foreclosure,  §  171,  d,  p.  266. 

INTEREST, 

receiver  may  recover,  illegally  paid,  ^  75,  (7),  p.  171. 

liability  of  receiver  for,  on  funds,  g  109,  a,  p.  203;  §  111,  p.  206;  §  116, 

p.  214. 
liability  of  receiver  of  corporation  to  pay,  g  234,  c,  p.  394. 

INTERFERENCE, 

with  receiver's  possession,  generally,  §  44,  p.  122;  §  45,  p.  126. 
with  receiver,  in  Iowa  is  criminal  offense,  §  47,  note,  p.  133. 

INTERIM   RECEIVER, 

when  appointed,  ^  8,  p.  25. 

INTERMINGLING, 

of  trust  funds,  ground  for  appointment  of  receiver,  g  30G,  p.  541. 

INTERNATIONAL  COMITY, 
when  enforced,  §  37,  note. 

See  also  Comity. 

INTERPLEA, 

by  receiver,  practice,  §  403,  p.  619. 

INTIMIDATION, 

as  interference  with  possession,  ^  4<i,  note,  p.  130. 


INDEX.  737 

[References  arc  to  sections  and  pajfcs  in  body.] 
INVALID   MORTGAGE, 

receiver  may  question,  §  75,  (12),  p.  171. 

See  also  Mortgage  and  Powers  of  Receiver. 
INVESTMENT, 

power  of  receiver  to  make,  of  receiver.«hip  money,  g  233,  j,  p.  333. 
See  also  Powers  of  Receiver. 

ISSUANCE   OF    CERTIFICATES. 

obtaining  leave  for,  by  receiver,  t^  411,  p.  626. 
See  also  Certificates. 

J. 

JUDGMENT, 

receiver  may  attach  when  illegal,  §  75,  (11),  p.  17. 
what  considered  on  arrest  of,  g  81,  p.  180. 
form  of  petition  to  set  aside.  No.  5,  p.  640. 
form  of,  against  receiver,  g  128,  p.  228;  §  397,  p.  617. 
See  also  Liens. 

JUDGMENT  CREDITORS, 

may  apply  for  receiver  of  corporation,  §  224,  f,  p.  354;  §  225,  k,  p.  363. 
not  affected  by  appointment  of  receiver  in  a  suit  to  which  not  a  party, 

§  17,  f,  p.  51. 
cannot  move  to  vacate  without  leave,  g  21,  h,  p.  66. 
action  by  to  reach  property,  §  148,  a,  p.  241. 

JUDGMENT  DEBTOR, 

appointment  of  receiver  in  case  of,  g  4,  c,  p.  8. 

JUDGMENT  LIEN, 

distribution  when  claimed  as  priority,  §  358,  g,  p.  601. 
See  also  Liens. 

JUDICIAL  CAUTION, 

required  of  court  in  appointment  of  receiver  of  corporation,  §  232,  p.  377. 
See  also  Discretion. 

JUDICIAL  DISCRETION, 
definition  of,  §  5,  a,  p.  10. 
what  is,  ^  5,  a,  p.  10;  §  5,  a,  note,  p.  11. 
exercise  of,  §  5;  §  5,  a,  p.  10. 
basis  of,  §  5,  b,  p.  12. 
not  subject  of  review,  §  5,  a,  note  1,  p.  12. 
in  appointing  receiver  over  trust  properly,  §  306,  p.  540. 
to  be  exercised  in  removal  of  receiver,  §  330,  b,  p.  558. 
exercised   in   manner   of   determining  claims   against   receiversliip    fund, 

§  340.  d,  p.  571. 
in  suit  against  receiver,  §  398,  p.  617. 

JURISDICTION, 

over  receivership  incident  to  a  chancery  court,  ^^  7,  p.  2. 
over  receiversliip  is  ancillary,  t^  2,  p.  3. 

47 


738  INDEX. 

[Uofcrcnces  aro  to  sections  and  pages  in  body.] 
JURISDICTION,  continued. 

to  appoint  receiver  wlien  not  exercised,  §  16,  p.  45. 

of  courts  of  equity  to  appoint  receiver  for  corporation,  g  220,  p.  343. 

court's  exercise  of,  in  appointment  of  receiver,  §  18,  p.  54. 

appointment  provisional,  §  18,  note,  p.  54. 

based  on  inadequacy  of  common  law,  §  18,  p.  54. 

judge  of  one  circuit  court  cannot  appoint  for  property  in  another,  in  Flor 

ida,  t^  18,  note,  p.  54. 
In  England,  Supreme  Court  Judicature  Act  1873,  §  18,  note,  p.  54. 
U.  S.  courts  governed  by  English  court  of  chancery,  ^  18,  note,  p.  54. 
power  of  circuit  judge  in  Mississippi,  ^  18,  note,  p.  54. 
power  of  resident  judge  in  North  Carolina,  §  18,  note,  p.  54. 
in  New  York  under  Act  of  1880,  §  18,  note,  p.  54. 
to  appoint  in  vacation,  §  18,  note,  p.  54, 
in  vacation  in  Illinois,  g  18,  note,  p.  54. 
in  vacation  in  Texas,  §  18,  note,  p.  54. 
as  to  co-ordinate  courts,  ^  17,  c,  p.  47. 
of  CO  ordinate  court,  possession  affected  by,  §  44,  p.  122. 
conflict  of,  in  appointment  of  receiver,  §  19,  p.  5G. 
conflict  of,  in  appointment  of  receivers  for  corporation,  §  220,  p.  843. 
conflict  of,  not  ground  for  refusing,  §  15,  d,  p.  41. 
conflict  between  state  and  Federal  courts,  §  19,  note,  p.  56. 
power  of  state  court  as  to  Federal  receiver,  §  19,  note,  p.  56. 
Federal  courts,  exclusive  in  bankruptcy,  when,  g  19,  note,  p.  56. 
conflict  between  common  pleas  and  superior  court,  Ohio,  §  19,  note,  p.  56. 
scope  of  in  appointment  of  receiver,  §  20,  p.  59. 
appointment  confers  jurisdiction  for  all  persons,  t^  18,  note,  p.  54. 
service  of  process  gives  jurisdiction  over  the  person.     Seizure  gives  juris- 
diction over  the  property,  §  44,  note,  p.  132. 
as  to  third  parties,  §  23,  c,  note,  p.  64. 
of  the  court,  when  the  receiver  is  in  possession,  is  exclusive,  §  45,  note, 

p.  126. 
process  how  interfered  with,  g  44,  note,  p.  123. 
interference  by  Federal  courts  with  state  courts,  §  44,  note,  p.  123. 
interference  by  state  court  with  Federal  court,  §  44,  note,  p.  123.  . 
of  Federal  court  in  suit  by  receiver  of  National  Bank,  §  252,  c,  p.  433. 
Compare  PowEUS. 

JURISDICTION— FOREIGN, 

power  of  receiver  in,  §  37,  p.  108. 

JURY, 

when  called,  §  7,  b,  p.  23. 

L. 

LABOR, 

power  of  receiver  to  employ,  ^  32,  p.  94. 
liability  of  receiver  for,  generally,  g  118,  p.  217. 
and  material,  liability  of  receiver  for,  §  109,  a,  p.  203. 
See  also  Liability. 


INDEX.  739 

[References  are  to  sections  iiud  pages  in  body.] 
LABORER'S  WAGES, 

preferred  claim  against  receivership  fund,  §  342,  p.  574. 
a  preferred  claim  when  made  so  by  statute,  ^  844,  p.  581. 
See  also  Claims. 
LAND, 

suit  by  receiver  regarding,  must  be  in  jurisdicliou  where  suit  is,  i^  241, 
p.  416. 

See  Real  Estate. 

LANDLORD, 

interference  with  receiver's  possession  by,  §  47,  p.  133. 
See  also  Tenancy  and  Possession. 
LEASE, 

power  of  receiver  to  make,  t:^  o6,  p.  104;  §  2'6'd,  h,  p.  388. 
power  of  receiver  to  cancel,  ^  36,  p.  104. 

unexpired,  effect  of  appointment  of  receiver  upon,  §  230,  e,  p.  373. 
adoption  of,  by  receiver,  i^  36,  b,  p.  105. 

what  amounts  to,  ^  123,  p.  221. 
adoption  of,  in  England,  §  30,  b,  note,  p.  105. 
when  adopted  by  receiver  of  railway,  §  283,  i,  p.  506. 
receiver's  liability  on,  §  122,  p.  221. 
of  cars,  liability  for  when,  §  36,  b,  note,  p.  105. 
of  rolling  stock,  when  sale  construed  as,  §  281,  f,  p.  499. 

See  also  Liability,  Rent,  Rolling  Stock,  and  Car  Trusts. 
r.EASEHOLD, 

receiver  not  assignee  of  term,  ^  35,  a,  p.  102. 

LEAVE  OF  COURT, 

necessary  to  disturbance  of  receiver's  possession,  §  47,  p.  132. 

failure  to  obtain,  does  not  devest  court  of  jurisdiction,  §  44,  note,  p.  122. 

to  sue  receiver,  generally,  t^  94,  p.  187. 

under  act  of  Congress  not  required,  §  94,  p.  187. 

when  receiver  manager  not  required,  i^  94,  p.  187. 

a  prerequisite,  §  395,  p.  612. 

judicial  discretion  in  granting,  §  398,  p.  617. 

must  be  alleged  and  proved,  §  95,  p.  190;  Appx.  p.  698. 
required  before  suit  brought  by  receiver,  when,  §  239,  p.  410. 

not  required  when  statute  empowers  him  to  sue,  §  69,  note,  p.  152. 

not  required  where  receiver  appointed  to  collect  partnership  assets, 
^  69,  note,  p.  152. 

not  required  to  sue  on  appeal  bond  from  order  appointing,  §  09,  note, 
p.  152. 

not  required  where  waste  is  being  committed,  ^  69,  note,  p.  152. 
to  defend,  required  in  order  to  bind  proi)url3',  ^  09,  note,  p.  153. 
appeal  not  dismissed  for  want  of,  ^  41,  note,  p.  117. 
when  reviewable  on  appeal,  ^  95,  p.  190. 
to  sell,  procurement  by  receiver,  §  409,  p.  625. 
to  contract,  when  necessary  to  receiver,  ^  410,  p.  635. 
to  issue  certificates,  obtaining  for  receiver,  §  411,  p.  626. 


740  INDEX. 

[References  are  to  sections  and  paK-es  in  body.] 
LESSOR  AND  LESSEE. 

appointment  of  receiver  between,  §  319,  p.  551. 

LEVY, 

effect  upon  receiver's  possession,  §  45,  p.  126. 

title  of  receiver  of  National  Banks  to,  §  255,  p.  433.  ^ 

for  taxes,  not  prevented  by  receiver's  possession,  §  54,  p.  137. 

LIABILITY  OF  DIRECTORS, 

of  National  Banks  to  receiver,  §  260,  p.  448. 

LIABILITY  OF  RECEIVER, 

generally,  §  109,  p.  199. 
of  corporation,  generally,  ^  234,  p.  391. 
of  railways,  generally,  j^  285,  p.  508. 
of  National  Bank,  generally,  §  256,  p.  432. 
to  creditor,  ^  109,  a,  p.  201. 
to  general  creditors  of  mortgagee,  §  130,  p.  231. 
respecting  funds,  to  proper  payment,  t^  109.  a,  p.  203. 
for  specific  funds,  ^  110,  p.  205. 

for  use  of  receivership  funds,  generally,  §  111,  p.  206;  §  116,  p.  214. 
for  profits  on  receivership's  funds,  §  109,  p.  203;  ^  116,  p.  214. 
when  chargeable  with  interest,  §  116,  p.  214. 
for  fund  deposited  in  bank,  generally,  §  119,  p.  218. 
for  interest  on  bank  deposit,  ^  109,  a,  p.  201. 
without  order  of  court,  §  109,  a,  p.  201. 
where  bank  fails,  §  109,  a,  p.  201. 
for  mingling  receivership  property,  §  109,  a,  p.  201. 
for  mixing  funds,  §  111,  p.  206,  §  116,  p.  214. 

with  personal  funds,  §  111,  p.  206. 
for  misappropriating  funds,  §  109,  a,  p.  202. 
where  one  of  two  appropriates  funds,  §  111,  p.  205. 

joint  and  several,  §  111,  p.  206. 
ordered  to  be  invested,  §  116,  p.  214. 
illegally  invested,  §  116,  p.  214. 

for  illegal  freights  collected,  §  109.  a,  p.  203;  §  134,  p.  233. 
on  note  not  collected,  Appx.  p.  697. 

for  money  collected  under  void  appointment,  i^  109,  a,  p.  203;  §  129, 
p.  230. 
for  default  of  another,  generally,  §  117,  p.  216. 

as  attorney,  §  117,  p.  216. 
for  violating  order  of  court,  §  109,  a,  p.  202;  §  110,  p.  205;  §  130,  p.  231. 
by  taking  property  not  included  in,  trespass,  §  130,  p.  231. 
in  not  following  decree  absolutely  and  without  discretion,  §  110,  p.  205. 
in  contempt  of  court.  §  111,  p.  200;  §  136,  p.  234. 
when  in  contempt  cannot  be  heard,  §  111,  p.  206. 
to  attachment  when,  §  111,  p.  206. 
for  torts,  generally,  ^  109,  a,  p.  202. 

a  quasi-public  corporation  liable  for  personal  injury,  rule,  §  113,  p.  208. 
for  loss  by  negligence,  §  109,  a,  p.  202. 


INDEX.  741 

[References  are  to  sections  and  pages  in  budj'.] 
LIABILITY  OF  RECEIVER,  contiuued. 
for  lorts,  for  trespass,  ^  loO,  p.  231. 
when  crimiDal,  §  111,  p.  20(5. 

to  action  of  replevin  for  property  wrongfully  taken,  §  130,  p.  231. 
on  contracts,  generally,  §  125,  p.  224. 

partially  completed,  §  85,  note,  p.  102. 
where  no  funds  to  pay,  §  128,  p.  228. 
for  damages  on  predecessor's  contract,  §  126,  p.  225. 
for  labor  and  supplies,  when  controlled   by  court,   §  109,  a,   p.  203; 
6^  118,  p.  217. 
by  what  court  enforced,  §  118,  p.  217. 
not  personal,  §  118,  p.  217. 
for  wages  due  at  time  of  appointment,  determined  by  scope  of  order, 

Appx.  p.  697. 
for  use  of  railway  track,  §  125,  p.  224. 
for  removalof  switch,  §  125,  p.  224. 
for  rent,  on  unexpired  lease,  §  109,  a,  p.  203;  §  121,  p.  220;  §  132,  p.  221; 
Appx.  p.  697. 
depends  on  privity  of  estate,  §  121,  p.  220. 
accrued  prior  to  receivership,  §  36,  b,  p.  105. 
collected  before  bond  given,  ^  121,  p.  220. 
on  property  not  reduced  to  possession,  §  121,  p.  220. 
where  lease  has  been  adopted,  J5  121,  p.  220. 
amount,  how  determined,  §  121,  p.  220;  ^  123.  p.  223. 

measure  of,  §  122,  p.  221. 
how  enforced,  §  121,  p.  220. 

where  possession  of  premises  continued,  Appx.  p.  603. 
duration  of,  determined  by  statute  in  Illinois,  Appx.  p.  093. 
for  lease  of  railways,  §  123,  p.  222. 

made  without  order  of  court,  §  124,  p.  224. 
of  cars  under  invalid  contract,  ^  127,  b,  p.  223. 
on  adoption  of  lease,  how  incurred,  ^  123,  p.  222. 
by  implication,  §  123,  p..  222. 
by  sale  of  property,  §  123,  p.  222. 
within  what  time  to  be  made,  §  123,  p.  223. 
for  rent  thereunder,  g  123,  p.  222. 
for  attorneys'  fees,  generally,  55  129,  p.  230. 
to  whom  allowed,  §  129,  p.  230. 
amount  how  determined.  ^  129,  p.  230. 
as  common  carrier,  generally,  §  109,  a,  p.  202;  §  112,  p.  203. 
in  matters  ex  contractu,  §  112,  p.  208. 
in  matters  ex  delicto,  §  112.  p.  208. 
for  personal  injuries,  §  112,  p.  208. 
on  connecting  line,  §  113,  p.  208. 
on  leased  line,  §  113,  p.  208. 
when  personal,  §  113,  p.  208. 
for  damages,  generally,  g  114,  p.  211. 

from  what  fund  payable,  §  114,  p.  211. 


742  INDEX. 

[References  are  to  sections  and  paaos  in  body.] 
LIABILITY  OF  RECEIVER,  continued. 

as  common  carrier,  for  damages,  payable  (romcuneal  receipts,  §  114,  p.  311. 

for  negligence  in  construcliou,  §  114,  p.  211. 

for  loss  of  freight,  §  114,  p.  211. 

for  goods  consigned,  §  109,  a,  p.  202. 

for  i)roperty  not  reduced  to  possession,  §  114,  p.  211. 

for  properly  lost  in  transit,  §  114,  p.  211. 

for  negligent  destruction  of  property,  ^  114,  p.  211. 

for  property  in  transit — bondholders,  ^  114,  p.  211. 

for  goods  sold,  §  114,  p.  211. 

for  necessary  repairs,  §  114,  p.  211. 
when  personal,  generally,  ^  128,  p.  228. 

when  contract  personal,  ^  128,  p.  228. 

when  operating  under  lease  or  contract,  ^  128,  p.  228. 

for  acts  beyond  scope  of  authority,  §  128,  p.  228. 
to  account,  generally,  §  131,  p.  232. 

how  determined,  §  131,  p.  232. 
none,  for  contracts  of  predecessor,  t^  109,  b,  p.  205. 

for  contract  of  principal  not  adopted  by  him,  §  109,  b,  p.  204. 

for  attorneys'  fees,  when,  §  109,  b,  p.  205. 

for  injury  before  appointipent,  §  109,  b,  p.  204. 

for  injury  after  appointment,  when,  §  109,  b,  p.  204. 

for  statutory  injury,  when,  §  109,  b,  p.  204. 

personal  for  acts  ordered  by  court,  §  109,  b,  p.  204. 

personally  on  official  contracts,  §  109,  b,  p.  204. 

for  money  expended  in  good  faith,  §  109,  b,  p.  205. 

for  speculation  profits,  §  109,  b,  p.  205. 

for  loss  without  fault,  §  109,  b,  p.  204. 

for  injury  by  foreign  receiver,  when,  §  109,  b,  p.  204. 

after  discharge,  §  109,  b,  p.  204. 
as  to  preferred  payments,  general  creditors,  §  127,  p.  226. 

under  creditor's  bill,  g  127,  a,  p.  228. 

in  foreclosure  proceedings,  g  127,  p.  226;  §  127,  b,  p.  2C3. 
order  of  payment,  preferential  debts,  8  127,  p.  22a. 
when  ordered  to  pay,  effect  of,  §  132,  p.  232. 
judgment  for,  form  of,  §  128,  p.  228. 
for  violating  Act  of  Congress,  §  109,  a,  p.  203. 
under  statutory  penalty,  §  134,  p.  233. 
effect  of,  as  to  corporation,  §  115,  p.  213. 

as  to  plaintifiP,  §  115,  p.  213. 
for  costs  of  suit,  >^  109,  a,  p.  203. 

for  costs  and  expenses,  §  120,  p.  219. 
effect  of  discharge,  §  133,  p.  233. 
not  affected  by  removal,  §  330,  b,  p.  566. 

LIABILITY  OF  RECEIVER'S  PERSONAL  REPRESENTATIVE, 
generally,  §  135,  p.  233. 
how  enforced,  §  135,  p.  233. 

See  also  Executors,  etc. 


INDEX.  743 

[References  are  to  sections  and  pages  in  body.] 
LIABILITY  OP  STOCKHOLDERS, 
to  what  extent  enforced,  §  77,  p.  173. 

receiver  in  creditor's  proceeding,  no  power  to  enforce,  ^  39,  note,  p.  115. 
enforced  by  receiver  of  corporation,  when,  Appx.  p.  007. 
when  creditor  may  enforce,  g  77.  p.  173. 
in  what  court  enforced,  §  77,  p.  173. 
suits  in  Federal  courts,  g  77,  p.  173. 
suit  by  receiver,  injunction,  §  77,  p.  173. 
suits  to  recover  illegal  dividends,  §  77,  p.  173. 
on  illegal  distribution  of  stock,  §  77,  p.  173. 

LIABILITY  ON  BOND, 

how  enforced,  §  380,  p.  606. 

See  Bond  and  Sureties. 

LIENS, 

not  affected  by  appointment,  when,  §  7,  c,  p.  23. 

effect  of  receiver's  appointment  as  to,  §  44,  p.  123. 

receiver's  title  subject  to  existing,.  §  68,  p.  150. 

receiver  may  attack  for  invalidity,  §  75,  (10),  p.  171. 

fraudulent,  may  be  removed  by  receiver,  §  75,  (3),  p.  171. 

of  judgment,  after  jiidgnicnl  and  before  bond  filed,  fe^  17,  f,  note,  p.  51. 

of  judgment  creditors,  paid  from  receivership  fund,  §  341,  g,  p.  574. 

of  mortgage,  inferior  to  claim  from  wages,  when  made  so  by  statute,  §  344, 

p.  581. 
by  statute,  for  wages  takes  priority  over  the  mortgage,  §  344,  p.  581. 
statutory,  paid  from  receiversliip  fund,  §  341,  f,  p.  574. 
obtaining  leave  to  create,  ^  410,  p.  625. 

LIFE  TENANTS, 

appointment  of  receiver  in  case  of,  §  4,  c,  p.  8. 

LIMITATIONS, 

on  power  of  receiver,  generally,  §  35,  p.  103. 
on  receiver's  power  to  sue,  §  393,  p.  611. 

LIMITED  PARTNERSHIP, 

appointment  of  receiver  in  case  of,  §  199,  p.  319. 

See  also  Afi'Ointment  op  Reckiver  and  Partnership. 

LIQUIDATORS, 

when  appointed,  §   3,  p.  3. 

under  Companies  Act  of  1802,  i;  3,  n.  3. 
general  or  special,  ^  8,  note,  p.  25. 
power  of,  §  3,  p.  3. 

See  Receiver. 

LOAN. 

power  of  receiver  to  make,  §  27,  p.  87. 
receiver  cannot  make,  of  funds,  >^  20!),  c,  p.  337. 
See  PowERH  OF  Rkckivkr. 


714  INDEX. 

[Kpferonccs  are  to  sections  nii<l  pnpros  in  Ixxly.] 

LOAN  ASSOCIATIONS, 

{ground  tor  appointment  of  receiver  for,  ^  ^2'-),  p.  554. 

iipitoiiilMH'nt  of  receiver  for,  i^  :323,  p.  55;J. 

ternu'd  "Corporate  Copartnerships,"  §  ;}22,  p.  553. 

See  also  Building  and  Loan  Associations. 
LOCOMOTIVES, 

tire  produced  by,  damages  from  not  a  preferred  claim,  when,  §  313,  p.  5'0 

LOSS  OF  GOODS, 

by  receiver  of  railway,  liability  for,  §  285,  d,  p.  516. 

See  Common  Cauhikus  and  Liahimty. 
LUNACY. 

See  Insanity. 

LUNATIC'S  ESTATE, 

when  receiver  to  be  appointed  for,  §  4,  a,  p.  7;  §  310,  p.  547. 


M. 

MANAGER, 

receiver  as,  rule  relating  to,  ^  402,  p.  619. 
of  corporation,  when,  i?  232,  p.  376. 
of  railway,  appointment  of,  g  5,  d,  p.  14. 
in  partnership  matters,  when,  §  211,  p.  339. 
form  of  order  appointing,  No.  15,  p.  652. 
form  of  order  appointing  for  mine,  No.  16,  p.  653. 
See  also  Powers  of  Keceiver. 

MANDAMUS, 

not  sustainable  against  receiver,  ^  96,  p.  192. 

MAKHIEI)  WOMEN, 

appointment  of  receiver  in  estates  of,  §  4,  d,  p.  9. 
See  also  Appointment,  etc. 
MASTER, 

reference  to,  in  appointment,  §  305,  p.  608. 

report  of  appointment,  relates  to  granting  order  of  reference,  §  17,  g,  p.  52 
report  of,  is  final  when,  §  18,  note,  p.  54. 
See  also  Report. 
MATERIAL, 

when  not  a  preferred  claim  against  receivership  fund,  §  343,  p.  579. 
See  also  Work,  Labor,  and  Material. 

MECHANICS'  LIENS, 

existing  at  the  time  of  appointment  will  be  sustained,  g  45,  note,  p.  126. 
See  also  Liens. 
MINE, 

order  appointing  managing  receiver  for,  No.  16,  p.  653. 

MINE  OWNERS'  ROYALTY, 

when  a  preferred  claim  against  receivership  fund,  §  343,  p.  578. 
See  also  Infants. 


INDEX.  745 

[References  are  to  sections  and  pagres  in  body.] 
MINORITY  STOCKHOLDERS, 

violation  of  rights  of,  ground  for  appointment  of  receiver,  ^  225,  j,  p.  2G2. 
application  for  receiver  of  railways  by,  §  278,  d,  p.  468. 
See  also  Appointment  of  Receiver. 
MINORS.     See  Infants. 

MISAPPROPRIATED  PROPERTY, 
receiver  may  recover,  §  75,  (5),  p.  171. 

See  PowEKS  op  Receiver. 

MISAPPROPRIATION  OF  FUNDS, 

a  ground  for  appointment  of  receiver,  in  case  of  partnership,  §  207,  p.  335. 
in  lieu  of  trustee,  §  306,  p.  540. 

MISCONDUCT  OF  OFFICERS, 

form  of  order  granting  receiver  for.  No.  17,  p.  654. 
See  also  Officers. 

MISMANAGEMENT  OF  PARTNERSHIP, 

a  cause  for  appointment  of  receiver,  ^  203,  p.  324. 

See  also  Appointment  and  Partnership. 

MONEY  HELD  IN  TRUST, 

receiver  may  recover,  §  75,  (6),  p.  171. 

See  also  Functions  and  Powers. 

MONEY  LOANED, 

when  not  a  preferred  claim  against  receivership  fund,  §  343,  p.  579. 

MORTGAGE, 

power  of  receiver  to  make,  §  233,  i,  p.  388. 
See  also  Liens. 

MORTGAGE  FORECLOSURE, 
generally,  §  170,  p.  226. 
grounds  for  invoking  jurisdiction,  §  171,  p.  207. 

where  mortgage  provides  for,  §  171,  a,  p.  260. 

■where  statute  provides  for,  §  171,  b,  p.  267. 

insolvency  of  mortgagor,  §  171,  c,  p.  267. 

in  case  of  waste,  ^  171,  d,  p.  267. 

inadequacy  of  security,  §  171,  c,  p.  267. 

nonpayment  of  insurance,  §  171,  a,  p.  266. 

nonpayment  of  taxes,  §  171,  d,  p.  267. 

fraud,  §  171,  e,  p.  266. 
receiver  not  appointed  in,  generally,  §  173,  p.  278. 

where  plaintiff  has  legal  remedy,  §  173,  a,  p.  278. 

where  mortgage  gives  no  right,  §  173,  b,  p.  281. 

where  by  statute  mortgagor  entitled  to  possession,  §  173,  c.  p.  282. 

where  amount  disputed,  §  173,  d,  p.  283. 

where  petition  of  plaintiff  denied  by  answer,  fc^  173,  d,  p.  283. 

where  insolvency  not,  shown,  §  173,  e,  p.  284. 

where  right  of  foreclosure  not  shown,  §  173,  f,  p.  2s5. 

where  plaiutill  has  no  equitable  standing  in  court,  i^  173,  g,  p.  286. 


746  INDEX. 

[Referoiiops  are  to  sections  mid  piitres  in  body.! 
MORTGAOE  F01{R(;L()8URE.  conliuued. 

receiver  not  appointed  in,  where,  pending  appeal,  the  bond  affords  protec- 
tion, S  173.  h,  p.  287. 
where  defendant,  by  deposit  in  court,  secures  plaintiff,  §  173,  i,  p.  287. 
where  property  is  a  homestead,  §  173,  j,  p.  287. 

where  plaintiff  guilty  of  laches  in  making  application, §  173,  k,  p.  287. 
appointment  of  receiver  in.  generally,  §  170,  p.  2G6;  §  389,  p.  G09. 
for  corporation,  g  229,  p.  371. 
grounds  for,  §  171,  p.  266. 
where  mortgage  provides  for,  §  171,  a,  p.  266. 
for  statutory  cause,  ij  171,  b,  p.  267. 
for  insolvency  of  mortgagor,  §  171,  c,  p.  267. 
for  insolvency  of  grantee  of  mortgagor,  g  171,  c,  p.  267. 
for  waste  by  mortgagor,  §  171,  d,  p.  207. 
for  nonpayment  of  taxes,  t;  171,  d,  p.  267. 
for  nonpayment  of  insurance,  ^  171,  d,  p.  267. 
for  fraud  or  bad  faith  of  mortgagor,  ^5  171,  e,  p.  267. 
for  inadequate  security,  g  171,  c,  p.  267. 
where  express  grant  or  pledge  of  rents,  §  172,  a,  p.  270. 
where  security  inadequate,  ^  172,  b,  p.  272. 
where  trustee  refuses  to  act,  ^  172,  c,  p.  276. 
where  there  are  equitable  grounds  for  relief.  §  172,  d,  p.  276. 
where  there  are  statutory  grounds,  i^  172,  e,  p.  277. 
where  there  are  special  grounds,  t^  172,  f,  p.  277. 
where  there  is  contest  over  mortgage  property,  ^  172,  g,  p.  277. 
where  grantee  guilty  of  fraud,  §  172,  h,  p.  278. 
where  mortgagee  guilty  of  fraud,  §  172,  h,  p.  278. 
where  mortgagor  is  committing  waste,  §  172,  p.  278. 
where  interest  due  and  unpaid,  §  172,  j,  p.  278. 
for  inadequacy  of  security,  when  property  insufficient,  §  174,  a,  p.  237. 

when  mortgagor  insolvent,  §  174,  a,  p.  288. 

both  elements  mu.st  be  shown,  §  174,  b,  p.  290. 

presumption  as  to  value,  §  174,  c,  p.  291. 

rule  in  California  and  other  states,  §  174,  d,  p.  292. 

rule  in  New  Jersey,  §  174,  d,  p.  292. 

rule  where  mortgagor  entitled  to  possession,  §  174,  d,  p.  292. 

what  indebtedness  included,  §  174,  e,  p.  294. 

proof  required,  §  174,  f,  p.  294. 

English  rule,  §  174,  g,  p.  294. 

conflicting  decisions  regarding,  §  175,  p.  294. 
jurisdiction  as  to  property,  §  176,  p.  295. 
when  to  be  made,  §  177,  p.  297. 

before  decree,  §  177,  a,  p.  297. 

after  decree,  §  177,  b,  p.  297. 
when  mortgagee  appointed,  g  178,  p.  299. 
general  rules  applicable  to,  ^  178,  p.  299. 
allegations  of  petition  for,  regarding  po.ssession,  §  178,  p.  299. 
rights  of  senior  and  junior  mortgagees,  generally,  §  179,  p.  299. 


INDEX.  747 

[References  are  to  sections  and  i)aKes  in  body.] 
MORTGAGE  FORECLOSURE,  continued. 

appointment  of  receiver  in,  rights  of  senior  and  junior  mortgagees,  English 
rule,  i^  179,  a,  p.  299. 
American  rule,  §  179,  b,  p.  300. 
on  application  of  wife,  §  130,  a,  p.  302, 
on  behalf  of  annuitants,  §  180,  b,  p.  302. 
on  behalf  of  bondholders,  ^  180,  c,  p.  303. 
on  behalf  of  vendors,  §  180,  d,  p.  303. 
form  of  bill  in.  No.  4,  p.  G39. 
form  of  affidavit  for  receiver  in,  No.  6,  p.  G41. 
MORTGAGE— INVALID, 

receiver  may  question,  §  75,  (12),  p.  171. 

notes  secured  by,  not  to  be  included  in  order  for  distribution,  §  358,  b, 
p.  598. 
MORTGAGE  LIEN, 

receiver  may  attack  for  invalidity,  §  75,  (10),  p.  171. 
what  claims  are  prior  to,  on  receivership  fund,  §  342,  p.  574. 
inferior  to  claim  for  wa^es  when  made  so  by  statute,  §  314,  p.  581. 
See  also  Liens. 

MORTGAGORS  IN  POSSESSION, 

appointment  of  receiver  in  case  of,  g  4,  c,  p.  8. 
MOTION, 

form  of  affidavit  for,  to  compel  payment.  No.  33,  p.  COS. 
See  also  Fokms. 
MOTION  IN  ARREST  OF  JUDGMENT, 
what  considered  under,  §  81,  p.  180. 
See  also  Judgment. 
MUNICIPAL  AID, 

receiver  has  no  power  to  contract  for,  §  35,  note,  p.  103. 
See  PowEKS  of  RiicEivEit. 
MUTUAL  INSURANCE  COMPANIES, 
right  of  setoff  in,  ^  81,  note,  p.  180. 
assessments  in,  §  39,  note,  p.  115. 

N. 

NATIONAL  BANKS,  RECEIVERS  FOR, 
appointment  of,  generally,  §  252,  p.  419. 

under  statute,  §  252,  a,  p.  419. 

acts  of  Congress  relating  thereto,  ^  252,  a,  p.  419. 
power  of  comptroller  to  appoint,  generally,  §  252,  b,  p.  421;  §  253,  p.  425. 
grounds  upon  which  comi)lroller  may  appoint,  §  253,  p.  425. 

independent  of  Act  of  Congress,  ^  252,  b,  p.  421. 

on  application  by  minority  stockholders,  ^  252,  b,  p.  421. 

effect  as  to  corporation,  §  252,  b,  p.  421. 
power  of,  g  252,  b,  p.  423. 

to  sue,  ^5  252,  c,  p.  423. 


748  INDEX. 

[Uefpronccs  are  fo  sootions  and  pages  in  liody.] 

NATIONAL  RANKS,  RI'X^EIVEIiS  FOR,  continued. 

power  of,  to  sue,  jurisdietion  of  Federal  court,  ^5  2''»2,  c,  p.  423, 
irrespective  of  cili/eiiship,  §  252,  c,  p.  423. 
irrespective  of  amount  involved,  §  252,  c,  p.  423. 
control  of  court  of  equity  over,  §  252,  c,  p.  424. 
governed  by  statute,  t^  254,  p.  426. 
to  collect,  §  254,  p.  420. 
to  compound  bad  debts,  §  254,  p.  426, 
to  sell,  ^  254,  p.  42(5. 
to  enforce  slock  liability,  §  254,  p.  426, 

prereipiisites  to,  t^  254,  p.  420. 
to  disiiHirm  unlawful  act,  §  254,  p.  427, 
to  avoid  illegal  preferences,  ^  254,  p.  428. 
to  recover  funds  misapplied,  §  254,  p.  428. 
as  representative  of  government,  i^  254,  p.  428, 
title  of,  generally,  §  255,  p.  429. 

as  to  third  person  or  corporation,  §  255,  p.  429. 
as  to  bonds  deposited  with  treasurer,  §  255,  p.  430. 
as  to  property  held  in  trust,  §  255,  p.  430. 
as  to  levies,  §  255,  p.  432. 
liability  of,  generally,  §  250,  p.  432. 
suits  by,  generally,  §  257,  p.  433. 
to  collect  assets,  §  257,  p.  433. 
to  recover  stock  liability,  ^  257,  p.  433. 
in  what  court  to  be  brought,  §  257,  p.  433. 
for  what  causes  of  action.  §  257,  p.  435. 
against  directors,  §  257,  p.  437. 
to  recover  wasted  or  lost  assets,  §  257,  p.  487. 
liability  of  stockholders,  determined  by  comptroller,  §  258,  a,  p.  437. 
action  of  comptroller  conclusive,  §  258,  a,  p.  437. 
action  by  comptroller  precedent  to  recovery,  ^  258,  a,  p.  437. 
action  to  enforce,  when  at  law  or  in  equity,  t^  258,  a,  p.  437. 
in  what  court  enforced,  §  258,  a,  p.  440. 
right  of  defendant  to  set-off,  §  258,  a,  p.  438. 
enforced  against  executors  and  administrators,  §  258,  a,  p.  441. 
suit  to  enforce  again.st  married  women,  §  258,  a,  p.  441. 
under  statutes,  §  258,  a,  p.  442. 
defenses  to,  §  258,  b,  p.  443. 
suit  to  recover,  limitation  of,  §  258,  b,  p.  445. 
illegal  preferences,  statutes  relating  to,  g  259,  p.  445. 
liability  of  directors,  generally,  §  200,  p.  448. 

statutes  relating  to,  t^  260,  p.  448. 
character  of,  §  260,  p.  448. 

nature  of  action  against,  §  260,  p.  448. 

NATURE, 

of  preferred  claims  against  receivership  fund,  §  343,  p.  576. 
of  receiver's  possession  as  to  third  parties,  §  404,  p.  020. 


INDEX.  749 

[References  are  to  sections  and  pajies  in  body.] 
NEGLIGENCE, 

liability  of  receiver  for,  §  109,  a,  p.  203. 
as  common  carrier,  §  285,  d,  p.  516. 
receiver  may  be  sued  for,  of  emi)loyee,  when,  g  96,  p.  193. 
See  also  Liability. 

NONRESIDENCE, 

an  excuse  for  want  of  notice,  g  5,  d,  p.  14. 

NONRESIDENTS, 

receiver's  title  as  to  choses  in  action  due  from,  §  63,  p.  145. 

NOTICE, 

a  prerequisite  to  appointment  of  receiver,  §  5,  d,  p.  14. 

when  not  required,  prayer  for  receiver,  §  5,  d,  p.  14. 

appearance  does  not  waive,  in  chambers,  §  13,  note,  p.  35. 

excuse  for  not  serving  must  clearly  appear,  §  13,  note,  p.  35. 

intervening  petitioner  not  entitled  to   ^  13,  note,  p.  35. 

waived  only  in  case  of  irreparable  injury,  §  13,  note,  p.  35. 

appointment  not  void  for  want  of  notice  to  nonresident  partner,  §  23   i, 

note,  p.  68. 
receiver  not  entitled  to  notice  of  revocation  of  appointment,  §  32,  j.  note 

p.  69. 
form  of,  of  motion  for  instructions,  No.  48,  p.  674. 

of  petition  for  distribution.  No.  51,  p.  676. 

of  motion  to  revoke  appointment,  No.  55,  p.  679. 

of  motion  to  discharge  receiver.  No.  58,  p.  780. 

of  motion  to  discharge  as  to  specific  property,  No.  60,  p,  781. 
of  application  for  receiver,  excuse  for  want  of  notice,  §  5,  d,  p.  14. 

statutory  excuse  for  not  serving,  §  5,  d,  note,  p.  14. 

of  railway,  g  271,  p.  454. 

for  receiver,  §  374,  p.  603. 

for  removal  and  discharge,  ^  330,  a,  p.  557. 

form  of.  No.  8,  p.  643. 
of  appointment  of  receiver,  presumption  as  to,  g  5,  d,  note,  p.  14. 

want  of,  who  can  take  advantage  of,  §  5,  d,  note,  p.  14. 

form  of,  and  to  present  claims.  No.  26,  p.  663. 
See  also  Fohms. 

o. 

OBJECTIONS  TO  MASTER'S  FIN  FLINGS, 
on  receiver's  report,  g  356,  c,  p.  596. 
form  of,  to  receiver's  accounts,  No.  54,  p.  678. 

OFFICER  OF  COURT, 

receiver  is,  g  6,  p.  20. 

OFFICERS  AND  DIRECTORS. 

statutory  liability,  how  enforced,  g  78,  p.  177. 
liability,  in  case  of  excessive  indebtedness,  H  76,  p.  173, 


750  INDEX. 

[llefcrcnccs  arc  to  sections  and  pages  in  body.] 
OFFICERS  AND  DIRECTORS,  continued. 

suits  against,  in  case  of  insolvency,  §  76,  p.  173. 
in  case  of  acts  ultra  vires,  §  76,  p.  172. 
to  avoid  illegal  chattel  mortgages,  §  76,  p.  173. 
by  receiver,  for  misconduct,  §  70,  p.  172. 
in  case  of  void  transfers,  §  76,  p.  172. 
to  recover  assets,  §  76,  p.  172. 
defenses  to,  §  77,  p.  173. 
mismanagement  of,  appointment  of  receiver  in  case  of,  §  4,  c,  p.  8. 
misconduct  of,  order  granting  receiver  for,  No.  17,  p.  654. 
failure  to  elect,  ground  for  appointment  of  receiver  of  corporation,  §  335, 
h,  p.  361. 

OFFSET, 

right  of,  in  receivership  cases,  g  399,  p.  618. 
See  also  Set-off. 

OPERATING  EXPf:NSES, 

of  railway,  power  of  receiver  to  pay  preferred  claim,  based  on,  §  276,  e, 
p.  481. 
power  of  receiver  to  pay  implied,  when  ordinary,  §  277,  a,  p.  483. 
when  preferred  to  mortgagee's  claim,  §  343,  p.  575. 
paid  from  receivership  fund,  §  341,  e,  p.  574. 

See  also  Powers  op  Receiver  and  Expenses. 

ORDER  APPOINTING  RECEIVER, 

scope  and  requisites,  §  6,  a,  p.  30;  §  32,  p.  63;  §  381,  p.  606. 

in  foreclosure  proceedings,  §  176,  p.  395. 

when  interlocutory  and  when  final,  §  22,  note,  p.  63. 

must  define  duties  of  receiver,  §  23,  note,  p.  83. 

must  describe  property,  ^  22,  a,  p.  63. 

embraces  all  acts  necessary  for  protection  of  property,  §  22,  b,  p.  63. 

as  to  custody  of  property,  §  22,  c,  p.  64. 

cannot  direct  distribution,  §  22,  c,  note,  p.  64. 

as  to  third  parties,  §  33,  d,  p.  04. 

relates  from  what  time,  §  22,  e,  p.  65. 

is  an  equitable  execution,  §  33,  e,  note,  p.  65. 

effects  a  sequestration,  §  33,  e,  note,  p.  65. 

as  to  assignment  of  property,  §  33,  f,  p.  65. 

as  to  title,  g  33,  f,  p.  65. 

when  modified,  §  33,  g.  p.  66. 

effect  of  recitals  in,  §  32,  g,  p.  66. 

collateral  attack,  ^  33,  g.  p.  66. 

irregularity  of,  §  33,  i,  p.  68. 

when  void,  §  33,  i,  p.  69;  Appx.,  p.  695. 

when  court  without  jurisdiction,  §  32,  j,  p.  69. 

when  revoked,  §  22,  j,  p.  69. 

when  improvidently  m.ade,  §  22,  j,  p.  69. 

application  to  vacate,  when  to  be  made,  §  22,  j,  p.  69. 
findings  embodied  in,  §  883,  p.  607. 


INDEX.  751 

[References  are  to  sectioas  and  pag'es  in  body.] 
ORDER  APPOINTING  RECEIVER,  conliuued. 
need  not  find  insolvency,  i^  15,  d,  p.  41. 
does  not  relate  to  date,  as  to  strangers,  §  17,  g,  p.  52. 
measure  of  power,  §  66,  b,  note,  p.  22. 
effect  of,  §  7,  b,  note,  p.  24. 

not  vacated  because  receiver  nonresident,  §  22,  g,  p.  66. 
vacation  of,  effect,  §  23,  j,  note,  p.  69. 

revocation  of,  receiver  not  entitled  to  notice,  ^  22,  j,  note,  p.  69. 
conclusive  in  suit  by  receiver,  §  23,  h,  note,  p.  66. 
when  appeal  from  allowed,  §  32,  k,  p.  70. 
effect  of,  appeal  from,  ^  33,  1,  p.  73. 
affidavits  as  basis  of,  ^  384,  p.  607. 
form  of,  general.  No.  9,  p.  643. 

for  manufacturing  corporation,  No.  10,  p.  644. 

for  railway,  No.  13,  p.  648. 

for  railroad  in  foreclosure.  No.  11,  p.  645. 

on  foreclosure  by  trustee  of  corporation.  No.  13,  p.  650. 

for  partnership.  No.  14,  p.  651. 

for  managing  receiver  of  joint  business,  No.  15,  p.  653. 

for  managing  receiver  of  mine.  No.  16,  p.  653. 

because  of  misconduct  of  officers,  No.  17,  p.  654. 

for  specific  property.  No.  18,  p.  655. 

without  prejudice  to  riglits  of  prior  encumbrancers.  No.  19,  p.  655. 

of  rents  and  profits  on  foreclosure,  etc..  No.  20,  p.  656. 

ORDER  OF  COURT— Generally. 

in  foreclosure  cases  when  void,  §  130,  p.  231. 

disobedience  to  as  ground  for  appointment  of  receiver  in  lieu  of  trustee, 

§  306,  p.  541. 
fixing  receiver's  compensation  not  revoked,  g  350,  j,  p.  591. 
discharging  receiver  pending  action,  §  414,  p.  629. 
form  of,  granting  injunction,  etc.,  No.  17,  p.  654. 

to  show  cause  why  receiver  should  not  be  appointed.  No.  31,  p.  657. 

on  creditors  to  exhibit  claim.  No.  37,  p.  662. 

appointing  special  commissioner  to  hear  and  report  claims,  No.  39, 
p.  663. 

to  pay  claims,  etc..  No.  30,  p.  664. 

for  defendant  to  turn  over  bi  o'vs,  etc..  No.  31,  p.  665. 

to  settle  traffic  balances.  No.  37,  p.  670. 

to  pay  rent.  No.  38,  p.  670. 

giving  leave  to  pay  secured  claim,  No.  40,  p.  671. 

directing  sale  of  perishable  property,  No.  41,  p.  673. 

confirming  sale.  No.  43,  p.  673. 

to  complete  purchase.  No.  44,  p.  673. 

sanctioning  employment  of  counsel.  No.  46,  p.  674. 

discharging  receiver.  No.  56,,p.  679. 

removing  receiver  and  appointing  substitute,  No.  57,  p.  780. 

to  show  cause  why  receiver  should  not  be  disciiarged,  No.  59,  p.  781. 

that  receiver  pay  over  funds  to  successor,  No.  61,  p.  781. 


752  INDEX. 

LRoterencPS  are  to  sections  and  pagres  in  body.] 
ORDER  OF  COURT— Gknbkally,  continued. 

fc>rin  of,  to  sberifif  to  withdraw  levy,  No.  65,  p.  784. 
special,  to  receiver  to  bring  suit,  No.  66,  p.  784. 

autliorizing  compromise  with  shareholders  of  National  Bank,  No.  71, 
p.  O'Jl. 
for  distribution  of  receivership  funds,  generally,  i^  'd^)7,  p.  595. 
when  attorney's  fees  to  be  embraced  in,  §  ;558,  a,  p.  597. 
to  include  rents  and  profits,  when,  §  358,  d,  p.  599. 
to  include  debts  due  contractors,  S  *358,  c,  p.  599. 
to  include  expenses  and  advances,  when,  §  iJ58,  e,  p.  599. 
to  include  money  paid  by  security,  when,  i^  358,  f,  p.  000. 
■when  judgment  claimed  to  be  a  prior  lien,  §  358,  g,  p.  001. 
where  collaterals  are  held,  §  358,  h,  p.  601. 

ORIGIN  OF  LAW, 

of  receivership,  §  1,  p.  2. 


P. 

PARAMOUNT  TITLE. 

the  claimant  of,  must  apply  to  court  to  protect  his  right,  5  45,  note,  p.  126. 

PARTIES, 

to  petition  for  receiver,  §  373,  p.  603. 
to  suit  by  receiver,  §  391,  p.  611. 

receiver  of  firm  need  not  make  firm  or  members  parlies,  §  72,  note,  p.  160. 
on  bill  filed  by  receiver  for  creditors  and  stockholders,  they  need  not  be 
parties,  §  72,  note,  p.  160. 

See  also  Plaintiff  and  Defendant. 

PARTITION  SUITS, 

appointment  of  receiver  in,  between  tenants  in  common,  §  317,  p.  549. 

PARTNERS, 

receiver  cannot  enforce  liability  of,  §  78,  p.  177. 
appointment  of  receiver  for,  disqualification  of,  §  4,  b,  p.  7. 

PARTNERSHIP. 

receiver  for,  generally,  §  190,  p.  305. 

when  to  be  appointed,  for  violation  of  partnership  agreement,  §  191,  a, 
p.  306. 
for  breach  of  partnership  duty,  t^  191,  a,  p.  306. 
for  fra\id  of  partner,  t^  191,  b,  p.  306. 
for  serious  di-sagreemeut,  §  191,  c,  p.  306. 

for  disagreement  as  to  disposition  of  firm  property,  §  191,  c,  p.  306. 
for  mismanagement  by  partner  in  charge,  §  191,  d,  p.  306. 
for  violation  of  dissolution  agreement,  §  191,  e,  p.  307. 
for  appropriating  firm  property  to  individual  use,  §  191,  f,  p.  307. 
for  insolvency  of  limited  partnership,  i^  191,  g,  p.  307. 
where  plaintiff  entitled  to  dissolution,  §  191,  h,  p.  307. 


INDEX.  753 

[References  are  to  sections  and  pages  in  body.] 
PARTNERSHIP,  continued. 

receiver  for,  wlien  to  be  appointed,  where  on  dissolution  partners  disagree 
as  to  adjustment,  Ji^  191,  i,  p.  'Ml. 
for  insolvency  of  partner  in  charge  after  dissolution,  §  191,  j, 

p.  307. 
for  exclusion  of  partner  from  profits,  §  191,  k,  p.  307. 
for  exclusion  from  management,  §  191,  k,  p.  307. 
where  partners  are  dead,  §  191,  1,  p.  307. 
for  mismanagement  by  surviving  partner,  §  191,  m,  p.  308. 
when  not  to  be  appointed,  where  a  mere  disagreement,  §  193,  a,  p.  308. 
where  partnership  not  clearly  shown,  §  192,  b,  p.  308. 
where  lack  of  profits  only  grounds,  §  192,  c,  p.  308. 
where  defendant  responsible  and  danger  of  loss  not  shown,  §  193, 

d,  p.  308. 
where  plaintiff  in  possession,  §  192,  e,  p.  308, 
where  allegations  denied  by  answer,  §  193,  f,  p.  308. 
where  right  to  dis.solution  does  not  clearly  appear,  §  193,  g,  p.  309. 
where  dis.solution  probable,   but  receiver  unnecessary,  §  193,  h, 
p.  309. 
prerequisites  to  appointment,  generally,  §  193,  p.  309. 

partnership  or  joint  interest  to  be  shown,  §  193,  a,  p.  309. 
must  be  partnership  in  fact  and  not  in  name,  §  193,  a,  p.  309. 
agreement  for  partnership  insufficient,  ^  193,  a,  p.  309. 
violation  of  agreement  must  be  substantial,  §  193,  b,  p.  310. 
sufficient  cause  for  dissolution  must  be  shown,  §  193,  b,  p.  310. 
quarrel  between  partners  not  sufficient,  §  193,  b,  p.  310. 
who  to  be  appointed,  generally,  §  194,  p.  311. 

partner,  when  eligible,  §  194,  p.  311. 
in  case  of  retiring  partner,  §  195,  p.  313. 

danger  of  loss  a  necessary  element,  §  195,  p.  315. 
in  case  of  assignment  by  insolvent  partner,  §  190,  p.  315. 
in  case  of  dissolution  by  death,  §  197,  p.  316. 
on  application  of  creditor,  §  198,  p.  318. 
in  case  of  limited  partnerships,  §  199,  p.  319. 
in  case  of  expiration  of  partnership  agreement,  §  200,  p.  321. 
in  case  of  exclusion  of  partner,  generally,  §  201,  p.  321. 
in  case  of  fraud  by  partner,  §  202,  p.  323. 
in  case  of  mismanagement  by  partner,  §  203,  p.  324. 
in  case  of  insolvency,  §  204,  p.  326. 
in  case  of  dissolution,  §  205,  p.  329. 
before  dissolution,  §  200,  p.  332. 
miscellaneous  grounds,  §  207,  p.  335. 
special  grounds  for  refussal  of,  §  208,  p.  335. 
powers  and  duties  of,  generally,  §  209,  p.  836. 

regulated  by  order  of  appointment,  ^  209,  a,  p.  336, 
title  not  in  receiver,  g  209,  b,  p.  336. 
cannot  loan  receivership  funds,  when,  i^  209,  c,  p.  337. 
disintereoted  as  to  both  parties,  §  209,  d,  p.  337. 

48 


754  INDEX. 

[Uoforcnces  are  to  sections  aud  papes  in  body.] 
PAKTNErjSniP,  contiuued. 

receiver  for,  powers  aud  duties  of,  care  and  diligence  required,  §  209,  e, 
p.  337. 
suits  by,  in  foreign  state,  §  209,  f,  p.  337. 
suit  by,  in  own  name,  §  209,  f,  p.  337. 
power  limited  to  power  of  firm,  §  209,  g,  p.  237. 
effect  of  appointment,  as  to  liens,  §  210,  p.  338. 
as  to  possession,  §  210,  p.  338. 
as  to  rights  of  parties,  ^  210,  p.  338. 
when  manager,  t^  211,  p.  339. 
form  of  petition  for  receiver  in  case  of.  No.  2,  p.  G33. 
form  of  order  appointing  receiver  for,  No.  14,  p.  G51. 
form  of  bond  for  receiver  of,  No.  22,  p.  658. 
form  of  assignment  to,  No.  25,  p.  660. 

PAYMENT  OF  CLAIMS, 
order  for,  No.  30,  p.  661. 

preferred,  law  as  to  in  U.  S.  Court,  §  127,  p.  2'3ri. 
form  of  order  to  compel  receiver  to  make,  No.  32,  p.  005. 

PENDENTE  LITE  RECEIVER, 
what  is,  §  8,  note,  p.  25. 

PERISHABLE  PROPERTY, 

form  of  order  to  sell,  No.  41,  p.  672. 
See  also  Propeiity. 

PERMISSION. 

See  Leave  of  Court. 

PERSONAL  INJURIES, 

liability  of  receiver  for,  when,  §  113,  p.  203. 

when  damages  resulting  from,  not  a  preferred  claim,  Appx.  p.  C95. 
See  also  Liability. 

PERSONAL  PROPERTY, 

transfer  of  title,  generally,  §  37,  b,  p.  109. 
by  act  of  parties,  §  37,  b,  p.  109. 
by  operation  of  law,  §  37,  b,  p.  109. 

how  governed,  §  37,  note,  p.  111. 
domicil  of  owner  governs,  when,  ^  37,  b,  p.  109. 
taxes  on,  as  claim  against  receivership  fund,  g  341,  b,  p.  573. 

PERSONAL  REPRESENTATIVE, 

of  receiver,  liability  of,  generally,  §  135,  p.  283. 
See  also  Liability. 

PETITION, 

leave  of  court  necessary  to  filing,  §  93,  p.  183. 

by  receiver,  for  order  of  authority,  g  400,  p.  618. 

for  appointment  of  receiver,  necessary  parties  to,  §  373,  p.  603. 

necessary  allegations  in  case  of  insolvency  of  corporation,  §  22», 
p.  370. 


INDEX.  755 

[Ueferences  are  to  sections  and  pages  in  body.] 
PETITION,  continued. 

for  appointment  of  receiver,  prayer  contained  in,  §  372,  p.  603. 
form  of,  in  case  of  partnert-bip.  No.  1,  p.  636. 

for  receiver  of  partnership  proiterty.  No.  3,  p.  638. 
against  insolvent  corporation,  No.  2,  p.  637. 
in  foreclosure,  No.  4,  p.  639. 

by  creditor  of  corporation  to  account,  to  set  aside  judgment,  and 
to  appoint  receiver.  No.  5,  p.  640. 
form  of,  to  compel  payment  to  receiver.  No.  32,  p.  665. 

for  permission  to  defend  suit  and  comproiiii.se  claim.  No.  35,  p.  608. 

for  leave  to  settle  traffic  balances.  No.  36,  p.  669. 

for  leave  to  sell,  No.  39,  p.  671. 

to  compel  completion  of  purchase.  No.  43,  p.  672. 

for  authority  to  pay  counsel  fees,  No.  45,  p.  673. 

for  leave  to  pay  claims,  No.  47,  p.  674. 

that  receiver  be  instructed  to  pay  deposit,  No.  49,  p.  675. 

that  receiver  surrender  possession.  No.  50,  p.  676. 

for  permission  to  account  and  be  discharged.  No.  52,  p.  677. 

for  substituting  party  to  action  pending,  when  appointed.  No.  64, 

p.  783. 
of  receiver  of  National  Bank  for  leave  to  compromise.  No.  70,  p.  680. 
See  also  Bill  and  Compl.\int. 
PLAINTIFF, 

receiver  of  corporation  may  be,  when,  §  235,  a,  p.  397. 

name  of,  in  suit  by  receiver,  §  391,  p.  611. 

when  securing  appointment,  is  liable  for  costs,  §  22,  j,  note,  p.  69. 

PLAINTIFF'S  TITLE, 

must  be  clearly  shown,  §  5,  a,  note,  1,  p.  12. 

no  appointment  when,  in  dispute,  §  5,  b,  note,  p.  13. 

PLEADING, 

in  receivership  cases,  generally,  §  370,  p.  601. 

the  prayer,  §  372,  p.  603. 

necessary  parties,  §  373,  p.  603. 

notice  of  appointment,  §  364,  p.  603. 

affidavit  basis  of  order  of  appointment,  §  384,  p.  603. 

when  application  to  be  made,  ^  375,  p.  604. 

when  application  granted  before  answer,  g  376,  p.  604. 

bond  required,  §  377,  p.  604. 

effect  of  giving  bond,  §  378,  p.  604. 

form  of  the  bond,  §  379,  p.  605. 

reference,  §  385,  p.  608. 

in  foreclosure,  §  389,  p.  609. 

statutory  proceedings,  g  387,  p.  609. 

right  to  set  ofif,  §  399,  p.  618. 
in  suit  by  receiver,  generally,  i?  390,  p.  610. 

in  what  name  begun,  g  391,  p.  611. 

necessary  allegations,  ^5  391,  p.  611. 

must  aver  leave  of  court  to  sue,  Appx.  p.  698. 


756  INDEX. 

[Ufferences  are  to  sections  and  pukps  in  body.] 
PLEADING,  conlinucd. 

in  suit  by  receiver,  form  of  allegations,  ^  393,  p.  (ill. 

in  suit  against  receiver  on  void  appoiulmenl,  i5  396,  p.  615. 

petition  by  receiver  for  autliority,  ^  400,  p.  618;  ^  401,  p.  619. 

interplea  by  receiver,  ^  403,  p.  619. 

order  discharging  receivers  pendinij  suit,  §  414,  p.  629. 

POSITION  OF  KECEIVEH, 

general  nature  of,  as  to  third  parties,  ^  404.  p.  620. 
See  also  FuNCTioi>iS  and  Powers. 

POSSESSION  OF  RECEIVER, 

in  possession  of  court,  §  7,  c,  note,  p.  23. 

protected  by  court,  §  44,  note,  p.  122. 

receiver  entitled  to,  notice  not  required,  §  17,  b,  p.  47. 

as  against  personal  representatives,  §  17,  b,  note,  p.  47. 
appointment  vests  in  receiver  a  special  property,  tj  48,  note,  p.  137. 
receiver  need  not  apply  for  leave  to  obtain  possession  of  property,  §  48, 

note,  p.  133. 
efifect  in  foreign  jurisdiction,  §  17,  d,  note,  p.  48. 

vested  in  one  state,  will  be  protected  in  another  state,  §  48,  note,  p.  137. 
when  not  disturbed,  ^  5,  b,  p.  13. 
not  interfered  with,  without  leave,  ^  7,  b,  note,  p.  23. 
how  interfered  with,  by  suits  against  without  leave,  g  43,  p.  121. 

by  infringement  of  patents,  ^  43,  p.  121. 

by  rival  receivers,  §  43,  p.  121. 

by  untrue  circulars  and  publications,  §  43,  p.  121. 

by  bankruptcy  proceedings,  §  43,  p.  121. 

by  garnishment,  §  43,  p.  121. 

by  unlawful  withholding,  g  43,  p.  121. 

by  tax  officers,  §  43,  p.  121. 

by  condemnation  proceedings,  §  43,  p.  121. 

by  orders  of  co-ordinate  courts,  §  43,  p.  121. 

by  force,  g  43,  p.  121. 

by  trespass,  §  43,  p.  121. 

by  distress  for  rent,  §  43,  p.  121. 

by  ejefctment.  §  43,  p.  121. 

by  levy  of  execution  and  attachments,  g  43,  p.  121. 

by  coordinate  court,  g  44,  p.  122. 

by  state  and  Federal  courts,  g  44,  p.  122. 

by  execution  and  attachment,  ^  44,  note,  p.  122. 

by  courts  of  concurrent  jurisdiction,  g  44,  p.  122. 

by  suits  in  foreign  courts,  g  45,  p.  126. 

under  irregular  order,  g  45,  p.  126. 

by  ejectment,  §  45,  p.  126. 

by  replevin,  g  45,  p.  126. 

by  levy,  g  45,  p.  126. 

strikes  and  conspiracies,  §  43,  p.  121;  §  46,  p.  133. 
interfered  with,  by  threats,  §  46,  p.  130. 


INDEX.  757 

[References  are  to  sections  and  pages  in  body.] 
POSSESSION  OF  RECEIVER,  continued. 

interfered  with,  by  placards  and  advertisenienis,  §  46,  note,  p.  130. 

property  in  foreign  jurisdiction,  §  47,  p.  132. 

by  landlord,  §  47,  p.  V6i. 

as  to  collection  of  money,  §  47,  p.  132. 

leave  of  court  required,  ^  47,  p.  132. 

a  contempt,  when,  §  45,  p.  126. 

under  mistake  of  law  may  be  contempt,  §  47,  p.  132. 

withholding  possession  of  contract  is,  t^  48,  p.  133. 

not  on  ground  that  appointment  illegal,  or  iniprovldently  made,  §  44, 
note,  p.  122. 
enjoined,  §  45,  p.  120. 
duty  as  to,  generally,  ^  48,  p.  133. 

diligence  required,  §  48,  p.  133. 

when  exercise  excused,  §  48,  p.  133. 

aid  of  court,  g  48,  p.  133. 

protected  in  foreign  jurisdictions,  §  48,  p.  133. 
effect  of,  against  foreign  creditors,  §  48,  p.  133. 

as  to  public  improvements,  ^  49,  p.  135. 

as  to  new  business,  §  50,  p.  135. 

as  to  tenants,  §  50,  p.  135. 

as  to  rents,  §  51,  p.  136. 

as  to  set  off,  ^  55,  p.  138. 

as  to  exemptions,  §  56,  p.  139. 

as  to  executors  and  administrators,  §  57.  p.  139. 

as  to  title,  §  59,  p.  142. 

as  to  receiver's  appointment,  §  44,  p.  122. 

where  lien  has  attached  when  receiver  appointed,  possession  not  af- 
fected thereby,  g  45,  note,  p.  126. 
extent  of,  as  to  taxes,  §  54,  p.  137. 

as  to  secured  creditor,  §  54,  p.  137. 

protected  from  levy,  §  44,  note,  p.  122. 

cannot  be  levied  on  and  sold  so  as  to  confer  title,  §  44,  note,  p.  122. 
in  foreclosure,  Appx.  p.  695. 

in  another  court,  §  19,  note,  p.  56. 
of  corporation,  peculiarities  of,  §  242,  p.  416. 
to  whom  restored  on  dismissal  of  bill,  S  52,  p.  136. 

court  will  not  make  summary  order  on  receiver  to  turn  over  property,  §  48, 
note,  p.  133. 

POWER  OF  COMPTROLLER  OF  CURRENCY, 
to  appoint  receiver,  §  252,  a,  p.  421. 

Sec  also  National  B.\nks. 

POWER  OF  COURT. 

to  appoint  receiver,  discretionary,  §  222,  p.  347. 
statutory  as  to  corporations,  §  221,  p.  345. 
limited,  g  223,  p.  349. 
for  insolvent  corporation,  §  228,  p.  369. 
over  receiver  of  National  Bank  appointed  by  comptroller,  §  252,  c,  p.  424. 


758  INDEX. 

[References  are  to  sections  and  pajrcs  in  bodj'.] 
POWER  OF  COURT,  continued. 

to  appoint  receiver  over  trust  property,  ^5  305,  p.  539. 
to  compel  assignment,  ^  03,  p.  145. 
as  to  choses  in  action,  i^  GI5,  p.  145. 
See  also  Juuisdiction. 

POWER  OF  LIQUIDATORS, 

generally,  §  3,  p.  3. 

POWERS  OF  RECEIVER, 

under  English  Judicature  Act  1873,  §  3,  p.  3. 
under  "Companies'  Act,"  §  3,  p.  3. 
under  statutes  of  .stales,  §  3,  p.  3. 

Delaware,  §  4,  p.  6. 

Florida,  ^  4,  p.  6. 

Georgia,  tj  4,  p.  6. 

Idaho,  §  4,  p.  6. 

Illinois.  ^  4,  p.  6, 

Indiana,  ^  4,  p.  6. 

Iowa,  §  4,  p.  6. 

Kansas,  §  4,  p.  6. 

Kentucky,  §  4,  p.  6. 

Maine.  §  4,  p.  6. 

Maryland,  g  4,  p.  6. 

Massachu.setts,  §  4,  p.  G. 

Michigan,  §  4,  p.  6. 

Minne.sota,  §  4,  p.  6. 

Mississippi,  §  4,  p.  6. 

Missouri,  §  4,  p.  G. 

Montana,  j^  4,  p.  6. 

Nebraska,  §  4.  p.  6. 

Nevada,  §  4,  p.  6. 

New  Jersey,  §  4,  p.  6.  • 

New  York,  §  4,  p.  6. 

North  Carolina.  |  4,  p.  G. 

Norlh  Dakota,  g  4,  p.  6. 

Ohio.  §  4,  p.  G. 

Oklahoma,  §  4,  p.  6. 

Oregon,  §  4,  p.  6. 

Pennsylvania,  §  4.  p.  6. 

Rhode  Island,  §  4,  p.  G. 

South  Carolina,  §  4,  p.  6. 

Tennessee,  §  4,  p.  G. 

Texas.  §  4,  p.  6. 
generally,  §  3,  p.  3;  §  24,  p.  81. 
source  of,  §  24,  p.  81. 

practice  of  court  of  equity,  §  24,  p.  81. 
.    statutor''  enactment,  t^  24,  p.  ^ 
embraced  in  order. 


nt,  t^  24,  p.  bl. 
r,  §  25,  a,  p.  f^. 


INDEX.  759 

[References  are  to  sections  and  pages  in  buJj-.] 
POWERS  OF  RECEIVER,  continued. 

source  of,  Englisli  practice,  i^  25,  a,  p.  83. 

American  practice,  S  25,  a,  p.  82. 

practice  of  court,  §  25,  b,  p.  83. 

statutory  euactments,  §  25,  c,  p.  84. 

limitation  of,  §  25,  d,  p.  85. 

■when  terminated,  §  25,  e,  p.  84. 
under  irregular  appointment,  §  25,  f,  p.  85. 
retrospective  action  of  courts,  effect  of,  §  25,  f,  p.  85. 
limited  to  order,  §  25,  note,  p.  82. 

P"'ederal  receiver  must  obey  state  law,  §  25,  c,  note,  p.  7G. 
expendikures  in  good  faitb,  i^  26,  a,  p.  85. 
to  borrow  money,  §  26,  a,  §  26,  b,  p.  85. 

when  authorized,  §  26,  b,  p.  85. 
to  loan  money,  authority  of  court  required,  §  27,  a,  p.  87. 

to  whom  to  be  loaned,  §  27,  b,  p.  87. 

when  liable  for  interest,  §  27,  d,  p.  87. 
to  compromise  debts,  authority  of  court  required,  g  28,  a,  p.  83. 

may  be  general,  g  28.  b,  p.  88. 

statutory  liability,  §  28,  c,  p.  88. 

no  power  to  commute,  §  28,  d,  p.  88. 
to  employ  counsel,  must  be  general  or  special,  §  29,  a,  p.  89. 

when  order  not  required,  §  29,  a,  p.  89. 

compensation  of,  §  29,  a,  p.  89. 

who  employed,  §  29,  b,  p.  90. 

complainant's  solicitor  not  eligible,  §  29,  b,  p.  90. 
to  sue,  generally,  §  30,  p.  91. 

limitation  of,  i^  30,  b,  p.  92;  §  394,  p.  611. 

under  direction  of  court,  §  30,  a,  p.  92. 

leave  of  court  required,  §  30,  c,  p.  92. 

authority  must  be  alleged,  §  30,  d,  p.  92. 

he  must  allege  leave  of  court  and  equity  of  the  party  he  represents, 
§  69,  note,  p.  152. 

when  denied  must  be  shown,  §  71,  note,  p.  158. 

grounds  upon  which  receiver  appointed  need  not  be  averred,  ^  71,  note, 
p.  158. 

extent  of  power,  §  30,  e,  p.  92. 

as  a  rule  confined  to  the  power  of  the  person  or  corporation,  i^  70, 
note,  p.  156. 

in  foreign  jurisdiction,  §  37,  note,  p.  108;  t^  63,  p.  145. 
English  rule,  §  37,  b,  p.  108. 

in  supplementary  proceedings,  §  70,  c,  p.  156. 

to  set  aside  irregular  attachment,  §  42,  p.  119. 

under  creditor's  bills,  §  70,  c,  p.  156. 

as  representative  of  creditors,  §  70,  note,  p.  156. 

on  bond  assigned  to  him,  §  72,  note,  p.  160. 

on  contract  of  insurance,  Appx.  p.  698. 

for  property  converted,  §  42,  p.  119. 


760  INDEX. 

[References  are  to  sectious  and  pajircs  in  body.] 

POWERS  OF  RECf:iVER,  conlinued. 

to  make  repairs,  under  direcliou  of  court,  §  31,  a,  p.  93. 

uuthnrily  of  court,  i^  31,  b.  p.  93. 

applied  to  railways,  ^  31,  b,  p.  93. 
to  pureliase  supplies,  labor,  etc.,  extent  of,  §  32,  p.  94. 

sanction  of  court  when,  §  32,  p.  94. 

application  to  railways,  i^  32,  p.  94. 

binds  trust  property,  t^  32,  p.  94. 
to  continue  business,  limitation  of,  b^  33,  p.  96. 

must  be  clearly  shown,  §  33,  p.  96. 

as  to  new  business,  §  33,  p.  96. 

as  applied  to  partnership,  §  33,  p.  96. 

as  applied  to  railway  receiverships,  §  33,  p.  93. 
to  complete  contracts,  §  33,  note,  p.  94. 
to  annul  contracts,  §  35,  note,  p.  103. 
to  sell,  extent  of,  §  34,  a.  p.  98. 

only  on  day  named,  Appx.  p.  698. 

order  of  court  required,  g  34,  a,  p.  98. 

requisites  of  order,  i^  34.  a,  p.  98. 

when  ordered,  §  34,  a,  p.  98. 

evidence  of  sale — deed,  §  34,  b,  p.  99. 

■what  required  of  purchaser,  §  34,  b,  p.  99. 

confirmation  of  court  required,  §  34,  b,  p.  99. 

application  of  rule  of  caveat  emptor,  §  34,  b,  p.  99. 

protection  of  receiver  in,  §  34,  b,  99. 

attack  of  sale,  how  made,  §  34,  c,  p.  101. 

notice  to  purchaser,  §  34,  c,   p.  101. 
to  perform  contracts,  not  granted,  generally,  §  35,  a,  p.  103. 

when  court  will  require,  §  35,  a,  p.  102. 

receiver  may  avoid  when,  §  35,  a,  p.  102. 
to  lease,  authority  of  court  required,  §  36,  a,  p.  104. 

limitation  as  to  time,  §  36,  a,  p.  104. 
to  cancel  lease,  must  be  in  reasonable  time,  ij  36,  b,  p.  105. 
in  foreign  jurisdiction,  as  to  property,  American  rule,  §  37,  b,  p.  109. 

English  rule,  §  37,  a,  p.  108. 

limitation  of,  generally,  §  37,  p.  108. 
coextensive  only  with  jurisdiction  of  court,  §  37,  note,  p.  108. 
to  impeach  fraudulent  transactions,  limitation  of,  §  38,  p.  111. 

as  representative  of  creditors,  §  38,  p.  111. 

as  representing  corporation,  §  38,  p.  111. 
to  collect  stock  subscriptions,  prerequisites  of,  §  39,  p.  115. 

application  of  rule  to  banks,  g  39,  p.  115. 

fraudulent  cancelations,  §  39,  p.  115. 
to  issue  certificates,  incident  to  borrow  money,  §  40,  p.  117. 

authority  of  court  required,  §  40,  p.  117. 
to  appeal,  limitation  of,  §  41,  p.  117. 

where  personally  interested,  §  41,  p.  117. 
to  take  notes  instead  of  money,  §  42,  p.  119. 


INDEX.  7GI 

[References  are  to  sections  and  pages  iu  body.] 
POWERS  OF  RECEIVER,  continued. 

to  receive  money  before  due,  5^  42,  p.  119. 

to  execute  summary  order  of  ejectment,  g  42,  p.  119. 

as  to  rents  accrued,  §  43,  p.   119. 

to  surrender  collaterals,  §  42,  p.  119. 

to  satisfy  mortgages,  g  42,  p.  119. 

to  compel  disclosure  of  knowledge,  §  42,  p.  113. 

not  to  be  delegated,  §  42,  p.  119. 

to  use  seal  of  corporation,  §  42,  p.   119. 

may  not  be  mortgagee  of  receiversliip  properly,  §  42,  p.  119. 

10  subject  property  to  lien  for  storage,  ^  42,  p.  119. 

limited  by  charter  of  corporation,  §  42,  p.  119. 

tender  to,  not  good,  §  42,  p.  119. 

as  to  discrimination  in  freight.  ^  42,  p.  119. 

to  interfere  with  suit  pending,  t^  42,  note,  p.  119. 

may  reduce  wages  of  employees,  §  46,  p.  130. 

discretionary  power  of  receiver  limited,  §  6,  a,  p.  20 

has  same  power  to  redeem  as  corporation,  i^  70,  note,  p.  156. 

to  avoid   fraudulent    acts  of    corporation    in    New    York,   §  74,    note, 

p.  170. 
as  to  acts  ultra  vires,  §  70,  b,  p.  156. 
no  power  to  avoid  fraudulent  payment  made  before  appointment,  §  72, 

note,  p.  160. 
to  interfere  in  suit  pending,  §  70,  c,  p.  156. 
of  in.solveut  corporation  to  represent  creditors  and  stockholders,  §  70,  note 

p.  156. 
to  enforce  liability  of  stockholder,  Appx.  p.  697. 
to  enforce  assessments,  §  40S,  p.  623. 

to  bind  as  to  title,  not  where  owners  not  parties,  §  71,  note.  p.  158. 
to  petition  for  statement  of  authority,  §  400,  p.  618. 
to  compromise  doubtful  claims,  §  407,  p.  023. 
in  supplementary  proceedings,  §  154,  p.  256. 

in  foreign  jurisdiction,  §  158,  p.  262. 
in  case  of  partnership,  j?  209,  p.  336. 
as  manager  of  corporation,  §  232,  p.  377;  §  402,  p.  019. 

general  rule,  §  233,  p.  380. 

to  sue,  §  233,  e,  p.  382. 
of  National  Bank,  to  sue,  §  252,  p.  419. 

to  sell  g  254,  p.  426. 

respecting  title,  g  255,  p.  429. 
for  railways,  generally,  g  274,  p.  471;  g  283,  p.  501. 

to  pay  preferred  claims,  grounds  of  allowance,  g  276,  p.  476. 

iu  payment  of  preferred  claims,  g  280,  b,  p.  494. 

to  disafhrm  acts  of  (jfhcers,  §  283,  d,  p.  503. 

to  restrain  illegal  acts,  g  283,  e,  p.  503. 

limitations  of,  g  284,  p.  507. 
when  they  cease,  §  6,  b,  note,  p.  23. 
See  also  Functions. 


702  INDEX. 

[Ueferonces  arc  to  sections  iind  pages  in  body.] 
PKACTICE, 

in  receivership  cases,  generally,  t^  <j~0.  p.  001. 

notice  of  applicalion,  §  374,  p.  60:5. 

wlien  application  to  be  made,  §  375,  p.  604. 

wben  application  granted  before  answer,  §  376,  p.  604, 

bond  re(juired,  t^  377.  p.  604. 

elTecl  of  giving  bond,  §  378,  p.  604. 

form  of  the  bond,  i^  371),  p.  605. 

enforcement  of  liabilily  on  bond,  g  380,  p.  606. 

il.s  scope,  t^  381,  p.  606. 

the  order  appointing,  §  381,  p.  606. 
findings  embodied  in  order  appointing,  g  3^3,  p.  507. 
affidavit  as  basis  of  order  of  appointment,  i;  384,  p.  607. 
reference,  §  385,  p.  608. 

in  code  states,  examination  of  debtor,  ^  380,  p.  608. 
in  statutory  proceedings,  §  387,  p.  609. 
on  foreclosure,  §  389,  p.  609. 
in  suit  by  receiver,  §  390,  p.  610. 

in  what  name  begun,  §  391,  p.  611. 

necessary  allegations,  §  392,  p.  611. 

form  of  allegations,  §  393,  p.  611. 
leave  to  sue  receiver,  jj  395,  p.  612. 

in  suit  against  receiver  under  void  appointment,  §  396,  p.  615. 
right  of  set-off,  §  399,  p.  618. 
petition  of  receiver  for  authority,  §  400,  p.  618. 
application  by  receiver  for  direction,  §  401,  p.  619. 
on  interplea  by  receiver,  §  403,  p.  619. 
■when  receiver  acts  outside  of  his  duty,  g  405,  p.  622. 
where  receiver  refuses  to  act,  §  406,  p.  622. 
leave  to  compromise,  §  407,  p.  623. 
leave  of  receiver  to  sell,  g  409,  p.  629. 
obtaining  leave  to  contract  debts  and  liens,  g  410,  p.  625. 
order  discharging  receiver  pending  suit,  g  414,  p.  629. 
elTect  of  order  discharging  receiver  pending  action,  §  414,  p.  629. 
obtaining  leave  to  issue  certificates,  §  411,  p.  626. 
determining  conflicting  claims,  §  415,  p.  630. 
appeal  by  receiver,  §  418,  p.  632. 

PRAYER, 

for  appointing  receiver,  petition  to  contain,  §  372,  p.  603. 

in  case  of  partnership,  form  of,  No.  1,  p.  636. 

unnecessary  when,  §  10,  c,  note,  p.  28. 
for  nonappointment,  where  facts  inconsistent  with,  g  15,  d,  p.  41. 
for  judgment  against  insolvent  corporation,  form  of,  No.  2,  p.  637. 
for  an  accounting  against  corporation,  No.  5,  p.  640. 
See  also  Form. 

PREFERENCES— ILLEGAL, 

by  National  Banks,  void  under  statutes,  §  259,  p.  445. 
See  also  National  Banes. 


INDEX.  'iros 

[References  are  to  sections  anrt  pae-es  in  body.] 

TRKFEHRED  CLAIMS, 

against  receivership  fuud,  ground  for  allowance,  S  312,  p.  574. 
nature  of.  g  34:^.  p.  576. 

when  deprived  of  that  character,  §  343,  p.  579. 
when  attorney's  fee  is,  §  358,  p.  598. 
See  also  Claims. 

PREFERRED  PAYMENTS, 

law  as  to  U.  S.  courts  regarding,  §  127,  p.  226. 

PRIORITY, 

of  claims  against  receivership  fund,  §  342,  p.  575. 

of  creditors  in  supplementary  proceedings,  §  159,  p.  203. 

how  determined,  ^  159,  p.  264. 
of  judgment,  when  claimed  as  a  prior  lien  on  distribution.  §  358,  g,  p.  601. 

PROCEEDINGS  IN  AID  OF  EXECUTION, 
when  receiver  appointed,  §  4,  d,  p.  9. 
under  statute,  receiver's  title  in,  §  61,  p.  144. 

See    also    Cueditors'    Bills   and    Supplementaiit    Pro- 
ceedings. 
PROFITS. 

See  Rents  and  Profits. 

PROPERTY, 

in  custodia  legis,  effect  of,  §  7,  a,  p.  23. 

held  in  trust,  duties  regarding,  §  412,  p.  627. 

when  misappropriated  receiver  may  recover,  §  75,  (5),  p.  171. 

when  abstracted  receiver  may  recover,  §  75,  (13),  p.  171. 

real,  transfer  of  title  by  act  of  parties,  §  37,  b,  p.  109. 

personal,  transfer  of  title,  generally,  §  37,  b,  p.  109. 

transfer  of  title,  by  operation  of  law,  §  37,  b,  p.  109. 
domicil  of  owner  governs  when,  ^^37.  b,  p.  109. 
See  also  Personal  Property  and  Land. 
PURCHASER, 

wLeu  liable  for  damages,  §  34,  a,  p.  98. 
See  also  Vendee  and  Sale. 

R. 

RAILWAY  CROSSING, 

liability  of  receiver  for  construction,  §  114,  p.  211. 
See  also  Liaijility. 

RAILWAY  RECEIVERS. 

attitude  of  court  toward,  §  270,  p.  452. 
appointment  of,  notice  of  application  for,  g  271,  p.  454. 
generally,  §  272,  p.  456. 
form  of  order  appointing.  No.  12,  p.  648. 
when  appointed,  where  directors  unlawfully  lease  the  road  and  property, 
§  272,  a,  p.  450. 
where  directors  delegate  management  to  another  corporation,  §  272,  a, 
p.  456. 


7Gi  INDEX. 

[References  are  to  sections  and  i^afires  in  body.] 

RAILWAY  RECEIVERS,  continued. 

when  appointed,  where  default  in  payment  of  taxes,  ^  272,  b,  p.  461. 
for  default  in  mortgage  indebtedness,  §  272,  b.   p.  457. 
where  default  in  interest,  §  272,  b,  p.  461. 
where  corporation  insolvent,  §  272,  b,  p.  457. 
where  security  inadequate,  ^  272,  b,  p.  401. 
wlicre  revenues  and  income  being  wasted,  ^  272,  c,  p.  403. 
vhere  revenues  being  misapplied,  §  272,  c,  p.  403. 
where  income  and  profits  pledged,  and  default  in  interest,  ^  272,d,  p.  464 
where  funds  are  being  embezzled,  ^  272,  e,  p.  465. 
where  mismanagement  by  officers  and  directors,  g  272,  e,  p.  465. 
where  property  is  being  wasted,  §  272,  e,  p.  465. 
when  none  competent  to  have  custody,  §  272,  f,  p.  465. 
where  there  is  a  failure  to  elect  officers,  §  272,  f,  p.  405. 
where  statutory  cause  for  revoking  charter,  g  272,  g,  p.  465. 
where  statutory  cause  for  appointment,  §.272,  g,  p.  405. 
when  not  appointed,  generally,  §  273,  p.  465. 

where  no  notice  of  application  given,  §  273,  a,  p.  466. 

where  no  fraud  or  breach  of  trust  is  alleged,  §  273,  b,  p.  467. 

where  breach  of  conditions  in  mortgage  not  clearly  shown,  §  273,  c, 

p.  467. 
where  right  to  foreclose  doubtful,  §  273,  c,  p.  458. 
where  application  by  minority  stockholders,  §  273,  d,  p.  468. 
where  default  in  interest  alone  insufficient,  §  273,  c,  p.  468. 
where  danger  of  loss  not  shown,  §  273,  e,  p.  468. 
where  plaintiCF  has  adequate  remedy  at  law,  §  273,  f,  p.  469. 
where  by  statute  officers  are  made  trustees,  ^  273,  g,  p.  469. 
where  rights  of  third  persons  are  affected,  §  273,  h,  p.  471. 
where  disagreement  as  to  management,  §  273,  i,  p.  471. 
powers  of,  generally,  §  274,  p.  471. 

derived  from  order  of  appointment,  §  274,  p.  471. 
to  pay  unsecured  claims,  g  274,  p.  472. 

on  what  based,  §  274,  a,  p.  473. 

limitations  of,  §  275,  b,  p.  475. 
to  pay  preferred  claims,  grounds  of  allowance,  §  276,  p.  476. 

based  on  necessity  to  preserve  property,  §  276,  a,  p.  476. 

based  on  practice  of  courts  of  equity,  §  278,  p.  485 

based  on  application  of  mortgagor  for  foreclosure,  §  276,  b,  p.  476. 

based  on  diversion  of  income,  ^  276,  c,  p.  477. 

based  on  statute,  §  276,  d,  p.  479. 

confined  to  operating  expenses,  §  276,  e,  p.  481. 

based  on  application  of  income  to  interest  or  improvements,  §  276, 
e,  p.  481. 
implied,  from  general  order,  §  277,  a,  p.  483. 

to  pay  ordinary  operating  expenses,  §  277,  a,  p.  482. 

to  pay  for  labor  and  supplies,  §  277,  a,  p.  482. 

limited  to  public  corporations,  §  277,  b,  p.  484. 

based  on  equitable  terms  imposed  by  court,  §  278,  b,  p.  485. 


INDEX.  765 

[References  are  to  sections  and  pagres  in  body.l 
RAILWAY  RECEIVERS,  continued. 

powers  of,  its  extent,  §  282,  p.  500;  §  33,  p.  94. 

to  preserve  property,  §  283,  a,  p.  501. 

to  operate  road,  §   383,  a,  p.  501. 

to  collect  debts,  §  283,  b,  p.  502. 

to  reduce  property  to  possession,  §  283,  c,  p.  503. 

to  disaffirm  unlawful  acts  of  officers,  §  283,  d,  p.  503. 

to  restrain  illegal  acts  of  officers,  §  283,  e,  p.  503. 

to  defend  suits,  etc.,  §  283,  f,  p.  504. 

to  make  traffic  arrangements,  §  283,  g,  p.  504. 

as  to  unfinished  contracts,  §  283,  h,  p.  505. 

as  to  adoption  of  unexpired  leases,  §  283,  i,  p.  506. 

limitations  of,  §  284,  p.  507. 
payment  of  preferred  claims,  rule  in  Federal  courts,  generally,  §  279,  p.  486. 

applied  to  rolling  stock,  ^  280,  p.  491. 

discretion  of  receiver  in,  §  280,  b,  p.  494. 

applied  to  car  trusts,  §  280,  p.  491. 

car  trusts,  return  of  property,  §  280,  d,  p.  494. 
payment  of  claims  not  preferred,  damages  by  fire,  §  281,  b,  p.  498. 

advances  to  complete  road,  §  281,  b,  p.  491. 

attorneys'  fees,  when,  t  281,  c,  p.  498. 

goods  sold  after  mortgage  given,  §  2S1,  d,  e,  p.  498. 
liability  of,  generally,  §  285,  p.  508. 

as  common  carriers,  §  285,  a,  p.  509. 
exceptions  to  rule,  §  285,  p.  510. 

supersedes  that  of  corporation,  §  285,  b,  p.  515. 

when  i)ersonal,  §  285,  c,  p.  516. 

when  official,  §  285,  d,  p,  516. 

on  executory  contract  of  railway,  §  285,  e,  p.  516. 

effect  of  discharge  on,  §  286,  p.  517. 
certificates  of,  issued  by  order  of  court,  §  287,  a,  p.  523. 

must  be  for  purpose  authorized,  §  287,  a,  p.  521. 

non  negotiable,  §  387,  b,  p.  522. 

holder  charged  with  notice,  §  287,  c,  p.  523. 

when  not  preferential,  §  287,  d,  p.  523. 

issued  with  caution,  §  287,  f,  p.  525. 

payment  protected  by  court,  §  287,  g,  p.  525. 

validity  where  questioned,  §  287,  h,  p.  525. 

REAL  ESTATE, 

necessity  of  formal  transfer,  g  17,  b,  p.  47. 
receiver's  title  as  to,  in  foreign  jurisdiction,  §  64,  p.  146. 
suit  by  receiver  regarding,  must  be  in  jurisdiction  where  same  is,  §  241,  p. 
416. 

See  also  Land. 

RECEIVER'S  ACCOUNTS, 

law  regarding,  §  416,  p.  631. 

See  also  Account. 


766  INDEX. 

[References  are  to  sections  and  pages  in  body.] 

RECEIVER  AD  LITEM. 

appointment  of,  |  310,  p.  547. 

See  also  Appointment. 

RECEIVER— ANCILLARY, 

application  for,  when,  §  10,  e,  p.  29. 

See  Applic.\tion  and  Appointment. 

RECEIVER'S  APPEAL, 

rule  governing,  §  417,  p.  633. 
See  also  Appeal. 

RECEIVER— APPLICATION  FOR, 

by  plaintiff,  generally,  §  10,  a,  p.  27. 
defendant  must  have  notice,  when,  §  5,  d,  p.  14. 
when  by  defendant,  t=  10,  a,  p.  27. 
when  ex  parte,  see  Appx.  p.  694. 
care  of  court  required  in  granting,  §  10,  b,  p.  27. 
averment  must  be  clear  and  distinct,  §  10,  c,  p.  28. 
prayer  necessary,  §  10,  c,  p.  28. 

must  show  disinterestedness  of  appointee,  §  10,  d,  p.  23. 
when  heard  in  chambers,  §  18,  p.  54. 
subsequent  receivers,  ancillary,  §  10,  e,  p.  29. 
at  what  stage  of  suit  to  be  made,  §  375,  p.  60i. 
must  be  in  reasonable  time,  §  10,  c,  p.  2S. 
when  granted  before  answer,  §  376,  p.  604. 
effect  of  giving  bond,  §  378,  p.  604. 
statutory  requirements,  §  387,  p.  609. 
See  also  Application. 

RECEIVER'S  APPOINTMENT, 

in  case  of  lunacy,  §  4,  a,  p.  7;  §  310,  p.  547;  Appx.  p.  O"). 

in  case  party  entitled  to  custody  incompetent,  i^  4,  a,  p.  7. 

in  case  of  insolvency,  §  15,  d,  p.  41. 

in  case  of  insolvent  corporations,  §  4,  d,  p.  9. 

in  case  of  infancy,  §  4,  a,  p.  7. 

in  case  of  decedents'  estates,  §  4,  a,  p.  7;  «  300,  p.  526;  §  309,  p.  545. 

in  case  of  claimants  of  legal  title,  §  4,  b,  p.  7. 

in  case  of  disqualification,  of  party,  §  4,  b,  p.  7. 

of  partners,  §  4,  b,  p.  7. 

of  tenants  in  common,  §  4,  b,  p.  7. 
in  case  of  vendor  and  vendee,  §  4.  c,  p.  8;  8  315,  p.  548. 
in  case  of  debtor  and  creditor,  §  4,  c,  p.  8;  g  316,  p.  549. 
in  case  of  waste,  §  4,  c,  p.  8. 
in  case  of  trustees,  §  4,  c,  p.  8. 

over  trust  property,  generally,  §  305,  p.  539. 

in  lieu  of  trustee,  §  306,  p.  540. 

when  not  made  in  trust  cases,  g  306,  b,  p.  543. 

in  lieu  of  testamentary  trustee,  §  308,  p.  544. 
ground  for,  §  306,  p.  540. 
in  case  of  specific  performance  of  contracts,  §  4,  c,  p.  8;  §  318,  p.  551. 


INDEX.  767 

[References  are  to  sections  and  pages  in  body.] 
RECEIVER'S  APPOINTMENT,  continued, 
in  case  of  life  tenants,  §  4,  c,  p.  8. 
in  case  of  executors  and  administrators,  ^  4,  c,  p.  8. 
in  case  of  mortgagors  in  possession,  §  4,  c,  p.  8. 
in  case  of  mismanatrement  of  officers,  §  4,  c,  p.  8. 
in  case  of  delinquent  annuitants,  §  4,  c,  p.  8. 
in  case  of  assignees,  g  4,  c.  p.  8. 

for  fraudulent  assignment,  §  307,  p   543. 
in  creditor's  suits,  §  4,  d,  p.  9. 

where  common  law  proceeding  inadequate,  §  4,  d,  p.  9. 
in  estates  of  married  women,  ^  4,  d,  p.  9. 
in  case  of  fraud,  §  15,  c,  p.  40. 

in  partition  suits  between  tenants  in  common,  §  317,  p.  549. 
where  tenant  in  common  excludes  coteuant,,  t^  317,  a,  p.  550. 
where  tenant  in  common  refuses  to  account  to  colenant,  ^  317,  b,  p.  550. 
where  tenant  in  common  will  not  join  in  executing  lease,  i^  317,  c,  p.  550. 
when  necessary  to  protect  cotenant's  interest,  §  317,  d,  p.  550. 
as  between  lessor  and  lessee,  ^  319,  d,  p.  551. 
in  ejectment  suits,  §  320,  p.  551. 
in  suit  for  alimony,  g  321,  p.  552. 
for  building  and  loan  associations,  §  322,  p.  553. 

ground  for,  §  323,  p.  554. 
on  ex  parte  application,  Appx.  p.  G94. 
on  application  of  wife,  Appx.  p.  694. 

in  supplementary  proceedings,  §  153,  p.  255;  §  157.  p.  201;  §  160,  p.  264. 
in  foreclosure  of  mortgage,  generally,  §  170,  p.  2GU;  g  173,  p.  207;  §  173, 
p.  278. 

for  rents  and  profits,  Appx.  p.  693. 
jurisdiction  of  court,  §  176,  p.  295. 

general  rules  applicable  to,  §  178,  p.  299. 
when  wife  entitled  to,  g  180,  a,  p.  302. 
when  annuitant  entitled  to,  §  180,  b,  p.  302. 
when  bondholder  entitled  to,  §  180,  c,  p.  303. 
when  vendor  entitled  to,  §  180,  d.  p.  393. 
in  case  of  partnership,  §  190,  p.  305. 

prerequisites  to,  §  193,  p.  309. 

when  to  be  appointed,  §  194,  p.  311. 

where  a  member  retires,  g  195,  p.  313. 

when  insolvent  partner  assigns,  §  196,  p.  315. 

on  dissolution  by  death,  g  197,  p.  316. 

on  application  of  creditor,  g  198,  p.  318. 

limited  partnership,  generally,  ^  199,  p.  319. 

expiration  of  partnership  agreement,  §  200,  p.  331. 

exclusion  of  partner,  generally,  §  201,  p.  321. 

fraud  of  partner,  §  202,  p.  323. 

mismanagement  by  partner,  g  203,  p.  324. 

insolvency  of  partnership,  g  204,  p.  326. 

dissolution  of  partnership,  §  205,  p.  329. 


768  INDEX. 

[Keferonces  are  to  sections  and  pa^^t'S  in  l)()ily.l 
RECEIVER'S  API'OINTMENT,  continued. 

in  case  of  partnership,  lack  of  profits  no  ground  for,  g  '-lO"),  [>.  3C3. 

before  dissolution,  i^  206,  p.  3:{'3. 

on  miscellaneous  grounds,  i^  207,  p.  835. 

special  grounds  for  refusal  of,  ^  208,  p.  335. 

powers  and  duties  of,  ^  209,  p.  336. 

effect  of,  ^  210,  p.  3:?8. 
for  corporations,  generally,  §  220,  p.  342;  §  226,  p.  363. 
in  case  of  street  railway,  Appx.  p.  C9(J. 

in  voluntary  proceedings  to  dissolve,  Appx.  p.  604. 

statutory  power  of  court  in,  §  221,  p.  345. 

power  of  court,  discretionary,  ^  222,  p.  347. 

limitation  of  court's  power,  §  223,  p.  349. 

application,  by  whom  to  be  made,  generally,  §  224,  p.  350. 
by  judgment  creditors,  ^  225,  k,  p.  363. 

grounds  for,  generally,  §  225,  a,  p.  355. 

fraud  is  ground  for  when,  ^  227,  p.  366. 

on  ground  of  insolvency,  ^  228,  p.  367. 

in  foreclosure  proceedings,  generally,  §  229,  p.  371. 

effect  of  appointment,  §  230,  p.  371. 

his  relationship,  generally,  g  231,  p.  375. 

pleading  and  practice  in,  §  389,  p.  609. 
for  National  Banks,  generally,  §  252,  p.  419. 

power  of  comptroller  to  appoint,  generally,  §  253,  p.  4^5. 

governed  by  statute,  §  254,  p.  426. 

title  of  receiver,  generally,  §  255,  p.  429. 

pleading  and  practice,  i^  388,  p.  609. 
for  railways,  generally,  §  271,  p.  454;  g  272,  p   456. 

when  not  appointed,  ^  273,  p.  465. 
pleading  and  practice  in,  generally,  S  370,  p.  601. 

when  and  how  asked,  ^  371,  p.  602. 

prayer  for,  petition  to  contain,  §  372,  p.  603. 

notice  of  application  for,  §  374,  p.  603. 

when  application  for  to  be  made,  §  375,  p.  604. 

when  made  before  answer,  §  376,  p.  604. 

bond  required,  §  377,  p.  604. 

effect  of  riving  bond,  §  378,  p.  604. 

form  of  the  bond,  ^  379,  p.  605. 

scope  of  order,  g  380,  p.  606. 

atlidavit  as  basis  of  order  for,  ^  384,  p.  607. 

when  reference  advisable,  ^  385,  p.  608. 

statutory  proceedings  in,  i^  387,  p.  609. 

attack  on  void  order,  t^  396,  p.  615;  Appx.  p.  695. 
general  rules  governing,  g  5,  p.  10;  §  14,  p.  37. 

in  the  discretion  of  court,  §  5,  a,  p.  10. 

caution  required  of  court,  §  15,  a,  p.  38. 

only  where  plaintiff's  recovery  probable,  §  5,  b,  p.  13. 

refused  where  remedy  at  law  exists,  §  5,  c,  p.  14;  §  15,  b,  p.  44. 


INDEX.  769 

[References  are  to  sections  and  pages  in  body.] 
RECEIVER'S  APPOINTMENT,  continued. 

general  rules  governing,  must  be  danger  of  loss,  §  5,  c,  p.  14;  ^  15,  a,  p. 
38;  §  15,  b,  p.  39. 

plaintiff's  title  must  be  clear,  §  15,  e,  p.  43. 

refused  when  legal  title  alone  involved,  i^  15,  e,  p.  43. 

defendant  must  have  an  opportunity  to  be  beard,  ^  5,  d,  p.  14, 
grounds  of  jurisdiction,  generally,  S;  15,  p.  37. 

when  entertained,  §  16,  p.  45. 

exercise  of  jurisdiction,  §  18,  p.  54. 

conflict  of  jurisdiction,  §  19,  p.  56. 

as  to  courts  of  co  ordinate  jurisdiction,  ^  17,  c,  p.  47. 

scope  of  jurisdiction,  §  20,  p.  58.  ' 

effects  of  appointment,  generally,  §  7,  p.  23;  g  17,  a,  p.  45. 

removes  defendant  from  possession,  §  17,  b,  p.  47. 

as  to  possession,  §  17,  d,  p.  48;  t^  44,  p.  132. 

places  property  in  custodia  kgis,  %  7,  a,  p.  23. 

custody  limited,  §  17,  e,  p.  50. 

as  to  title,   17,  d,  p.  48;  §  44,  p.  133. 

as  to  contracts,  mortgages,  etc.,  §  17,  f,  p.  51. 

as  to  liens,  §  44,  p.  122. 

when  receiver's  rights  accrue,  §  17,  g,  p.  53. 

as  to  property,  §  17,  h,  p.  53. 

operates  as  an  equitable  execution,  §  44,  p.  123. 

cannot  be  sued,  §  7,  b,  p.  23. 

determines  no  rights  and  affects  no  liens,  §  7,  c.  p.  23. 
time  when  appointed,  §  9,  p.  26;  §  12,  a,  p.  33. 

must  be  suit  pending,  §  9,a,  p.  26;  §  13,  p.  35. 

usually  before  answer,  §  9,  b,  p.  26;  §  12.  b,  p.  33. 

when  after  decree,  §  9,  c,  p.  26;  §  12,  c,  p.  34. 

after  decree  and  appeal,  when,  §  9,  d,  p.  37;  §  13,  d,  p.  35. 

when  heard  in  vacation,  S  18,  p.  54. 
who  to  be  appointed,  generally,  g  21,  a,  p.  59;  §  10,  c,  note,  p.  28. 

competency  required,  §  21,  b,  p.  59. 

must  be  indifferent  person  to  all  parties,  §  21,  b,  p.  59. 

rests  within  discretion  of  court,  §  21,  b,  p.  59. 

selection  of  the  parties,  §  21,  b,  p.  59. 

English  practice  outlined,  §  21,  b,  p.  59. 
who  not  to  be  appointed,  §  20,  note,  p.  58. 
scope  of  bill  or  petition,  §  11,  p.  33. 
form  and  scope  of  order,  must  describe  property,  §  22,  a,  p.  63. 

embraces  all  acts  necessary  to  preservation  of  property,  §  23,  b,  p.  63. 

as  to  custody  of  property,  g  23,  c,  p.  64. 

as  to  third  parties,  §  22,  d,  p.  64. 

relates  from  what  time,  ^  23,  e,  p.  65. 

as  to  assignment  of  property,  §  23,  f,  p.  65. 

as  to  title,  §  22,  f ,  p.  65. 

when  modified,  §  22,  g,  p.  66. 

effect  of  recitals  in,  §  22,  g,  p.  66. 

49 


770  INDEX. 

[References  are  to  sections  and  papes  in  body.] 
RECEIVER'S  APrOINTMENT,  couliuued. 

form  and  scope  of  order,  collateral  attack,  ^  32,  h,  p.  G6. 
irregularity  of,  §  23,  i,  p.  68. 
when  void,  §  23,  j,  p.  69. 
when  revoked,  §  22,  j,  p.  69. 
when  improvideutly  made,  ^  22,  j,  p.  69. 
when  court  without  jurisdiction,  §  23,  j,  p.  69. 
effect  of  collusion,  §  22.  j,  p.  69. 
application  to  vacate,  when  to  be  made,  §  22,  j,  p.  69. 
application  to  vacate  order,  §  22,  j,  p.  69. 
when  order  appealed  from,  §  22,  k,  p.  70. 
effect  of  appeal  from  order,  §  22,  1,  p.  72. 
bond  required,  §  23,  p.  78. 

revoked  for  want  of  bond,  recovery  of  damages,  see  Appx.  p.  695. 
See  also  Appointment. 

RECEIVER'S  BOND, 

required  before  possession  taken,  §  48,  p.  133. 
in  supplementary  proceedings,  §  153,  p.  255. 
requirements  concerning,  g  377,  p.  604. 
effect  of  giving,  §  378,  p.  604. 
may  be  renewed  or  increased,  g  379,  p.  605. 
form  of,  i^  379,  p.  605. 
liability  of  sureties  on.  see  Appx.  p.  696. 
See  also  Bond. 

RECEIVER'S  CERTIFICATES, 

generally,  §  387,  p.  532. 
power  of  receiver  to  issue,  j^  40,  p.  117. 
when  valid,  see  Appx.  p.  695. 
when  a  preferred  claim  against  fund,  ^  343,  p.  578. 
See  also  Certificates. 

RECEIVER'S  COMPENSATION, 

generally,  §  350,  p.  583. 

must  be  reasonable,  elements  of,  §  350,  a,  p.  583. 
fixed  on  commission  basis,  §  350,  b,  p.  585. 
when  to  be  salary,  §  350,  c,  p.  587. 
when  court  will  refuse,  §  350,  d,  p.  588. 
within  discretion  of  court,  see  Appx.  p.  696. 
when  plaintiff  liable  for,  §  350,  e,  p.  588. 
does  not  depend  on  result  of  litigation,  i^  350,  f,  p.  589. 
entitled  to  priority  over  certificates  and  labor  claims,  g  350,  g,  p.  589. 
statutory  compensation,  §  350,  i,  p.  591. 
order  fixing,  not  revoked,  §  350,  j,  p.  591. 
additional  allowances,  §  358,  p.  590. 

lack  of,  no  ground  for  refusal  to  discharge,  §  330,  g,  p.  567. 
See  also  Fees. 

RECEIVER  OF  CORPORATIONS, 

jurisdiction  of  courts  of  equity  to  appoint,  §  320,  p.  343. 


INDEX.  771 

[References  are  to  sections  and  pages  in  body.] 
RECEIVER  OF  CORPORATIONS,  continued, 
statutory  power  of  court  in,  ^  221,  p.  345. 

limitations  of,  §  221,  p.  345. 
discretionary  power  of  court  to  impose  terms,  §  222,  p.  34S. 
power  of  court  to  appoint,  exercise  of,  di.scretionary,  §  232,  p.  347. 

limitations  of,  §  223,  p.  349. 
appointment  of,  application,  by  whom  made,  generally,  §  224,  p.  350. 

by  creditor  at  large,  §  224,  a,  p.  351. 

by  surety,  i^  224,  b,  p.  353. 

by  minority  stockholder,  g  224,  c,  p.  353. 

by  defendant,  §  224,  d,  p.  353. 

by  directors,  §  224,  e,  p.  354. 

by  judgment  creditors,  §  224,  f,  p.  354. 

by  corporation,  ^  224,  g,  p.  354. 

not  by  party  disinterested,  §  224,  g,  p.  355. 

to  follow  statute  strictly,  §  224,  g,  p.  355. 
when  not  appointed,  generally,  §  226,  p.  363. 

statutory  cause  for  dissolution  wanting,  g  226,  a,  p.  363. 

for  mere  disagreement,  §  226,  b,  p.  364. 

where  reasonable  effort  for  redress  has  not  been  made,   §  226,  c, 

p.  365. 
where  adequate  remedy  at  law,  §  226,  d,  p.  365. 
where  operating  company  responsible,  §  226,  e,  p.  366. 
where  defendant  is  foreign  corporation   without  property,  §  226,  f, 

p.  366. 
where  right  to  possession  is  in  dispute,  §  226,  g,  p.  366. 
where  right  to  foreclose  not  clear,  §  226,  h,  p.  366. 
where  no  danger  or  loss,  §  226,  i,  p.  366. 
where  nothing  to  distribute,  §  226,  j,  p.  366. 
where  claims  relatively  small,  §  226,  k,  p.  366. 
where  applicant  is  secured,  §  226,  1,  p.  366. 

where  property  in  possession  of  mortgagee's  agent,  §  226,  m,  p.  366. 
grounds  for  appointment,  statutory,  ^  225,  a,  p.  355. 
breach  of  covenant,  §  225,  b,  p.  358. 
mismanagement  by  officers  and  directors,  §  225,  c,  p.  359. 
default  in  payment  of  mortgage  indebtedness,  §  225,  d,  p.  358. 
refusal  of  officers  to  act,  §  225,  d,  p.  360. 
insolvency,  t^  225,  d,  p.  360. 
where  it  has  been  dissolved,  §  225,  e,  p.  361. 
where  charter  repealed,  §  225,  f,  p.  361. 
bankruptcy,  §  225,  g,  p.  361. 
failure  to  elect  officers,  §  225,  h,  p.  361. 
failure  to  collect  subscriptions,  t;  225,  i,  p.  362. 
violation  of  rights  of  minority  of  stockholders,  §  225,  j,  p.  362. 
violation  of  charter  by  majority  stockholders,  i^  225,  j,  p.  362. 
on  application  of  judgment  creditors,  §  225,  k,  p.  363. 
fraud  is,  §  227,  p.  366. 

fraud  of  officers  and  directors,  §  227,  p.  366. 


772  INDEX. 

[References  arc  to  sections  and  pages  in  body.] 
RECEIVER  OF  COllFORATIONS,  continued. 

grounds  for  appointment,  fraud  is,  wlierc  plaintifif  has  legal  remedy,  §  327, 
p.  367. 
plaintiff  not  to  participate  in  fraud,  §^  227,  p.  367. 
apprehension  of  fraud  not  sufficient,  t^  227,  p.  367. 
insolvency  as  indicated  by  statute,  §  228,  p.  367. 
power  of  court  in,  §  228,  p.  369. 
necessary  allegations  in,  §  228,  p.  369. 
a  jurisdictional  fact,  §  228,  p.  369. 
discretion  of  court  in,  §  228,  p.  389. 
application  by  corporation,  ^  228,  p.  370. 
ex  parte  application  not  sufficient,  §  228,  p.  371. 
in  foreclosure  proceedings,  generally,  §  229,  p.  371. 

effect  of  appointment,  existing  rights  remain  in  statu  quo,  §  230,  a,  p.  371. 
liens  remain  unimpaired,  §  230,  a.  p.  371. 
as  to  possession,  §  230,  b,  p.  372. 
as  to  co-ordinate  courts,  §  230,  c,  p.  372. 
as  to  litigation,  §  230,  d,  p.  373. 
as  to  unexpired  leases,  §  230,  e,  p.  373. 
as  to  contract  of  predecessor.  §  230,  f ,  p.  373. 
as  to  revival  of  corporate  powers,  §  230,  g,  p.  374. 
as  to  debtor's  control  of  property,  §  230,  h,  p.  37'1. 
as  to  abatement  of  actions,  §  230,  i,  p.  374. 
relationship  of,  to  the  court,  §  231,  a,  p.  375. 
to  the  shareholders,  §  231,  b,  p.  375. 
to  the  corporate  creditors,  §  231.  b,  p.  375. 
to  the  corporation,  §  231,  c,  p.  375. 
in  supplementary  proceedings,  §  231,  c,  p.  376. 
as  manager,  when,  §  232,  p.  377. 

powers  and  duties  of,  §  232,  p.  377. 
judicial  caution  required  of  court,  ^  232,  p.  377. 
powers  and  duties  of,  generally,  §  233,  p.  380. 
to  borrow  money,  §  233,  a,  p.  380. 
to  purchase  rolling  stock,  §  233,  b,  p.  381. 
to  make  repairs,  §  233,  c,  p.  381. 
to  compromise,  §  233,  d,  p.  381. 
to  sue,  §  233,  e,  p.  382. 
to  redeem,  §  233,  f,  p.  387. 
to  pay  taxes,  §  233,  g,  p.  387. 
to  make  leases,  §  233,  h,  p.  388. 
to  mortgage,  §  233,  i,  p.  388. 
to  invest  receivership  money,  §2C3,  j,  p.  383. 
to  contract,  §  233,  k,  p.  389. 
to  sell,  §  233,  1.  p.  389. 
to  make  assessments,  §  233,  m,  p.  390. 
to  take  appeal,  §  233,  n,  p.  391. 
liability  of,  generally,  §  234,  p.  -391. 
on  his  contracts,  §  234,  a,  p.  391. 


INDEX.  773 

[References  are  to  sections  and  pag-os  in  body.] 
RECEIVER  OF  CORPORATIONS,  continued, 
liability  of,  for  rent,  §  234,  b,  p.  393. 
for  interest,  §  234,  c,  p.  394. 
for  debts  incurred,  §  234,  d,  p.  394. 
for  torts  when  personsd.  §  234,  e,  p.  395. 
for  torts  when  official,  §  234,  f,  p.  395. 
for  damages,  §  234,  f,  p.  395. 
its  extent,  §  234,  g,  p.  396. 
for  loss  in  management,  §  234,  h,  p.  396. 
on  orders  of  court,  §  234,  i,  p.  397. 
Buits  by,  generally,  S  235,  a,  p.  397. 
against  officers,  §  235,  a,  p.  397. 

to  recover  property  fraudulently  disposed  of,  §  235,  a,  p.  898. 
to  recover  illegal  dividends,  §  235,  a,  p.  398. 
to  recover  assets,  §  335,  a,  p.  398. 
when  officially,  §  235,  b,  p.  399. 
to  recover  stock  subscriptions,  generally,  §  236,  p.  402. 

extent  of  recovery,  §  236,  a,  p.  402. 

excludes  right  of  individual  creditors,  §  236,  b,  p.  403. 

collusion  unavailable  against,  §  236,  c,  p.  404. 

extent  of  power,  §  236,  d,  p.  404. 

condition  precedent  to,  §  236,  e,  p.  404. 

how  liability  enforced,  §  236,  f,  p.  405. 
to  avoid  fraudulent  transfer,  §  237,  p.  406. 

nature  of  decree,  §  237,  p.  406. 
to  recover  illegal  dividends,  §  238,  p.  408. 
leave  of  court  necessary  when,  §  239,  p.  410. 
when  corporation  foreign,  §  240,  p.  411. 

in  case  of  insolvency,  ^  240,  a,  p.  411. 

when  attachment  will  not  lie,  §  240,  b,  p.  412. 

when  title  to  property  is  in  receiver,  §  240,  c,  p.  412. 

when  receiver  in  possession,  §  240,  d,  p.  413. 

to  recover  insurance,  §  240,  e,  p.  414. 

what  must  be  averred,  ^  240,  f,  p.  414. 
concerning  land,  must  be  in  jurisdiction  where  land  is,  §  241,  p.  416. 
collateral  attack  upon,  §  241,  p.  415. 
cannot  be  enjoined  when,  §  241,  p.  416. 

possession  of,  differs  from  ordinary  receiver  in  what,  §  242,  p.  416. 
suit  against  must  be  by  leave  of  court,  g  242,  p.  417. 
may  be  restrained  when,  §  242,  p.  417. 

RECEIVER  OF  DECEDENT'S  ESTATE, 
when  appointed,  generally,  §  300,  a,  p.  526. 

in  contests  over  wills,  §  300,  b,  p.  527. 

in  lieu  of  executors  and  administrators,  §  801,  a,  p.  528. 

misconduct  and  refusal  to  act,  ^  301,  c,  p.  534. 

where  no  one  competent  to  act,  ^  301,  d,  p.  537. 
when  not  appointed,  §  301,  b,  p.  532. 


774  INDEX. 

[References  are  to  sectious  and  pages  in  body.] 
RECEIVER'S  DEED, 

rule  governing,  t^  418,  p.  632. 

RECEIVER'S  DISCHARGE, 

rests  in  sound  discretion  of  court,  §  330,  b,  p.  558. 
effect  of  pending  action,  §  413,  p.  639. 
what  not  ground  for,  Appx.  p.  096. 

on  dismissal  of  action  in  which  appointed,  Appx.  p.  690. 
cancelation  of  bond  upon,  Appx.  p.  696. 
See  also  Dischaugb. 

RECEIVER'S  DUTIES, 
generally,  §  3,  p.  3. 

when  appointed  in  supplementary  proceedings,  §  153,  p.  255. 
in  case  of  partnership,  §  209,  p.  336. 

when  appointed  over  trust  property,  ^  305,  p.  539;  §  412,  p.  627, 
See  also  Duties. 

RECEIVER'S  FUNCTIONS, 

is  the  hand  of  the  court,  §  6,  a,  p.  20. 
derived  from  statute,  when,  §  6,  a,  p.  20. 
derived  from  scope  of  order,  §  6,  a,  p.  20. 
derived  primarily  from  court,  §  6,  a,  p.  20. 
is  trustee  for  all  parties,  §  6,  b,  p.  21. 
not  trustee  to  strangers,  ^  6,  b,  p.  21. 
not  to  interfere  with  litigation  of  parties,  §  6,  b,  p.  21. 
to  have  care  and  custody  of  receivership  properly,  §  6,  c,  p.  2;J 
See  also  Functions  and  Poweus. 

RECEIVER'S  LIABILITY, 
generally,  §  109,  p.  199. 
to  creditor,  §  109,  a,  p.  201. 
for  interest  on  bank  deposit,  §  109,  a,  p.  201. 
for  deposit  where  bank  fails,  §  109,  a,  p.  201. 
for  mingling  receivership  funds,  §  109,  a,  p.  201. 
for  deposit  made  without  order  of  court,  §  109,  a,  p.  201. 
for  trespass  and  torts,  §  109,  a,  p.  202. 
for  goods  consigned,  §  109,  a,  p.  202. 
for  loss  by  negligence,  §  109,  a,  p.  202. 
for  violation  of  order  of  court,  §  109,  a,  p.  202. 
to  proper  payment  of  funds,  §  109,  a,  p.  203. 
for  rent,  generally,  §  109,  a,  p.  203. 

accrued  prior  to  receivership,  §  36,  b,  p.  105. 

where  possession  of  premises  continued,  Appx.  p.  097. 

duration  of  determined  by  statute,  in  Illinois,  Appx.  p.  693. 
for  profit  on  receivership  funds,  §  109,  a,  p.  203. 
for  money  paid  under  void  appointment,  §  109,  a,  p.  202. 
for  violating  act  of  Congress,  §  109,  a,  p.  203. 
for  misappropriating  funds,  t^  109,  a,  p.  203. 
for  labor  and  materials,  §  109,  a,  p.  203. 


INDEX.  775 

[References  are  to  sectioQs  and  pa^cs  in  body.] 
RECEIVER'S  LIABILITY,  contiuued. 

for  wages  due  at  time  of  appointment  determined  by  scope  of  order,  Appx. 

p.  097. 
for  illegal  freights  collected,  §  109,  a,  p.  203. 
for  cost  of  suit,  §  109,  a,  p.  203. 
none  for  statutory  injuries,  wlien,  5^  109,  b,  p.  204. 
none  for  loss  witliout  his  fault,  §  109,  b,  p.  204. 
none  for  injury  before  appointment,  §  109,  b,  p.  204. 
none  for  injuries  after  appointment,  when,  §  109,  b,  p.  204. 
none  for  covenants  and  contracts  of  principal,  §  109,  b,  p.  204. 
none  for  contract  of  principal  not  adopted  by  him,  §  109,  b,  p.  204. 
none  after  discharge,  §  109,  b,  p.  204. 
none  for  attorneys'  fees,  when,  §  109,  b,  p.  205. 
none  personal  on  official  contracts,  §  109,  b,  p.  205. 
none  personal  for  acts  ordered  by  court,  §  109,  b,  p.  205. 
none  for  speculative  profits,  §  109,  b,  p.  205. 
none  for  money  expended  in  good  faith,  §  109,  b,  p.  205. 
none  for  contracts  of  predecessor,  §  109,  b,  p.  205. 
to  follow  decree  absolutely  and  without  discretion,  g  110,  p.  205. 
for  specific  funds,  §  110,  p.  205. 
for  deviating  from  decree,  §  110,  p.  205. 
joint  and  several,  §  111,  p.  206. 
for  use  of  trust  funds,  §  111,  p.  200. 
where  one  of  two  appropriates  funds,  §  111,  p.  206. 
when  criminal,  §  111,  p.  206. 
for  contempt,  when,  §  111,  p.  206. 
when  a  contempt  cannot  be  heard,  §  111,  p.  206. 
to  attachment,  when,  §  111,  p.  206. 
for  mingling  with  personal  funds,  §  111,  p.  206. 
of  quasi-public  corporation,  for  personal  injury,  rule,  g  113,  p.  208. 
as  a  common  carrier,  generally,  §  109,  a,  p.  202;  §  112,  p.  208. 
in  matters  ex  contractu,  %  112,  p.  208. 
in  matters  ex  delicto,  §  112,  p.  208. 

for  personal  injuries,  §  112,  p.  208. 

on  connecting  line,  §  113,  p.  208. 

on  leased  line,  ^  113,  p.  208. 

when  personal,  §  113,  p.  208. 

for  goods  sold,  ^  114,  p.  211. 

for  loss  of  freight,  §  114,  p.  211. 

for  damages,  generally,  §  114,  p.  211. 

for  property  lost  in  transit,  §  114,  p.  211. 

for  property  not  reduced  to  possession,  §  114,  p.  211. 

for  property  in  transit;  bondholder,  §  114,  p.  211. 

for  negligent  destruction  of  property,  §  114,  p.  211. 

payable  from  current  receipts,  §  114,  p.  211. 

from  what  fund  payable.  §  114,  p.  211. 

for  necessary  repairs,  §  114,  p.  211. 

in  construction,  §  114,  p.  211. 


776  INDEX. 

[References  are  to  sections  and  paaos  in  body.] 
FtECEIVER'S  LIABILITY,  continued, 
efifect  of,  as  lo  plaiutiff,  §  115,  p.  213. 

as  lo  corporation,  ^  115,  p.  213, 
for  use  of  receivership  funds,  generally,  §  IIG,  p.  214. 

■when  ordered  to  be  invested,  §  116,  p.  214. 

■when  improperly  intermingled,  §  116,  p.  214. 
when  illegally  invested,  §  116,  p.  214. 
when  chargeable  with  interest,  §  116,  p.  214. 
for  profits  on  receivership  funds,  §  116,  p.  214. 
for  default  of  another,  generally,  i5  117,  p.  216. 

as  attorney,  §  117,  p.  216. 
for  supplies,  labor,  etc.,  §  118,  p.  217. 

when  controlled  by  court,  §  118,  p.  217. 

in  what  court  enforced,  t^  118,  p.  217. 

not  personal,  §  118,  p.  317. 
for  money  deposited  in  bank,  generally,  g  119,  p.  218. 
for  costs  and  expenses,  generally,  §  120,  p.  219. 
for  rents,  generally,  §  121,  p.  220. 

depends  on  privity  of  estate,  §  121,  p.  220. 

on  property  not  reduced  to  possession,  §  121,  p.  220. 

collected  before  bond  given,  §  121,  p.  220. 

how  enforced,  §  121,  p.  220. 

measure  of,  §  122,  p.  221. 

amount,  how  determined,  §  121,  p.  220;  §  12:^,  p.  223. 

of  leased  railways,  §  123.  p.  222. 

on  leases  made  without  order  of  court,  §  124,  p.  224. 

on  unexpired  leases,  §  122,  p.  221. 

where  lease  has  been  adopted,  t^  121,  p.  220;  §  123,  p.  223. 
adoption  of  lease,  how  made,  §  123,  p.  222. 

by  implication,  §  123,  p.  222. 

by  sale  of  property,  §  123,  p.  222. 

within  what  time  to  be  made,  §  123,  p.  222. 
on  contracts,  generally,  §  125,  p.  224. 
for  use  of  railroad  track,  §  125,  p.  224. 
for  removal  of  switch,  §  125,  p.  224. 
on  contracts  of  predecessor,  §  126,  p.  225. 
for  damages  on  predecessor's  contract,  §  126,  p.  225. 
on  note  not  collected,  Appx.  p.  697. 
order  of  payment,  ^  127,  p.  226. 

preferential  debts,  §  127,  p.  226. 
general  creditors,  §  127,  p.  226. 
under  creditor's  bills,  §  127,  a,  p.  228. 
in  foreclosure  proceedings,  §  127,  p.  226;  ^5  127,  b,  p.  223. 

for  cars,  under  invalid  contract,  cj,  127,  b,  p.  228. 
when  personal,  generally,  §  128.  p.  228. 

when  contract  personal,  §  128,  p.  228. 

when  operating  under  lease  or  contract,  §  128,  p.  228. 

for  acts  beyond  scope  of  authority,  §  128,  p.  228. 

for  money  collected  under  void  appointment,  §  129,  p.  230. 


INDEX.  777 

[References  are  to  sectious  and  paj^es  in  boJy.l 
RECEIVER'S  LIABILITY,  continued. 

for  attorneys'  fees,  generally,  g  129,  p.  230. 

amount,  bow  determined,  §  129,  p.  2:30. 

to  whom  allowed,  g  129,  p.  230. 
for  contracts  where  no  funds  to  pay,  §  128,  p.  223. 
judf^ment  for,  form  of,  ^  128,  p.  228. 
to  general  creditor  of  mortgagee,  i^  130,  p.  231. 
for  trespass,  §  130,  p.  231. 
for  taking  properly  not  included  in  the  order  of  court;   trespass,  §  130, 

p.  231. 
for  disobeying  order  of  court,  generally,  §  130,  p.  231. 

in  contempt  of  court,  §  13G,  p.  234. 
to  action  of  replevin  for  property  wrongfully  taken,  §  130,  p.  231. 
to  account,  generally,  §  131,  p.  232. 

how  determined,  j^  131,  p.  232. 
when  ordered  to  pay,  effect  of,  §  132,  p.  233. 
effect  of  discharge,  §  133,  p.  233. 
under  statutory  penalty,  §  134,  p.  233. 
for  unjust  freights  exacted,  §  134,  p.  233. 
not  affected  by  removal,  §  330,  f,  p.  566. 
for  railway,  generally,  §  285,  p.  508. 

RECEIVER  AS  MANAGER, 
rule  relating  to,  §  302,  p.  619. 
when  manager  in  partnership  matters,  §  211,  p.  339. 

See  also  Powers  of  Receiver  and  Manaceb. 

RECEIVER  OF  NATIONAL  BANK, 

appointment  of,  and  powers  under  statute,  §  252,  a,  p.  419. 
acts  of  Congress  relating  thereto,  §  252,  a,  p.  419. 
independent  of  act  of  Congress,  §  252,  b,  p.  421. 
on  application  by  minority  stockholders,  §  252,  b,  p.  421. 
effect  as  to  corporation,  §  252,  b,  p.  421. 
control  of  court  of  equity  over,  §  252,  c,  p.  424. 
power  of  comptroller  to  appoint,  §  252,  a,  p.  421;  §  253,  p.  425. 

grounds  upon  which  may  appoint,  §  253,  p.  425. 
power  of,  ^  252,  b,  p.  423. 
to  sue,  S  252,  c,  p.  423. 

irrespective  of  citizenship,  §252,  c,  p.  423. 
irrespective  of  amount  involved,  i^  252,  c,  p.  423. 
jurisdiction  of  Federal  court,  §  252,  c,  p.  423. 
governed  by  statute,  ^  254,  p.  426. 
to  sell,  §  254,  p.  426. 
to  collect,  §  254,  p.  426. 
to  compound  bad  debts,  §  254,  p.  426. 
to  enforce  stock  liability,  §  254,  p.  426. 

prerequisites  to,  g  254,  p.  426. 
to  di.saflirm  unlawful  act,  g  254,  p.  427. 
to  recover  funds  misapplied,  §  254,  p.  428. 


778  INDEX. 

[References  are  to  sections  and  pasres  in  body.] 
RECEIVER  OF  NATIONAL  BANK,  continued. 

power  of,  to  avoid  illegal  preferences,  ^  254,  p.  428. 

as  representative  of  government,  ^  254,  p.  428. 
title  of,  generally,  ^5  255,  p.  429. 

as  to  third  persons  or  corporations,  §  255,  p.  430. 

as  to  bonds  deposited  with  treasurer,  p.  255,  p.  430. 

as  to  levies,  §  255,  p.  432. 
liability  of,  generally,  §  256,  p.  432. 

liability  of  stockholders,    action  by  comptroller  precedent  to  recovery, 
§  258,  a,  p.  437. 

determined  by  comptroller,  §  258,  a,  p.  437. 

action  of  comptroller,  conclusive,  §  258,  a,  p.  437. 

under  statutes,  §  258,  a,  p.  442. 

action  to  enforce,  when  at  law  or  in  equity,  t^  258,  a,  p.  437. 

enforced  against  executors  and  administrators,  ti^  258,  a,  p.  440. 

In  what  court  enforced,  g  258,  a,  p.  440. 

suit  to  recover,  limitation  of,  §  258,  b,  p.  445. 

defenses  to,  §  258,  b,  p.  443. 

right  of  defendant  to  set  oflf,  ^  258,  a,  p.  438. 

suit  enforced  against  married  women,  §  258,  a,  p.  441. 
liability  of  directors,  generally,  §  260,  p.  448. 

character  of,  g  2G0.  p.  448. 

statute  relating  to,  §  2G0,  p.  448. 

nature  of  action  against,  §  260,  p  448. 
suits  by,  generally,  §  257,  p.  433. 

in  .what  court  to  be  brought,  §  257,  p.  433. 

for  what  causes  of  action,  §  257,  p.  435. 

to  collect  assets,  §  257,  p.  433. 

to  recover  wasted  or  lost  assets,  §  257,  p.  437. 

to  recover  stock  liability,  §  257,  p.  433. 

against  directors,  §  257,  p.  437. 
illegal  preferences,  statute  relating  to,  §  259,  p.  445. 
See  also  National  Banks. 

RECEIVER  FOR  PARTNERSHIP, 
generally.  §  190,  p.  305. 

when  to  be  appointed,  for  breach  of  partnership  duty,  §  191,  a,  p.  306. 
for  violation  of  partnership  agreement,  §  191,  a,  p.  306. 
for  fraud  of  partner,  §  191,  b,  p.  306. 

for  serious  disagreement  between  partners,  §  191,  c,  p.  306. 
for  disagreement  regarding  disposition  of  property,  §  191,  c,  p.  306. 
for  mismanagement  by  partner  in  charge,  §  191,  d,  p.  306. 
for  violation  of  dissolution  agreement,  §  191,  e,  p.  307. 
for  appropriating  firm  property  to  individual  use,  §  191,  f,  p.  307. 
for  insolvency  of  limited  partnership,  §  191,  g,  p.  307. 
vfhere  plaintiff  entitled  to  dissolution,  §  191,  h,  p.  307. 
where  upon  dissolution,  partners  disagree  as  to  adjustment,  §  191,  1, 

p.  307. 
for  insolvency  of  partner  in  charge  after  dissolution,  g  191,  j,  p.  307. 


INDEX.  779 

[References  are  to  sections  and  pages  in  bodj'.] 
RECEIVER  FOR  PARTNERSHIP,  continued. 

when  to  be  appointed,  for  exclusion  of  partner  from  profits,  §  191,  k,  p.  307. 

for  exclusion  of  partner  from  management,  §  191,  k,  p.  307. 

where  partners  all  dead,  S  191,  1,  p.  308. 

for  mismanagement  by  surviving  partner,  §  191,  m,  p.  308. 
when  not  to  be  appointed,  where  a  mere  disagreement  of  partners,  §  192,  a, 
p.  308. 

where  partnership  not  clearly  shown,  §  192,  b,  p.  308. 

where  lack  of  profits  only  ground,  §  192,  c,  p.  308. 

where  defendant  responsible  and  danger  of  loss  not  shown,  §  192,  d, 
p.  308. 

where  plaintiff  not  in  possession,  §  192,  e,  p.  30S. 

where  allegations  denied  by  answer,  §  192,  f,  p.  308. 

where  right  to  dissolution  does  not  clearly  appear,  §  192,  g,  p.  309. 

where  dissolution  probable  but  receiver  not  necessary,  §  192,  h,  p.  309. 
prerequisite  to  appointment,  generally,  §  193,  p.  309. 

must  be  partnership  in  fact  and  not  in  name,  ^  193,  a,  p.  309. 

partnership  or  joint  interest  to  be  shown,  §  193,  a,  p.  309. 

agreement  for  partnership  insufficient,  §  193,  a,  p.  309. 

violation  of  agreement  must  be  substantial,  §  193,  b,  p.  310. 

sufficient  cause  for  dissolution  must  be  shown,  §  193,  b,  p.  310. 

quarrel  between  partners  not  sufficient,  §  193,  b,  p.  310. 
who  appointed,  generally,  §  194,  p.  311. 

partner  when  eligible,  §  194,  p.  311. 
in  case  of  retiring  partner,  §  195,  p.  313. 

danger  of  loss  a  necessary  element,  §  195,  p.  315. 
in  case  of  assignment  by  insolvent  partner,  i^  190,  p.  315. 
in  case  of  dissolution  by  death,  §  197,  p.  316. 
in  case  of  limited  partnership,  §  199,  p.  319. 
in  case  of  expiration  of  partnership  agreement,  §  200,  p.  321. 
in  case  of  exclusion  of  partner,  generally,  §  201,  p.  321. 
in  case  of  fraud  by  a  partner,  §  202,  p.  323. 
in  case  of  mismanagement  by  partner,  §  203,  p.  324. 
in  ease  of  insolvency,  ^5  204,  p.  326. 
on  application  of  creditor,  fc^  198,  p.  318. 
before  dissolution,  §  206,  p.  332. 
miscellaneous  ground,  t^  207,  p.  335. 
special  grounds  for  refusal  of,  ^5  208,  p.  835. 
powers  and  duties  of,  §  209,  p.  336. 

regulated  by  order  of  appointment,  §  209,  a,  p.  336. 

title  not  in  receiver,  §  209,  b,  p.  33C. 

cannot  loan  receivership  funds,  when,  t^  209,  c,  p.  337. 

disinterested  as  to  both  parties,  §  209,  d,  p.  337. 

care  and  diligence  required,  §  209,  e,  p.  337. 

suits  by,  in  foreign  states,  ^  209,  f,  p.  337. 

suit  by,  in  own  name,  §  209,  f,  p.  337. 

power  limited  to  power  of  firm,  ^  209,  g,  p.  337. 
effect  of  appointment,  as  to  liens,  §  210,  p.  338. 


780  INDEX. 

[References  are  to  sections  and  paj^es  in  bod}-.] 
RECEIVER  FOR  PARTNERSHIP,  oonlimied. 

elTect  of  appointment,  as  to  possession,  ^  210,  p.  333. 

as  to  rijfhts  of  partners,  §  210,  p.  338. 
when  manager,  §  211,  p.  339. 
form  of  bond  for.  No.  22,  p.  058. 
form  of  assignment  to,  No.  25,  p.  6G0. 

RECEIVER'S  PETITION, 

for  order  of  authority,  ^  400,  p.  618. 
See  Petition. 

RECEIVER'S  POSSESSION, 

how  interfered  with,  by  levy  of  executions  and  attachments,  §  43,  p.  121; 
§  44,  note,  p.  122;  §  45,  p.  126. 

by  garnishment,  §  43,  p.  121. 

by  distress  for  rent,  §  43,  p.  121. 

by  tax  officers,  §  43,  p.  121. 

by  force,  S  43,  p.  121. 

by  trespasses,  §  43,  p.  121. 

by  ejectment,  §  43,  p.  121;  §  45,  p.  126. 

by  strikes  and  conspiracies,  i^  43,  p.  121;  §  46,  p.  ICO. 

by  rival  receivers,  §  43,  p.  121. 

by  unlawful  withholding,  §  43,  p.  121. 

by  replevin,  §  45,  p.  126. 

by  untrue  circulars  and  publications,  §  43,  p.  121. 

by  suits  against,  without  leave,  §  43,  p.  121. 

by  bankruptcy  proceedings,  §  43,  p.  121. 

by  condemnation  proceedings,  g  43,  p.  121. 

by  infringement  of  patents,  §  43,  p.  121. 

by  order  of  court  of  co-ordinate  jurisdiction,  §  43,  p.  121. 

by  state  and  Federal  courts,  §  44,  p.  122. 

by  co-ordinate  court,  §  44,  p.  122. 

by  courts  of  concurrent  jurisdiction,  §  44,  p.  122. 

by  suits  in  foreign  courts,  §  45,  p.  126. 

under  irregular  order,  §  45,  p.  126. 

a  contempt,  when,  §  45,  p.  126. 

enjoined,  §  45,  p.  126. 

property  in  foreign  jurisdiction,  when,  g  47,  p.  132. 

leave  of  court  required,  §  47,  p.  132.  j 

by  landlord,  §  47,  p.  133. 

as  to  collection  of  money,  i^  47,  p.  132. 
duty  of  receiver  as  to,  generally,  t^  48,  p.  133. 

diligence  required,  §  48,  p.  133. 

when  exercise  excused,  §  48,  p.  133. 

aid  of  court  may  be  demanded,  i^  48,  p.  133. 

protected  in  foreign  jurisdictions,  §  48,  p.  133. 
effect  of,  as  to  rents,  §  51,  p.  136. 

as  to  tenants,  §  51,  p.  136. 

against  foreign  creditors,  §  48,  p.  133. 


INDEX.  781 

[ReferenccB  are  to  sections  and  pajrcs  in  body.] 
RECEIVER'S  POSSESSIOIST,  continued. 

efiect  of,  as  to  public  improvements,  ^  49,  p.  135. 
as  to  new  business,  §  50,  p.  135. 
as  to  set-off,  §  55,  p.  13S. 
as  to  exemptions,  ^  56,  p.  139. 
as  to  executors  and  administrators,  ^  57,  p.  139. 
as  to  title,  §  59,  p.  142. 
extent  of,  as  to  secured  creditor,  §  53,  p.  136. 

as  to  taxes,  §  54,  p.  137. 
to  whom  restored  on  dismissal  of  bill,  §  52,  p.  136. 
of  corporation,  peculiarities  of,  §  242,  p.  416. 
general  nature  of,  as  to  third  parties,  §  404,  p.  630, 

RECEIVER'S  POWERS, 

generally,  §  3,  p.  3;  §  24,  p.  81. 

under  English  Judicature  Act  1873,  §  3,  p.  3. 

under  "  Companies'  Act,"  §  3,  p.  3. 

statutory,  mainly,  §  6,  a,  p.  20. 

source  of,  §  24,  p.  81. 

statutory  enactments,  §  24,  p.  81 ;  §  25,  c,  p.  84. 

English  practice,  §  25,  a,  p.  82. 

American  practice,  §  25,  a,  p.  82. 

practice  of  court  of  equity,  §  24,  p.  81. 

practice  of  particular  court,  §  25,  b,  p.  83. 

embraced  in  order,  §  25,  a,  p.  82. 

limitation  of,  §  25,  d,  p.  84. 

■when  terminated,  25,  e,  p.  84. 

under  irregular  appointment,  g  25,  f,  p.  85. 
retrospective  action  of  court,  effect  of,  §  25,  f ,  p.  85. 
when  authorized,  §  26,  b,  p.  85. 
to  borrow  money,  §  26,  a,  p.  85;  §  26,  b,  p.  85. 
to  loan  money,  authority  of  court  required,  §  27,  a,  p.  87. 

to  whom  to  be  loaned,  §  27,  b,  p.  87. 

when  liable  for  interest,  §  27,  d,  p.  87. 
to  compromise  debts,  may  be  general,  §  28,  b,  p.  88. 

authority  of  court  required,  §  28,  a,  p.  88. 

doubtful  claims,  §  407,  p.  623. 

no  power  to  commute,  §  28,  d,  p.  88. 

statutory  liability,  §  28,  c,  p.  88. 
to  employ  counsel,  when  order  not  required,  §  29,  a,  p.  89. 

must  be  general  or  special,  §  29,  a,  p.  89. 

compensation  of,  §  29,  a,  p.  89. 

who  employed,  ^  29,  b,  p.  90. 

complainant's  solicitor  not  eligible,  §  29,  b,  p.  90. 
to  sue,  generally,  |^  30,  p.  91. 

under  direction  of  court,  §  30,  a,  p.  93. 

limitation  of,  ^  30,  b,  p.  92;  §  394,  p.  611. 

leave  of  court  required,  ^  30,  c,  p.  92. 

authority  must  be  alleged,  §  30,  d,  p.  92. 


782  INDEX. 

[Rcforencea  are  to  suctions  and  pages  in  body.] 
RECEIVER'S  POWERS,  continued. 

to  sue.  extent  of  power,  ^  30,  e,  p.  92. 

for  property  converted,  §  42,  p.  119. 

to  set  aside  irregular  attachment,  §  42,  p.  119. 

to  sue  in  foreign  jurisdiction,  t^  G3,  p.  145. 

on  contract  of  insurance,  Appx.  p.  698. 
to  make  repairs,  under  direction  of  court,  §  31,  a,  p.  93. 

authority  of  court,  §  31,  b,  p.  93. 

applied  to  railways,  §  31,  b,  p.  93. 
to  purchase  supplies,  labor,  etc.,  sanction  of  court  when,  §  32,  p.  94. 

extent  of,  §  32,  p.  94. 

binds  trust  property,  §  32,  p.  94. 

application  to  railways,  §  32,  p.  94. 
to  continue  business,  must  be  clearly  shown,  §  33,  p.  96. 

limitation  of,  §  33,  p.  96. 

as  applied  to  partnership,  ^  33,  p.  96. 

applied  to  railway  receiverships,  §  33,  p.  96. 

as  to  new  business,  §  33,  p.  96. 
to  sell,  extent  of,  §  34,  a,  p.  98. 

order  of  court  required,  §  34,  a,  p.  98. 

when  ordered,  §  34,  a,  p.  98. 

requisites  of  order,  §  34,  a,  p.  98. 

what  required  of  purchaser,  §  34,  b,  p.  99. 

protection  of  receiver  in,  ^  34,  b,  p.  99. 

application  of  rule  of  caveat  emptor,  §  34,  b,  p.  99. 

confirmation  of  court  required,  §  34,  b,  p.  99. 

evidence  of  sale,  deed,  §  34,  b,  p.  99. 

notice  to  purchaser,  §  34,  c,  p.  101. 

attack  of  sale,  how  made,  §  34,  c,  p.  101. 

only  on  day  named,  Appx.  p.  698. 
to  perform  contracts,  not  granted  generally,  §  35,  a,  p.  103. 

when  court  will  require,  §  35,  a,  p.  102. 

receiver  may  avoid  when,  §  35,  a.  p.  102. 
to  lease,  authority  of  court  required,  §  36,  a,  p.  104. 

limitation  as  to  time,  §  36,  a,  p.  104. 

must  be  in  reasonable  time,  §  36,  b,  p.  105. 
In  foreign  jurisdiction,  as  to  property,  limitation  of,  generally,  §  37,  p.  108. 

English  rule,  §  37,  a,  p.  108. 

American  rule,  §  37,  b,  p.  109. 
to  impeach  fraudulent  transactions,  limitation  of,  §  38,  p.  111. 

as  representative  of  creditors,  §  38,  p.  111. 

as  representing  corporation,  §  38,  p.  111. 
to  collect  stock  subscriptions,  prerequisites  of,  §  39,  p.  115. 

fraudulent  cancelations,  §  39,  p.  115. 

application  of  rule  to  banks,  §  39,  p.  115. 
to  enforce  assessments,  §  408,  p.  623. 
to  enforce  liability  of  stockholder,  Appx.  p.  697. 
to  issue  certificates,  incident  to  borrow  money,  §  40,  p.  117. 


INDEX.  783 

[References  arc  to  sections  and  pages  in  body.] 
RECEIVER'S  POWERS,  continued. 

to  issue  certificates,  authority  of  court  required,  when,  g  40,  p.  117. 
to  appeal,  limitation  of,  §  41,  p.  117. 

where  personally  interested,  §  41,  p.  117. 
to  use  seal  of  corporation,  §  42,  p.  119. 
to  take  notes  instead  of  money,  §  42,  p.  119. 
to  surrender  collaterals,  §  43,  p.  119. 
to  satisfy  mortgages,  §  42,  p.  119. 
to  subject  property  to  lien  for  storage,  ^  42,  p.  119. 
to  receive  money  before  due,  §  42,  p.  119. 
to  execute  summary  order  of  ejectment,  §  42,  p.  119. 
to  compel  disclosure  of  knowledge,  §  42,  p.  119. 
not  to  be  delegated,  §  42,  p.  119. 
tender  to,  not  good,  §  42,  p.  119. 

may  not  be  mortgagee  of  receivership  property,  ^  42,  p.  119. 
as  to  rents  accrued,  §  42;  p.  119. 
as  to  discrimination  in  freight,  §  42,  p.  119. 
limited  by  charter  of  corporation,  §  42,  p.  119. 
derived  from  act  of  court  and  not  parties,  §  58,  note,  p.  141. 
as  to  acts  'ultra  vires,  §  70,  b,  p.  156. 
in  supplementary  proceedings,  §  70,  c,  p.  156. 
under  creditor's  bills,  §  70,  c,  p.  156. 
to  interfere  in  suit  pending,  §  70,  c,  p.  156. 
in  supplementary  proceedings,  §  154,  p.  256. 

in  foreign  jurisdiction,  §  158,  p.  263. 
in  case  of  partnership,  §  209,  p.  336. 

to  pay  preferred  claims  of  railways,  grounds  of  allowance,  §  376,  p.  476. 
in  payment  of  preferred  claims  for  railways,  §  280,  b,  p.  494. 
for  railway  companies,  generally,  §  274,  p.  471;  §  283,  p.  501. 

to  restrain  illegal  acts,  §  283,  e,  p.  503. 

to  disaffirm  illegal  acts  of  officers,  §  283,  e,  p.  503. 

limitations  of,  §  284,  p.  507. 
when  acting  as  manager,  §  403,  p.  619. 
to  petition  for  statement  of  authority,  §  400,  p.  618. 

RECEIVERS  OF  RAILWAYS, 

attitude  of  courts  toward,  §  270,  p.  452. 
appointment  of,  generally,  §  272,  p.  456. 

notice  of  application  for,  i^  271,  p.  454. 

where  directors  unlawfully  lease  the  road  and  property,  p  272,  p.  456. 

where  directors  delegate  management  to  another  corporation,  §  272,  a. 
p.  456. 

where  default  in  mortgage  indebtedness,  §  272,  b,  p.  457. 

where  corporation  is  insolvent,  §  272,  b,  p.  457. 

where  default  in  payment  of  taxes,  §  272,  b,  p.  461. 

where  security  inadequate,  §  272,  b,  p.  401. 

where  default  in  interest,  §  272,  b,  p.  4G1. 

where  revenues  are  misapplied,  i^  272,  c,  p.  403. 

where  revenues  and  income  are  being  diverted,  g  273,  c,  p.  463. 


784  INDEX. 

[References  are  to  sections  and  pages  in  body.] 
RECEIVERS  OF  RAILWAYS,  continued. 

appointment  of,  ■where  income  of  profits  are  pledged  and  default  in  in- 
terest, §  273,  d,  p.  464. 
where  mismanaeement  by  officers  and  directors,  ^  273,  e,  p.  465. 
•where  corporate  funds  are  being  embezzled,  §^  272,  e,  p.  465. 
where  property  is  being  wasted,  ^  372,  e,  p.  465. 
where  none  competent  to  have  custody,  ^  273,  f,  p.  465. 
where  a  failure  to  elect  oflicers,  ^  373,  f,  p.  465. 
where  statutory  cause  for  appointment,  §  272,  g,  p.  465. 
where  statutory  cause  for  revoking  the  charter,  ^  373,  g,  p.  465. 
when  not  appointed,  generally,  §  273,  p.  465. 

where  no  notice  of  application  given,  §  273,  a,  p.  466. 

where  no  fraud  or  breach  of  trust  is  alleged,  §  273,  b,  p.  467. 

where  breach  of  condition  in  mortgage  not  clearly  shown,  §  373,  c, 

p.  467. 
where  right  to  foreclose  doubtful,  §  373,  c,  p.  468. 
where  application  by  minority  stockholders,  §  273,  d,  p.  468. 
where  default  in  interest  alone  insufficient,  §  373,  e,  p.  468. 
where  danger  of  loss  is  not  shown,  §  273,  e,  p.  468. 
where  plaintiff  has  adequate  remedy  at  law,  §  273,  f,  p.  469. 
where  by  statute  officers  are  made  trustees,  §  373,  g,  p.  469. 
where  mere  disagreement  as  to  management,  ^  373,  i,  p.  471. 
where  the  rights  of  third  persons  are  affected,  §  373,  h,  p.  471. 
powers  of,  generally,  §  274,  p.  471. 

derived  from  order  of  appointment,  §  274,  p.  471. 
to  pay  unsecured  claims,  §  375,  p.  472. 

on  what  based,  §  375,  a,  p.  473. 

limitations  of,  §  375,  b,  p.  473. 
to  pay  preferred  claims,  grounds  of  allowance,  §  276,  p.  476. 

based  on  necessity  to  preserve  property,  §  376,  a,  p.  476. 

based  on  application  of  mortgagor  for  foreclosure,  §  376,  b,  p.  476. 

based  on  diversion  of  income,  ^  376,  c,  p.  477. 

based  on  statute,  §  276,  d,  p.  479. 

based  on  application  of  income  to  interest  or  improve- 
ments, §  276,  e,  p.  481. 

based  on  practice  of  courts  of  equity,  §  278,  p.  485. 

based  on  equitable  powers  of  court,  §  278,  b,  p.  485. 

confined  to  operating  expenses,  §  276,  e,  p.  481. 

rule  in  Federal  courts,  generally,  §  279,  p.  486. 

application  to  rolling  stock,  §  380,  p.  491. 

applied  to  car  trusts,  §  280,  p.  491. 

car  trusts,  return  of  property,  §  380,  d,  p.  494. 

discretion  of  receiver  in,  §  280,  b,  p.  494. 
payment  of  claims  not  preferred,  advances  to  complete  road,  §  281,  a, 
p.  498. 

damages  by  fire,  §  281,  b,  p.  498. 

attorneys'  fees,  when,  §  281,  c,  p.  498. 

goods  sold  after  mortgage  given,  §  381,  d,  e,  p.  498. 


INDEX.  785 

[References  are,  to  sections  and  pag'cs  iu  body.] 
RECEIVERS  OF  RAILWAYS,  continued, 
powers  of,  their  extent,  §  282,  p.  500. 

to  preserve  property,  §  283,  a,  p.  501. 

to  operate  road,  §  283,  a,  p.  501. 

to  collect  debts,  283,  b,  p.  502. 

to  reduce  property  to  possession,  §  283,  c,  p.  503. 

to  disaffirm  unlawful  acts  of  officers,  §  283,  d,  p.  503. 

to  restrain  illegal  acts,  §  283,  e,  p.  503. 

to  defend  suits  and  proceedings,  §  283,  f,  p.  504. 

to  make  traffic  arrangements,  §  283,  g,  p.  504. 

as  to  unfinished  contracts,  §  283,  h,  p.  505. 

as  to  adoption  of  unexpired  leases,  §  283,  i,  p.  506. 

limitations  of,  §  284,  p.  507. 
power  implied,  from  general  order,  §  277,  a,  p.  482. 

to  pay  for  labor  and  supplies,  §  277,  a,  p.  482. 

ordinary  operating  expenses,  §  277,  a,  p.  483. 

limited  to  public  corporations,  §  277,  b,  p.  484. 
liability  of,  generally,  §  285,  p.  508. 

as  common  carriers,  §  285,  a,  p.  509. 
exception  to  rule,  §  285,  a,  p.  510. 

supersedes  that  of  corporation,  t^  285,  b,  p.  515. 

when  personal,  §  285,  c,  p.  516. 

when  official,  §  285,  d,  p.  516. 

on  executory  contract  of  railway,  §  285,  e,  p.  516. 

effect  of  discharge,  on,  5^  286,  p.  517. 
certificates  of,  issued  by  order  of  court,  §  287,  a,  p.  523. 

non-negotiable,  §  287,  b,  p.  523. 

holder  takes  with  notice,  §  287,  c,  p.  522. 

when  not  preferential,  §  287,  d,  p.  523. 

must  be  for  purpose  authorized,  §  287,  e,  p.  524. 

issued  with  caution,  §  287,  f,  p.  524. 

payment  protested  by  court,  §  287,  g,  p.  525. 

validity,  when  questioned,  §  287,  h,  p.  525. 
effect  of  discharge,  on  his  liability,  t^  286,  p.  517. 
RECEIVER'S  REMOVAL  AND  DISCHARGE, 
generally,  §  330,  p.  557. 
by  whom  to  be  made,  §  330,  c,  p.  560. 
not  subject  to  appeal,  §  330,  e,  p.  564. 
rests  in  sound  discretion  of  court,  ^  330,  f ,  p.  564. 
See  also  Discharge  and  Removal. 

RECEIVER'S  REPORT, 
generally,  §  355,  p.  593. 

must  be  to  court  appointing  him,  §  356,  a,  p.  594. 
to  be  referred  to  a  master,  ^  356,  b,  p.  594. 
objections  to  master's  findings  on,  §  356,  c,  p.  594. 
no  appeal  from  order  approving,  §  356,  e,  p.  595 
approval  of,  g  356,  f,  p.  594. 

See  also  Account. 
50 


786  INDEX. 

[References  arc  to  sections  and  pajrcs  in  body.] 
RECEIVER'S  SALE, 

purchaser's  liability,  Appx.  p.  698. 
purchaser  may  withdraw  bid,  when,  Appx.  p.  698. 
See  also  Sale. 

RECEIVER'S  SUITS  (Against  Receiver). 
judicial  discretion  in,  ^  398,  p.  617. 
leave  of  court,  required  generally,  §  92,  p.  182;  §  395,  p.  612. 

as  to  levies,  §  93,  p.  183. 

what  determined  by,  §  93,  p.  183. 

when  property  wrongfully  obtained,  §  93,  p.  183. 

when  denied,  §  93,  p.  183. 

when  revoked,  §  93,  p.  183. 

to  establish  liens,  §  93,  p.  183. 

when  waived  by  statute,  §  93,  p.  183. 

necessary  allegations,  ^  93,  p.  183. 
how  obtained,  §  93,  p.  183. 

under  act  of  Congress  March  3,  1887,  §  94,  a,  p.  186. 

when  receiver  is  manager,  §  94,  b,  p.  187. 

not  required  when  receiver  common  carrier,  §  94,  b,  p.  187. 

under  garnishment  process,  §  94,  c,  p.  188. 

not  required  in  action  for  damages,  §  94,  d,  p.  188. 

where  judgment  prior  to  receivership,  §  94,  e,  p.  188. 

in  re  execution  sales,  §  94,  e,  p.  188. 

where  property  wrongfully  held,  §  94,  f,  p.  189. 

in  action  of  trover,  §  94,  f,  p.  189. 

when  waived,  §  94,  g,  p.  189. 

effect  of  judgment,  §  94,  g,  p.  189, 
when  in  separate  action,  §  95,  p.  190. 
when  in  original  action,  §  95,  p.  190. 
in  what  court  brought,  §  95,  p.  190. 

where  facts  disputed,  §  95,  p.  190. 
in  chancery,  constitutional  limitation,  §  95,  p.  190. 

extent  of  power,  §  95,  p.  190. 
may  not  be  brought,  for  trespass  of  principal,  i^  96,  p.  192. 

for  negligence  of  employees  in  statutory  proceedings,  §  96,  p.  192. 

for  tort  of  predecessor,  g  96,  p.  192. 
mandamus  not  sustainable,  when,  ^  96,  p.  192. 
may  be  sued  for  negligence  of  employees,  when,  §  96,  p.  192. 
restraint  of,  where  personally  liable,  §  97,  p.  193. 

where  officially  liable,  §  97,  p.  193. 

where  application  to  be  made,  §  97,  p.  193. 

regarding  other  than  receivership  property,  §  97,  p.  193. 
may  be  restrained,  when,  §  97,  p.  193. 
when  may  be  enjoined,  §  101,  p.  197. 
what  court  may  enjoin,  §  101,  p   197. 
defenses,  extent  of,  §  98,  p.  194. 

in  statutory  proceedings,  §  98,  p.  194. 

statute  of  limitations,  §  98,  p.  194. 


INDEX.  787 

[References  are  to  sections  and  pa^es  in  boiiy.] 
RECEIVER'S  SUITS  (Against  Receiver),  conlinued. 
character  of  judgment,  generally,  §  99,  p.  195. 
when  conclusive,  §  99,  p.  195. 
when  a  nullity,  §  99,  p.  195. 
form  of  judgnient,  §  397,  p.  617. 

when  receiver  a  necessary  party  to,  generally,  §  100,  p.  190. 
when  receiver  not  a  necessary  party  to,  §  100,  p.  196, 
effect  of  discharge  as  to,  §  103,  p.  197. 
effect  of,  under  void  appointment,  §  396,  p.  615. 
See  also  Suits  against  Receivek. 

RECEIVER'S  SUITS  (by  Receiver). 
limitation  of  power,  §  394,  p.  611. 
must  be  authorized  by  court,  generally  or  specially,  §  69,  p.  153. 

exception  under  act  of  Congress,  ^  69,  p.  154. 
authority  may  be  conferred  by  decree,  §  69,  a,  p.  155. 
authority  in  partnership  receiverships,  ^  69,  b,  p.  155. 
no  authority  required  where  suit  in  court  of  appointment,  §  69,  c,  p.  155. 

in  case  of  waste,  §  69,  d,  p.  155. 

if  power  given  by  statute,  §  69,  e,  p.  155. 
leave  given  in  discretion  of  court,  g  69,  f,  p.  155. 
leave  not  given  if  right  to  not  recover  is  clear,  §  69,  f,  p.  155. 
limited  to  person  or  corporation  over  whose  property  ap- 
pointed, §  70,  p.  156. 
power,  when  represents  creditors,  §  70,  a,  p.  156. 

extended  by  statute,  §  70,  a,  p.  156. 

with  reference  to  acts  ultra  vires,  §  70,  b,  p.  156. 
in  supplementary  proceedings,  §  70,  b,  p.  156. 
on  creditor's  bills,  §  70,  c,  p.  156. 
leave  to  continue  pending  action,  §  71,  p.  158. 
leave  must  be  alleged,  §  71,  p.  158. 

authority  to  sue  must  be  shown,  §  71,  p.  158;  Appx.  p.  698. 
allegations  necessary,  §  71,  a,  p.  158;  §  393,  p.  611. 
form  of  allegations,  §  393,  p.  611. 

must  show  time  and  mode  of  appointment,  §  71,  b,  p.  159. 
giving  of  bond  must  be  shown,  i^  71,  c,  p.  159. 
in  what  name  to  sue,  §  391,  p.  611. 
when  in  his  own  name,  §  73,  p.  160. 

where  order  so  directs,  §  73,  a,  p.  161. 

where  statute  authorizes,  §  73,  b,  p.  161. 
when  not  in  his  own  name,  §  73,  c,  p.  161. 
in  insolvency  proceedings,  §  73,  p.  163. 
in  foreign  jurisdiction,  generally,  §  73,  a,  p.  163. 

English  rule,  §  73,  b,  p.  163. 

later  English  rule,  §  73,  c,  p.  164. 

early  American  rule,  §  73,  d,  p.  165. 

later  American  rule,  t^  73,  e,  p.  165. 

present  American  rule,  §  73,  e,  p.  165. 

where  citizens  of  it  is  interested,  §  73,  (8),  p.  167. 


788  INDEX. 

[References  are  to  sections  and  pages  in  body.] 
RECEIVER'S  SUIT  (by  Reckiver),  continued. 

in  foreign  jurisdiction,  based  on  comity,  §  73,  (2),  p.  1G7. 

as  to  realty,  §  74,  p.  170. 
in  state  where  appointed,  §  73,  (1),  p.  167. 
in  matters  of  fraud,  generally.  §  75,  p.  171. 
to  recover  property  in  actions  for  limited  divorces,  §  75,  p.  171. 
in  actions  for  alimony,  §  75,  p.  171. 
in  conversions  of  proj)erly  by  debtor,  §  75,  (1),  p.  171, 
in  conversion  by  strangers,  §  75,  (1),  p.  171. 
on  bill  for  discovery  (N.  J.),  §  75,  (2),  p.  171. 
to  remove  fraudulent  liens,  §  75,  (3),  p.  171. 
as  to  assets  under  invalid  mortgage,  §  75,  (4),  p.  171. 
to  reach  concealed  assets  or  misappropriated  property,  §  75,  (5),  p.  171. 
to  recover  trust  money,  §  75,  (6),  p.  171. 
to  recover  illegal  interest  paid  out,  §  75,  (7),  p.  171. 
to  avoid  conveyance,  g  75,  (8),  p.  171. 
to  recover  corporate  securities  transferred,  J;  75,  (9),  p.  171. 
to  determine  validity  of  mortgage,  ^  75,  (10),  p.  171. 
to  cancel  judgment,  §  75,  (11),  p.  171. 
to  cancel  invalid  mortgage,  §  75,  (12),  p.  171. 
to  recover  abstracted  property,  5^  75,  (13),  p.  171.        ' 
to  recover  illegal  dividends,  t^  77,  p.  173. 
against  officers  and  directors,  generally,  §  76,  p.  172. 

for  misconduct,  §  76,  p.  172. 

in  case  of  acts  ultra  vires,  §  76,  p.  173. 

in  case  of  excess  of  indebtedness,  §  76,  p.  172. 

in  case  of  void  transfers,  §  76,  p.  172. 

of  insolvent  corporation,  t^  76,  p.  172. 

to  avoid  illegal  chattel  mortgage,  ^5  76,  p.  172. 

to  compel  surrender  of  assets,  g  76,  p.  172. 

defense  to,  §  76,  p.  172;  §  77,  p.  173. 
against  stockholders,  when  brought,  §  77,  p.  173. 

how  brought,  §  77,  p.  173. 

on  statutory  liability,  §  78,  p.  177. 

to  what  extent  enforced,  §  77,  p.  173. 

limitation  on  receiver's  power,  §  77,  p.  173. 

defenses  to,  §  77,  p.  173. 

for  unpaid  subscriptions,  generally,  §  77,  p,  173. 

all  equities  settled,  §  77,  p.  173. 
to  invalidate  liens,  generally,  §  79,  p.  178. 
to  determine  validity  of  levy,  how  begun,  §  79,  p.  178. 
as  to  legal  title  of  property  when  held  adversely,  §  79,  p.  178. 
for  an  accounting  in  favor  of  mortgagor,  g  79,  p.  178. 
against  persons  not  parties,  how  begun,  §  79,  p.  178. 
when  replevin  maintainable,  §  80,  p.  179. 
when  distraint  maintainable,  g  80,  p.  179. 
against  assignee,  when  maintained,  §  80,  p.  179. 
on  debtor's  bond,  when  maintainable,  §  80,  p.  179. 


INDEX.  T89 

[References  are  to  sections  and  pag'es  ia  body.] 
RECEIVER'S  SUIT  (by  Receiveh).  coutinued. 
defenses  to,  generally,  §  81,  p.  130. 
set-off,  §  81,  p.  180. 

invalidity  of  appointment,  ^81,  p.  180. 
See  also  Suit  by  Receiver. 

RECEIVER'S  TITLE. 

how  defined,  §  58,  p.  140. 

in  absence  of  formal  assignment,  g  59,  p.  143. 

effect  of  receiver's  possession  as  to,  ^  59,  p.  142. 

when  not  absolute,  §  59,  p.  142. 

with  reference  to  corporate  functions,  §  59,  p.  143. 

effect  of  possession  as  to,  §  59,  p.  142. 

special  as  to  res,  §  59,  p.  142. 

merely  possessory  in  character,  §  59,  p.  142. 

distinguished  from  legal  title,  §  59,  p.  143. 

as  affected  by  character  of  property,  §  59,  p.  142. 

as  to  subsequently  acquired  properly,  §  60,  p.  143. 

in  supplementary  proceedings,  fc^  60,  p.  143. 

under  conditional  contracts,  §  60,  p.  143. 

with  reference  to  accrued  indebtedness,  §  60,  p.  143. 

as  to  future  indebtedness,  §  60,  p.  143. 

in  statutory  proceedings,  generally,  §  61,  p.  144. 

as  to  real  and  personal  property,  §  61,  p.  144. 
in  actions  pendente  lite,  §  63,  p.  145. 
as  to  choses  in  action,  generally,  §  64,  p.  146. 

when  accrues,  §  64,  p.  146. 

from  nonresidents,  §  63,  p.  145. 

to  set  aside  assignment  of,  §  64,  p.  146. 
to  real  estate,  generally,  §  66,  p.  148. 

in  foreign  jurisdictions,  §  64,  p.  146. 
Massachusetts  rule,  §  64,  p.  146. 
New  York  rule,  §  65,  p.  147. 
English  rule,  §  65,  p.  147. 
extent  of,  as  to  the  debtor,  §  67,  p.  149. 

as  to  creditors,  §  67,  p.  149. 

as  to  frauds  on  creditors,  §  67,  p.  149. 

as  to  individual  or  corporation,  §  67,  p.  149. 

as  affected  by  statute,  ^  67,  p.  149. 
subject  to  existing  liens,  ^  68,  p.  150. 
in  supplementary  proceedings,  §  153,  p.  255. 

when  appointed  to  obtain  satisfaction  of  a  suit  at  law,  Appx.  p.  C99. 
See  also  Title. 

RECEIVER  OF  TRUST  PROPERTY, 

when  appointed,  generally,  §  305,  p.  539, 
in  lieu  of  trustees,  §  306,  a,  p.  540. 
over  testamentary  trustees,  g  308,  p.  544. 
for  infants'  estates,  §  309,  p.  545. 


T90  INDEX. 

[References  arc  to  sections  and  pa^cs  iu  body.] 
RECEIVER  OF  TRUST  PROPERTY,  continued, 
when  appointed,  for  lunatics'  estates,  §  310,  p.  547. 
in  re  assignments,  ^  307,  p.  543. 
when  not  appointed,  §  306,  b,  p.  543. 

RECEIVERSHIP, 

origin  of  the  law  of,  §  1,  p.  3, 

RECEIVERSHIP  FUND, 

claims  against,  generally,  §  340,  p.  5G8. 

receiver  must  be  disinterested  in,  t^  340,  a,  p.  5G8. 
must  be  paid  in  the  order  of  distribution,  tj  340,  b,  p.  569. 
must  be  proved  within  time  allowed  by  court,  §  340,  c.  p.  569. 
how  determined,  §  340,  d,  p.  570. 
what  allowed  as  such,  §  341,  p.  572. 

preferred  claims  against,  ground  of  allowance,  §  342,  p.  574. 
v.'hen  supplies  a  preferred  claim,  §  343,  p.  57G. 
nature  of  those  preferred,  §  343,  p.  576. 

when  not  preferred,  lliough  of  a  nature  to  be  preferred,  §  343,  p.  579. 
distribution  of,  generally,  §  358,  p.  595. 

RECOVERY, 

extent  of,  in  suit  by  receiver  of  corporation,  §  236,  a,  p.  402. 
See  Damages  and  Judgment. 

REDEMPTION, 

power  of  receiver  to  make,  §  233,  f,  p.  387. 

has  same  power  as  corporation,  §  70,  note,  p.  156. 

REFEREE, 

in  appointment  of  receiver,  g  385,  p.  608. 

REFERENCE, 

when  required  in  appointment  of  receiver,  g  385,  p.  608. 

REFUSAL, 

to  discharge  receiver,  grounds  for,  §  330,  g,  p.  506. 
of  receiver  to  act,  practice,  §  406,  p.  622. 

REMEDY, 

receivership  is  an  ancillary  and  provisional,  g  2,  p.  3. 
at  law  a  bar  to  appointmeqt,  §  5,  b,  note,  p.  12. 

REMOVAL, 

of  receiver,  generally,  g  330,  p.  557. 

notice  of  application,  §  330,  a,  p.  557. 

application  for,  g  330,  b,  p.  558. 

in  sound  discretion  of  court,  g  330,  f,  p.  559. 

by  whom  to  be  made,  g  330,  c,  p.  560. 

grounds  for,  g  330.  d,  p.  562. 

not  subject  to  appeal,  g  330,  e,  p.  564. 

effect  of,  g  330,  f,  p.  564. 

grounds  for  refusal  to  order,  g  330,  g,  p.  506. 


INDEX.  791 

[References  are  to  sections  and  pag-es  in  body.] 
RENTS, 

effect  of  receiver's  possession  as  to,  g  51,  p.  136. 

liability  of  receiver  for,  generally,  §  121,  p.  220;  §  36.  p.  104;  §  109,  a, 
p.  203;  Appx.  p.  693. 

when  possession  of  premises  continued,  Appx.  p.  093. 
of  corporation,  §  234,  b,  p.  393. 
as  against  mortgagees,  §  121,  p.  220. 
when  to  be  paid  to  plaintiff,  J^  12,  d,  note,  p.  35. 
when  prior  to  mortgage,  §  32,  note,  p.  94. 
form  of  order  to  pay,  No.  38,  p.  670. 

when  a  preferred  claim  against  receivership  fund,  §  312,  p.  574. 
when  not  a  preferred  claim  against  receivership  fund,  §  343,  p.  579. 
duration  of,  determined  by  statute,  giving  time  for  winding  up  concern, 

Appx.  p.  693. 
due  to  car  trusts,  how  determined,  §  280,  c,  p.  495. 

RENTS  AND  PROFITS, 

to  be  included  in  order  for  distribution  when,  §  358,  d,  p.  599. 
appointment  of  receiver  for,  in  foreclosure  cases,  §  315,  p.  548. 
See  also  Profits  and  Rents. 

REPAIRS, 

power  of  receiver  to  make,  ^  31,  p.  98. 
to  be  authorized  by  court,  §  31,  note,  p.  93. 
liability  of  receiver  for,  generally,  §  114,  p.  211. 
for  rented  property,  §  114,  p.  211. 

REPEAL  OF  CHARTER, 

grounds  for  appointment  of  receiver  of  corporation,  g  225,  f,  p.  3G1. 
See  also  Charter  and  Appointment. 

REPLEVIN. 

possession  interfered  with  by,  §  44,  p.  123. 
when  receiver  may  maintain,  §  80,  p.  179. 
See  also  Receiver's  Suits. 

REPORT,  ^ 

of  receiver,  duty  to  malte,  generally,  §  355,  p.  593. 

must  be  to  court  appointing  him,  §  356,  a,  p.  594. 
to  be  passed  upon  by  a  master,  §  356,  b,  p.  594. 
no  appeal  from  order  approving,  §  350,  e,  p.  595. 
approval  of,  §  356,  f,  p.  595. 
objections  to  master's  findings  on,  §  394,  c,  p.  594. 

See  also  Forms,  Practice,  and  Receiver's  Report. 

RIVAL  RECEIVERS, 

possession  affected  by,  §  43,  p.  121. 

ROLLING  STOCK, 

when  purchased,  §  26,  a,  p.  85. 

payment  for,  preferred  when,  j^  280,  p.  491. 

when  vendor  entitled  to  return,  §  280,  d,  p.  494. 


792  INDEX. 

[Kcfcrences  are  to  sections  and  pages  in  Ijody.] 
ROLLING  STOCK,  continued. 

couslrucliou  of  contracts  relating  to,  §  281,  f,  p.  499. 
conditional  sale  of,  fraudulent  when,  §  281,  f,  p.  493, 
wlien  sale  of,  construed  as  a  lease,,^  281,  f,  p.  499.* 
leases  of.     See  Cau  Tuusts  and  Rolling  Stock. 

ROYALTY, 

when  a  preferred  claim  against  receivership  fund,  §  343.  p.  573. 

RULES, 

governing  appointment  of  receiver,  generally,  §  5,  p.  10. 
See  Appointment  and  Fuactice. 


s. 

SALARY, 

-when  receiver  may  receive,  §  350,  c,  p.  587. 
See  also  Compensation. 

SALE  OF  PROPERTY, 

after  appointment  is  void,  §  17,  c,  note,  p.  47. 

court  may  limit  price,  g  34,  a,  p.  98. 

leave  of  receiver  to  make,  §  409,  p.  625. 

powers  of  receiver  to  make,  §  34,  p.  98;  §  233,  1,  p.  389, 

can  only  be  on  day  named,  Appx.  p.  698. 
power  of  receiver  of  National  Bank  to  make,  §  254,  p.  42G. 
notice  of,  §  34,  b,  note,  p.  99. 
correction  as  to  amount,  §  34,  c,  p.  101. 
at  inadequate  price  set  aside,  t^  34,  c,  note,  p.  101, 
when  set  aside  by  court,  §  34,  c,  note,  p.  101. 
of  rolling  stock  when  fraudulent,  §  281,  f,  p.  499. 
purchaser's  liability,  App.x.  p.  698. 
purchaser  may  withdraw  bid,  when,  Appx.  p.  693. 
deed  by  receiver,  §  418,  p.  632. 

SATISFACTION. 

See  Accord  and  Satisfaction. 
SAVINGS  BANKS, 

rights  of  set-off,  §  81,  note,  p.  180. 

See  also  National  Banks. 
SECURED  CREDITOR, 

claim  paid  from  receivership  fund,  §  341,  d,  p.  574. 

See  also  Claims  and  Preferred  Claims, 
SECURITY, 

inadequacy  of,  as  ground  of  foreclosure,  generally,  §  174,  p.  287;  §  175, 

p.  294. 
receiver  may  recover  for  corporation,  §  75,  (9),  p.  171. 

SEQUESTRATION  OF  PROPERTY, 
form  of  affidavit  for.  No.  7,  p.  643. 
See  also  Possession. 


INDEX.  7i)3 

[References  are  to  sections  and  pag:es  in  body.] 
SET-OFF, 

right  of,  in  receivership  cases,  §  399,  p.  618;  §  81,  p.  ISO. 
general  rule,  §  81,  note,  p.  180. 
prerequisites  to,  §  81,  p.  180. 
accounts  must  be  mutual,  §  55,  note,  p.  138. 
when  not  permissible  against  receiver,  g  81,  p.  180. 
effect  of  receiver's  possession  as  to,  §  56,  p.  139. 

right  of  stockholder  of  National  Bank  to  action  by  receiver,    §  258,  a, 
p.  438. 

SHOW  CAUSE  ORDER, 
form  of,  No.  21,  p.  657. 

See  also  Oiiders  and  Forms. 

SPECIFIC  PERFORMANCE  OF  CONTRACT, 

appointment  of  receiver  in  suit  for,  §  4,  c,  p.  8;  §  318,  p.  551. 
not  enforced  against  receiver,  §  35,  a,  p.  102. 

STATE  STATUTES, 

as  to  appointment  of  receivers,  referred  to,  §  4,  p.  6. 
See  also  Appointment. 

STATUTES  OF  STATES, 

as  to  appointment  of  receiver  referred  to,  §  4,  p.  6. 
See  also  Appointment  op  Receiver. 

STATUTE  13  ELIZABETH,  CHAP.  5. 
in  what  states  adopted,  §  148,  a,  p.  243. 

STATUTORY  COMPENSATION, 

of  receivers,  ^  350,  i,  p.  591. 

See  also  Compensation. 

STATUTORY  GROUND, 

for  receiver,  generally,  §  228,  p.  367. 

See  also  Appointment  op  Receiver,  ground  for. 

STATUTORY  LIABILITY, 

how  enforced.  §  78,  p.  177. 

See  also  Liability  and  Receiver's  Liabilitt. 

STATUTORY  LIEN, 

paid  from  receivership  fund,  §  341,  b,  p.  574. 
for  wages  has  a  priority  over  the  mortgage,  §  344,  p.  581. 
See  also  Liens  and  Preferred  Claims. 

STATUTORY  POWER, 

of  court  to  appoint  receivers  for  corporation,  §  221,  p.  345. 
See  also  Appointment  op  Receiver. 

STATUTORY  PROCEEDINGS. 

receiver's  title  in,  §  61,  p.  144. 

See  also  Creditor's  Suits,  Cross  Bills  and  Sdpplement- 
ARY  Proceedings. 


794  I^DEX. 

[References  are  to  sections  and  pages  in  body.] 

STATUTORY  RECEIVER, 
power  of,  §  G,  a,  p.  20. 

See  also  Recbiver's  Powers. 

STOCKHOLDERS, 

dissenting,  riffhts  of,  in  suit  by  receiver  to  collect  illegal  divi- 
dends, §  238,  p.  408. 
violation  of  rights  of  minority,  grounds  for  appointment  of  re- 
ceiver, §  125,  j,  p.  362. 
suits  against,  of  National  Banlis,  defenses  to,  §  258,  b,  p.  443. 
defenses  by,  §  77.  p.  173. 

for  unpaid  .subscriptions,  generally,  §  77,  p.  173. 
by  receiver,  how  brought,  §  77,  p.  173. 
joining  in  petition  to  sell  cannot  question  validity  of  appoint- 
ment, t^  22,  j,  p.  69. 
not  appointed  receiver,  §  21,  b,  note,  p.  60. 

of  loan  associations,  when  may  have  receiver  appointed,  §  322,  p.  553. 
may  apply  for  receiver  of  corporation,  §  224,  c,  p.  353. 
application  by,  for  receiver,  danger  of  loss  to  be  shown,  §  15,  b,  note,  p.  39. 

STOCKHOLDER'S  LIABILITY, 

for  illegal  distribution  of  stock,  §  77,  p.  178. 

enforced  by  receiver  of  corporation,  when,  Appx.  p.  697. 

when  creditor  may  enforce,  §  77,  p.  173. 

liability  of,  must  be  in  suit  at  law,  §  77,  note,  p.  173. 

to  what  extent  enforced,  §  77,  p.  173. 

in  what  court  enforced,  §  77,  p.  173. 

suits  in  Federal  courts,  §  77,  p.  173. 

suits  to  recover,  on  illegal  dividends,  §  77,  p.  173. 

by  receiver,  injunction,  §  77,  p.  173. 

by  receiver  of  National  Banks,  §  257,  p.  433. 
power  of  receiver  to  enforce,  §  254,  p  426. 
liability  determined  by  comptroller,  §  258,  a,  p.  427. 

STOCK  SUBSCRIPTIONS, 

how  collected,  §  39,  p.  115. 

how  enforced  in  several  states,  §  39,  note,  p.  115. 
enforcement  by  receiver,  ^  39,  note,  p.  115. 
defenses  to,  §  40,  note,  p.  117. 
suits  to  recover  in  New  York,  §  77,  note,  p.  173. 
suit  by  receiver  of  corporation  to  recover,  §  236,  p.  403. 
failure  to  collect,  grounds  for  appointment  of  receiver  for  cor- 
poration. §  225,  1,  p.  362. 

STRIKES, 

possession  of  receiver  affected  by,  §  43,  p.  121. 

will  interfere  with  receiver's  possession  when,  §  46,  p.  130. 

interference  with  travel  and  traffic,  §  46,  p.  130. 

■what  is  intimidation,  §  46,  p.  130. 

receiver  no  right  to  refuse  freight  to  prevent  strike,  §  46,  note,  p.  130. 


INDEX.  795 

[References  are  to  sections  and  pag-es  in  body.] 
SUBSCRIPTIONS  FOR  STOCK, 
how  collected,  §  39,  p.  115. 
enforced  by  receivers,  g  77,  p.  173. 

suits  by  receiver  of  corponition  to  recover,  §  23G,  p.  402. 
failure  to  collect,  ground  for  appointment  of  receiver  for  cor- 
porotion,  §  225,  i,  p.  3(51, 
See  also  Stock. 

SUFFICIENT  CAUSE, 

for  waiver  of  notice,  §  5,  d,  note,  p.  14. 
See  also  Notice. 

SUITS  AGAINST  RECEIVER, 

leave  of  court,  required,  generally,  §  92,  p.  182;  §  7,  b,  p.  23;  §  395,  p.  612. 

not  required,  when  receiver  is  common  carrier,  i^  91,  b,  p.  187. 

not  required  in  action  for  damages,  g  94,  d,  p.  188. 

under  void  appointment,  §  396,  p.  615. 

■when  waived,  §  94,  g,  p.  189. 
by  statute,  §  93,  p.  183. 

hovp  obtained,  §  93,  p.  183. 

necessary  allegations,  §  93,  p.  183. 

what  determined  by,  §  93,  p.  183. 

to  establish  liens,  §  93,  p.  183. 

as  to  levies,  §  93.  p.  183. 

when  denied,  §  93,  p.  183. 

judicial  discretion  in,  §  398,  p.  617. 

when  revoked,  §  93,  p.  183. 

under  act  of  Congress  March  3, 1887,  §  94,  a,  p.  18G. 

when  receiver  is  manager,  §  94,  b,  p.  187. 

under  garnishment  process,  §  94,  c,  p.  188. 

where  judgment  prior  to  receivership,  §  94,  e,  p.  188. 

in  execution  sales,  §  94,  e,  p.  188. 

when  properly  wrongfully  obtained,  §  93,  p.  183. 

where  property  wrongfully  held,  g  94,  f,  p.  189. 

in  action  of  trover,  §  94,  f,  p.  189. 

effect  of  judgment,  §  94,  g,  p.  189. 

not  obtained,  possession  affected  by,  g  40,  p.  121. 
when  in  separate  action,  §  95,  p.  190. 
when  in  original  action,  §  95,  p.  190. 
in  what  court  brought,  g  95,  p.  190. 

where  facts  disputed,  §  95,  p.  190. 
in  chancery,  constitutional  limitation,  g  95,  p.  190. 

extent  of  power,  g  95,  p.  190. 
may  be  sued  for  tort  of  predecessor,  g  96,  p.  192. 
may  be  sued  for  negligence  of  employees,  g  96,  p.  192. 
may  not  be  sued  for  negligence  of  employees  in  statutory  pro- 
ceeding, g  96,  p.  192. 
may  not  be  sued  for  trespass  of  principal,  g  96,  p.  192. 
mandamus  not  sustainable,  when,  g  96,  p.  192. 


796  INDEX. 

[References  arc  to  sections  and  pag'cs  in  liody.] 
SUITS  AGAINST  RECEIVER,  continued. 

may  be  restrained,  when,  §  97,  p.  193;  i^  100,  p.  19G. 
restraint  of,  where  personally  liable,  ^  97,  p.  193. 

where  oflicially  liable,  §  97,  p.  193. 

where  application  to  be  made,  §  87,  p.  193. 

regarding  other  than  receivership  properly,  §  97,  p.  193. 
what  court  may  enjoin,  §  101,  p.  197. 
defenses  to,  in  statutory  proceedings,  §  98,  p.  194. 

extent  of,  §  98,  p.  194. 

statute  of  limitations,  ^  98,  p.  194. 
character  of  judgment,  generally,  §99,  p.  195. 

when  conclusive,  §  99,  p.  195. 

when  a  nullity,  t^  99,  p.  195. 
form  of  judgment,  §  397,  p.  617. 

when  receiver  an  unnecessary  party,  generally,  §  100,  p.  19G. 
effect  of  discharge,  as  to,  §  102,  p.  197. 

SUIT  BY  RECEIVER, 

limitation  of  power,  §  394,  p.  611. 

power  of  receiver  to  bring  on  contract  of  insurance,  Appx.  p.  698. 

before  bond  receiver  cannot  .sue,  §  33,  p.  73. 

must  have  legal  title,  §  73,  note,  p.  160. 

no  power  to  set  aside  fraudulent  conveyance,  §  73,  note.  p.  IGO. 

power  on  contracts  made  by  receiver,  §  73,  note,  p.  160. 

where  parties  enjoined,  §  73,  note,  p.  160. 

power  of  court  to  authorize,  g  73,  note,  p.  160. 

must  be  authorized  by  court,  generally  or  specially,  5^  69,  p.  153. 

exception  under  Act  of  Congress,  §  69,  p.  152. 
the  order  must  be  followed,  §  34,  a,  note,  p.  98. 
authority,  may  be  conferred  by  decree,  §  69,  a,  p.  155. 

partnership  receiverships,  §  69,  b,  p.  155. 
no  authority  required,  if  power  given  by  statute,  §  69,  c,  p.  155. 

where  suit  in  court  of  appointment,  g  69,  d,  p.  155. 

in  case  of  waste,  §  69,  e,  p.  155. 
leave  given,  in  discretion  of  court,  §  69,  f,  p.  155. 

if  right  not  to  recover  is  clear,  §  69,  f,  p.  155. 
limited  to  person  or  corporation  over  whose  property  appointed,  §  70, 

p.  156. 
power  when  represents  creditors,  ^  70,  a,  p.  156. 
power  extended  by  statute,  §  70,  a,  p.  156. 
power  with  reference  to  acts  ultra  ures,  §  70,  b,  p.  156. 
in  supplementary  proceedings,  §  70,  b,  p.  156. 
in  creditors'  bills,  §  70,  c,  p.  156. 

to  set  aside  judgment  obtained  by  collusion,  g  70,  note,  p.  156. 
as  representative  of  creditors,  g  70,  note,  p.  156. 
leave  to  continue,  pending  action,  g  71,  p.  158. 
complaint  must  show  leave  of  court  to  bring,  Appx.  p.  698. 
leave  must  be  alleged,  g  71,  p.  158. 
authority  must  be  averred,  §  71,  p.  158. 


INDEX.  797 

[References  are  to  sections  and  pages  in  body.] 
SUIT  BY  RECEIVER,  continued. 

averment  of  appointment  not  sufficient,  §  71,  note,  p.  158. 

must  show  time  and  mode  of  appointment,  §  71,  b,  p.  159. 

giving  bond  must  be  sliown,  §  71,  c.  p.  159. 

allegations  necessary,  §  71,  p.  158;  §  392,  p.  611. 

form  of  allegations,  §  393,  p.  611. 

transcript  of  proceedings  ia  appointment  not  required,  g  71,  note,  p.  158. 

in  wliat  name  to  be  brought,  §  391,  p.  611. 

when  in  his  own  name,  §  72,  p.  160;  §  235,  a,  p.  399. 
where  order  so  directs,  §  72,  a,  p.  161. 
where  statute  authorizes,  §  72,  b,  p.  161. 

no  power  to  recover  property  which  has  not  been  reduced  to  pos- 
session, §  72,  note,  p.  161. 

when  not  in  his  own  name,  §  72,  c,  p.  161. 

in  name  of  third  person,  what  required,  g  72,  note,  p.  160. 
in  foreign  jurisdiction,  generally,  §  73,  a,  p.  163. 

English  rule,  §  73,  b,  p.  163. 

later  English  rule,  §  73,  c,  p.  164. 

early  American  rule,  §  73,  d,  p.  165. 

later  American  rule,  §  73,  e,  p.  165. 

present  American  rule,  §  73,  e,  p.  165. 

to  recover  property  wrongfully  withheld,  §  73,  f,  p.  167. 

rule  in  Federal  courts,  §  73,  f,  note,  p.  167. 

rule  in  Massachusetts,  §  73,  f,  note,  p.  167. 

rule  in  Indiana,  §  73,  f,  note,  p.  167. 

rule  in  New  Jersey,  73,  f,  note,  p.  167. 

rule  in  New  York.  8  73,  f,  note,  p.  167. 

in  state  where  appointed,  |  73  (1),  p.  167. 

where  citizens  of  it  is  interested,  §  73,  (2),  p.  167. 

based  on  comity,  §  73,  (2),  p.  167. 

as  to  realty,  §  74,  p.  170. 
in  insolvency  proceedings,  §  73,  c,  p.  164. 
in  matters  of  fraud,  generally,  §  75,  p.  171. 

to  set  aside  fraudulent  transfers  in  supplementary  proceedings,  g  76, 
note,  p.  172. 
to  recover  property,  in  actions  for  limited  divorce,  §  75,  p.  171. 

wrongfully  taken  from,  g  73,  f,  p.  167. 
for  an  accounting,  in  f&vor  of  mortgagor,  g  79,  p.  178. 
as  to  legal  title  of  property,  when  held  adversely,  §  79,  p.  178. 
to  determine  validity  of  levy,  how  begun,  §  79,  p.  178. 
to  invalidate  liens,  generally,  §  79,  p.  178. 
against  pensons  not  parties,  how  begun,  §  79,  p.  178. 
against  assignee,  when  maintainable,  g  80,  p.  179. 
on  debtor's  bond,  when  maintainable,  g  80,  p.  179. 
when  replevin  maintainable,  g  80,  p.  179. 
when  distraint  maintainable,  §  80,  p.  179. 
in  actions  for  alimony,  g  75,  p.  171. 
in  conversion  by  stranger,  §  75,  (1),  p.  171. 


798  INDEX. 

[References  are  to  sections  and  pages  in  body.] 

SUIT  BY  RECEIVER,  continued. 

in  conversions  of  property  by  debtor,  iii  75,  (1),  p.  171. 

on  bill  for  discovery  (N.  J.).  §  75,  (2),  p.  171. 

to  remove  fraudulent  Hens,  §  75,  (3),  p.  171. 

as  to  assets  held  under  invalid  mortgage,  §  75,  (4)  p.  171. 

to  reach  concealed  assets  or  misappropriated  property,  §^  75,  (5),  p.  171. 

to  recover  trust  money,  §  75,  (0),  p.  171. 

to  recover  illegal  interest  paid,  §  75,  (7),  p.  171. 

to  avoid  conveyance,  §  75,  (8),  p.  171. 

to  recover  corporate  securities,  §  75,  (9),  p.  171. 

to  determine  validity  of  mortgage,  ^  75,  (10),  p.  171. 

io  cancel  judgment,  §  75,  (11),  p.  171. 

to  cancel  invalid  mortgage,  ^  75,  (12),  p.  171. 

to  recover  abstracted  property,  §  75,  (13),  p.  171. 

by  receiver  of  corporation,  generally,  §  235,  a,  p.  397;  §  2'J3,  e,  p.  383 

of  National  Bank,  generally,  §  257,  p.  433. 

jurisdiction,  §  252,  p.  419. 

may  sue  stockholders  at  law,  §  72,  note,  p.  160. 
against  officers  and  directors,  generally,  §  76,  p.  173. 

of  insolvent  corporation,  §  76,  p.  172. 

for  misconduct,  §  76,  p.  172. 

in  case  of  acts  ultra  vires,  §  76,  p.  172. 

in  case  of  excess  of  indebtedness,  §  76,  p.  173. 

in  case  of  void  transfers,  §  76,  p.  172. 

to  compel  surrender  of  assets,  §  76,  p.  172. 

to  avoid  illegal  chattel  mortgage,  §  76,  p.  172. 

defense  to,  g  76,  p.  172;  §  77,  p.  173. 
against  stockholders,  not  until  liability  judicially  determined,  §  71,  note, 
p.  158. 

limitation  of  receiver's  power,  §  77,  p.  173. 

how  brought,  §  77,  p.  173. 

when  brought,  g  77,  p.  173. 

for  unpaid  subscriptions,  generally,  §  77,  p.  173. 

all  equities  settled,  §  77,  p.  173. 

to  what  extent  enforced,  §  77,  p.  173. 

to  recover  illegal  dividends,  ^  77,  p.  173. 

on  statutory  liability,  §  78,  p.  177. 

to  enforce  stock  liability  of  National  Banks,  §  254,  p.  426. 

defenses  to,  §  77,  p.  173. 
defenses  to,  generally,  ^81,  p.  180. 

invalidity  of  appointment,  g  81,  p.  180. 

set-off,  g  81,  p.  180. 
practice,  5=  390,  p.  610. 

SUITS  FOR  PARTITION, 

appointment  of  receiver  in,  between  tenants  in  common,  §  317,  p.  549. 
See  Tenants  in  Common  and  Appointment. 

SUIT  PENDING, 

a  prerequisite  to  petition  for  receiver,  when,  ^  371,  p.  002. 


INDEX.  799 

[References  are  to  sections  and  pajres  in  body.] 
SUIT  PENDING,  continued. 

a  prerequisite  to  petition  for  receiver,  not  in  cdse  of  lunatics,  infants,  etc., 

§  13,  note,  p.  35. 
receiver's  title  in,  §  63,  p.  145. 

SUPPLEMENTARY  PROCEEDINGS, 

chancery  jurisdiction  in,  §  146,  p.  235. 
governed  by  chancery  practice,  §  150,  p.  251. 
regulation  of,  by  statute,  §  146,  p.  236. 

based  on  inadequacy  of  common  law  remedy,  i^  146,  b,  p.  237. 
prerequisites  to  such  proceeding,  §  146,  b,  p.  238. 
necessity  of  judgment,  §  146,  b,  p.  238;  §  148,  b,  p.  248. 
prior  judgment,  when  not  required,  §  146,  b,  p.  23!). 
necessity  of  execution  and  return,  §  146,  b,  p.  239. 
execution,  how  long  retained,  §  151,  p.  252. 
lifetime  of  execution,  §  151,  a,  p.  252. 
life  of  execution,  contra.  §  151,  b,  p.  253. 
inadequacy,  what  is,  §  146,  b,  p.  238. 
to  reach  concealed  property,  §  147,  p.  240. 
to  remove  cloud  upon  title,  §  147,  p.  240. 
removal  of  fraudulent  transfer,  §  147,  p.  240. 
classes  of  creditor's  proceedings,  generally,  §  147,  p.  240. 
application  of  statute,  13  Eliz.  chap.  5,  and  2'J  Eliz.  chap.  5,  §  148,  a,  p.  243. 
practice  in  Code  states,  §  152,  p.  254. 
action  by  judgment  creditors,  §  148,  a,  p.  241. 
action  by  receiver,  ^  148,  a,  p.  241. 
to  attack  invalid  mortgage,  §  148,  a,  p.  244. 
rule  as  to  executions,  §  148,  b,  p.  244. 

exceptions  to,  generally,  ^  148,  b,  p.  246. 

as  to  fraudulent  conveyance,  §  148,  b,  p.  247. 
as  to  attachment,  §  148,  b,  p.  246. 
as  to  practical  utility,  §  148,  b,  p.  246. 
as  to  insolvent  estates,  §  148,  b,  p.  247. 
where  judgment  debtor  has  absconded,  §  148,  b,  p.  247. 
where  waived,  t^  148,  b,  p,  247. 
to  reach  fraudulent  assignments  or  conveyances,  ^  148,  a,  p.  241. 
jurisdiction  in  matters  of  assignment,  §  149,  a,  p.  249. 
fraudulent  assignment,  how  removed,  §  149,  a,  p.  249. 
assignments,  when  fraudulent  under,  §  149,  a,  p.  249. 
ground  for,  in  case  of  fraudulent  assignment,  §  149,  a,  p.  250. 
assignment,  receiver  in,  where  assignee  fails  to  take  possession,  §  149,  b, 
p.  250. 

for  mismanagement  by  assignee,  §  149,  b,  p.  250. 
fraudulent  transfer,  suit  by  receiver,  when  necessary,  §  150,  p.  252. 
who  receiver  represents,  §  150,  p.  251. 
liability  of  sureties  of  receiver  in,  g  153,  p.  255. 
effect  of  filing  bill  in  lieu  of,  §  154,  p.  256. 
appointment  of  receiver  in,  generally,  ^  153,  p.  255. 
when  appointed,  §  4,  d,  p.  9. 

when  dispensed  with,  §  156,  p.  261. 


800  INDEX. 

[References  are  to  sections  and  paRCS  in  borly.] 
SUPPLEMENTARY  PROCEEDINGS,  continued. 

when  appointed,  as  affected  by  practice  of  court,  i^  153,  p.  255. 

bond  required,  §  153,  p.  255. 

duties  of  receiver,  g  153,  p.  255. 

effect  of  statutory  provisions,  §  153,  p.  255. 

judicial  discretion  of  court,  §  153,  p.  255. 

order  of,  §  157,  p.  261. 
nature,  g  153,  p.  255. 
limitation,  §  157,  p.  262. 

effect  of  order,  ii  157,  p.  261. 

as  to  title,  ^5  157,  p.  261 ;  g  158,  p.  263. 
effect  of  reversal,  g  157,  p.  261. 

where  mortgagee  in  pos.session,  ^  160,  p.  264. 

where  title  involved,  g  160,  p.  264. 
receiver's  title  in,  §  60,  p.  143;  §  150,  p.  252;  :■  153,  p.  255;  §  159,  p.  203. 
receiver's  powers  in,  generally,  ^  154,  p.  256. 

to  give  bond  required,  ^  154,  p.  256. 

as  to  fraudulent  transfers,  §  154,  p.  256. 

as  to  what  property,  §  154,  p.  257. 

as  to  property  in  debtor's  possession,  §  154,  p.  257. 

as  to  property  in  hands  of  third  person,  §  154,  p.  257. 

as  to  trust  property,  §  154,  p.  257. 

as  to  exempt  property,  ^  154,  p.  257. 

relates  from  what  date,  §  154,  p.  257.  . 

to  question  title,  fe^  154,  p.  257. 

to  sue  and  be  sued,  §  156,  p.  260. 

to  set  aside  fraudulent  transfers,  §  155,  p.  259. 

to  reduce  property  to  possession,  §  155,  p.  259. 

as  to  creditors,  §  159,  p.  263. 

trustee  fOT  creditors,  §  155,  p.  258. 

in  foreign  jurisdiction,  §  158,  p.  262. 
receiver's  functions,  §  155,  p.  258. 
power  of  court  to  compel  conveyance,  §  154,  p.  257. 
sale  thereunder,  §  159,  p.  263. 
creditors  in,  how  made  parties,  ^  159,  p.  263. 
privity  of  creditors  in,  generally,  i^  159,  p.  263. 

over  purchasers,  §  159,  p.  263. 

as  to  mortgagee,  §  159,  p.  264. 

when  determined,  §  159,  p.  264. 

SUPPLIES, 

power  of  receiver  to  purchase,  §  32,  p.  94. 

liability  of  receiver  for,  generally,  ^  118,  p.  217. 

when  a  preferred  claim  against  receivership  fund,  §  343,  p.  576. 

SURETY, 

may  apply  for  appointment  of  receiver  for  corporation,  §  224,  b,  p.  353. 
claim  of,  when  allowed  from  receivership  fund,  §  341,  e,  p.  574. 
on  bond,  who  competent,  §  23,  c,  p.  76. 


INDEX.  801 

[References  are  to  sections  and  pases  iu  body.] 
SURETY,  continued. 

on  bond,  person  or  corporation,  §  23,  c.  p.  7G. 
how  approved,  §  23,  c,  p.  7G. 
how  discharged,  §  23,  c,  p.  76. 
death  of,  §  23,  b,  note,  p.  75. 
liability  of,  §  23,  c,  e,  pp.  76,  78. 

where  principal  absconds,  §  23,  c,  p.  76. 

how  enforced,  ^  23,  c,  note,  p.  76. 

on  special  covenants,  §  23,  d,  note,  p.  77. 

for  money  in  hands  of  receiver,  §  23,  e,  p.  78. 

for  money  borrowed  by  receiver,  §  23,  e,  p.  78. 

for  interest  when,  §  23,  e,  p.  78. 

for  costs,  §  23,  e,  p.  78. 

how  determined,  §  23,  e,  p.  78. 
suit  on,  when  to  be  brought,  §  23,  d.  p.  77. 

SWITCH, 

liability  of  receiver  for  removal  of,  §  125,  p.  224. 
See  Liability. 

T. 

TAXES, 

levy  of  taxes  may  interfere  with  possession,  §  54,  note,  p.  137. 

power  of  receiver  to  pay,  §  233,  g,  p.  387. 

on  personal  property,  as  claim  against  receivership  fund,  §  341,  b,  p.  573. 

sale  for,  as  ground  of  foreclosure,  §  171,  d,  p.  267. 

TAX  LEVY, 

not  prevented  by  receiver's  possession,  §  54,  p.  137. 

TAX  OFFICERS, 

possession  affected  by,  §  43,  p.  121. 
See  also  Officers. 
TEMPORARY  RECEIVER, 

entitled  to  possession,  when,  see  Appx.  p.  699. 
See  also  PEDENTE  LITE. 
TENANTS, 

effect  of  receiver's  possession  as  to,  §  51,  p.  136. 

TENANTS  IN  COMMON, 

appointment  of  receiver  for,  disqualific^ation  of,  §  4,  b,  p.  7. 
in  case  of  disagreement,  §  30ti,  p.  542. 
partition  suits  between,  §  317,  p.  549. 

TENANTS  FOR  LIFE. 

See  Life  Tenants. 

testa:\ientary  guardian, 

appointment  of  receiver  in  lieu  of,  §  309,  p.  545. 

testamentary  trustees, 

when  receiver  appointed  in  lieu  of,  §  308,  p.  514. 
51 


802  INDEX. 

[Ucforcnccs  arc  to  sections  aiul  pa^a's  in  body.] 
TITLE, 

of  plaintiff  must  be  clearly  shown,  ^  5,  a,  note  1,  p.  12. 

dispute  as  to,  g  5,  b,  note.  p.  12. 

in  dispute,  not  ground  for  receiver,  §  17,  a,  note,  p.  45. 

not  in  receiver,  generally,  ^  17,  d,  note,  p.  48. 

not  affected  by  appointment,  §  17,  d,  note,  p.  48. 

legal  and  equitable,  distinction  between,  §  23,  d,  note,  p.  G4. 

what  acquired  by  purchaser,  §  34,  p.  98. 

evidence  of,  §  34,  p.  98. 

reserved  in  sale,  §  34,  a,  p.  98. 

to  property,  in  supplementary  proceedings,  g  39,  note,  p.  115. 

effect  of,  as  to  appointment  of  receiver,  §  44,  p.  122. 

how  defined,  §  58,  p.  140. 

under  New  York  Statute  1869  title  is  transferred  to  the  receiver,  §  58, 

note,  p.  140. 
to  real  estate  only  vested  in  receiver  by  conveyance,  §  58,  note,  p.  140. 
may  be  transferred  to  receiver  by  order  of  court,  i^  58,  note,  p.  140. 
independent    of    statute,    is    not    transferred    to    receiver,    §  58,    note, 

p.  140. 
equitable,  is  vested  in  receiver  by  appointment,  §  58,  note.  p.  140. 
receiver  no  power  to  litigate,  §  71,  note,  p.  158. 
receiver  having  reduced  property  to  possession,  has  special  title,  §  72,  note, 

p.  160. 
legal,  suit  by  corporation  to  try,  §  76,  note,  p.  172. 
removal  of  cloud  upon,  §  147,  p.  240. 
to  real  estate  vests  in  receiver  only  when  within  the  state,  §  66,  note, 

p.  148. 
lease  by  a  party  to  suit  confers  no  title,  §  59,  note,  p.  142. 

when  not  absolute,  §  59,  p.  142. 

special  as  to  ren,  §  59,  p.  143. 

distinguished  from  legal  title,  §  59,  p.  142. 

merely  possessory  in  character,  §  59,  p.  142. 

in  absence  of  forma!  assignment,  §  59,  p.  143. 

as  affected  by  character  of  property,  §  59,  p.  143. 

with  reference  to  corporate  functions,  ^  59,  p.  142. 

with  reference  to  accrued  indebted ne.*s,  i^  60,  p.  143. 

as  to  subf^equentlj'  acquired  property,  §  60,  p.  143. 

as  to  future  indebtedness,  §  60,  p.  143. 

under  conditional  contracts,  §  60,  p.  143. 

in  supplementary  proceedings,  ^  60,  p.  143;  §  153,  p.  255. 

in  statutory  proceedings,  generally,  §  61,  p.  144. 
as  to  real  and  personal  property,  i^  61,  p.  144. 

in  actions  pendente  lite,  §  62,  p.  145. 

as  to  choses  in  action,  generally,  §  64,  p.  146. 
to  set  aside  assignment  of,  ^  64,  p.  146. 
from  nonresidents,  ^  63,  p.  145. 
when  accrues,  ^  64,  p.  146. 

to  real  estate,  generally,  g  06,  p.  148. 


INDEX.  803 

[References  are  to  seotiotis  and  pag-os  in  body.] 
I'lTLE.  continued. 

lease  by  a  party  to  suit  confers  no  title,  to  real  estate,  in  foreign  jurisdic- 
tions, §  64,  p.  146. 
Massachu.selts  rule,  §  64,  p.  146. 
New  York  rule,  §  6.5,  p.  147, 
extent  of,  as  affected  by  statu le,  g  67,  p.  149. 
as  to  debtor,  §  67,  p.  149. 
as  to  creditors,  §  67,  p.  149. 
as  to  frauds  on  creditors,  §  67,  p.  149. 
as  to  individual  or  corporation,  j!;  67,  p.  149. 
subject  to  existing  liens,  §  68,  p.  150. 
of  National  Banks,  generally,  §  25"),  p.  429. 
appointed  to  obtain  satisfaction  of  a  judgment  at  law,  Appx.  p.  699. 

TOLLS, 

when  ground  of  appointment  for,  §  15,  b,  p.  39. 

TORTS, 

liability  of  receiver,  to  action  for,  g  109,  a,  p.  202. 
of  corporation  for,  ^  234,  e,  p.  395. 

See  also  Liability  and  Receiver's  Suits. 

TRADER— INSOLVENT. 

appointment  of  receiver  for,  §  15,  d,  p.  41. 

TRANSFER  OF  PROPERTY, 

governed  by  owner's  domicil,  §  37,  note,  p.  108. 

by  operation  of  law,  §  73,  c,  p.  164. 

removal  of,  when  fraudulent,  §  147,  p.  240. 

fraudulent,  as  ground  for  creditor's  bill,  §  149,  a,  p.  249. 

receiver's  power  over,  in  supplementary  proceedings.  §  154,  p.  255. 
bow  avoided  by  receiver  of  corporation,  §  237,  p.  406. 
leave  of  receiver  to  make,  §  409,  p.  625. 
deed  by  receiver,  §  418,  p.  632. 

See  also  Assignment  and  Sale. 

TRESPASS, 

possession  of  receiver  interfered  with,  is,  §  43,  p.  121. 
receiver  may  be  sued  for  ton  of  predecessor,  when,  §  96,  p.  193. 
receiver  may  not  be  sued  for  tort  of  piincipal,  g  96,  p.  192. 
liability  of  receiver  to  suit  for,  §  109,  a,  p.  202;  §  130.  p.  231. 
receiver  commits,  when  he  acts  outside  of  his  duty,  §  405,  p.  622. 

TROVER, 

receiver  cannot  maintain,  for  property  converted  before  appointment, 

§  58,  note,  p.  140. 
when  brought  against  receiver  leave  of  court  not  required,  §  94,  f,  p.  189. 

TRUST, 

receivers  in  case  of,  §  300,  p.  540. 

See  TuusTEK  and  Cau  Trusts. 


804  INDEX. 

[References  are  to  sections  and  pages  in  body.] 
TRUSTEE, 

appointment  of  receiver  in  case  of,  §4,  c,  p.  8. 
receiver  is,  to  all  parlies,  but  not  to  strangers,  §  6,  b,  p.  21. 
power  to  sue  in  foreign  jurisdiction,  §  73,  f,  note,  p.  107. 
accounting  of,  effected  by  appointment  of  receiver,  §  30o,  a,  p.  542, 
appointment  of  receiver  in  lieu  of,  §  305,  p.  539, 

when  appointed,  §  306,  p.  540. 

when  not  appointed,  §  306,  b,  p.  543. 
testamentary,  appointment  of  receiver  for,  §  308,  p.  544. 

TRUST  FUNDS, 

intermingling,  ground  for  appointment  of  receiver,  §  300,  p.  541, 
receiver  may  recover,  §  75,  (6),  p,  171. 
See  also  Funds. 

TRUST  PROPERTY, 

held  by  receiver,  duty  regarding,  ^  412,  p,  627, 

powers  of  court  of  equity  to  appoint  receiver  over,  g  305,  p.  539. 

receivership  over,  when  appointed,  generally,  g  305,  p,  539;  §  300,  p.  540. 

in  lieu  of  trustee,  §  306,  a,  p.  540. 

over  testamentary  trustee,  §  308,  p.  544. 

in  reassignment,  §  307,  p.  543. 

for  lunatics'  estates,  ^  310,  p.  547. 

for  infants'  estates,  §  309,  p.  545. 
when  not  appointed,  §  306,  b,  p.  543. 
See  also  Funds. 

TRUST  RELATIONSHIP, 

violation  of,  receiver  appointed  for,  §  4,  c,  p.  8. 

u. 

ULTRA  VIRES  ACTS, 

avoided  by  receiver,  §  76,  p.  172. 

UNEXPIRED  LEASE, 

effect  of  appointment  of  receiver  upon,  §  230,  e,  p.  373. 
receiver's  liability  on,  §  122,  p.  221. 
when  adopted  by  receiver  of  railway,  g  283,  i,  p.  506. 
See  also  Liability  and  Lease. 

UNITED  STATES  COURT  OF  APPEALS, 
concerning  receiverships  in,  §  22,  k,  p.  70. 

UNLAWFUL  WITHHOLDING, 

possession  affected  by,  §  43,  p.  121. 

V. 

VACATION  OF  ORDER, 

appointing  receiver,  when  to  be  made,  ^  22,  j,  p.  C9. 
where  supersedeas  bond  affords  protection,  g  22,  1,  note,  72. 


INDEX.  805 

[References  are  to  sections  and  pages  tu  body.] 
VALIDITY, 

of  appointment  of  receiver,  Appx.  p.  G95. 

See  also  Appointment  and  Order. 
VENDOR, 

right  of,  to  appointment  of  receiver,  §  180,  d,  p.  303. 

and  vendee,  appointment  of  receiver  betveeen,  §  4,  c,  p.  8;  §  315,  p.  548. 

VIOLATION  OF  CHARTER, 

ground  for  appointment  of  receiver  for  corporation,  g  225,  j,  p,  362. 
See  Chakter  and  Corpokation. 

w. 

WAGES, 

of  employees,  control  of  court  over,  §  118,  p.  217. 
liability  of  receiver  for,  Appx.  p.  697. 
preferred  claim  against  receivership  fund,  §  342,  p.  574. 

made  so  by  statute,  §  344,  p.  581. 
■when  not  a  preferred  claim  against  receivership  fund,  §  343,  p.  579. 
See  also  Claim  and  Preferred  Claim. 
WASTE, 

appointment  of  receiver  in  case  of,  §  4,  c,  p.  8. 

as  ground  of  appointment  of  receiver,  §  5,  b,  note,  p.  14. 

of  infant's  estate,  §  309,  p.  545. 
as  grounds  of  foreclosure,  §  171,  d,  p.  267. 

WIFE, 

may  apply  for  receiver,  when,  Appx.  p.  694. 

See  also  Appointment  and  Applicatiok. 
WILLS, 

appointment  of  receiver  in,  §  301,  b,  p.  527. 
See  also  Appointment. 

WINDING  UP  CONCERN, 

v.'hen  receiver  appointed  in,  §  4,  d,  p.  9. 
in  trust  cases,  §  306,  p.  541. 


In  recognition  of  the  very  gratifying  reception  my  effort  to  pre- 
sent the  hiw  of  this  subject  has  met  with  from  the  profession,  I 
have  prepared  a  supplement  to  the  original  work,  covering  the 
later  decisions  to  January  1,  1900,  and  enlarging  upon  some  points 
where  further  study  made  it  seem  to  me  desirable.  This  Supple- 
ment follows  the  chapters  and  sections  of  the  original  work  and 
may  be  referred  to  from  it. 

J.  W.  S. 
Chicago,  May,  1900. 


LAW    OF    EECEIVEESHIPS. 

SUPPLEME]^T, 

Arrang-ing  tlie  new  matter  with,  reference  to  the  appro- 
priate pag-es  and  sections  of  the  original  work. 


Page  10,  sec.  5. — Of  the  appointment. 
(a)   Discretion  of  court. 


Appointment  is  in  the  discretion 
of  the  court.  People,  Gore,  v.  Illi- 
nois Bldg.&L.  Asso.  .50  111.  App.  642; 
Crane  v.  McCoy,  1  Bond,  422 ;  Beau- 
mont V.  Beaumont,  166  Pa.  615; 
Farmers'  Loan  &  T.  Go.  v.  Chicago 
<G  A.  R.  Co.  27  Fed.  Rep.  140. 

The  appointment  is  in  the  discre- 
tion of  the  court,  as  to  the  extent 
of  property  over  which  receiver  is  ap- 
pointed. Tressilian  v.  Coniffe,  4  Ir. 
Ch.   Rep.  399. 

If  the  appointment  is  in  the  dis- 
cretion of  court,  and  no  abuse  ap- 
pears, the  appointment  will  not  be 
interfered  with.  Wilcoxon  Mfg.  Go. 
V.  Atkinson,  78  Ga.  338. 

The  discretion  of  the  court  in  ap- 
pointing a  receiver  should  not  be  in- 
terfered with,  except  where  the  lower 
court  has  clearly  exceeded  its  juris- 
diction and  there  is  no  other  ade- 
quate remedy.  Ex  parte  Smith,  23 
Ala.  94. 

There  must  be  an  abuse  of  dis- 
cretion in  order  to  secure  a  reversal. 
Sanders  v.  Slaughter,  89  Ga.  34. 

The  court  has  a  broad  discretion 
in     reference    to    the    appointment 


when  executions  are  returned  unsat- 
isfied. Button  V.  Thomas,  97  Mich. 
93 ;  Bagletj  v.  Scudder,  06  Mich.  97 ; 
Rankin  v.  Rothschild,  78  Mich.   10. 

In  a  suit  to  set  aside  proceedings 
alleged  to  be  collusive,  wherein  a 
receiver  has  been  appointed,  it  is  dis- 
cretionary to  appoint  a  new  receiver, 
and  not  reviewable.  Gomwlly  v. 
Kretz,  78  N.  Y.  020. 

An  application  for  the  appoint- 
ment of  a  receiver  pending  an  appeal 
from  a  decree  of  foreclosure  is  ad- 
dressed to  the  sound  discretion  of 
the  court  in  Nebraska,  and  will  be 
denied  where  it  appears  that  a 
greater  injury  would  ensue  from  the 
appointment  than  from  permitting 
the  possession  of  the  property  to  re- 
main undisturbed.  Provident  Life 
&  T.  Go.  V.  Keniston,  53  Neb.  80. 

Residence  of  defendant. 

A  receiver  of  personal  property 
may  be  appointed  although  the  de- 
fendant resides  in  another  state. 
Hellehush  v.  Blake,  119  Ind.  349. 


Page  12. 


-(b)     Probability  of  plaintiff^s  recovery. 


A  receiver  will  not  be  appointed  to 
take  possession  of  property  and 
charge  of  business  in  the  hands  of  a 
defendant,  unless  the  plaintiff's  right 
is  sufliciently  probable,  or  when  it  is 
not  probable  that  such  property  will 

R.  Supp. 


be  lost  or  will  sustain  injury  during 
the  suit  if  it  is  left  in  defendant's 
hands,  or  that  the  business  will  be 
mismanaged.  Ogden  City  v.  Bear 
Lake  &  River  Waterworks  &  Irrlg. 
Co.  16  Utah,  440,  41  L.  R.  A.  305. 

1 


§5 


RECEIVERSHIPS— SUPPLEMENT. 


Where,  in  a  petition  for  the  ap 
point nu'iit  of  a  receiver,  the  lelicf 
])rayi'd  for  is  that  complainant's 
chiini  be  decrood  a  prior  lien  on  all 
the  insolvent's  assets,  and  such  relief 


cannot  be  granted,  a  receiver  should 
not  be  granted.  Bank  of  Florence  v. 
United  States  Sav.  t£-  L.  Co.  104  Ala. 
297. 


Page  14.— (c) 


Necessity  of  preserving  property. 


A  receiver  of  book  accounts  as- 
signed by  a  debtor  to  one  of  his 
creditors  will  not  bo  appointed  pend- 
ing a  suit  by  another  creditor  to 
set  aside  the  assignment  as  fraudu- 
lent, where  the  assignee  has  put  m 
an  answer  denying  the  allegations  of 
fraud  and  asserting  liis  right  to  the 
security,  and  it  appears  that  he  has 
abundant  means  to  respond  in  any 
amount  for  which  he  may  be  held  lia- 
ble. Waeber  v.  Rosenstein,  6  App. 
Div.  447. 

A  receiver  should  never  be  appoint- 
ed over  a  mortgagee  of  chattels  in 
possession,  where  there  is  a  balance 
due  him.  Bayaud  v.  Felloios,  28 
Barb.  451. 

In  the  absence  of  fraud,  and  where 
a  corporation  has  parted  with  all  its 
property  and  used  the  same  in  pay- 
ment of  debts,  a  receiver  will  not  be 
appointed.  JIalc-Berry  Co.  v.  Dia- 
mond State  Iron  Co.  94  Ga.  61. 

And  where  rents  are  applied  to  the 
payment  of  the  mortgage  debt  and 
necessary  expenses  in  the  manage- 
ment and  care  of  the  property,  a  re- 
ceiver will  not  be  appointed.  Myton 
V.  Davenport,  51  Iowa.  583. 

Receiver  not  appointed  where  ad- 
ministrator has  power  to  protect 
propertv.  Veret  v.  Duprez,  L.  R.  G 
Eq.  329! 

An  order  appointing  a  receiver 
pendente  lite,  in  a  proceeding  under 
3  How.  (Mich.)  Ann.  Stat.  §  87400, 
providing  for  the  appointment  of  a 
receiver  at  the  instance  of  persons 
having  preferred  claims  under  a  vol- 
untary assignment,  is  improvident,  if 
not  an  absolute  nullity.  Ball  v. 
Wayne  Circuit  Judge,  111  Mich.  395. 

Because  the  husband  of  an  execu- 
trix was  in  the  West  Indies,  and  not 
amenable  to  the  process  of  court  in 
case  his  wife  as  executrix  should 
coirimit  waste  or  refuse  to  pay,  a  re- 
ceiver   was    appointed.     Decided    by 


the  Lord   Chancellor   of   England  in 
1741.     Taylor  v.  Allen,  2  Atk.  213. 

'Notice   of    application  for   appoint- 
ment. 

As  a  general  rule,  notice  of  the  ap- 
plication for  the  appointment  of  a 
receiver  must  be  given.  Mestier  v. 
A.  Chevallier  Pavement  Co.  51  La. 
Ann.  142;  Sehone  v.  Consolidated 
Bldg.  d  8av.  Go.  4  Ohio  N.  P.  21G; 
Sf  nit  ton  V.  Davidson,  1  Russ.  &  M. 
484  ;  Grace  v.  Gurtiss,  3  Misc.  558  ; 
Elwood  V.  First  Nat.  Bank,  41  Kan. 
475 ;  Thompson  v.  Tower  Mfg.  Go. 
87  Ala.  733;  People,  Port  Huron  t^ 
G.  R.  Co.  V.  St.  Glair  Circuit  Judge, 
31  Mich.  450;  Todd  v.  Crooke,  4 
Sandf.  094;  Cincinnati,  H.  dc  D.  R. 
Go.  V.  Jewett,  37  Ohio  St.  049 ;  Gil- 
bert V.  Block,  51  111.  App.  510;  Mor- 
gan V.  Von  Kohnstamm ,  9  Daly,  355, 
00  How.  Pr.  101. 

And  so  with  regard  to  an  appli- 
cation to  extend  the  receivership. 
he  Grand  v.  O'Neill,  2  Ir.  Ch.  Rep. 
509;  state,  Thornton-Thomas  Mer- 
cantile Co.  V.  Second  Judicial  Dist. 
Ct.  20  Mont.  284;  Sandf ord  v.  ■S'm- 
clair,  8  Paige,  373. 

In  the  absence  of  a  statute  the  ap- 
pointment of  a  receiver  cr  parte  ia 
void,  and  can  be  assailed  collaterally. 
Whitney  v.  Hanover  Nat.  Bank,  71 
Miss.  1009,  23  L.  R.  A.  531. 

Not  required  if  defendant  cannot 
be  found  and  his  counsel  refuses  tO' 
disclose  his  whereabouts.  Hopp':r 
v.  Davies,  70  111.  App.  082;  St. 
Louis,  K.  d-  S.  R.  Co.  v.  Wear,  135 
Mo.  230,  33  L.  R.  A.  341 ;  Hangaii  v. 
Nctland,  51  Minn.  552;  Hendrix  v. 
Amcrcian  Freehold  Land  Mortg.  Co. 
95  Ala.  313. 

Insolvency  of  the  debtor  alone  is 
not  sufficient  ground  for  dispensing 
with  notice.  Smith  Dimick  Lumber 
Go.  V.  Teague  (Ala.)   24  So.  4. 

There  must  be  an  emergent  neces- 


GENERAL  NATURE  AND  FEATURES  OF  THE  LAW. 


§7 


sity  for  the  immediate  appointment. 
Wehh  V.  Allen,  15  Tex.  Civ.  App.  tlOS. 

And  the  emergency  must  be  shown 
by  allegations.  Jacksonville  Ferry 
Co.  V.  Stockton   (Fla.)   23  So.  557. 

And  the  allegations  must  be  posi- 
tive, and  the  excuse  for  not  giving 
notice  must  not  be  alleged  as  a  mere 
conclusion  or  on  belief,  but  the  facts 
justifying  such  belief  or  establishing 
such  conclusion  must  be  stated.  Ihld. 

Appointment  ex  parte  may  be 
made  in  aid  of  the  jurisdiction  of  the 
court,  or  as  a  conservatory  process 
incident  to  the  principal  demand.  Re 
Moss  Cigar  Co.  50  La.  Ann.  780. 

There  must  be  an  obvious  necessity 
for  prompt  action.  Bristoiv  v.  Home 
Bldcj.  Co.  91  Va.  18. 

Or  extreme  danger  apparent. 
Fredenheini  v.  Rohr,  87  Va.  704. 

Or  danger  of  irreparable  loss.  Cin- 
cinnati, H.  &  D.  R.  Co.  V.  Jewett,  37 
Ohio  St.  649. 

Affidavits  in  support  of  the  motion 
should  also  be  served.  Brundage  v. 
Home  Sav.  d  L.  Asso.  11  Wash.  277. 

The  statute  frequently  regulates 
the  matter  of  notice  in  the  appoint- 
ment of  receivers.  Allen  v.  Cooley, 
53  S.  C.  414. 

Under  Mo.  Laws  1895,  p.  91, 
amending  Mo.  Rev.  Stat.  1889,  § 
2246,  the  power  of  the  court  to  ap- 
point a  receiver  on  an  ex  parte  ap- 
plication Avithout  notice  should  not 
extend  beyond  such  time  as  is  rea- 
sonably required  to  allow  the  de- 
fendant to  show  cause  against  the 
continuance  of  the  receivership.  8t. 
Louis,  K.  &  »S'.  R.  Co.  v.  Wear,  135 
Mo.  230,  33  L.  R.  A.  341. 


At  the  next  term,  three  months 
distant,  is  too  long.  Whitney  v. 
Welch,  2  Abb.  N.  C.  442;  Btohn  v. 
Epstein,  6  N.  Y.  Civ.  Proc.  Rep.  36, 
14  Abb.  N.  C.  322. 

In  a  proceeding  under  §  298,  Code 
of  New  York,  if  the  debtor  has  ab- 
sconded so  that  notice  cannot  be 
served  on  him  the  remedy  is  by  credi- 
tors' bill,  and  not  supplementary 
proceeding.  Kemp  v.  Harding,  4 
How.  Pr.   178. 

To  authorize  the  appointment  un- 
der §  298,  Code  of  New  York,  notice 
to  the  debtor  must  be  given.     Ihid. 

Construction  of  N.  Y.  Laws  1883, 
chap.  378,  §  8,  relative  to  copy  of  mo- 
tions, etc.,  and  service  on  attorney 
general.  Grea.son  v.  Goodwillie- 
Wyman  Co.  38  Hun,  138. 

Notice   of   application  for   removal. 

The  court  may  dismiss  a  suit 
against  a  corporation,  and  discharge 
a  temporary  receiver  appointed 
therein,  without  any  notice  to  the 
general  creditors.  Rockwell  v.  Port- 
land Sav.  Bank,  31  Or.  431;  Re  Pre- 
mier Cycle  Mfg.  Co.  70  Conn.  473; 
New  York  &  W .  U.  Teleg.  Co.  v.  Jew- 
ett, 115  N.  Y.  IGO. 

Failure  to  direct  notice  to  be  given 
to  the  parties  to  an  action  for  the  re- 
moval of  a  receiver  is  not  ground  for 
reversal,  where  they  in  fact  received 
actual  notice  before  the  hearing,  and 
interposed  no  objection  for  want  of 
formal  service,  and  do  not  appeal. 
Re  Premier  Cycle  Mfg.  Co.  70  Conn. 
473;  Atty.  Gen.  v.  Haberdasher's  Co. 
2  Jur.  915. 


Page  23,  sec.  7.— Effect  of  appointment. 


(a)   Places  property  in  custodia  eegis. 


Property  belonging  to  one  not  a 
party  to  an  action  in  which  a  re- 
ceiver has  been  appointed,  and  for 
which  a  receiver  has  not  been  asked, 
is  not  in  custodia  legis,  so  as  to  pre- 
clude its  seizure  under  legal  process, 
although    the    receiver    has    wrong- 


fully taken  possession  thereof. 
Farmers'  cC-  M.  Nat.  Bank  v.  Scott 
(Tex.  Civ.  App.)  45  S.  W.  26. 

Property  in  hands  of  receiver  is 
in  custodia  legis,  and  not  subject  to 
attachment.  Texas  Trunk  R.  Co.  v. 
Lewis,  81  Tex.  1. 

3 


§  s 


RECEIVERSHIPS— SUPPLEMENT. 


A  receiver's  custody  is  that  of  the 
court  which  appointed  him.     People, 


Tremper,  v.  Brooks,  40  Mich.  333,  29 
Am.  Rep.   534. 


Page  25,  sec.  8. — Kinds  of  receivers. 


Ancillary     receivers. 

A  court  of  the  state  in  which  a 
corporation  was  organized  may  ap- 
point a  receiver  of  its  property,  not- 
withstanding that  all  its  property, 
both  real  and  personal,  is  situated  in 
another  state;  and  the  courts  of  the 
latter  state  may  properly,  under  the 
rules  of  comity,  appoint  the  same 
person  as  ancillary  receiver.  Bayne 
V.  Brewer  Pottery  Co.  82  Fed.  Kep. 
391. 

A  receiver  will  not  be  appointed 
by  a  court  of  insolvency,  where  the 
principal  relief  sought  is  injunction 
and  other  equitable  relief,  and  the 
appointment  of  a  receiver  is  ancil- 
lary thereto.  Rehn  v.  North  Fair- 
mount  B.  d  S.  Co.  5  Ohio  N.  P.  314. 

A  court  appointing  ancillary  re- 
ceivers of  a  foreign  corporation  to 
collect  assets  within  its  jurisdiction 
will  not  refuse  to  transmit  the  fund 
to  the  original  receivers,  in  favor  of 
domestic  creditors,  unless  they  have 
acquired  some  priority  of  lien  on  the 
corporate  assets.  New  York  Insu- 
lated Wire  Co.  v.  Greeley,  59  U.  S. 
App.  GIO;  Sands  v.  E.  S.  Greeley  & 
Co.  88  Fed.  Rep.  130,  31  C.  C.  A.  424. 

A  United  States  circuit  court 
which  has  appointed  an  ancillary  re- 
ceiver for  a  foreign  corporation  has 
jurisdiction  of  a  suit  by  him  against 
citizens  of  the  same  state  in  which 
he  lived  to  collect  subscriptions  to  the 
corporation,  the  claims  for  Avhich 
have  been  transmitted  to  him  by  the 
principal  receiver  appointed  at  the 
domicil  of  the  corporation  in  an- 
other state.  Sullivan  v.  Sheehan, 
89  Fed.  Rep.  247. 

An  ancillary  receiver  of  a  foreign 
corporation,  who,  by  the  order  of  his 
appointment,  is  vested  with  the 
usual  powers  and  duties  of  receivers, 
is  authorized  to  make  an  accord  and 
satisfaction  of  a  claim.  Goodrich 
V.  Sanderson,  35  App.  Div.  54G. 

An  ancillary  receiver  of  a  railroad 
cannot  be  sued  in  the  jurisdiction  of 


his  appointment  for  a  tort  committed 
in  the  jurisdiction  of  the  appoint- 
ment of  the  principal  receiver,  al- 
though the  principal  and  ancillary 
receivers  are  the  same  persons. 
Union  Trust  Co.  v.  Atchison,  T.  & 
S.  F.  R.  Co.  87  Fed.  Rep.  530. 

It  has  been  held  in  New  York  that 
on  the  application  of  a  foreign  re- 
ceiver an  ancillary  receiver  will  not 
be  appointed  in  that  state,  where 
the  foreign  receiver  has  apparently 
all  the  power  requisite.  Mabon  v. 
Ojiglcy  Electric  Co.  156  N.  Y.  196. 

An  ancillary  decree  appointing  re- 
ceivers will  not  be  in  effect  so  modi- 
fied as  to  except  a  portion  of  the 
property  in  tlie  district,  where  the 
original  appointment  includes  all 
the  property  of  the  company.  Mer- 
cantile Trtist  Co.  V.  Baltimore  &  0. 
R.  Co.  79  Fed.  Rep.  389. 

A  motion  to  allow  an  ancillary  re- 
ceiver of  an  insolvent  corporation  to 
pay  over  the  funds  to  the  court  of 
primary  jurisdiction  was  held  under 
advisement  upon  opposition  by  resi- 
dent creditors,  where  it  appeared 
that  they  did  not  thoroughly  under- 
stand the  situation,  and  erroneously 
supposed  if  the  fund  was  not  trans- 
ferred their  claims  would  be  forth- 
with paid  in  full,  but  in  fact  con- 
tinued litigation  would  result,  and 
the  fund  would  probably  not  be  dis- 
tributed for  years.  Sands  v.  E.  S. 
Greeley  d  Co.  83  Fed.  Rep.  772. 

Receivers  pendente'  lite. 

The  court  has  authority,  in  a 
proper  case,  to  appoint  a  receiver  to 
hold  property  pending  litigation  in 
the  same  court,  in  which  case  he  is  a 
receiver  pendente  lite.  Tregaskis  v. 
Detroit  Super.  Ct.  Judge,  47  Mich. 
509. 

A  receiver  may  properly  be  ap- 
pointed, under  the  Texas  statute,  to 
take  charge  of  property  pending  a 
litigation  in  regard  thereto.  Lynn 
V.  First  Nat.  Bank,  40  S.  W.  228. 

But  where  the  statute  provides  for 


GENERAL  NATURE  AND  FEATURES  OF  THE  LAW. 


S9 


the  appointment  of  a  receiver  he  is 
not  a  receiver  pendente  lite.     People 


V.  Gloie  Mut.  L.  Ins.  Co.  57  How.  Pr. 
481. 


Page  26,  sec.  9. — At  what  stage  appointed. 


Under  N.  Y.  Code,  §  294,  a  receiver 
will  not  be  appointed  before  execu- 
tion returned  unsatisfied.  Darroiv 
v.  Lee,  16  Abb.  Pr.  215. 

If  the  record  shows  the  receiver 
was  appointed  on  the  same  day  the 
action  was  commenced,  the  pre- 
sumption is  that  each  was  done  in 
the  i^roper  order.  Ehcood  v.  First 
ISlat.  Bank,  41  Kan.  475. 

May  he  by  statute  in  vacation  or  at 
chatnhers. 

Under  Mo.  Rev.  Stat.  1889,  § 
2193,  a  receiver  may  be  ajapointed  in 
vacation,  in  any  county  within  the 
circuit,  no  matter  where  the  case  is 
pending.  8t.  Louis,  K.  &  8.  R.  Co. 
V.  Wear,  135  Mo.  268,  33  L.  R.  A. 
341. 

Under  W.  Va.  Acts  1882,  chap.  78, 
§  28  (Worth's  Code,  p.  743),  a  judge 
has  no  right  to  appoint  a  receiver  of 
real  estate,  rents,  etc.,  in  vacation. 
Kerr  v.  Hill,  27  W.  Va.  576. 

Tlie  appointment  of  a  receiver  in 
A"acation  is  void  unless  there  is  statu- 
tory power  to  appoint.  Guy  v. 
Doalc,  47  Kan.  236. 

Under  the  California  insolvency 
act  of  1880  a  receiver  may  be  ap- 
pointed by  a  judge  in  chambers  upon 
ex  parte  application.  Real  Estate 
Asso.  v.  San  Francisco  City  d  County 
Super.  Ct.  GO  Cal.  223. 

Appointed    before    service,    when. 

In  Tanfield  v.  Irvine,  2  Russ.  Ch. 
149,  a  receiver  was  appointed  before 
service,  where  the  defendant  was  out 
of  the  jurisdiction.  Macintosh  v. 
Great  Western  R.  Co.  18  L.  J.  Ch.  N. 
S.  169. 

A  receiver  was  denied  where  the 
defendant  was  alleged  to  hold  ad- 
versely to  the  plaintiH",  and  was  not 
served  with  process.  Hyslop  v.  Hop- 
pock,  5  Ben.  447. 

Under  a  bill  properly  verified,  an 


order  appointing  a  receiver  before 
appearance  and  before  service  of  pro- 
cess cannot  be  disturbed.  Sieg- 
mund  V.  Ascher,  37  111.  App.  122; 
Gage  v.  Smith,  79  111.  219. 

Before  answer. 

Where  the  application  for  a  receiver 
is  made  before  the  defendant  has  filed 
his  answer  the  defendant  has  a  right 
to  be  heard  upon  afiidavit  as  to  his 
defense.  Whitehouse  v.  Point  De- 
fiance, T.  &  E.  R.  Co.  9  Wash.  558. 

A  receiver  has  been  refused  before 
answer  where  the  party  applying 
could  not  make  out  an  equitable  title. 
Metcalfe  v.  Pulvertoft,  1  Ves.  «&,  B. 
180. 

A  motion  for  receiver  before  an- 
swer is  unusual,  but  has  been  granted 
where  defendant  filed  affidavit,  in  a 
strong  case  of  waste.  Jervis  v. 
White,  6  Ves.  Jr.  738;  Middleton  v. 
Dodsicell,  13  Ves.  Jr.  266;  Hugonin 
V.  Basely,  13  Ves.  Jr.  105;  Metcalfe 
V.  Pulvertoft,  1  Ves.  &  B.  180;  Duck- 
worth V.  Trafford,  18  Ves.  Jr.  283; 
Vann  v.  Barnett,  2  Bro.  Ch.  158; 
Compton  V.  Bearcroft,  Trin.  1773, 
cited  in  2  Bro.  Ch.  158. 

It  is  the  common  jsractice  to  grant 
a  receiver  before  answer  where  fraud 
is  clearly  proved  by  affidavit,  or 
where  it  is  shown  that  imminent 
danger  will  ensue  unless  the  prop- 
erty is  taken  under  the  care  of  the 
court.  Ilugonin  v.  Basely,  13  Ves. 
Jr.  105;  Middleton  v.  Dodswell,  13 
Ves.  Jr.  266;  Lloyd  v.  Passingham, 
16  Ves.  Jr.  59;  Duckworth  v.  Traf- 
ford, 18  Ves.  Jr.  283;  Scott  v.  Bech- 
er,  4  Price,  346. 

And  so,  where  the  plaintiff  states 
a  clear  equitable  title.  Metcalfe  v. 
Pulvertoft,  1  Ves.  &  B.  180;  Jervis 
V.  White,  6  Ves.  Jr.  738 ;  Daivson  v. 
Yates,  1  Beav.  301 ;  Williamson  v. 
Wilson,  1  Bland,  Ch.  422;  Blood- 
good  v.  Clark,  4  Paige,  577;  Micou 
V.  Moses,  72  Ala.  439;  Prohasco  v. 
Prohasco,  30  N.  J.  Eq.  108. 

5 


t;  10 


RECEIVERSHIPS— SUPPLEMENT. 


A  receiver  will  not  be  appointed 
before  answer  unless  in  case  of  im- 
pomlinj*'  mischief  irreparable  in  case 
of  delay.  Ogdcn  v.  Kip,  0  Johns. 
Ch.  100;  Woudyatt  v.  Greslcy,  8  Sim. 
180. 

Pending  return  of  inquisition. 

A  receiver  of  a  lunatic's  estate 
may  be  appointed  pending  the  return 
of  the  inquisition.  Ifc  Kenton,  5 
Binn.  C13. 

Pending  judgment  on  motion  for  new 
trial. 

After  judgment  and  before  the  mo- 
tion for  a  new  trial  the  court  may 
appoint  a  receiver  if  the  defendant  is 
insolvent  and  is  in  receipt  of  large 
sums  of  money  from  the  premises. 
Whitney  v.  Buckman,  26  Cal.  447 ; 
Bainbrigge  v.  Bainbrigge,  3  Eng.  L. 
&  Eq.  80. 

Pending  a  plea  to  an  amended  bill. 

The  pendency  of  a  plea  to  an 
amended  bill  does  not  prevent  the 
hearing  of  a  motion  for  a  receiver, 
wheie  the  original  bill  is  answered. 
Thompson  v.  Selby,  12  Sim.  100. 

On  hearing. 

The  appointment  may  be  made  on 
hearing.  Shee  v.  Harris,  1  Jones  & 
L.  91. 


At  any  time. 

Receiver  may  be  appointed  at  any 
time  when  proceedings  are  pending. 
People,  Fitch,  v.  Mead,  29  How.  Pr. 
300. 

After  appeal. 

Notwithstanding  an  appeal  the 
court  may  appoint  a  receiver  of  the 
rents  and  profits.  Button  v.  Lock- 
ridge,  27  W.  Va.  428. 

And  even  after  appeal  perfected. 
Chicago  c6  8.  E.  R.  Co.  v.  St.  Clair, 
144  Ind.  371;  Brinkman  v.  Ritzin- 
ger,  82  Ind.  358. 

To  deprive  the  trial  court  of  juris- 
diction to  appoint  a  receiver  upon 
the  ground  that  an  appeal  is  pend- 
ing, if  the  pendency  of  an  appeal  de- 
feats its  jurisdiction,  it  must  clearly 
appear  that  the  case  is  pending  in 
an  appellate  court  that  has  juris- 
diction thereof.  Stone  v.  Stone 
(Tex.  Civ.  App.)  43  S.  W.  567. 

A  judgment  of  affirmance  by  an  ap- 
pellate court  after  a  receiver  has 
been  appointed  for  appellant,  with- 
out substituting  the  receiver  as  ap- 
jiellant,  is  valid  and  binding  where 
the  judgment  affirmed  was  rendered 
before  the  receiver  was  appointed. 
Steinhauer  v.  Colmar,  11  Colo.  App. 
494. 


Page  27,  sec.  10. — Application  for;  allegations;  who  appointed. 


"Notice  of. 
If  the  purpose  is  stated  in  the  no- 
tice for  application,  the  specific 
grounds  of  the  application  need  not 
be  stated.  Columbia  Finance  &  T. 
Co.  V.  Morgan,  19  Ky.  L.  Rep.  1701, 
Modified  on  Rehearing  in  19  Ky.  L. 
Rep.  1705,  which  has  Rehearing  De- 
nied in  19  Ky.  L..  Rep.  1705. 

In  what  action. 
Ind.  Code,  §  1222,  authorizes  the 


appointment  of  a  receiver,  without 
regard  to  the  form  of  action,  when- 
ever justice  requires  it.  Hellebush 
V.  Blake,  119  Ind.  349. 

Under  the  judicature  act  of  1873, 
in  England  the  appointment  of  a  re- 
ceiver may  be  made  in  the  original 
action,  and  a  bill  in  chancery  after 
judgment  is  no  longer  required, 
though  such  practice  would  be  prop- 
er. Smith  V.  Cowell,  L.  R.  0  Q.  B. 
Div.  75. 


Page  27. — (a)     By  whom  made. 


The  court,  at  the  instance  of  one 
to  whom  a  married  woman  has  been 
ordered  to  pay,  out  of  her  separate 
6 


estate  only,  certain  costs  of  a  maxi- 
mum amount,  which  have  not  yet 
been  taxed,  may  appoint  a  receiver 


GENERAL  NATURE  AND  FEATURES  OF  THE  LAW. 


10 


of  her  interest  (not  exceeding  the 
maximum)  in  an  estate,  as  security 
for  the  costs,  where  she  has  no  other 
separate  property  out  of  whicli  thej' 
can  be  paid.  Cummins  v.  Perkins 
(C.  A.)  [1899]  1  Ch.  IG,  68  L.  J.  Ch. 
N.  S.  57. 

Receiver  may  be  appointed  on  the 
application  of  the  state.  Where  a 
lien  on  the  rents  is  not  given,  and  the 
security  is  not  ample,  and  the  mort- 
gagor is  insolvent,  a  receiver  will  be 
appointed,  imitate  v.  Northern  C.  R. 
Co.  18  Md.  193;  Columbian  Athletic 
Club  V.  Htate,  McMahon,  143  Ind.  98, 
28  L.  R.  A.  727. 

A  receiver  will  not  be  appointed 
at  the  instance  of  an  insolvent  cor- 
poration. Hugh  v.  McRae,  Chase 
Dec.  4GG. 

A  receiver  will  not  be  appointed 
on  the  application  of  a  cestui  que 
trust  who  has  but  a  small  interest 
in  the  matter  of  profits  growing  out 
of  a  contract.  Webb  v.  Van  Zandt 
( 1863)   16  Abb.  Pr.  314,  note. 

An  application  for  the  appoint- 
ment of  a  receiver,  although  based 
upon  concurrent  demands  of  the 
parties,  cannot  be  granted  under  N. 
Y.  Code  Civ.  Proc.  §  713,  subd.  1, 
permitting  a  receiver  before  judg- 
ment, on  the  application  of  a  party 
who  establishes  an  apparent  right  to 
property  in  possession  of  the  adverse 
party,  where  there  is  danger  of  its 
being  lost.  Dusenbury  v.  Dusen- 
burij,  11  Daly,  112. 

A  creditor  may  apply,  notwith- 
standing X.  C.  Acts  1891,  chap.  155, 
and  K  C.  Acts  1893,  chap.  478. 
North  V.  Piedmont  Bank.  121  N.  C. 
343. 

Defendants  may  apply  by  a  cross 
bill.  Russell  V.  Mohrweil  Lumber 
Co.  102  Ga.  593. 

A  creditor  or  subsequent  encum- 
brancer has  no  right  to  a  receiver  as 
against  a  mortgagee  in  possession. 
McConnell  v.  Denham,  72  Iowa,  494. 

The  United  States  may,  for  the 
protection  or  reclamation  of  public 
lands,  pursue  the  same  equitable 
remedies,  including  the  appointment 
of  a  receiver,  that  an  individual  un- 
der like  circumstances  may  pursue  in 
reference  to  his  own  lands,  and  is  en- 
titled to  the  .same  measure  of  relief 


which  would  be  extended  to  him. 
Steele  v.  Walker,  115  Ala.  485. 

If  made  by  creditors  they  must 
have  judgment.  Brabrook  Tailoring 
Co,  V.  Belding  Bros.  40  HI.  App.  326. 

A  receiver  will  not  be  appointed  on 
the  application  of  a  general  creditor. 
Cahn  v.  Johnson,  12  Tex.  Civ.  App. 
304. 

A  receiver  will  be  appointed  in  a 
creditors'  action  where  the  property 
sought  to  be  subjected  to  the  pay- 
ment of  the  judgment  is  merchandise 
in  the  possession  of  the  insolvent 
debtor,  who  has  mortgaged  it,  but 
reserved  from  the  sale  sufficient  to 
defray  the  running  expenses  of  the 
business,  to  replenish  stock,  to  sup- 
port his  family,  and  to  compensate 
himself.  Hirsch  v.  Isreal,  10(3  Iowa, 
498. 

A  receiver  of  a  corporation  may 
be  appointed  in  a  proceeding  insti- 
tuted by  a  simple-contract  creditor, 
under  111.  Rev.  Stat.  chap.  32,  §  25, 
although  the  debt  is  not  due.  J.  V. 
Nortliam  d  Co.  v.  Atherton,  67  111. 
App.  230. 

Objection  to  application. 

It  is  no  objection  to  a  motion  to 
appoint,  that  answer  under  oath  is 
waived.  Root  v.  Safford,  2  Barb. 
Ch.  33. 

The  proper  time  for  presenting 
reasons  why  a  receiver  should  not  be 
appointed  is  when  the  application 
for  his  appointment  is  made.  Mer- 
chants' Nat.  Bank  v.  Braithwaite,  7 
N.  D.  358. 

A  sheriff  who  levies  an  attachment 
has  no  right  to  object  to  an  order  ap- 
pointing a  receiver  of  the  property 
of  the  attachment  defendant,  where 
the  attachment  plaintiffs  consent 
thereto.  Pease  v.  F.  /S'.  Waters  & 
Co.  m  111.  App.  359. 

Bringing   fund   into   court. 

If  money  in  dispute  is  brought  into 
court  a  receiver  will  not  be  ap- 
pointed. Curling  v.  Toionshend,  19 
Ves.  Jr.  628. 

Nor  where  security  is  given  by  de- 
fendants to  satisfy  any  judgment 
which  may  be  rendered  against 
them.     Conquest  v.   National  Bank, 

7 


§  10 


RECEIVERSHIPS— SUPPLEMENT. 


97    Ga.    500;    Haigh  v.    Grattan,    1 
Beav.  201. 

Application  may    be    renewed  token. 

The  denial  of  an  application  Tor 
appointment  of  a  receiver  does  not 
prevent  a  second  application  on  the 
same  ground  as  the  first,  but  on  a 
difl'erent  state  of  facts.  Columbia 
Finance  d  T.  Co.  v.  Morgan.  19  Ky. 
L.  Rep.  17G1,  Modified  on  Rehearing 
in  19  Ky.  L.  Rep.  1765,  Which  has 
Rehearing  Denied  in  19  Ky.  L.  Rep. 
17()5;  Atty.  Gen.  v.  Galway,  1 
Molloy,  95;  Allen  v.  Harris,  4  Lea, 
190. 

The  continuance  of  an  application 
for  a  receiver,  made  in  vacation,  is 
no  bar  to  an  application  in  term 
time.  McCaskill  v.  Warren,  58  Ga. 
286. 

The  motion  for  appointment  may 
be  denied  with  leave  to  renew,  if  it 
does  not  distinctly  appear  that  the 
judgment  and  execution  were  regu- 
lar. Bank  of  Wooster  v.  Spencer, 
Clarke  Ch.  386. 

A  receiver  of  a  corporation  will 
not  be  appointed  on  a  second  appli- 
cation on  proof  concerning  its  in- 
solvency, which  might  have  been  of- 
fered on  the  previous  application. 
Ft.  Wayne  Electric  Corp.  v.  Frank- 
lin Electric  Light  Co.  (N.  J.  Eq.)  41 
Atl.  217. 


An  application  for  appointment  in 
a  suit  that  has  been  dismissed  is  not 
a  bar  to  a  second  application  in  an- 
other suit  subsequently  brought. 
Anderson  v.  Poivell,  44  Iowa,  20. 

Affidavits  in  support  of  application. 

Aflidavits  may  accompany  the  pe- 
tition for  the  appointment  of  a  re- 
ceiver, vmder  Tex.  Rev.  Stat.  1895, 
art.  1465,  and  may  be  read  in  sup- 
port of  its  allegations,  but  they  can- 
not serve  as  pleadings  in  the  case,  or 
enlarge  upon  the  case  made  by  the 
petition.  Welib  v.  Allen,  15  Tex. 
Civ.  App.  605 ;  Bell  v.  M'Loghin, 
Flan.  &  K.  272. 

Upon  the  hearing  of  a  motion  for 
the  appointment  of  a  receiver,  affida- 
vits are  properly  stricken  out  as 
irrelevant,  when  they  are  not  perti- 
nent to  the  issue  presented, but  relate 
to  an  issue  already  decided.  Allen 
V.  Cooley,  53  S.  C.  414. 

Prayer  for. 

A  receiver  will  not  be  appointed  if 
not  praved  for.  Barlow  v.  Gains,  8 
Beav.  329. 

Absence  of  legal  remedy. 

It  sliould  appear  at  the  making  of 
the  application  that  no  adequate 
legal  remedy  exists.  Congden  v. 
Lee,  3  Edw.  Ch.  304. 


Page  28. — (c)     Allegations  ;  averments. 


The  averment  in  a  complaint  in 
an  action  to  set  aside  a  trust  deed 
executed  by  a  corporation,  that  the 
property  would  not  bring  in  the  open 
market  more  than  a  specified 
amount,  which  is  less  than  the 
amount  of  the  debt  secured,  unless 
an  exceptional  purchaser  should  be 


found,  is  not  conclusive  against  the 
plaintiff  upon  the  application  for 
the  appointment  of  a  receiver  to  take 
charge  of  the  property  pending  the 
action,  that  he  would  have  no  inter- 
est therein  if  the  trust  deed  should  be 
held  good.  Goshen  Woolen  Mills  Co. 
V.  City  Nat.  Bank,  150  Ind.  279. 


Page  28. 


-(c)  6.     Laches  in  making  application. 


.  After  forty  years'  undisturbed 
possession,  the  court  will  not  ap- 
point. Gray  v.  Chaplin,  2  Russ.  Ch. 
126. 

Reference  of,  to  master. 

On  reference  to  a  master  on  an  ap- 
plication for  a  receiver,  the  only 
8 


question  for  examination  is  the  re- 
ceivership question.  Copous  v. 
Kauffman,  8  Paige,  583. 

For  lohom,  appointed. 

A  receiver,  while  the  instrument 
of  the  court  for  the  conservation  of 


MATTERS  RELATING  TO   THE  APPOINTMENT. 


11 


the  estate,  in  a  sense  represents  all 
parties  in  interest,  and  it  is  his 
duty  and  right  to  defend  it  against 
all  claims  which  he  deems  unjust. 
Bosicorth  V.  Terminal  R.  Asso.  53  U. 
S.  App.  302,  80  Fed.  Rep.  969,  26  C. 
C.  A.  279. 

A  receiver  is  appointed  not  only 
for  plaintiff,  but  also  for  the  benefit 
of  all  persons  who  may  establish 
rights  in  the  case.  First  Nat.  Bank 
V.  Barnum  Wire  &  Iron  Works,  60 
Mich.  487. 

A  receiver  appointed  under  the  act 
of  Congress  of  March  3,  1887,  repre- 
sents not  only  the  corporation,  but 
also  the  government  and  all  who 
have  interests  in  the  property. 
United  States  v.  Church  of  Jesus 
Christ  of  L.  D.  S.  5  Utah,  .538. 

The  receiver  of  an  insolvent  life  in- 
surance company  is  the  trustee  of 
and  represents  the  creditors  and  all 
interested  in  the  fund,  including  pol- 
icy holders,  and  is  not  the  represen- 
tative of  the  latter  to  the  exclusion 
of  the  corporation.  Mason  v.  Henry, 
152  N.  Y.  529. 

Ordinarily  the  receiver  is  the 
agent  of  the  mortgagor,  but  not  so 
where  other  trusts  are  involved.  Jef- 
freys V.  Dickson,  L.  R.  1  Ch.  183. 

A  receiver  is  not  the  representa- 
tive of  the  owner  in  regard  to  the 
fulfilment  of  his  contracts,  except 
such  as  he  adopts.  Broicn  v.  War- 
ren, 78  Tex.  543,  11  L.  R.  A.  394. 

Must  be  assets. 

A  receiver  will  not  be  appointed 
where  the  existing  mortgages  will 
consume  all  the  property.  Collins 
V.  Myers,  68  Ga.  530. 

Where  there  are  no  assets  of  a 
building  and  loan  association  for  dis- 
tribution; a  receiver  will  not  be  ap- 
pointed. Barton  v.  Enterprise  Loan 
&  Bldg.  Asso.  114  Ind.  226. 

Where  it  appears  that  a  receiver 
will  be  useless  the  court  will  not  ap- 


point. Mercantile  Invest.  &  G. 
Trust  Co.  V.  River  Platte  Trust,  L. 
&  A.  Co.  [1892]  2  Ch.  303;  Barton  v. 
Enterprise  Loan  &  Bldg.  Asso.  114 
Ind.  226. 

A  receiver  will  not  be  appointed 
after  judgment  debtor  has  become  a 
bankrupt.  Ryan  v.  Lefroy,  3  Ir.  Ch. 
Rep.  351. 

When  title  in  dispute. 

The  court  is  slow  to  appoint  a  re- 
ceiver of  real  estate  where  the  legal 
title  is  in  controversy,  and  one  of  the 
parties  is  in  the  peaceable  posses- 
sion under  claim  of  right.  This 
rule,  however,  does  not  apply  where 
the  property  is  already  in  the  pos- 
session of  a  receiver,  and  a  third 
party  claiming  adversely  to  the  oth- 
ers asks  to  have  the  receivership  con- 
tinued. State  V.  Allen,  1  Tenn.  Ch. 
512. 

A  preliminary  injunction  or  re- 
ceivership will  not  be  granted  upon 
the  ground  that  the  complainant  is 
the  owner  of  the  property  and  busi- 
ness sought  to  be  reached  in  the  ac- 
tion, the  legal  title  of  which  is  in  de- 
fendant, where  the  facts  set  up  in  the 
answer  and  affidavits  amount  to  a 
denial  of  such  ownership,  and  the 
case  is  not  within  any  of  the  excep- 
tions to  the  general  rule  denying 
such  relief  under  such  circum- 
stances. Guild  V.  Meyer,  56  N.  J. 
Eq.  183. 

A  receiver  will  be  apjDointed  in  an 
action  involving  the  title  and  right 
to  possession  of  real  property,  where 
the  complainants  have  a  good  equi- 
table title  to  the  land  and  in  equity 
the  right  to  its  immediate  posses- 
sion, although  the  naked  legal  title  is 
outstanding,  and  it  appears  that  the 
defendants  in  possession  are  insolv- 
ent and  are  destroying  the  timber  on 
the  land.  Smith  v.  Lusk  (Ala.)  24 
So.  256. 


Page  32,  sec.  11. — Scope  of  bill  or  petition. 


In  the  appointment  the  court  acts 
only  on  well-established  principles, 
and  in  that  sense  only  can  a  receiver 
be  said  to  be  ex  debito  justitiw, 
whether    the    application    be    by    a 


judgment  creditor  or  anyone  else. 
The  court  acts  only  on  a  proper  case 
made  out.  Smith  v.  Post  Dover  & 
L.  H.  R.  Co.  12  Ont.  App.  Rep.  288. 
A  receiver  will  be  granted  without 


§§  12,   13 


RECEIVERSHIPS— SUPPLEMENT. 


costs  where  the  grounds  are  doubt- 
ful. Shepherd  v.  Murdoch,  2  Mol- 
loy.  531. 

Jn  Mood  V.  Gaynor,  1  Ambl.  395, 
the  court  refused  to  appoint  because 
there  was  no  precedent  for  such  ac- 
tion. 

Tlie  <;oneral  rule  is  that  a  receiver 
is  appointed  only  in  clear  cases  when 


no  adequate   remedy  at  law   exists. 
Tumlin  V.   Vanhorn,  77  Ga.  315. 

In  the  appointment  the  court  may 
impose  conditions  as  to  the  payment 
of  claims,  and  order  that  they  be  paid 
out  of  the  earnings  of  the  property. 
United  States  Trust  Co.  v.  ^ew 
York  W.  S.  d  B.  R.  Co.  25  Fed.  Rep. 
800. 


Page  33,  sec.  12. — Time  when  appointed. 


Where  the  debtor  died  after  appli- 
cation for  a  receiver,  and  two  days 
after,  without  reviving  the  action  or 


bringing  in  the  heirs,  the  receiver 
was  appointed,  held  to  be  error.  Re 
Shcphard,  L.  R.  43  Ch.  Div.  131. 


Page  33. — (b)     Existence  of  property  not  prerequisite. 


That  the  debtor  does  not  appear 
to  have  property  is  no  ground  for 
refusal  to  ap])oint;  but  where  it  ap- 
pears that  the  only  property  is  a 
trust  fund  under  a  devise  which  the 
debtor  is  willing  to  apply  upon  the 
demand,  the  appointment  will  be  re- 
fused. De  Camp  v.  Dempsey,  10  N. 
Y.  Civ.  Proc.  Rep.  210. 

The   answer    in    a    creditors'   bill, 


that  defendant  has  not  property  to 
the  amount  of  $100,  is  not  a  suffi- 
cient reason  for  refusing  to  appoint 
a  receiver.  Fuller  v.  Taylor,  0  N.  J. 
Eq.  301 ;  Fitzhugh  v.  Fveringham,  6 
Paige,  29. 

That  there  is  no  other  property 
than  an  equity  of  redemption  is  not  a 
defense.  Bailey  v.  Lane,  15  Abb. 
Pr.  373,  note. 


Page  35,  sec.  13. — Must  be  a  suit  pending. 


An  order  appointing  a  receiver 
where  no  suit  is  pending  concerning 
the  property  of  which  he  is  put  in 
charge  is  void.  Merchants'  &  Mfrs. 
Nat.  Bank  v.  Kent  Circuit  Judge,  43 
Mich.  292 ;  Eoc  parte  Mountfort,  15 
Ves.  Jr.  445;  Re  Hancock,  27  Hun, 
575. 

The  filing  of  the  petition  in  an  ac- 
tion between  partners  is  a  prerequi- 
site to  the  appointment  of  a  receiver 
by  the  district  court,  under  Tex.  Rev. 
Stat.  1895,  art.  14(55.  Wehh  v.  Al- 
len, 15  Tex.  Civ.  App.  506. 

A  cause  cannot  be  pending,  within 
Ohio  Rev.  Stat.  §  5587,  so  as  to  au- 
thorize the  appointment  of  a  re- 
ceiver, before  it  has  been  commenced 
as  provided  in  §  5035 ;  and  the  ap- 
pointment of  a  receiver  in  a  cause 
where  a  petition  has  been  filed,  but 
before  a  summons  has  been  issued, 
is  invalid.  Dwelle  v.  Hinde,  8  Ohio 
10 


C.  D.  177 ;  Barher  Bros.  v.  Manier, 

71  Miss.  725;  Hardy  v.  McClellan, 
53  Miss.  507 ;  Guy  v.  Doak,  47  Kan. 
236. 

A  receiver  will  not  be  appointed 
on  a  petition,  but  only  on  a  bill, — 
when.  Rice  v.  Tonnele,  4  Sandf.  Ch. 
568. 

An  action  may  be  pending,  so  that 
the  court  may  appoint  a  receiver, 
though  the  notice  or  service  was  de- 
fective. Hellcbush  v.  Blake,  119 
Ind.  349. 

A  motion  for  the  appointment, 
where  the  order  to  show  cause 
against  the  appointment  is  served 
before  the  commencement  of  the 
suit,  is  irregular.  Kattenstroth  v. 
Astor  Bank,  2  Duer,  632. 

A  receiver  cannot  be  appointed 
preliminary  to  the  commencement  of 
suit,  and  without  notice  such  ap- 
pointment is  void.     Jones  v.  Schall, 


MATTERS  RELATING  TO  THE  APPOINTMENT. 


§  15 


45  Mich.  379;  Merchants'  d  Mfrs. 
Nat.  Bank  v.  Kent  Circuit  Judge,  43 
Mich.  292. 

An  agreement  to  receive  property 
in  part  payment  of  a  judgment,  and 
an  indorsed  note  for  the  balance, 
does  not  prevent  the  filing  of  a  cred- 
itors' bill  and  the  appointment  of  a 
receiver.  Balde  v.  Smith,  5  Ch.  Sent. 
11. 

What  court  may  appoint. 

The  better  practice  in  an  applica- 
tion for  a  receiver  after  an  appeal 
has  been  taken  in  the  supreme  court 
is  to  apply  to  the  court  of  original 
jurisdiction.  Coleman  v.  Fisher 
(Ark.)   48  S.  W.  807. 

In  Alabama,  on  appeal  from  the 
register   the   question   comes   before 


the  chancellor  as  an  original  peti- 
tion, and  lie  may  hear  other  evidence. 
Efoivali  Min.  Co.  v.  Wills  Valley 
Min.  c6  3Ifg.  Co.  106  Ala.  492. 

An  application  for  the  appoint- 
ment of  a  receiver  in  supplementary 
proceedings  must  be  made  to  the 
judge  who  granted  the  order  of  ref- 
erence and  appointed  the  referee. 
Ball  V.  Goodenough,  37  How.  Pr. 
479. 

Ordinarily  a  motion  under  the 
North  Carolina  Code  for  the  appoint- 
ment of  a  receiver  for  a  corporation 
must,  at  the  option  of  the  mover, 
be  made  before  the  resident  judge  of 
the  district,  or  one  assigned  to  the 
district,  or  holding  the  courts  there- 
of by  exchange.  Worth  v.  Piedmont 
Bank,  121  N.  C.  343. 


Page  37,  sec.  15. — Grounds  upon  which  jurisdiction  is  entertained. 


A  receiver  will  not  be  appointed  if 
any  other  remedy  will  afi'ord  ample 
protection.  Etoivah  Min.  Co.  v. 
Wills  Valley  Min.  &  Mfg.  Co.  106 
Ala.  492. 

If  made  under  statutory  power  it 
is  with  great  caution.  Brabrook 
Tailoring  Co.  v.  Belding  Bros.  40 
111.  App.  326. 

Where  a  city  which  is  a  stock- 
holder in  a  corporation  is  competent 
to  prosecute  all  actions  against  it, 
and  there  are  no  funds  to  take  charge 
of,  the  appointment  is  void  and 
should  not  be  made.  Burnes  v. 
Atchison,  48  Kan.  507. 

To  justify  the  appointment  it 
must  appear  that  the  possession  of 
defendant  was  obtained  by  fraud,  or 
that  the  income  is  in  danger  of  loss 
from  neglect,  waste,  or  misconduct. 
Gilhert  v.  Block,  51  111.  App.  516. 

Courts  do  not  appoint  receivers  as 
a  punishment  for  past  dereliction  or 
because  of  past  dangers.  In  pass- 
ing upon  the  appointment  of  a  re- 
ceiver for  a  solvent,  prosperous  cor- 
poration, something  more  must  be 
shown  than  past  misconduct.  Orig- 
inal Vienna  Bakery,  C.  &  N.  Co.  v. 
Eeissler,  50  111.  App.  406. 

The  appointment  of  a  receiver  for 
a  railroad  will  not  be  made  merely 
for  default  in  payment  of  interest. 


Loss  must  be  shown.  Union  Trust 
Co.  V.  St.  Louis,  I.  M.  £  S.  R.  Co.  4 
Dill.  114;  Buffalo  Chemical  Works 
V.  Bank  of  Commerce,  79  Hun,  93; 
Drought  v.  Perceval,  2  Molloy,  502. 

A  partner  who  upon  dissolution 
leaves  assets  with  his  copartner  to 
be  applied  to  the  payment  of  firm 
debts,  which  the  latter  assumes,  is 
entitled  to  the  appointment  of  a  re- 
ceiver to  prevent  waste  and  misap- 
plication of  the  assets  by  the  copart- 
ner.    Allen  V.  Coolcy,  53  S.  C.  414. 

A  receiver  should  not  be  appointed 
of  a  fund  in  the  hands  of  the  sheriff, 
on  which  a  lien  is  claimed,  unless 
it  appears,  as  required  by  Ky.  Civ. 
Code,  §  298,  that  there  is  danger  of 
its  loss  or  removal.  Combs  v. 
Breatldtt  County,  20  Ky.  L.  Rep. 
1247. 

A  receiver  may  be  appointed  in  a 
suit  by  a  judgment  creditor,  over 
stock  standing  in  the  name  of  the 
debtor's  wife,  where  there  is  reason- 
able ground  to  apprehend  that  it  will 
be  removed  beyond  the  jurisdiction 
of  the  court,  or  will  be  lost.  State 
Bank  v.  Gill,  23  Hun,  410. 

But  the  appointment  is  never  in 
anticipation  of  something  that  may 
happen.  Chadron  Bkg.  Co.  v.  Ma- 
honey,  43  Neb.  214. 

A  receiver  pendente  lite  will   not 

11 


§  15 


RECEIVERSHIjt»S— SUPPLEMENT. 


be  appointed  in  an  action  to  recover 
possession  of  real  property,  where 
plaintiff's  title  is  piit  in  issue,  in  the 
absence  of  some  special  circum- 
stances rendering  such  an  appoint- 
ment necessary  to  preserve  plaintiir's 
rights.  Sengfclder  v.  Hill,  IG  Wash. 
355. 

The  power  to  appoint  a  receiver  of 
a  corporation  will  not  be  exercised 
except  upon  a  grave  necessity  and  a 
clear  showing  that  the  applicant  has 
otherwise  no  adequate  remedy,  and 
is  in  danger  of  suffering  irreparable 
loss.  People's  Invest.  Co.  v.  Craw- 
ford (Tex.  Civ.  App.)   45  S.  W.  738. 

Nor  because  an  ollicer  is  in  a  posi- 
tion to  betray  it,  where  there  is  no 
evidence  to  establish  any  probability 
that  he  will  so  act.  Young  v.  Rutan, 
69  111.  App.  513;  Dozier  v.  Logan, 
101  Ga.  173;  Boston  Invest.  Co.  v. 
Pacific  Short-Line  Bridge  Co.  104 
Iowa,  311. 

A  receiver  should  not  be  appointed 
on  the  ground  that  a  corporation  is 
insolvent  or  in  imminent  danger  of 
insolvency,  when  its  assets  are  three 
times  its  stated  indebtedness,  and  it 
is  not  shown  that  it  is  attempting 
fraudulently  to  dispose  of  its  prop- 
erty. Miller  v.  Southern  Land  <& 
Lumber  Co.  53  S.  C.  364. 

A  receiver  of  property  conveyed 
by  an  insolvent  partnership  to  one 
of  the  firm  creditors  at  an  overvalua- 
tion, to  hinder  and  defeat  other 
creditors,  should  not  be  appointed  ab- 
solutely without  giving  the  pur- 
chasers the  alternative  of  giving 
bond  and  security,  where  they  are 
not  alleged  to  be  insolvent,  and  the 
property  consists  of  a  sawmill  and 
fixtures  and  a  large  number  of  ani- 
mals used  therewith,  the  care  of 
which  would  be  a  great  expense  to  a 
receiver.  Stillwcll  v.  Savannah 
Grocery  Co.  88  Ga.  100. 

The  appointment  of  a  receiver  is 
a  common  practice  in  case  of  the 
mortgage  of  tolls  or  income.  Rug- 
gles  v.  Southern  Minnesota  R.  Co.  5 
Chicago  Legal  News,  110,  17  Int. 
Rev.  Rec.  29;  Potts  v.  Warwick  d 
B.  Canal  Nav.  Co.  1  Kay,  142,  143; 
Tripj)  v.  Chard  R.  Co.  11  Hare,  249, 
17  Jur.  887 ;  Dumville  v.  Ashbrooke, 
3  Russ.  Ch.  98;  Imperial  Mercantile 
12 


Credit  Asso.  v.  Newry  &  A.  R.  Co. 
Ir.  Rep.  2  Eq.  1 ;  Knapp  v.  Williams, 
4  Ves.  Jr.  430,  note  a;  Crewe  v. 
Edleston,  1  De  G.  &  J.  93. 

A  judgment  creditor  of  a  railroad 
company,  to  whom  the  company's 
lands  have  been  delivered  under  a 
writ  of  elegit,  is  entitled  to  a  re- 
ceiver of  the  tolls  and  earnings. 
Kingston  v.  Cambridge  R.  Co.  41  L. 
J.  Ch.  N.  S.  152. 

The  appointment  of  a  receiver  for 
'  the  purpose  of  preserving  the  future 
rents  of  real  property,  to  abide  the 
result  of  an  action  concerning  the 
same,  is  not  authorized  where  the  ac- 
tion proceeds  on  the  assumed  owner- 
ship by  plaintiff  of  the  land  and  the 
profits  thereof,  and  involves  merely 
legal,  as  distinguished  from  equi- 
table, rights.  San  Jose  Safe  Deposit 
Bank  of  Savings  v.  Bank  of  Madera, 
121  Cal.  543. 

A  receiver  may  be  appointed  un- 
der §  24  of  the  garnishment  act  of 
Illinois.  Myres  v.  Frankenthal,  55 
111.  App.  390. 

A  receiver  of  corporate  stock 
pledged  to  secure  a  debt  which  is  past 
due  may  be  appointed  in  proceedings 
in  aid  of  a  garnishment  against  the 
pledgee,  with  the  garnishee's  con- 
sent, to  sell  the  stock  for  payment 
of  the  amount  due  the  pledgee  and 
to  impound  the  surplus  to  await  the 
result  of  the  original  action  against 
the  debtor,  where  the  latter  is  in- 
solvent. Kimbrough  v.  J.  K.  Orr 
Shoe  Co.  98  Ga.  537. 

The  court  will  refuse  to  appoint 
a  receiver  pending  a  plea  to  the  ju- 
risdiction, but  may  order  an  im- 
mediate hearing  on  the  plea.  Ewing 
v.  Blight,  3  Wall.  Jr.  139. 

Nor  will  a  receiver  of  the  prop- 
erty of  a  railroad  in  Florida  be  ap- 
pointed in  a  suit  in  New  York.  Kit- 
tel  v.  Augusta,  T.  &  G.  R.  Co.  78 
Fed.  Rep.  855. 

The  power  to  remove  a  receiver 
and  appoint  another  does  not  depend 
on  notice  to  the  stockholders.  Hoyt 
V.  Continental  Ins.  Co.  21  N.  Y. 
Week.  Dig.  145. 

An  appointment  may  be  made  and 
an  early  sale  of  the  property  or- 
dered, to  save  forfeiture  of  the  fran- 
chises of  a  corporation.     Boston  In- 


MATTERS  RELATING  TO  THE  APPOINTMENT.     §g  16,  17 


vest.  Co.  V.  Pacific  Short-Line  Bridge 
Co.  104  Iowa,  311. 

On  application  of  the  seller  of 
goods  in  an  action  to  rescind  a  sale 
for  fraud,  the  court  may  appoint  a 
receiver,  where  the  goods  are  in  the 
hands  of  a  sheriff,  to  secure  the  pay- 
ment of  mortgages,  and  this,  though 
the  mortgagees  are  solvent.  Ex- 
change Batik  V.  U.  B.  Claflin  Co.  100 
Ga.  G40. 

The  court  will  not  appoint  a  re- 
ceiver of  a  partnership  in  supplemen- 
tal proceedings  against  the  firm, 
when  a  receiver  has  already  been  ap- 
pointed in  an  action  to  dissolve  the 
firm,  where  the  former  proceedings 
are  bona  fide.  Price  v.  Price,  2,1 
App.  Div.  597. 

That  mandamus  will  lie  to  compel 
a  cemetery  company  to  repair  princi- 
pal approach  to  cemetery  grounds 
will  not  prevent  the  appointment  of 
a  receiver  to  accomplish  such  object, 
where  the  duty  to  repair  is  clear  and 
the  latter  method  will  be  more  ex- 
peditious. Houston  Cemetery  Co.  v. 
Drew,  13  Tex.  Civ.  App.  530. 

As  a  condition  of  the  appointment 


the  court  in  a  foreclosure  proceeding 
may  order  the  receiver  to  pay  such 
outstanding  debts  for  labor,  supplies, 
equipments,  and  permanent  improve- 
ments as  are  reasonable.  Central 
Trust  Co.  V.  Vtah  C.  R.  Co.  16  Utah, 
12. 

In  the  absence  of  a  cause  of  action 
entitling  the  plaintiff  to  recover,  the 
court  will  not  appoint  a  receiver  an- 
cillary to  a  stockholder's  suit. 
Peoples'  Invest.  Co.  v.  Crawford 
(Tex.  Civ.  App.)   45  S.  W.  738. 

A  court  has  no  power  to  appoint 
a  receiver  of  property  out  of  its  ju- 
risdiction. Baltimore  Bldg.  <&  Loan 
Asso.  V.  Alderson,  99  Fed.  Rep.  142, 
32  C.  C.  A.  542. 

Where  the  mortgage  provides  for 
the  appointment  upon  the  com- 
mencement of  an  action  to  foreclose, 
without  regard  to  the  solvency  or  in- 
solvency of  the  mortgagor  or  the 
value  of  the  premises,  and  without 
notice,  and  it  appears  that  the  water 
taxes  and  insurance  are  unpaid,  as 
well  as  the  principal  and  interest, 
a  receiver  will  be  appointed.  Fletch- 
er V.  Erupp,  35  App.  Div.  586. 


Page  45,  sec.  16. — When  jurisdiction  not  entertained. 


The  court  will  not  by  mandamus 
compel  the  governor  to  appoint  a  re- 
ceiver  to   collect   taxes.     League  v. 


Brownsville    Taxing    Dist.    29 
Rep.  742,  752. 


Fed. 


Page  45,  sec.  17. — Effects  of  appointment. 

(a)   Settlement  of  disputes  as  to  title. 


In  an  action  where  two  parties 
claim  possession  and  are  interfer- 
ing with  each  other,  appointment  is 
proper.  Hlawacek  v.  Bohman,  51 
Wis.  92;  Corbin  v.  Thompson,  141 
Ind.  128. 

The  appointment  of  a  receiver  in 
the  case  of  a  disputed  title  to  real 
property  is  in  the  judicial  discretion 
of  the  court,  and  will  be  made  before 
judgment  in  a  proper  case,  although 
there  is  a  tenant  in  possession  to  re- 
ceive the  rents.  Foxwell  v.  Van 
Grutten,  75  L.  T.  N.  S.  311. 

The  court  since  tlie  passage  of  the 


English  judicature  act  1873,  §  25, 
subs.  8,  has  jurisdiction  to  appoint 
a  receiver  in  the  case  of  a  disputed 
title  to  real  property.     Ibid. 

Appointment  where  title  involved 
and  the  party  in  possession  is  com- 
mitting waste.  Collins  v.  Richart, 
14  Bush,  621. 

A  receiver  may  be  appointed 
against  the  legal  title,  in  a  clear  case. 
Lloyd  V.  Passingham,  16  Ves.  Jr.  59. 

Where  upon  answer  there  is  a 
strong  presumption  against  the  de- 
fendant's title,  a  receiver  will  be 
granted.     Stitioell    v.    Williams,    6 

13 


§  17 


RECEIVERSHIPS— SUPPLEMENT. 


3IadcI.  &  G.  49,  Same  case  on  appeal, 
Jac.  280. 

Places    property    in    custodia    legis. 

Money  or  property  in  the  receiv- 
ers' hands  is  in  custodia  legis.  De- 
luny  V.  Mansfield,  1  Hogan,  234. 


But  an  order  that  a  receiver  shall 
be  appointed  to  take  charge  of  goods 
does  not  place  such  goods  in  custodia 
leqis.  Dutcher  v.  Culver,  24  Minn. 
584. 


Page  51. — (f)   Leaves  the  riglils  of  all  parties  in  statu  quu. 


The  mere  appointment  determines 
no  right  existinii;  at  the  time.  Chase's 
Case,  1  Bland  Ch.  20(). 

The  appointment  of  a  receiver  does 
not  determine  the  rights  existing,  or 
alTect  the  liens  attaching  to  the  prop- 
erty over  which  the  receivership  ex- 
tends,— such  as  the  lien  of  attorneys 
for  services  performed  for  a  corpo- 
poration.  Re  Montgomery  (N.  J. 
Eq.)  30  Chicago  Legal  News,  237; 
Bennett  v.  Complete  Electric  Constr. 
Co.  8  App.  Div.  301 ;  Loivenberg  v. 
Jeff  cries,  74  Fed.  Rep.  385;  Hays  v. 
Lycoming  F.  Ins.  Co.  99  Pa.  621. 

But  it  has  been  held  that  the  dis- 


solution of  a  corporation  and  the  ap- 
pointment of  a  receiver  dissolve  at- 
tachments pending.  Wilcox  v.  Con- 
tinental L.  Ins.  Co.  50  Conn.  408. 

And  does  not  disable  tlie  corpora- 
tion from  moving  to  vacate  the  at- 
tachment against  property.  Waver- 
ly  Co.  V.  Worthington  Co.  4  Misc. 
447. 

The  lien  of  an  execution  is  unaf- 
fected. Re  Muehlfeld  cG  H.  Piano 
Co.  12  App.  Div.  492. 

And  so  with  the  lien  of  encum- 
brances. Bryant  v.  Bull,  L.  R.  10 
Ch.  Div.  153. 


Page  52. — (g)   Presumption   of   appointment. 


There  is  no  presumption  that  re- 
ceivers were  appointed  from  the  fact 
that  they  have  acted.  This  presump- 


tion only  applies  to  public  officers. 
International  cC-  G.  A^.  R.  Co.  v.  Moore 
(Tex.  Civ.  App.)   32  S.  W.  379. 


Page  53. — (li)    Over   what   property. 


If  the  appointment  of  a  receiver 
to  take  possession  of  the  property  of 
a  natural  person  upon  the  complaint 
of  the  holder  of  matured  chattel 
mortgages  were  proper  in  any  case, 
it  could  only  be  for  the  property  cov- 
ered by  the  mortgage,  and  could  not 
include  other  property.  State  v. 
Union  Nat.  Bank,  145  Ind.  537. 

The  appointment  of  a  receiver  in 
an  action  to  foreclose  a  mortgage 
which  does  not  purport  to  cover 
rents,  issues,  or  profits  does  not  cre- 
ate a  lien  upon  a  growing  crop,  un- 
der Cal.  Code  Civ.  Proc.  §  564,  subd. 
2.  Locke  V.  Klunker,  123  Cal.  231; 
FAlis  V.  Vernon  Ice,  L.  &  W.  Co.  86 
Tex.  109;  Georgia  v.  Atlantic  &  G. 
R.  Co.  3  Woods,  434;  Roxbury  v.  The 
14 


Lotta.  05  Fed.  Rep.  319:  J  .W.  Dann 
Mfg.  Co.  V.  Parkhurst,  125  Ind.  317; 
Arnold  v.  Wcimer,  40  Neb.  216;  Van 
Wagoner  v.  Paterson  Gaslight  Co.  23 
N.  J.  L.  283. 

A  lien  on  funds  is  followed  into 
the  hands  of  a  receiver, — as,  where 
a  dividend  has  been  declared  and  set 
apart  for  stockholders.  Re  Le  Blanc, 
14  Ilun,  8. 

By  adjudication  of  insolvency  and 
the  appointmenl  of  a  receiver,  the 
debts  of  creditors  at  large  are  fas- 
tened on  its  property.  Graham  But- 
ton Co.  V.  tSpielmann,  50  N.  J.  Eq. 
120. 

The  duty  to  repair  a  section  of  a 
turnpike  road  in  a  receiver's  hands 
will  be  shifted  from  the  owner  to  the 


MATTERS  RELATING  TO  THE  APPOINTMENT. 


§  17 


receiver  by  a  decree  placing-  a  por- 
tion of  tlie  road  in  the  hands  of  a  re- 
ceiver, and  directing  him  to  collect 
the  tolls.  Lock  v.  Franklin  &  H. 
Turnpk.  Co.  100  Tenn.  163. 

The  equitable  rights  of  parties. 

The  receiver  takes  the  property 
subject  to  the  equity  of  a  mortga- 
gee to  have  the  mortgage  reformed  so 
as  to  include  all  the  property  in- 
tended, though  the  mortgage  may  be 
invalid  because  not  recorded.  Ryder 
v.  Ryder,  19  R.  I.  188. 

The  equity  of  §  3009,  Ga.  Code,  ap- 
plies to  the  taking  possession  of 
property  by  a  receiver  under  the  or- 
der of  court,  as  well  as  the  levy  of 
an  execution.  Georgia,  v.  Atlantic 
tG  G.  R.  Co.  3  Woods,  434. 

The  mere  filing  of  a  bill  and  serv- 
ice of  process  do  not  prevent  a  rail- 
road company  from  surrendering 
steel  rails  on  its  right  of  way  but 
not  attached  to  the  road.  Illinois 
Steel  Co.  V.  Putnam,  30  U.  S.  App. 
358,  08  Fed.  Rep.  515,  15  C.  C.  A. 
556. 

Gives  plaintiff  a  lien. 

The  filing  of  a  creditors'  bill  and 
appointment  of  a  receiver  gave  plain- 
tifl's  a  lien  on  the  debtor's  property 
prior  to  a  subsequent  bill  against  the 
lessee  debtor,  though  the  specific 
property  was  not  mentioned  in  the 
first.  Sicift's  Iron  tC-  Steel  Works 
v.  Johnson,  20  Fed.  Rep.  828. 

Prevents  creditors  from  prosecuting 
suits  icithout  leave  of  court. 

First  Nat.  Bank  v.  Dovetail  Body 
c6  Gear  Co.  143  Ind.  534;  National 
State  Bank  v.  Vigo  County  Nat. 
Bank,  141  Md.  352;  Ellis  v.  Vernon 
lee,  L.  &  W.  Co.  80  Tex.  109. 

Does  not  abate  suits  pending. 

Toledo,  W.  &  W.  R.  Co.  v.  Begqs, 
85  111.  80,  28  Am.  Rep.  013;  Kitt- 
rcdgc  v.  Osgood,  101  Mass.  384. 

A  claim  against  a  receiver  may  be 
reduced  to  judgment  in  a  suit  pond- 
ing when  appointment  is  made.  Pine 
Lake  Iron  Co.  v.  La  Fayette  Car 
Works,  53  Fed.  Rep.  853. 

The  fact  that  a  railroad  has  gone 
into  the  hands  of  a  receiver  is  not 


an  abatement  of  mandamus  proceed- 
ings.    People  V.  Barnett,  91  111.  422. 

Notice  of  appointment,  effect  of. 

The  appointment  of  a  receiver  is 
notice  tq  all  parties  to  the  cause, 
but  is  not  notice  to  tenants  who  are 
not  parties.  As  to  such  it  is  only 
notice  from  the  time  the  order  is 
served.  Uensworth  v.  Maunsell,  1 
Ilogan,  170. 

An  agent  of  an  insurance  com- 
pany, authorized  to  surrender  pol- 
icies and  return  the  unearned  pre- 
miums to  policy  holders  upon  ten 
days'  notice  in  writing,  is  not  en- 
titled to  do  so  after  learning  of  the 
insolvency  of  the  insurance  com- 
pany and  the  intention  to  apply  for 
the  appointment  of  a  receiver. 
American  Casualty  Ins.  c6  S.  Co.  v. 
Arrott,  180  Pa.  I. 

Effect  of,  as  to  injunction. 

An  injunction  against  a  corpora- 
tion is  binding  on  its  receiver  sub- 
sequently appointed.  Steel  v.  Gor- 
don, 14  Wash.  521. 

And  it  is  the  duty  of  a  receiver  to 
see  that  the  injunction  is  obeyed. 
Stafford  v.  People,  85  111.  558. 

Effect  as  to  statute  of  limitations. 

The  appointment  of  a  receiver  does 
not  set  in  motion  the  statute  of  lim- 
itations. Riddle  V.  First  Nat.  Bank, 
27  Fed.  Rep.  503;  Harrison  v.  Dig- 
nan,  1  Connor  &  L.  370. 

Effect  as  to  specific  performance. 

Specific  performance  of  a  contract 
to  lease  the  joint  use  of  part  of  the 
track  of  a  railroad  is  not  prevented 
by  the  fact  that  receivers  have  been 
appointed  of  such  road,  where  it  does 
not  appear  that  specific  performance 
will  cast  a  burden  upon  the  track 
property,  injurious  or  prejudicial  to 
the  interests  of  those  interested 
therein.  Chicago,  B.  &  Q.  R.  Co.  v. 
Union  P.  R.  Co.  74  Fed.  Rep.  989, 

Effect  as  to  corporations. 

The  mere  appointment  of  a  re- 
ceiver of  an  insurance  company,  and 
partial  assumption  and  control  of  its 
affairs,  are  not  a  judicial  recogni- 
tion of  the  due  incorporation  of  tlie 

15 


§  18 


RECEIVERSHIPS— SUPPLEMENT. 


company.  People  v.  Van  Rensse- 
laer his.  Co.  38  Barb.  323. 

The  mere  appointment  of  a  re- 
ceiver does  not  work  a  dissolution  of 
a  corporation.  Stcinhauer  v.  Vol- 
niar,  11  Colo.  App.  494;  Del  Valle  v. 
Navarro,  21  Abb.  N.  C.  136. 

Or  destroy  the  corporate  entity. 
Second  Xat.  Batik  v.  New  York  8ilk 
Mfg.  Co.  11  Fed.  Rep.  532. 

Or  take  from  it  the  exercise  of  the 
corporate  franchises.  Notwithstand- 
ing the  receivership  the  corpora- 
tion may  still  exercise  its  franchises, 
if  in  so  doing  the  receiver  is  not  in- 
terfered with.  Ohio  d-  M.  K.  Co.  v. 
Russell,  115  111.  52;  Auburn  Button 
Co.  V.  kylvcster,  (58  Hun,  401. 

And  the  sale  of  property  by  a  re- 
ceiver does  not  prohibit  stockhold- 
ers from  electing  directors.  State, 
Atty.  Gen.,  v.  Merchant,  37  Ohio  St. 
251. 

Receivers  of  corporations  are  not 
purchasers  for  valuable  considera- 
tion, but  are  voluntary  assignees 
and  personal  representatives  of  the 
company.  Van  Wagoner  v.  Pater- 
son  Gaslight  Co.  23  N.  J.  L.  283. 

An  order  of  a  court  having  juris- 
diction, appointing  a  general  receiv- 
er of  a  corporation  for  the  purpose 
of  liquidation,  is  an  adjudication 
which  operates  as  a  sequestration  of 
the  property, — especially  when  it  is 
plain  that  such  is  the  intention  and 
scope  of  the  order.  Temple  v.  Glas- 
gow, 42  U.  S.  App.  417,  80  Fed.  Rep. 
441,  25  C.  C.  A.  540. 

Suits  by  and  against. 

An  act  repealing  a  charter  and  ap- 
pointing receivers  incapacitates  the 
corporation  from  suing  or  being 
sued.     Whitman  v.  Cox,  26  Me.  335. 

The  effect  of  a  general  receivership 
of  a  corporation,  accompanied  by  an 
injunction  restraining  its  officers 
and  agents  from  exercising  any  con- 
trol over  its  property  or  books,  or 
from  interfering  with  the  control  of 
the  receivers,  and  enjoining  any  suits 


against  the  corporation, — precludes 
creditors  from  prosecuting  claims  tn 
judgment  without  leave  of  the  court. 
Temple  v.  Glasgow,  42  U.  S.  App. 
417,  80  Fed.  Rep.  441,  25  C.  C.  A. 
540. 

Except  in  rare  cases,  stockholders 
cannot  intervene  where  the  corpora- 
tion is  dissolved  and  a  receiver  is  ap- 
pointed. People  v.  Cataract  Bank, 
5  Misc.  14. 

The  appointment  of  a  receiver  for 
a  national  bank  does  not  preclude  a 
stockholder  from  maintaining  an  ac- 
tion against  the  directors  for  their 
fraud  or  negligence  in  allowing  the 
publication  of  a  false  statement  of 
the  condition  of  tlie  bank,  by  which 
the  plaintiff  was  induced  to  purchase 
his  stocI<.  Houston  v.  Thornton, 
122  N.  C.  365. 

Discharges  officers  and  servants  of 
corporation. 

The  order  of  court  appointing  a 
receiver  and  manager  of  a  railroad 
company  has  the  effect  of  a  notice 
discharging  the  company's  officers 
and  servants.  Rcid  v.  Explosives 
Co.  56  L.  J.  Q.  B.  N.  S.  08 ;  Rochester 
V.  Bronson,  41  How.  Pr.  78,  82. 

Terminates    stockholders'     liability, 
when. 

The  appointment  of  a  receiver  for 
a  building  and  loan  association  ter- 
minates the  liability  of  stockholders 
for  monthly  dues.  Buist  v.  Bryan, 
4:4.  S.  C.  121,  29  L.  R.  A.  127. 

Makes  funds  of  bank  trust  fund. 

Riddle  v.  First  Nat.  Bank,  27  Fed. 
Rep.  503. 

Disables  corporation  from  assigning. 

After  a  receiver  has  been  ordered 
an  insolvent  corporation  has  no  right 
to  assign  portions  of  its  rent  and 
personal  estate.  It  would  be  a  fraud 
upon  the  process  and  proceedings  of 
the  court.  Leavitt  v.  Tylee,  1  Sandf. 
Ch.  207. 


Page  54,  sec.  18. — Courts  exercising  jurisdiction. 


For  the  provisions  of  N.  C.  Code, 
§§  338,  339,  enlarging  jurisdiction 
in  the  appointment  of  receivers,  see 
16 


John  L.  Loper  Lumber  Co.  v.  Wal- 
lace, 93  N.  C.  22. 

Prior  to  April  26,  1893,  the  court 


MATTERS  RELATING  TO  THE  APPOINTMENT. 


18 


of  common  pleas  of  Pennsylvania 
had  no  jurisdiction  to  appoint  re- 
ceivers. Fraternal  Guardian's  As- 
signed Estate,  159  Pa.  G03. 

The  English  judicature  act  1873, 
§  25,  subs.  8,  enables  any  judge  of 
the  high  court  to  appoint  a  receiver 
of  a  decedent's  estate,  notwithstand- 
ing the  absence  of  lis  jjendens ;  but 
applications  for  such  order,  being  on 
the  way  to  probate  proceedings,  are 
properly  made  in  the  probate  divi- 
sion, and,  if  made  elsewhere,  will  not 
be  encouraged.  Bearing  v.  Brooks, 
54  L.  J.  Ch.  N.  S.  694. 

The  appointment  of  a  receiver  of 
a  natural  person  at  the  instance  of 
a  creditor,  not  in  an  auxiliary  pro- 
ceeding, but  upon  a  complaint  in 
which  the  appointment  is  tlie  sole  re- 
lief sought,  is  not  authorized  by  the 
practice  under  the  common  law  or 
by  the  Indiana  statutes.  State  v. 
Union  'Nat.  Bank,  145  Ind.  537. 

Circuit  courts  are  authorized  by 
W.  Va.  Code,  chap.  53,  §§  58,  59,  in 
proper  cases  therein  set  forth,  to  ap- 
point receivers  for  and  wind  up  the 
affairs  of  foreign  corporations  which 
have  done  business,  acquired  prop- 
erty, and  contracted  debts  in  the 
state.  Swing  v.  Bentley  <&  G.  Fur- 
niture Co.  (W.  Va.)   31  S.  E.  925. 

The  jurisdiction  conferred  upon 
the  circuit  court  by  Mo.  Rev.  Stat. 
1889,  §§  2790-2792,  to  appoint  re- 
ceivers for  business  corporations  at 
the  instance  of  creditors  in  certain 
cases,  may  be  exercised  by  the  judge 
in  vacation,  in  view  of  §  2792,  pro- 
viding that  the  jurisdiction  is  to  be 
"exercised  as  in  ordinary  cases." 
Glover  v.  .S'^  Louis  Mut.  Bond  In- 
vest. Co.  138  Mo.  408. 

The  previous  execution  of  an  as- 
signment for  creditors  by  a  corpora- 
tion does  not  defeat  the  jurisdiction 
of  the  court,  under  the  Texas  stat- 
ute, to  appoint  a  receiver  for  an  in- 
solvent corporation.  Milam  Comity 
Co-Op.  Cotton  &  M.  Alliance  v.  Ten- 
nerit  Stribling  Shoe  Co.  (Tex.  Civ. 
App.)  40  S.  W.  331,  Rehearing  De- 
nied in  40  S.  W.  1027. 

N.  C.  Rev.  Code,  chap.  26,  §§  5.  6, 
oust  the  former  equity  jurisdiction 
to  appoint  receivers  at  the  instiince 
of  creditors.     The  statutory  remedy 


is  exclusive.  Von  Glahn  v.  Do  Ros- 
set,  81  N.  C.  467. 

State  courts  have  jurisdictions  of 
actions  against  receivers  of  the  Fed- 
eral court.  Schonberg  v.  Coioen,  7 
Ohio  Dec.  522. 

The  jurisdiction  of  a  state  court 
which  has  appointed  a  railroad  re- 
ceiver, to  direct  him  as  to  the  wages 
to  be  paid  for  operating  the  road 
within  that  state,  is  not  defeated  by 
the  fact  that  the  employees  in  oper- 
ating the  road  cross  the  state  bound- 
ary and  incidentally  perform  some 
services  in  another  state,  although 
the  receivership  is  ancillary  to  a  re- 
ceivership in  such  other  state.  Guar- 
antee Trust  d  S.  D.  Co.  v.  Philadel- 
phia, K.  d  N.  E.  R.  Co.  69  Conn.  709, 
38  L.  R.  A.  804. 

A  receiver  in  a  Federal  court,  who 
voluntarily  goes  into  a  state  court, 
cannot  question  the  right  of  that 
court  to  determine  the  controversy 
between  himself  and  the  other  partv. 
Grant  v.  Buckner,  172  U.  S.  232,  43 
L.  ed.  430. 

A  state  court  has  jurisdiction  of 
an  action  against  a  purchaser  of  a 
railroad  under  a  mortgage  fore- 
closure to  recover  for  personal  in- 
juries sustained  in  the  collision  of 
two  trains  while  the  road  was  being 
operated  by  receivers  appointed  by 
the  United  States  circuit  court, 
where  the  decree  of  that  court  di- 
recting foreclosure  of  the  railroad 
required  the  purchaser  as  a  part  of 
the  purchase  price,  and  in  addition 
to  the  sum  paid,  to  pay  all  liabilities 
incurred  by  the  receivers  before  de- 
livery of  possession  of  the  property. 
Atchison,  T.  &  S.  F.  R.  Co.  v.  Cun- 
ningham, 59  Kan.  722. 

A  state  court  will  not  direct  the 
payment  into  court  of  the  funds  in 
the  hands  of  a  relief  department  of 
a  railroad  company,  for  which  re- 
ceivers have  been  appointed  by  a 
Federal  court,  with  a  provision  that 
they  shall  continue  the  operation  of 
the  features  of  such  relief  depart- 
ment in  accordance  with  the  regula- 
tions adopted  by  the  officers  of  the 
company.  Baltimore  d  0.  R.  Co.  v. 
Flaherty,  87  Md.  102. 

A  Federal  court  will  not  appoint 
a  receiver  and  direct  the  possession 

17 


§  18 


RECEIVERSHIPS— SUPPLEMENT. 


of  property  in  the  possession  of  a 
state  court  under  attachment, 
thougli  tlie  attachment  proceedings 
are  defective.  Southern  Bank  c€  T. 
Co.  V.  Folsom.  4.3  U.  S.  App.  713,  75 
Fed.  Rep.  929,  21  C.  C.  A.  508;  Val 
Blatz  Brewing  Co.  v.  Walsh,  84  Fed. 
Rep.  5. 

A  circuit  court  of  the  United 
States  sitting  in  one  district  has 
power  to  appoint  a  receiver  of  the 
property  of  a  railroad  company  in 
anotlier  district,  for  the  purpose  of 
preserving  it  pending  litigation, 
where  a  proceeding  to  foreclose  a 
mortgage  thereon  has  been  insti- 
tuted. Triniiy  &  S.  R.  Co.  v.  Broivn, 
91  Tex.  073. 

Jurisdiction  of  a  United  States 
court  to  appoint  is  not  defeated  by 
the  fact  of  incipient  suits  in  a  state 
court.  Buck  v.  Piedmont  d  A.  L. 
Ins.  Co.  4  Fed.  Rep.  849. 

A  receiver  defendant  has  a  right 
to  remove  a  cause  to  the  United 
States  court  when  he  is  appointed 
over  a  national  bank.  He  acts  as 
receiver  under  the  laws  of  the  United 
States,  and  the  removal  act  there- 
fore applies.  Soivles  v.  Witters,  43 
Fed.  Rep.  700. 

The  appointment  of  a  receiver  does 
not  deprive  a  bankrupt  court  of  ju- 
risdiction. Re  Independent  Ins.  Go. 
Holmes,  103 ;  Re  National  L.  Ins.  Co. 
6  Biss.  35. 

Federal  courts  of  another  state 
will  not  refuse  to  entertain  garnish- 
ment against  a  receiver  on  the  pe- 
tition of  citizens  within  its  juris- 
diction, when  no  objection  to  the  ju- 
risdiction on  other  grounds  exists. 
Central  Trust  Co.  v.  Chattanooga  R. 
cG  C.  R.  Co.  68  Fed.  Rep.  685. 

The  filing  of  a  bond  and  its  ap- 
proval by  a  state  court,  as  required 
by  the  state  statute  in  case  of  an  as- 
signment for  creditors,  is  not  a  ju- 
dicial proceeding  which  gives  the 
state  court  jurisdiction  of  the  prop- 
erty, so  as  to  prevent  a  Federal  court 
from  appointing  a  receiver  for  it. 
Watsoti  V.  Bettman,  88  Fed.  Rep. 
825. 

In  case  of  conflict  between  the  di- 
rections of  the  primary  court  and 
one  of  ancillary  jurisdiction,  to  a  re- 
ceiver, the  directions  of  the  primary 
18 


court  will  control  in  matters  of  gen- 
eral administration,  and  those  of  the 
local  court  in  local  administration; 
and  the  question  as  to  what  shall  be 
done  with  personal  property  within 
the  jurisdiction  of  the  local  court 
and  encumbered  with  a  local  lien  is 
pre-eminently  a  matter  of  local  ad- 
ministration. Fletcher  v.  Harney 
Peak  Tin-Min.  Co.  84  Fed.  Rep.  555. 

The  infirmity  in  the  jurisdiction 
of  a  suit  to  foreclose  a  mortgage  up- 
on the  property  of  a  corporation,  in 
which  a  receiver  has  been  appointed, 
arising  from  the  collusion  of  the 
original  parties,  which  would  other- 
wise require  dismissal  of  the  suit, 
will  not  deprive  the  court  of  power 
to  take  cognizance  of  intervening 
petitions,  determine  the  validity  of 
the  claims  asserted,  and  give  due  ef- 
fect to  valid  claims  by  affording  the 
petitioners  appropriate  relief.  Elec- 
trical Supply  Co.  V.  Put-In-Bay 
Waterworks,  Light  &  R.  Co.  84  Fed. 
Rep.  740. 

The  receiver  must  be  appointed 
by  the  judge,  and  not  the  clerk. 
Parks  v.  Sprinkle,  04  N.  C.  037. 

And  by  the  court,  and  not  the 
chancellor.  Dclaivare  Bay  &  C.  M. 
R.  Co.  V.  Markley,  45  N.  J.  Eq.  139. 

A  receiver  may  be  appointed  in  an- 
other district  than  that  in  which 
supplementary  proceedings  are  pend- 
ing. Jacobson  v.  Doty  Plaster  Mfg. 
Co.  32  Hun,  430. 

The  general  rule  in  regard  to  con- 
current jurisdiction,  that  the  court 
first  obtaining  control  excludes  the 
other,  does  not  apply  to  a  ease  where 
an  insignificant  portion  of  the  prop- 
erty is  taken  possession  of,  and  the 
case  dismissed  before  suit  in  the 
other  court.  Liggett  v.  Glenn,  4  U. 
S.  App.  438,  51  Fed.  Rep.  381,  2  C. 
C.  A.  280;  Bell  v.  Ohio  Life  d  T.  Co. 
1  Biss.  200. 

Where  a  United  States  circuit 
court  has  appointed  receivers  for 
that  part  of  a  line  of  road  within 
its  jurisdiction,  anotlier  court  with- 
in whose  jurisdiction  a  part  of  the 
line  runs  may  appoint  the  same  re- 
ceivers, where  the  parts  of  the  road 
are  not  capable  of  separate  manage- 
ment. Dillon  V.  Oreqon  Short  Line 
&  U.  N.  R.  Co.  66  Fed.  Rep.  622. 


MATTERS  RELATING  TO  TJU:  APPOINTMENT. 


§  IS 


The  right  of  a  creditor  in  a  court 
of  equity  to  the  appointment  of  a  re- 
ceiver is  not  taken  away  by  the  Illi- 
nois statute  conferring  power  on 
the  state  auditor  to  file  a  bill  and 
procure  such  appointment.  People 
V.  Globe  8av.  Bank  (111.  C.  C.)  29 
Chicago  Legal  News,  396,  14  Nat. 
Corp.  Rep.  723,  Distinguishing  Peo- 
ple V.  Weigley,  155  111.  491. 

A  court  of  equity  has  no  jurisdic- 
tion to  appoint  a  receiver  for  the  col- 
lection of  taxes  of  a  school  district 
where  the  trustees  are  unable  to  get 
anyone  to  serve.  Grand  Raj)  ids 
School-Furniture  Co.  v.  School  Dist. 
No.  29,  19  Ky.  L.  Rep.  1610. 

A  court  of  equity  has  power  to  ap- 
point a  receiver  to  wind  up  a  part- 
nership and  sell  its  real  estate, 
though  part  of  it  lies  in  another 
state.  Dunlap  v.  Byers,  110  Mich. 
109. 

A  court  of  equity  having  jurisdic- 
tion of  a  railroad  in  a  foreclosure 
suit  may  order  the  payment  of  a  ven- 
dor's lien  for  property  taken  by  the 
road,  out  of  earnings  in  the  hands 
of  the  receiver,  or  out  of  the  pro- 
ceeds of  the  sale  of  the  road,  or,  in 
the  last  extremity,  it  may  order  a 
separate  sale  of  the  portion  of  the 
road  subject  to  the  lien.  Wheeling 
Bridge  &  T.  R.  Go.  v.  Reymann  Brew- 
ing Co.  90  Fed.  Rep.  189,  32  C.  C.  A. 
571. 

Courts  of  equity  by  virtue  of  their 
general  equitable  jurisdiction  will 
not  appoint  a  receiver  of  a  corpora- 
tion, and  assume  control  and  man- 
agement of  its  affairs,  at  the  suit  of 
a  stockholder  alleging  fraud,  mis- 
management, and  collusion  on  the 
part  of  the  corporate  authorities, 
or  ultra  vires  acts  of  the  directors  or 
of  the  corporation  itself,  but  in  such 
cases  will  limit  the  redress  granted 
to  the  specific  wrongs  charged,  and 
will  go  no  further  than  to  enjoin  or 
forbid  the  misconduct  complained 
of.  People's  Invest  Co.  v.  Craw- 
ford (Tex.  Civ.  App.)   45  S.  W.  738. 

A  court  of  law  has  no  power  to  ap- 
point. Myres  v.  Frankenthal,  55 
111.  App.  390;  Smith  v.  Los  Angeles 
County  Super.  Ct.  97  Cal.  348. 

The  supreme  court  of  a  state  will 
not   take   cognizance   of   an    alleged 


wrongful  diversion  of  the  income  ol 
a  railroad  during  a  receivership  ap- 
pointed by  the  United  States  dis- 
trict court,  but  the  complainant 
should  seek  redress  in  that  court,  or 
in  its  appellate  tribunal.  Kurtz  v. 
Philadelphia  d  R.  R.  Co.  187  Pa.  59. 
The  appellate  court  will  not  ap- 
point or  direct  the  appointment  of  a 
receiver  upon  reversing  a  judgment 
dismissing  a  bill  by  creditors  to 
reach  the  property  of  their  debtor, 
where  the  property  is  already  in  the 
possession  of  a  receiver  the  validity 
of  whose  appointment  is  attacked  in 
the  action.  Albion  Malleable  Iron 
Co.  V.  First  Nat.  Bank,  116  Mich. 
218. 

Power  of  the  court. 

The  powers  given  the  receiver  will 
be  enlarged  from  time  to  time  when 
necessary.  Ohio  Turnpike  Co.  v. 
Howard,  1  West.  L.  J.  216. 

The  court  may  authorize  the  re- 
ceiver of  a  railway  to  allow  an  elec- 
tric railroad  company  to  cross  its 
tracks  in  the  interest  of  the  public. 
Stewart  v.  Wisconsin  Cent.  Co.  89 
Fed.  Rep.  617. 

The  court  has  no  power  to  order 
the  sheriff  to  deliver  to  its  receiver 
treasury  warrants  seized  by  him  un- 
der a  writ  of  replevin  in  a  suit  by  a 
person  not  a  party  to  the  suit  in 
which  the  receiver  was  appointed, 
such  warrants  not  being  in  the  cus- 
tody of  the  court.  Elwell  v.  Good- 
now,  71  Minn.  383. 

A  court  of  equity  having  posses- 
sion, through  its  receiver,  of  a  rail- 
road system,  will  not  prevent  mort- 
gagees from  filing  suits  to  foreclose 
their  mortgages  on  the  property 
pending  proceedings  for  a  reorgan- 
ization of  the  road,  if  the  litigation 
over  the  reorganization  will  require 
a  month  or  more  for  its  determina- 
tion. Mercantile  Trust  Co.  v.  Balti- 
more cG  0.  R.  Co.  89  Fed.  Rep.  606. 

The  court  appointing  a  receiver  of 
a  corporation  has  no  authority  sum- 
marily to  order  one  not  a  party  to 
tlie  action  to  deliver  to  the  receiver 
jjroperty  claimed  to  belong  to  the 
corporation,  as  he  h.as  a  right  to  have 
his  title  determin(;d  in  an  a[)pr<)[)ri- 
ate  action;  and  the  fact  that  the  ac- 

19 


S  19 


RECEIVERSHIPS— SUPPLEMENT. 


tual  possession  was  in  the  plaintiff 
in  the  action  in  which  the  receiver 
was  appointed  is  not  material,  if 
such  possession  was  not  in  his  own 
right.  Stuparich  Mfg.  Co.  v.  ISan 
Fra)icisco  8uper.  Ct.  123  Cal.  290. 

The  court  should  not  direct  a  re- 
ceiA'er  to  expose  the  property  to  the 
hazard  incident  to  the  conduct  of  a 
precarious  business,  except  so  far  as 
is  necessary  to  preserve  the  existing 
status  and  maintain  the  rights  of  the 
parties.  Bigbee  v.  Summerour,  101 
Ga.  201. 

The  district  court  has  authority, 
either  on  its  own  motion  or  that  of 
defendants,  to  require  an  accounting 
from  a  receiver  appointed  in  the  ac- 
tion, and  a  return  of  the  property  to 
the  owners  after  a  decision  of  the  su- 
preme court  in  their  favor.  Hamm 
V.  J.  Stone  d  Sons  Livestock  Co.  13 
Tex.  Civ.  App.  414. 

Mere  oral  directions  by  the  judge 
who  appointed  a  receiver  of  a  cor- 
poration, which  were  never  reduced 
to  writing,  may  be  disregarded  by 
another  judge  in  passing  upon  the 
acounts    of    the    receiver    and    his 


claims  to  allowance  for  compensa- 
tion and  expenditures, — especially 
where  the  appointing  judge  had  such 
an  interest  as  to  disqualify  him. 
United  States  Nat.  Bank  v.  National 
Bank,  G  Okla.  103. 

The  court  which  appointed  a  re- 
ceiver of  a  corporation  may  render  a 
judgment  directing  the  sheriff  to  sell 
land  previously  conveyed  to  the  cor- 
poration, to  satisfy  judgments 
against  the  corporation's  grantor, 
upon  determining  in  an  action  by  the 
judgment  creditors  that  the  convey- 
ance to  the  corporation  was  fraudu- 
lent as  to  them ;  and  it  is  not  bound 
to  leave  the  property  in  the  hands  of 
the  receiver  and  direct  him  to  sell 
the  same  in  the  receivership  action. 
Cass  V.  Sutherland,  98  Wis.  551. 

The  court  having  the  custody  of 
the  property  of  an  insolvent  corpora- 
tion may,  on  the  bringing  of  an  ac- 
tion to  foreclose  a  mortgage,  order 
a  sale  by  the  receivers  of  all  the  as- 
sets of  the  corporation  not  embraced 
in  the  mortgage.  Kurtz  v.  Phila- 
delphia &  R.  R.  Co.  187  Pa.  59. 


Page  56,  sec.  19. — Conflict  of  jurisdiction. 


The  enactment  of  the  Federal 
bankruptcy  law  of  July  1,  1898,  did 
not  suspend  the  right  of  a  state 
court  to  appoint  a  receiver  for  an  in- 
solvent corporation  under  state  laws, 
when  it  had  not  been  adjudged  a 
bankrupt  under  the  law  of  Congress. 
State,  Strohl,  v.  King  County  Super. 
Ct.  (1899)  20  Wash.  545,  45  L.  R. 
A.  177. 

But  the  appointment  of  a  receiver 
by  a  state  court  will  not  prevent 
subsequent  bankrupt  proceedings  in 
the  Federal  court.  Re  Independent 
Ins.  Co.  (1872)  Holmes,  103,  Affirm- 
ing 2  Low.  Dec.  97  ;  Re  Safe  Deposit 
cC-  Sav.  Inst.  (1872)  7  Nat.  Bankr. 
Reg.  392;  Re  Green  Pond  R.  Co. 
(1876)  13  Nat.  Bankr.  Reg.  118; 
Re  National  L.  Ins.  Co.  (1874)  6 
Biss.  35;  Re  Noonan  (1873)  3  Biss. 
491;  Thornhill  v.  Bank  of  Louisiana 
(1870)  1  Woods,  1,  Affirming  (1870) 
3  Nat.  Bankr.  Reg.  435 
20 


As  to  the  effect  of  the  appoint- 
ment of  a  receiver  as  an  act  of  bank- 
ruptcy, see  fiote  in  45  L.  R.  A.  on 
page  190. 

A  court  in  which  a  foreclosure 
suit  is  brought,  and  which  has  en- 
tered a  final  decree  adjudging  fore- 
closure and  sale  by  a  special  master, 
has  such  jurisdiction  over  the  specif- 
ic property  as  to  entitle  it  to  hold 
exclusive  jurisdiction  and  possession 
thereof  to  the  exclusion  of  any  other 
court  and  of  a  receiver  appointed 
thereby  after  such  decree  and  before 
the  sale,  so  as  to  render  the  sale  sub- 
sequent to  the  appointment  of  the 
receiver  valid.  McLajie  v.  Holland 
Trust  Co.  52  U.  S.  App.  599,  suh 
nom.  Holland  Trust  Co.  v.  Interna- 
tional Bridge  d  Tramway  Co.  85  Fed. 
Rep.  865,  29  C.  C.  A.  400. 


MATTERS  RELATING  TO  THE  APPOINTMENT.     §§  20,  21 
Page  58,  sec.  20. — Scope  of  jurisdiction. 


Jurisdiction  must  be  exercised  in 
good  faith  and  for  the  common  bene- 
fit of    all.     Re    Maskelyne    British 


Typeicriter  Co.  [1898]  1  Ch.  133,  77 
L.  T.  N.  S.  579. 


Page  59,  sec.  21. — Who  appointed. 


As  a  rule  but  one  receiver  appointed. 

As  a  general  rule,  subject  to  the 
discretion  of  the  court,  but  one  re- 
ceiver should  be  appointed  over  the 
same  property. 

Where  a  receiver  has  been  ap- 
pointed in  a  creditors'  bill,  and  sub- 
sequently on  a  bill  to  foreclose  the 
same  property  a  receiver  is  asked, 
the  receivership  in  the  former  should 
be  extended.  Myrick  v.  Selden,  36 
Barb.  15;  Lloyd  v.  Chesapeake,  0.  & 
8.  W.  R.  Co.  65  Fed.  Rep.  351. 

After  consolidation  of  causes,  a 
receiver  in  the  former  may  be  made 
receiver  in  the  consolidated  suit. 
Central  Trust  Co.  v.  Wahash,  St.  L. 
&  P.  R.  Co.  23  Fed.  Rep.  863. 

After  the  appointment  of  a  re- 
ceiver of  a  street-railroad  company 
the  court  will  not  appoint  a  separate 
receiver  for  one  of  its  branches. 
Clapp  V.  Interstate  Street  R.  Co.  61 
Fed.  Rep.  537. 

As  a  general  rule  a  receiver  ap- 
pointed in  a  prior  suit  should  not 
be  replaced  by  the  same  court  for 
the  same  property.  This  rule .  has 
its  exceptions,  however.  State  v. 
Jacksonville,  P.  d  M.  R.  Co.  15  Fla. 
201. 

The  appointment  of  a  receiver  in  a 
supplementary  proceeding  is  not  a 
bar  to  the  appointment  in  a  credit- 
ors' proceeding;  nor  need  the  same 
person  be  appointed.  State  Bank  v. 
Gill,  23  Hun,  410. 

A  receiver  may  be  appointed  by 
one  court,  though  a  different  receiver 
has  been  previously  appointed  by  an- 
other court,  and  particularly  so 
where  there  is  a  reasonable  suspicion 
of  collusion  in  the  former  appoint- 
ment. Young  v.  Aronson,  27  Fed. 
Rep.  241. 

Extension  of  receivership  justifies 
additional  security  or  removal  of. 
Wise  v.  Ashe,  1  Ir.  Eq.  Rep.  210. 


On  motion  to  extend,  the  only  par- 
ties to  be  heard  are  the  petitioner 
and  debtor.  Walsh  v.  Walsh,  11  Ir. 
Eq.  Rep.  607. 

A  receiver  will  not  be  appointed 
over  the  possession  of  another  re- 
ceiver. In  such  case  the  former  re- 
ceivership should  be  extended.  Valle 
V.  O'Reilly,  1  Hogan,  199. 

Two  receivers  of  the  same  property 
should  not  be  appointed;  and  if  an 
attempt  is  made  in  a  second  suit  the 
first  receiver  or  the  creditors  he  rep- 
resents should  be  made  parties. 
Bank  of  Mutual  Redemption  v. 
Sturgis,  9  Bosw.  608. 

A  receiver  in  one  suit  may  be  com- 
pelled to  serve  in  a  second  suit  about 
the  same  projierty,  and  on  refusal 
may  be  removed  from  the  first. 
Cagger  v.  Howard,  1  Barb.  Ch.  368. 

N.  Y.  Code  Civ.  Proc.  §  2466,  pro- 
hibits more  than  one  receiver  for  the 
same  debtor,  but  provides  for  an  ex- 
tension of  the  receivership  already 
made.  Garfield  Nat.  Bank  v.  Bost- 
wick,  39  N.  Y.  S.  R.  358. 

The  object  of  the  139th  rule  in 
New  York,  relative  to  the  appoint- 
ment of  the  same  person  as  receiver 
in  different  suits  over  the  same  prop- 
erty, was  to  save  expense  and  con- 
flict between  receivers.  Cagger  v. 
Howard,  1  Barb.  Ch.  368. 

But  the  appointment  of  a  second 
receiver  is  within  the  discretion  of 
the  court.  Thau  v.  Bankers  c£-  M. 
Teleg.  Co.  24  Jones  &  S.  588. 

The  rule  (which  is  of  general  ap- 
plication) has  been  laid  down  that 
two  receivers  will  not  be  appointed 
unless  necessary,  and  they  must  be 
not  interested  in  the  litigation,  nor 
partisans  of  any  of  the  litigants,  nor 
nonresidents.  Meier  v.  Kansas  P. 
R.  Co.  5  Dill.  476. 

31 


§  21 


RECEIVERSHIPS— SUPPLEMENT. 


Receiver  should  be  disinterested. 

An  interest  in  the  business  of  a 
corporation  is  not  a  necessary  quali- 
fication of  a  receiver  of  the  corpora- 
tion, but,  on  the  other  hand,  lack  of 
interest  is  a  strong  recommendation. 
Bai/itc  V.  Breiocr  Pottery  Co.  82  Fed. 
Rep.  391. 

And  the  best  party. 

The  best  person  should  be  ap- 
pointed without  reference  to  who 
may  suggest  his  name.  Lespinasse  v. 
Bell,  2  Jac.  &  W.  436. 

Plaintiff's  solicitor    not    appointed. 

The  law  partner  of  plaintiff's 
solicitor  should  not  be  appointed, 
even  by  consent.  Merchants  <&  Mfrs. 
'Nat.  Bank  v.  Kent  Circtiit  Judge,  43 
Mich.   292. 

Officers  of  a  corporation  not. 

Neither  party,  counsel,  nor  officer 
will  be  appointed  receiver  of  a  cor- 
poration. Finance  Co.  of  Pennsyl- 
vania V.  Charleston,  C.  d  C.  R.  Co.  45 
Fed.  Rep.  430. 

The  secretary  of  an  insolvent  sav- 
ings bank  is  not  a  proper  person  to 
be  appointed,  where  he  has  made 
false  statements  as  to  its  solvency, 
and  verified  the  same.  People  v. 
Third  Avenue  Sav.  Bank,  50  How. 
Pr.  22. 

The  treasurer  of  a  railroad  com- 
pany may  be  appointed  receiver. 
Houston  V.  Rcdioine,  85  Ga.  130. 

In  England  the  general  rule  is  that 
the  directors  or  secretary,  or  some  of 
them,  of  a  railway,  will  be  appointed 
managers.  Re  Manchester  &  M.  R. 
Co.  L.  R.  14  Ch.  Div.  645. 

The  officers  of  a  corporation  may  be 
appointed  receivers.  Ralston  v. 
Washington  cG  C.  River  R.  Co.  65 
Fed.  Rep.  557. 

Party  to  suit. 

Being  a  party  to  the  suit  does  not 
disqualify  a  person  from  being  re- 
ceiver. People,  Gore,  v.  Illinois 
Bldg.  &  L.  Asso.  56  111.  App.  642. 

A  solvent  partner  who  is  a  party 
may  be  appointed  receiver  of  part- 
nership property  without  compensa- 
tion. Ex  parte  Stoveld,  1  Glyn  &  J. 
303. 
22 


A  peer. 

A  peer  will  not  be  appointed.  Atty. 
Gen.  V.  Gee,  2  Ves.  &  B.  208. 

Trustee. 

The  position  of  receiver  is  incom- 
patible with  the  position  of  trustee, 
in  bankruptcy.  Re  Stuyvesant  Bank, 
5  Ben.  566. 

A  trustee  of  an  estate  will  not  be 
appointed  receiver  if  another  can  be 
procured.  Hibbert  v.  Jenkins,  Mss., 
quoted  in  Sykes  v.  Hastings,  11  Ves. 

Jr.  363 ;  v.  Jolland,  8  Ves. 

Jr.  72. 

Assignee. 

Eichherg  v.  Wickham,  21  N.  Y. 
Supp.  647. 

An  assignee  for  the  benefit  of 
creditors  should  not,  after  attach- 
ment of  the  property  and  in  a  suit 
to  which  he  is  a  party,  be  appointed 
a  receiver  of  it,  since  under  Mansf. 
(Ark.)  Dig.  §  5290,  an  interested 
party  is  not  eligible  to  such  appoint- 
ment. Tail  V.  Carey  (Ind.  Terr.) 
49  S.  W.  50. 

Clerk   of  court 

The  court  may  appoint  the  clerk 
of  court  receiver,  and  his  sureties 
on  his  official  bond  will  be  liable. 
Waters  v.  Melso7i,  112  N.  C.  89. 

One   not   acquainted   with   business. 

A  receiver,  if  otherwise  competent, 
is  not  disqualified  because  he  is  not 
acquainted  with  all  the  details  of 
the  mechanical  work  of  a  railroad 
plant.  Farmers'  Loan  d  T.  Co.  v. 
Cape  Fear  d  Y.  Valley  R.  Co.  62  Fed. 
Rep.  675. 

Resident. 

A  receiver  of  a  corporation  ap- 
pointed by  a  United  States  circuit 
court  need  not  necessarily  be  a  resi- 
dent of  the  district  in  which  the  ap- 
pointment is  made.  Bayne  v. 
Brewer  Pottery  Co.  82  Fed.  Rep.  391. 

Citizen. 

Citizenship  of  a  person  is  not  a 
disqualification  for  receivership. 
Farmers'  Loan  d  T.  Co.  v.  Cape  Fear 
d  T.  Valley  R.  Co.  62  Fed.  Rep.  675. 

The  appointment  of  an  improper 
person  does  not  render  the  appoint- 


MATTERS  RELATING  TO  THE  APPOINTMENT. 


§  2S 


ment  void,  or  make  him  the  agent  of 
the  corporation.  San  Antonio  &  A. 
P.  It.  Co.  V.  Adams,  11  Tex.  Civ.  App. 
198. 

Receiver  not  a  puhlic  officer. 

Cohnen  v.  Stceenie,  105  Mich.  643. 


Co7isent. 


Consent  to  the  appointment  of  a 
particular  person  should  not  be 
made  a  rule  of  court.  Leach  v.  Tis- 
dal,  4  Ir.  Ch.  Rep.  209. 

Only  parties  to  a  suit  can  object 
to  appointment.  Creed  v.  Moore, 
4  Ir.  Eq.  Rep.  084. 


Page  63,  sec.  22. — Form  and  scope  of  order. 


A  decree  directing  that  the  prop- 
erty of  a  corporation  be  turned  over 
to  its  receiver  should  protect  the 
right  of  its  manager  to  have  the 
secret     of     certain     manufacturing 


processes  owned  by  him  preserved 
inviolate.  Wilt  v.  Reed  Electric  Go. 
187  Pa.  424;  Wehb  v.  Allen,  15  Tex. 
Civ.  App.  506. 


Page  QQ. — (li)   Collateral  attach. 


The  appointment,  if  made  in  a 
court  of  competent  jurisdiction,  and 
in  an  action  where  the  power  to  ap- 
point exists,  cannot  be  collaterally 
attacked.  Andrews  v.  Steele  City 
Bank  (Neb.)  9  Am.  &  Eng.  Corp.  Cas. 
N.  S.  452,  77  N.  W.  342 ;  Carroll  v. 
Pacific  X at.  Bank,  19  Wash.  639; 
Roby  V.  Title  Guarantee  d-  T.  Co.  166 
III.  336;  Comer  v.  Brady,  83  Ala. 
217. 

A  creditor  who  has  brought  suit 
against  a  private  corporation  in  a 
Federal  court,  and  caused  its  prop- 
erty to  be  attached  and  sequestered 
on  a  vendor's  lien,  which  property  is 
subequently  ordered  to  be  surrend- 
ered to  a  receiver  previously  ap- 
pointed in  a  state  court,  cannot  suc- 
cessfully assail  the  order  of  appoint- 
ment for  informality  in  the  proceed- 
ings, without  asking  for  judgment  on 
its  demand,  or  disclosing  a  well- 
grounded  claim  for  damages  against 
the  receiver  personally.  Remington 
Paper  Go.  v.  Watson,  49  La.  Ann. 
1296. 

The  vendee  of  a  receiver  cannot,  in 
the  absence  of  fraud  or  mistake,  deny 
the  validity  of  the  appointment, 
where  possession  has  been  taken  by 
the  receiver.  Stclzer  v.  La  Rose,  79 
Tnd.  435;  Jay  v.  De  Groot,  17  Abb. 
Pr.  36,  note;  Storm  v.  Ermantrout, 
89  Ind.  214. 

Under  N.  Y.   Rev.    Stat.  vol.   2,  p. 


463,  §  36,  it  was  held  that  if  the  ap- 
pointment was  binding  on  the  cor- 
poration no  one  else  could  question 
it.  Whittlesey  v.  Frantz,  74  N.  Y. 
456 ;  Peters  v.  Garr,  2  Dem.  22 ;  Bar- 
nett  v.  kelson,  54  Iowa,  41,  37  Am. 
Rep.  183;  Thompson  v.  Greeley,  107 
Mo.  577;  Elderkin  v.  Peterson,  8 
Wash.  674. 

The  appointment  of  a  receiver  by  a 
Federal  court  in  an  action  to  fore- 
close a  mortgage  is  absolutely  void 
and  subject  to  collateral  attack, 
where  the  court  never  acquired  any 
jurisdiction  of  the  cause.  Thurber 
V.  Miller  (S.  D.)   75  N.  W.  900. 

The  legality  of  the  appointment 
of  a  receiver  made  in  open  court,  in 
the  presence  of  the  adverse  party, 
without  objection  or  exception,  can- 
not be  raised  by  motion  to  set  it 
aside.  Gray  v.  Oughton,  146  Ind. 
285. 

,  The  appointment  of  a  receiver  can- 
not be  revoked  or  the  decree  modified 
upon  the  application  of  a  stranger 
to  the  action,  although  he  has  ac- 
quired rights  adverse  or  superior  to 
those  of  the  receiver.  Wright  v. 
Weisel,  19  App.  Div.  630. 

Where  parties  stipulate  that  a  re- 
ceiver acted  as  such  and  should  be 
protected,  the  validity  of  the  ap- 
pointment cannot  be  questioiu'd. 
Kelsey  v.  Sargent,  40  Hun,  150,  104 
N.  Y.  663. 

23 


§  -^3 


RECEIVERSHIPS— SUPPLEMENT. 


Page  69. — (j)    Vacation  of. 


An  ex  parte  order  for  a  receiver- 
ship of  property  by  a  judge  in  vaca- 
tion should  also  appoint  a  very  early 
day  for  the  showing  of  cause  against 
the  order.  Utate,  tit.  Louis,  K.  <&  S. 
R.  Co.,  V.  ^Year,  135  Mo.  230,  33  L.  R. 
A.  341. 

An  early  opportunity  to  combat 
and,  if  desired,  to  review  an  ex  parte 
appointment  of  a  receiver,  is  con- 
templated by  Mo.  Laws  1895,  p.  91, 
providing  for  an  appeal  and  the  very 


summary  determination  thereof, 
from  any  order  refusing  to  revoke, 
modify,  or  change  an  interlocutory 
order  appointing  a  receiver.  State, 
St.  Louis,  K.  &  S.  R.  Co.,  v.  Wear, 
135  Mo.  230,  33  L.  R.  A.  341. 

A  motion  to  set  aside  an  order  ap- 
pointing a  receiver  is  made  to  the 
court,  and  not  the  judge.  Lippin- 
eott  v.  Westray,  G  N.  Y.  Civ.  Proc. 
Rep.  74. 


Page  TO. — (k)  Appeal. 


A  receiver  cannot  be  appointed  to 
take  and  keep  possession  of  land,  and 
to  collect  the  rents,  issues,  and  profits 
thereof,  from  the  date  of  a  judgment 
for  such  rents,  until  the  further  or- 
der of  the  court,  in  order  to  carry 
such  money  judgment  into  effect, 
where  such  judgment  has  been 
stayed  by  a  proper  bond  on  appeal. 
San  Jose  Safe-Deposit  Baltic  of  Sav- 
incjs  V.  Bank  of  Madera,  121  Cal.  543. 

The  appointment  will  not  be  inter- 
fered with  on  appeal,  where  it  ap- 
pears that  there  is  not  a  clear  pre- 
ponderance of  evidence  against  the 
appointment.  Cameron  v.  Grove- 
land  Improv.  Co.  20  Wash.  169. 

Abuse  of  discretion  must  be  shown 
to  justify  appellate  review  of  the  ap- 
pointment of  a  receiver.  Armstrong 
V.  Alabama  Fertilizer  Co.  105  Ga. 
515. 

In  a  foreclosure  action  a  bond  con- 
ditioned in  accordance  with  Neb. 
Code  Civ.  Proc.  §  677,  that  the  appel- 
lants will  prosecute  an  appeal  with- 
out delay,  and  will  not  during  its 
pendency  commit  or  suffer  waste 
upon  the  premises,  will  not  super- 
sede an  order  appointing  a  receiver 
for  the  property.  Lowe  v.  Riley 
(Neb.)  77  N.  W.  758. 

As  to  the  effect  of  supersedeas,  see 
Downing  v.  Dunlap  Coal  Co.  93  Tenn. 
221. 

An  order  appointing  a  receiver 
upon  conflicting  affidavits  will  not 
be  disturbed  on  appeal.  Houston 
Cemetery  Co.  v.  Drew,  13  Tex.  Civ. 
App.  530. 
24 


A  stockholder  and  officer  of  a  cor- 
poration sued  for  an  accounting  for 
mismanagement,  in  which  suit  the 
corporation  is  a  defendant,  has  no 
right  of  appeal  from  the  order  ap- 
pointing a  receiver  under  Ind.  Rev. 
Stat.  1894,  §  1245.  McFarland  v. 
Pierce,  151  Ind.  546. 

An  order  that,  pending  appeal,  the 
receiver  should  not  sell  or  distribute 
the  property  that  might  come  into 
his  hands,  pending  appeal  or  until  the 
further  order  of  court,  is  as  strong 
a  stay  order  as  the  court  will  make. 
People  V.  North  River  Sugar  Ref.  Co. 
23  Abb.  N.  C.  311. 

The  lien  acquired  by  the  appoint- 
ment of  a  receiver  of  a  debtor's  prop- 
erty is  not  abrogated  by  an  appeal. 
Stanton  v.  Heard,   100  Ala.  515. 

A  defendant  who  fails  to  appeal 
from  an  order  of  appointment  can- 
not afterwards  claim  that  the  ap- 
pointment was  irregular.  Saunders 
V.  Kempner  (Tex.  Civ.  App.)  32  S. 
W.  585. 

On  an  appeal  from  the  appoint- 
ment of  a  receiver,  all  irregularities 
not  brought  up  are  waived.  Tinkey 
V.  Langdon,  60  How.  Pr.  180. 

Pending  appeal  a  receiver  was  re- 
fused, no  danger  appearing.  Munic- 
ipal Conirs.  V.  Lockhart.  Ir.  Rep. 
3  Eq.  515. 

When  appeal  is  taken  from  an  or- 
der of  appointment,  and  supersedeas 
is  granted,  the  custody  does  not  pass 
to  the  receiver  pending  appeal.  Cook 
V.  Cole,  55  Iowa,  70. 

A  supersedeas  bond  on  appeal   un- 


MATTERS  RELATING  TO  THE  APPOINTMENT. 


§  22 


der  Mo.  Rev.  Stat.  1889,  §  2249,  from 
an  order  overruling  a  motion  to  va- 
cate the  appointment  of  a  temporary 
receiver  to  preserve  and  manage  a 
railway  line  pending  an  action,  re- 
leases the  property  that  has  reached 
the  hands  of  the  temporary  receiver 
by  way  of  execution  of  the  original 
order  of  appointment.  State,  8t. 
Louis  &  K.  R.  Co.,  V.  Hirzel,  137  Mo. 
435. 

An  order  appointing  a  receiver  will 
be  affirmed  where  an  appeal  is  taken 
by  one  having  no  interest  affected 
thereby;  but  such  affirmance  will  not 
bo  binding  upon  any  interested 
party.  Sherwood  v.  Prussing  (111. 
App.)   1  Chic.  L.  J.  WIdy.  179. 

An  attempted  appeal  to  the  Texas 
supreme  court  from  a  judgment  of 
the  Texas  court  of  civil  appeals  af- 
firming a  judgment  so  far  as  it 
grants  a  divorce,  but  reversing  and 
remanding  the  case  for  a  new  trial 
as  to  property  rights,  does  not  de- 
prive the  trial  court  of  jurisdiction 
to  appoint  a  receiver    of    the    prop- 


erty, even  if  an  effectual  appeal 
would  have  that  result,  since  the 
jurisdiction  of  the  court  of  civil  ap- 
peals is  final  as  to  both  branches  of 
the  case.  Stone  v.  Stone  (Tex.  Civ. 
App.)   43  S.  W.  567. 

On  appeal  to  review  the  appoint- 
ment of  a  receiver,  the  only  question 
to  be  considered  is  the  jurisdiction 
of  the  court  to  make  the  appoint- 
ment, and  not  whether  it  properly 
exercised  its  discretion.  State,  In- 
dependent Dist.  Teleg.  Co.  v.  Second 
Judicial  Dist.  Ct.  15  Mont.  324,  27 
L.  R.  A.  392. 

On  appeal  from  an  order  appoint- 
ing a  receiver  the  court  must  deter- 
mine whether  the  order  was  author- 
ized by  the  law  and  facts,  and  is  not 
limited  to  the  question  of  jurisdic- 
tion. Roberts  v.  Washington  Nat. 
Bank,  9  Wash.  12. 

On  appeal  the  court  will  not  dis- 
turb the  appointment  of  a  receiver 
where  the  evidence  is  conflicting  and 
there  is  no  abuse  of  discretion. 
Bliley  v.  Taylor,  86  Ga.  163. 


Page  72. — (1)   Appeal  from;  order;  rents  and  profits. 


In  a  foreclosure  suit  where  an  or- 
der appointing  a  receiver  was  super- 
seded by  a  bond  given  by  the  appel- 
lants to  account  for  rents  and  profits 
if  the  receivership  order  should  be 
affirmed,  the  court  may,  upon  an  or- 
der to  show  cause  issued  in  the  fore- 
closure case  after  such  affirmance, 
enter  a  judgment  against  the  appel- 
lants for  the  rents  and  profits  of  the 
premises  during  the  time  the  re- 
ceivership was  suspended.  Loice  v. 
Riley  (Neb.)   77  N.  W.  758. 

Successor  to  dead  receiver. 

Where  the  order  appointing  a  re- 
ceiver is  in  force  the  refusal  to  ap- 
point a  successor  on  the  death  of  the 
first  is  error.  Smith  v.  Harris,  135 
Ind.  621. 

On  the  death  of  a  receiver  the  new 
receiver  will  be  authorized  to  con- 
tinue an  action  by  supplemental 
complaint.  Palmer  v.  Murray,  18 
How.  Pr.  545. 


On  the  death  of  a  receiver  the 
property  vests  in  the  court ;  and  on 
the  death  of  the  debtor  a  new  re- 
ceiver may  be  appointed.  Nicoll  v. 
Boijd,  90  N.  Y.  516. 

Validity;  not  heard  on  appeal,  when. 

Where  the  propriety  of  an  appoint- 
ment is  not  raised  in  the  court  below 
it  cannot  be  raised  on  appeal.  Bliley 
V.  Taylor,  86  Ga.  163. 

Who   may  attack. 

Irregularity  in  the  appointment  of 
a  receiver  is  not  to  be  raised  in  an 
action  by  the  receiver.  Green  v. 
Bookhart,  19  S.  C.  406. 

And  irregularity  in  the  appoint- 
ment is  no  ground  for  defendant's 
objecting  to  an  examination. 
Thomas  v.  Gartner,  97  Mich.  608; 
Cf.  JIo ward  V.  Palmer  (Mich.)  Walk. 
Ch.  391 

25 


§  23  RECEIVERSHIPS— SUPPLEMENT. 

Page  73,  sec.  23. — Bond;  sureties  on;  liability  on. 


Sureties  on  a  bond  reciting  the  ap- 
pointment of  the  principal  obligor 
as  receiver  of  a  corporation,  and  con- 
ditioned for  the  faithful  discharge  of 
his  duties  as  such,  are  estopped  to 
deny  his  appointment,  where  the 
right  of  the  court  to  make  the  ap- 
pointment existed,  although  the  ap- 
pointment at  the  time  was  improper 
because  of  tlie  insufliciency  of  the  pe- 
tition asking  therefor.  Thompson 
V.  Dvnner,  10  App.  Div.  1(50,  Citing 
Culler  Y.  Dickinson,  8  '  Pick.  385; 
Distinguishing  Mittnacht  v.  Keller- 
mann,  105  N.  Y.  409. 

A  surety  on  a  receiver's  bond  vpho 
purchases  from  the  receiver,  for  a 
sum  much  less  than  its  real  value, 
the  real  estate  of  the  latter's  cestuis 
que  trust,  which  he  has  no  lawful 
right  to  sell,  is  not  a  purchaser  of 
the  land  in  good  faith.  Donahue  v. 
Quaclcenhush  (Minn.)   77  N.  W.  430. 

The  appointment  of  a  receiver 
without  requiring  a  bond  of  the  com- 
plainants is  invalid,  since  Ala.  act 
February  18,  1895,  providing  that  a 
bond  shall  be  required  of  the  com- 
plainant whenever  application  shall 
be  made  for  a  receiver,  repeals  by 
implication  Ala.  act  December  14, 
1894,  in  so  far  as  the  lat.ter  invested 
the  appointing  officer  with  a  discre- 
tion in  the  matter  of  requiring  such 
bond.  David  v.  Levy  (Ala.)  24  So. 
589. 

An  independent  action  may  be 
maintained  to  ascertain  and  enforce 
the  liability  of  sureties  on  the  bond 
of  a  receiver.  Black  v.  Gentery,  119 
N.  C.  502. 

The  filing  of  a  bond  duly  approved, 
which  by  an  order  appointing  a  re- 
ceiver of  a  corporation  is  made  a  con- 
dition of  his  taking  possession  of  the 
property,  is  not  sufficiently  shown 
for  the  purposes  of  N.  Y.  Code  Civ. 
Proc.  §  082,  authorizing  any  person 
who  has  acquired  a  lien  upon  or  in- 
terest in  an  attachment  debtor's 
property  after  attachment  to  move 
to  vacate  or  modify  the  attachment, 
by  an  affidavit  of  such  filing  by  the 
managing  clerk  of  the  receiver's  at- 
torneys, which  does  not  disclose 
facts  or  circumstances  justifying  an 

26 


inference  that  he  had  personal 
knowledge  of  the  fact.  Belmont  v. 
Sigua  Iron  Co.  12  App.  Div.  441. 

A  receiver's  bond  filed  in  the 
wrong  office  through  inadvertence 
may  be  properly  filed  nunc  pro  tunc. 
Whiteside  v.  Prendergast,  2  Barb. 
Ch.  471. 

As  to  liability  of  sureties  on  bond 
of  clerk  of  court  appointed  receiver, 
see  Syme  v.  Bunting,  91  N.  C.  48. 

Where  a  temporary  receiver  is  ap- 
pointed, and  subsequently  he  is  made 
permanent  receiver,  the  court  may 
require  further  bond,  but  if  the 
bond  is  not  so  required  his  acts  are 
legal.     Jones  v.  Blun,  145  N.  Y.  333. 

For  suits  on  receiver's  bond  which 
turned  wholly  on  a  question  of  plead- 
ing, see  Wilde  v.  Baker,  14  Allen, 
349;  Keg.  v.  Bayly,  1  Dru.  &  War. 
210. 

A  receiver  is  not  liable  on  his  bond 
until  he  has  failed  to  obey  some  or- 
der of  the  court.  State  v.  Gibson, 
21  Ark.  140. 

Where  a  receiver's  surety  dies  or 
goes  abroad,  he  cannot  be  charged 
with  expense  of  new  appointment. 
Lane  v.  Townsend,  2  Ir.  Ch.  Rep. 
120. 

Sometimes  the  receiver  will  be  ap- 
pointed on  his  own  recognizance. 
Carlisle  v.  Berkley,  2  Ambl.  599; 
Ridout  V.  Plymouth,  1  Dick.  08. 

A  surety,  having  paid,  may  compel 
cosureties  to  contribute.  Ross  v. 
Williams,   11   Heisk.  410. 

Sureties  on  the  bond  of  a  clerk  are 
not  liable  for  funds  misappropriated 
by  him  as  receiver  over  which  the 
court  has  no  control.  State^  Rogers, 
V.  Odom,  80  N.  C.  432. 

A  receiver  under  JST.  Y.  Laws  1853, 
918,  chap.  406,  §  24,  is  required  to 
give  security.  Mechanics'  F.  Ins. 
Go's  Case,  5  Abb.  Pr.  444. 

The  surety  of  a  receiver  is  liable 
for  interest  on  his  balances,  in  the 
discretion  of  the  court.  Re  Uerrick, 
3  Ir.  Ch.  Rep.  183. 

A  receiver  and  his  sureties  are  lia- 
ble to  a  creditor  though  he  is  not 
named  in  the  bond.  Ross  v.  Will- 
iams, 11  Heisk.  410. 


RECEIVER'S   POWERS.  §§25,26 

Page  82,  sec.  25. — Source  of  power  of  receivers. 

(a)  (1)   Application  fo7-  instructions. 


Morgcll  v.  Royce,  2  Hogan,  235; 
People,  Atty.  Gen.,  v.  Security  L. 
Ins.  d  Annuity  Co.  79  N.  Y.  267. 

To  justify  the  receiver  in  apply- 
ing for  power  it  is  not  necessary  tliat 


the  power  to  lease  should  be  given  in 
the  order  of  appointment  or  that  it 
gives  liberty  to  apply  for  instruc- 
tions. Weeks  v.  Weeks,  lOG  N.  Y. 
G2G. 


Page  84. — (c)   Powee   of    statutory   eeceiveks. 


statutory  receivers  of  railroads 
are,  to  some  extent,  state  agents,  and 
unless  acting  within  the  scope  of  au- 
thority the  state  is  not  liable  for 
their  acts.  Such  receivers  have  no 
power  to  contract  debts  to    be    paid 


otherwise  than  from  earnings.  State 
V.  Edgefield  &  K.  R.  Co.  6  Lea,  353. 
Statutory  receivers  are  to  some  ex- 
tent public  agents,  and  the  state  is 
bound  by  their  acts  when  within  the 
scope  of  authority.     Ihid. 


Page  84. 


-(d)   Power  being-  limited  is  notice  to  ael. 


Under  Sayles's  (Tex.)  Civ.  Stat. 
art.  14G4,  a  receiver  cannot  as- 
sume 2J0wers  and  risks  not  within 
the  grant  or  control  of  the  court 
whose  agent  he  is.  International  & 
G.  Y.  A'.  Co.  V.  Wetitworth,  8  Tex. 
Civ.  App.  5. 

A  receiver  appointed  in  an  action 
to  foreclose  a  mortgage  on  street- 
railway  property,  to  take  possession 
of  the  mortgaged  property  and  to 
operate  the  road,  has  no  authority 


to  collect  claims  due  the  company 
not  covered  by  the  mortgage.  Cali- 
fornia Title  Ins.  cC-  T.  Co.  v.  Consoli- 
dated Piedmont  Cable  Co.  117  Cal. 
237. 

One  who  contracts  with  a  receiver 
does  so  with  the  knowledge  that  for 
an  injury  received  he  can  get  re- 
dress only  by  leave  of  the  court. 
Vanderbilt  v.  Central  R.  Co.  43  N. 
J.  Eq.  669. 


Page  85,  sec.  26. — Power  to  borrow  money. 


The  court  has  power  to  authorize 
receiver  to  borrow  money  and  make 
the  same  a  first  lien  on  property  in 
the  hands  of  the  receiver.  Blythe  v. 
Gibbons,  141  Ind.  332. 

The  borrowing  of  money  by  a  re- 
ceiver of  the  furniture  and  other  per- 
sonal property  in  a  hotel  may  be  au- 
thorized by  the  court  in  order  to 
prevent  the  closing  of  the  hotel  and 
the  loss  of  the  goodwill  of  its  busi- 
ness during  the  pendency  of  a  suit 
for  foreclosure.  Cake  v.  Mohun, 
164  U.  S.  311,  41  L.  ed.  448. 

Where  a  court  appoints  a  receiver 


of  oil  leases,  the  right  to  which  is  in 
litigation,  for  the  purpose  of  de- 
veloping the  property  for  the  bene- 
fit of  the  successful  claimant,  and 
permits  advances  to  be  made  to  him 
by  the  parties  to  aid  in  the  develop- 
ment, with  the  understanding  that 
the  amount  advanced  to  him  shall  be 
returned  to  the  unsuccessful  litigant 
in  case  the  amount  is  realized  from 
the  oil  produced,  it  will  order  a  re- 
turn of  the  advances  to  the  unsuc- 
cesssful  party  if  the  funds  warrant 
it.  Elk  Fork  Oil  &  Gas  Co.  v.  Jen- 
nings, 90  Fed.  Rep.  767. 

27 


g§  27—29  RECEIVERSHIPS— SUPPLEMENT. 

Page  87,  sec,  27. — Power  to  loan  money. 


Receiver  must  loan  receivership's 
funds  as  directed  by  the  court,  or  be- 
come responsible  in  case  of  loss, 
though  no  bad  faith  is  shown.  Carr 
V.  Morris,  85  Va.  21. 

The  court    is    prohibited    by    Ky. 


Civ.  Code,  §  308,  after  the  appoint- 
ment of  a  receiver  to  take  charge  of 
a  fund  in  controversy,  from  ordering 
it  to  be  loaned  out  against  the  pro- 
test of  a  claimant.  Comhs  v.  Breat- 
hitt County,  20  Ky.  L.  Rep.  1247. 


Page  88,  sec.  28. — Power  to  compromise  debts. 


The  authority  of  a  receiver  of  a 
mutual  insurance  company  imder  R. 
I.  Gen.  Laws,  chap.  177,  §  28,  to  do 
all  acts  which  might  be  done  by  the 
corporation  that  may  be  necessary 
for  the  final    settlement    of    its    un- 


finished business  and  the  winding  up 
of  the  corporation,  includes  power  to 
contest  or  compromise  a  claim  which 
he  is  not  satisfied  is  just.  Insur- 
ance Commissioners  v.  Commercial 
Mut.  Ins.  Co.  20  R.  I.  part.  1,  p.  7. 


Page  89,  sec.  29. — Counsel  for  receiver  and  compensation  of. 


Reasonable  allowance  for  plain- 
tiffs' attorney,  on  bill  filed  for  dis- 
solution of  partnership  when  fund 
brought  into  court  for  benefit  of  cred- 
itors by  receiver, — see  Payne  v.  Mc- 
Namara,  9  Ohio  C.  C.  132. 

Factors  who,  after  receiving  a  con- 
signment, are  enjoined  from  dispos- 
ing of  it,  at  the  instance  of  a  receiver 
of  the  consignor,  are  not  entitled  to 
charge  the  counsel  fees  expended  in 
defending  their  title  to  the  property, 
to  the  funds  in  the  receiver's  hands 
as  part  of  the  damages  caused  by 
the  injunction.  Fidelity  Ins.  Trust 
d  S.  D.  Co.  V.  Roanoke  Iron  Co.  91 
Fed.  Rep.  19. 

Fees  of  counsel  for  a  receiver  in 
sustaining  his  own  charges  should 
be  disallowed,  as  success  would  tend 
to  deplete,  and  not  protect,  assets  in 
the  hands  of  the  receiver.  Soicles  v. 
National  Union  Bank,  82  Fed.  Rep. 
139. 

Fees  of  counsel  for  a  receiver 
should  not  be  allowed  for  the  con- 
duct of  the  cause  in  which  the  receiv- 
er was  appointed,  as  counsel  fees  can 
be  chargeable  to  him  only  for  secur- 
ing the  assets.     Ibid. 

Counsel  employed  by  one  other 
than  the  receiver  of  a  corporation  to 
aid  in  resisting  a  motion  to  remove 
the  receiver  is  not  entitled  to  com- 
pensation out  of  the  corporate  ef- 
28 


fects,  where  the  receiver  had  counsel 
who  appeared  for  him  in  resistance 
of  the  motion.  Anderson  v.  Fidelity 
cC  D.  Co.  100  Ga.  739. 

Services  of  attorneys  for  the  re- 
ceiver of  an  employers'  liability  in- 
surance company,  rendered  in  de- 
fending against  claims  against  em- 
ployers holding  policies  therein  in- 
demnifying them  against  such 
claims,  and  giving  the  company  the 
right  to  take  full  charge  of  the  de- 
fense against  them,  are  rendered  for 
the  protection  and  benefit  of  all  the 
policy-holders,  so  that  the  receiver 
is  entitled  to  pay  for  them  out  of  the 
fund  in  his  hands.  Ross  v.  Ameri- 
can Employers'  Liability  Ins.  Co. 
56  N.  J.  Eq.  41. 

Creditors  who  come  in  to  take  the 
benefit  of  a  litigation  begun  by  one 
of  the  creditors  of  an  insolvent  cor- 
poration to  reach  funds  belonging  to 
it  will  not  be  permitted  to  defeat  the 
right  of  the  complainant's  solicitors 
to  payment  out  of  the  fund  distrib- 
uted to  the  creditors,  for  services 
rendered,  even  after  appointment  of 
a  receiver,  if  it  was  the  duty  of  such 
solicitors  to  protect  the  fund  against 
unfounded  claims,  and  their  efforts 
were  successful  in  defeating  claims, 
the  benefit  of  which  went  to  the  cred- 
itors. Burden  Central  Sugar  Ref. 
Co.  V.  Murphy,  58  U.  S.  App.  166,  31 


RECEIVER'S   POWERS. 


§29 


C.  C.  A.  233j  sub  nom.  Burdon  Cen- 
tral Sugar-Ref.  Co.  v.  Ferris  Sugar 
Mfg.  Co.  87  Fed.  Eep.  810. 

Attorneys'  fees  in  sustaining  the 
receiver's  appointment  is  a  proper 
charge  for  expenses.  Kimmerle  v. 
Dowagiac  Mfg.  Co.  105  Mich.  640. 

An  order  to  a  receiver  to  pay  "la- 
borers and  employees  for  labor  and 
services,  etc.,  includes  professional 
services  of  counsel.  Gurney  v.  At- 
lantic  cC  G.  W.  R.  Co.  58  N.  Y.  358. 

Counsel  fees  should  be  an  annual 
allowance.  Boston  Safe  Deposit  & 
T.  Co.  V.  Chamberlain,  25  U.  S.  App. 
251,  GO  Fed.  Rep.  847,  14  C.  C  A.  363. 

An  agreement  between  a  receiver 
whose  compensation  is  fixed  by  the 
court,  and  his  attorney,  whereby  the 
latter  is  to  get  only  half  of  the  at- 
torney's fees  stipulated  for  in  the 
obligations  on  which  he  may  bring 
suit  for  the  receiver,  inures  to  the 
benefit  of  the  debtors,  and,  if  known 
to  them,  is  available  as  a  defense  pro 
tanto,  and,  if  unknown  to  them, 
may  be  made  the  basis  of  a  direct 
proceeding  to  set  aside  a  judgment 
including  the  full  amount  of  such 
fees.  Hammond  v.  Atlee,  15  Tex. 
Civ.  App.  267. 

An  allowance  of  only  $1,000  to  a 
receiver  for  services  of  counsel  ex- 
tending over  thirteen  months,  con- 
sisting of  advice  required  in  the 
proper  performance  of  his  duties, 
and  applications  to  the  court  as  to 
the  payment  of  dividends,  and  serv- 
ices in  adjudications  determining  the 
liability  of  funds  in  his  hands  for 
certificates  of  profits  amounting  to 
about  $38,000, — is  insufficient.  Re 
'New  York  Mut.  Ins.  Co.  17  App.  Div. 
633. 

A  fund  in  the  hands  of  a  receiver 
of  a  corporation,  representing  the 
proceeds  of  a  judgment  obtained  by 
it,  is  not  subject  to  the  lien  of  an  at- 
torney for  services  rendered  general- 
ly to  the  corporation  at  its  request, 
but  not  in  the  action  in  which  the 
judgment  was  obtained.  Anderson 
v.  /•;.  De  Braekeleer  d  Co.  25  Misc. 
343,  Confirming  Referee's  Report  in 
28  N.  Y.  Civ.  Proc.  Rep.  306. 

A  receiver  of  an  insolvent,  who  is 
also  an  attorney  at  law,  will  be  al- 
lowed counsel  fees  only  for  services 
requiring  special  legal  skill,  as  he  is 


under  obligation  to  perform  such 
duties  in  respect  to  the  trust  as  an 
ordinarily  competent  business  man 
is  presumed  to  be  capable  of  perform- 
ing. Olson  V.  State  Bank  (Minn.) 
75  N.  W.  378. 

An  intervention  by  a  debtor  in  a 
judgment  in  favor  of  a  receiver,  in 
an  application  by  the  attorney  of  the 
receiver  to  have  the  attorney's  fees 
fixed  and  allowed,  whereby  such 
debtor  seeks  to  reduce  the  judgment 
by  one  half  of  the  attorney's  fees  in- 
cluded therein,  which  the  attorney 
had  agreed  to  allow  the  receiver  to 
retain,  is  a  direct  proceeding  within 
the  rule  that  a  judgment  may  be  as- 
sailed in  a  direct  proceeding  for 
fraud  or  accident  preventing  the 
party  from  availing  himself  of  a 
valid  defense,  where  the  court  is  the 
same  which  rendered  the  judgment, 
and  has  jurisdiction  of  all  the  par- 
ties interested  and  control  of  the 
funds.  Hammond  v.  Atlee,  15  Tex. 
Civ.  App.  267. 

A  counsel  fee  and  a  proportionate 
part  of  the  expenses  of  an  account- 
ing by  a  receiver  of  a  corporation 
are  properly  charged  against  a  fund 
realized  from  collateral  pledged 
with  the  corporation  to  secure  the 
performance  of  a  contract  with  it, 
which  was  completed  on  behalf  of  the 
corporation  by  the  receiver,  where 
such  expenses  were  rendered  neces- 
sary by  the  denial  of  his  right  to  de- 
duct the  expenses  of  completing  the 
contract  from  such  fund.  Re  A.  E. 
Chasmar  &  Co.  22  Misc.  680. 

An  attorney  employed  by  a  corpo- 
ration without  leave  of  court  to  re- 
sist claims  against  the  receiver  of  the 
corporation  who  has  all  the  assets 
of  the  corporation  in  his  hands, 
whose  services  availed  nothing,  is 
not  entitled  to  compensation  out  of 
the  funds  in  the  hands  of  the  re- 
ceiver. Anderson  v.  Fidelity  &  De- 
posit Co.  100  Ga.  739. 

No  allowance  should  be  made  upon 
the  accounting  of  a  receiver  for  ser- 
vices of  counsel  in  obtaining  the  ap- 
pointment of  a  former  receiver  who 
is  superseded.  Soivles  v.  National 
Union  Bank,  82  Fed.  Rep.  139. 

From  what  paid. 
Counsel  fees  not  for  services  in  be- 

39 


§  30 


RECEIVERSHIPS— SUPPLEMENT. 


half  of  a  trust,  but  in  opposition,  are 
not  payable  out  of  funds  in  hands  of 
receivers.  Com.  v.  Mechanics  Mut. 
F.  Ins.  Co.  122  Mass.  421. 

The  attorney  of  an  intervening 
creditor  in  sequestration  proceedings 
against  an  insolvent  corporation  for 
which  a  receiver  was  appointed  pur- 
suant to  Minn.  Gen.  Stat.  1894,  chap. 
76,  is  not  entitled  to  payment  for 
his  services  out  of  the  corporate  as- 
sets in  the  hands  of  the  receiver,  al- 
though the  attorney  brought  the  resi- 
dent stockholders  into  court  for  the 
purpose  of  enforcing  their  statutory 
liability,  where  the  latter  made  up  a 
fund  to  the  amount  of  their  unpaid 
stocK  subscriptions,  with  which  they 
paid  or  compromised  the  corporate 
debts.  lie  Xorllicrn  Trust  Co. 
(Minn.)   77  N.  W.  219. 

A  Federal  court  cannot  authorize 
its  receiver  to  pay  out  of  the  funds 
in  his  hands,  as  part  of  the  costs  in 
the  suit,  counsel  fees  contracted  for 
by  a  receiver  appointed  by  a  state 
court  over  the  same  property.  Amer- 
ican Loan  d  T.  Co.  v.  8outh  Atlantic 
&  0.  R.  Co.  81  Fed.  Rep.  62. 

Not  entitled  to  priority,  when. 

An  attorney  employed  by  a  re- 
ceiver of  an  insolvent  railroad  com- 
pany appointed  by  a  Federal  court 
to  defend  suits  brought  in  such  court 
against  the  company  for  claims  for 
right  of  way  taken  by  the  company 
is  not  entitled  to  priority  for  the  rea- 
sonable value  of  his  services  in  such 
suits,  in  a  general  creditors'  bill  in  a 
state  court  against  the  company, 
where  the  Federal  court  did  not  have 
jurisdiction  because  it  did  not  have 
the  custody  of  the  asssets  of  the  com- 
pany or  the  right  to  sell  the  same; 
but  such  claim  may  be  allowed  as  a 
debt    against    the    company    on    an 


equality  with  other  claims,  where 
other  creditors  do  not  object  thereto, 
although  the  receiver  appointetl  by 
the  state  court  does  object,  where 
the  order  appointing  him  defines  his 
duties,  and  such  objection  does  not 
fall  within  the  same.  Crosby  v. 
Morristown  <&  C.  G.  li.  Co.  (Tenn. 
Ch.  App.)  42  S.  W.  507. 

Attorneys  for  an  insolvent  corpo- 
ration are  not  entitled  to  be  paid  as 
))referred  creditors  of  the  corpora- 
tion for  services  performed  before 
the  commencement  of  proceedings  for 
the  appointment  of  a  receiver,  al- 
though he  continues  their  employ- 
ment after  his  appointment.  Re 
Montgomery  (N.  J.  Eq.)  30  Chicago 
Leg.  NewSj  237. 

By  tohom  appointed;  corr^ensation. 

A  receiver  has  no  right  to  employ 
counsel  without  the  consent  of  the 
court.  When  appointed,  the  court  de- 
termines their  charges.  Walsh  v. 
Raymond,  58  Conn.  251. 

Who  employed. 

A  receiver  in  supplementary  pro- 
ceedings may  employ  the  attorney 
of  the  party  for  whose  benefit  the 
proceedings  are  instituted.  Baker 
V.  Van  Epps,  60  How.  Pr.  79. 

Counsel  for  either  party  are  not 
employed  as  a  rule,  but  it  is  only 
when  the  receiver  is  acting  adversely 
to  one  or  the  other  that  the  rule  ap- 
plies. Hynes  v.  McDermott,  14 
Daly,  104. 

Independent  counsel  for  a  receiver 
should  be  appointed.  Emmons  v. 
Davis  d  D.  Pottery  Co.  (N.  J.  Eq.) 
16  Atl.  157. 

Case  referred  to  master  to  ascer- 
tain whether  there  was  a  valid  claim 
for  counsel  fees.  People  v.  E.  Bern' 
ington  &  8ons,  45  Hun,  347. 


Page  91,  sec.  30. — Power  to  sue. 


Power  of  a  receiver  to  convert 
property  into  money  and  distribute 
the  same  convej^s  the  implied  power 
to  manage  and  preserve.  Vander- 
bilt  V.  Central  R.  Co.  43  N.  J.  Eq. 
669. 

Mo.  Rev.  Stat.  §§  551,  2193,  2194, 
30 


confer  no  authority  on  a  receiver  of 
an  insolvent  corporation  to  prosecute 
actions  for  damages  for  the  miscon- 
duct of  directors.  A  court  of  equity 
under  its  general  power  may  do  so. 
Thompson  v.  Greeley,  107  Mo.  577. 
Where  the  judgment  debtor  is  in 


RECEIVER'S  POWERS. 


8S  31—33 


possession  of  property  as  agent  of  a 
third  person  who  owns  by  paper  title 
apparently  good,  it  is  improper  to 
order  a  delivery  to  the  receiver.  The 
receiver  in  such  case  must  sue.  Rod- 
man V.  Henry,  17  N.  Y.  482. 

A  receiver  of  anoiner's  personal 
property,  with  power  to  take,  col- 
lect, recover,  and  sequester  all  the 
rents  and  profits  of  his  real  estate, 
and  to  sell  and  dispose  of  his  person- 
al estate,  has  no  authority,  after  bid- 
ding in  the  projjerty  at  a  sale  under 
an  execution,  to  sell  it  while  acting 
in  his  fiduciary  capacity  as  receiver. 
Donahue  v.  Quackenbush  (Minn.) 
77  N.  W.  430. 

A  receiver  of  a  corporation  ap- 
pointed in  another  state  should  not 
be  allowed,  by  an  exercise  of  comity, 
to  sue  for  the  enforcement  of  the  li- 
ability of  stockholders,  when  it 
would    be    in  contravention    of  the 


rights  of  the  citizens  of  the  state, 
and  operate  to  their  injury.  Wy- 
man  v.  Eaton,  107  Iowa,  214,  43  L. 
R.  A.  G95. 

A  receiver  of  a  building  and  loan 
association,  empowered,  ordered,  and 
directed  by  the  court  to  collect  all 
claims  due  to  such  association,  by 
suit  or  otherwise,  has  authority  to 
bring  an  action  to  foreclose  a  mort- 
gage due  to  the  association.  Hat- 
field V.  Cummings,  152  Ind.  280. 

Poxcer  to  vote  stock. 

Where  a  receiver  has  been  ap- 
pointed under  a  creditors'  bill,  the 
court  may  order  the  defendant  to  ex- 
ecute a  proxy  or  power  of  attorney 
to  enable  the  receiver  to  vote  the 
stock  of  the  corporation,  over  which 
he  is  appointed  at  the  meeting  of 
stockholders.  Atkinson  v.  Foster,  27 
111.  App.  63. 


Page  93,  sec.  31. — Power  to  make  repairs. 


A  receiver  in  charge  of  a  railroad 
will  not  be  prevented  from  renewing 
the  piling  supporting  a  bridge  across 
a  stream,  at  the  suit  of  county  com- 
missioners, on  the  ground  that  the 
piling  interferes  with  the  flow  of  the 
water,  if  there  is  a  county  bridge  25 
feet  above  the  railroad  bridge,  un- 
der which  the  clear  space  is  only  one 
half  as  great  as  under  the  railroad 
bridge,  while  the  piling  is  not  shown 
to  interfere  with  the  How  of  water. 
Van  Wert  County  v.  Peirce,  90  Fed. 
Rep.  764. 

The  receivers  of  a  railroad  com- 
pany appointed  by  an  order  direct- 
ing them  to  continue  the  operation 


of  the  company  as  it  had  been  oper- 
ated, keep  the  premises  and  property 
in  good  condition  and  repair,  and  at 
their  discretion  carry  out  any  and 
all  contracts  that  the  company  has 
made,  and  renew  the  same,  have  au- 
thority, without  further  orders  of 
the  court,  to  continue  contracts  for 
the  rental  and  repair  of  cars  pre- 
viously entered  into  by  the  company. 
Mercantile  Trust  &  D.  Go.  v.  South- 
ern Iron  Car  Line  Co.  113  Ala.  543. 

An  order  to  change  the  location  of 
a  railroad  and  build  a  bridge  should 
be  made  only  on  report  of  the  master 
showing  the  necessity.  Hand  v.  Sa- 
vannah d  C.  R.  Co.  10  S.  C.  N.  S.  406. 


Page  94,  sec.  32. — Power  to  purchase  supplies,  labor,  etc. 


Where  a  receiver  is  appointed  to  order     of 

run  a  hotel  and  make  such  purchases  Ave.  cG  B 

as  may  be  necessary,  he  has  implied  Ala. 

authority  to  purchase  on  a  credit,  in  Ave. 
the  absence  of  any  provision  in  the 


appointment.     Highland 
R.  Co.  V.   Thornton.   105 
255 ;   cf.  Thornton  v.  Highland 
&  B.  R.  Co.  94  Ala.  353. 


Page  96,  sec.  33. — Power  to  continue  business. 


A  receiver  appointed  on  the  ap-  purpose  of  protecting  the  interests 
plication  of  a  subscriber  to  secure  of  the  subscriber,  sliouhl  not  be  au- 
the   location   of   a   factory,   for   the      thorized    to    continue    the    business 

31 


34 


RECEIVERSHl  PS— SUPPLEMENT. 


generally,  but  only  to  collect  debts 
and  protect  the  property.  Vance  v. 
Shiawassee  Circuit  Judge,  102  Mich. 
342. 

In  an  action  to  restrain  an  insol- 
vent defendant  from  mining  for  gold 
upon  the  land  of  the  plaintiff,  the 
receiver  appointed  to  beat  out  the 
ore  already  taken  out,  and  prevent 
its  waste,  will  not  be  directed  to  con- 
tinue the  mining  operations  on  his 
own  account,  where  such  an  order  is 
not  necessary  to  preserve  the  prop- 
erty or  to  maintain  the  rights  of  the 
parties.  Bigbee  v.  Summerour,  101 
Ga.  201. 

Power  to  operate  a  railroad. 

The  express  power  given  by  N.  J. 


act  Feb.  11,  1874,  to  operate  a  rail- 
road for  the  use  of  the  public,  is  not 
conferred  on  the  receiver  as  an  inde- 
pendent person,  but  as  an  olficer  of 
court.  Vanderbilt  v.  Central  R.  Co. 
43  N.  J.  Eq.  069. 

The  order  of  April  5,  1894,  direct- 
ing a  schedule  of  wages  to  be 
adopted  by  the  receivers  of  the  Union 
Pacific  Railroad  Company,  did  not 
prevent  them  from  making  changes 
in  the  train  service  or  exercising 
their  discretion  in  the  operation  of 
the  railroad,  although  a  little  more 
service  is  required  of  the  trainmen, 
where  no  unjust,  unreasonable,  or 
excessive  service  is  required.  Dex- 
ter v.  Union  P.  R.  Go.  75  Fed.  Rep. 
947. 


Page  98,  sec.  34. — Power  to  sell. 


failure  to  give  notice  to  the  attor- 
ney general,  as  required  by  the  New 
York  statute,  of  an  application  to 
sell  land,  is  cured  by  a  confirmation 
of  the  sale.  Johnson  v.  Rayner,  25 
App.  Div.  598. 

Purchaser,  no  setoff. 

The  purchaser  at  a  receivers'  sale 
has  no  right  of  setoflf  against  the  re- 
ceiver for  money  due  from  him  indi- 
vidually. Polk  V.  Garver  Coal  & 
Min.  Co.  91  Iowa,  570. 

Refusal  of  court  to  extend  time  not 
revieivable. 

The  discretion  of  the  court  in  not 
extending  the  time  of  payment  for 
goods  sold  at  receivers'  sale  is  not  re- 
viewable. Alvord  V.  Strickler,  10 
Colo.   89. 

A  sale  by  a  receiver  appointed  in 
proceedings  supplementary  to  a 
judgment  against  a  corporation 
passes  no  title.  Conner  v.  Todd,  48 
N.  J.  L.  361. 

Expense  of  sale  deducted  before  cred- 
its. 

A  chattel  mortgagee  will  not  be  re- 
quired to  credit  on  his  mortgage  the 
entire  proceeds  of  a  sale  of  the  mort- 
gaged property  by  a  receiver  under 
an  order  directing  the  receiver  to 
make  the  sale  and  the  mortgagee  to 
32 


apply  the  proceeds  to  the  payment  of 
the  mortgage,  but  only  the  balance 
of  such  proceeds  after  deducting  ex- 
penses properly  incurred  in  hand- 
ling and  taking  care  of  the  mort- 
gaged property,  including  amounts 
paid  to  watchmen  and  for  insurance 
while  awaiting  an  opportunity  to 
sell,  and  also  the  expense  of  loading 
the  property  for  transportation. 
Hughes  v.  Edisto  Cypress  Shingle  Co. 
47  S.  C.  1. 

Poicer  of  the  court  to  order  sale. 

The  court  has  no  power  to  direct 
the  sale  of  real  estate  free  from  judg- 
ment liens.  Re  Lebanon  Brewing 
Co.  3  Pa.  Dist.  R.  260;  Foster  v. 
Barnes,  81  Pa.  377. 

Receiver  protected  in  making  sale. 

A  receiver  duly  appointed  is  pro- 
tected in  the  sale  of  property  in  his 
possession;  and  he  is  not  a  tres- 
passer, nor  is  the  plaintiff.  Walling 
v.  Miller,  108  N.  Y.  173. 

Sale  is  judicial. 

A  sale  by  a  receiver  of  a  national 
bank  is  a  judicial  sale.  Re  Third 
Nat.  Bank,  9  Biss.  535. 

Purchaser  protected. 
The  president  of  a  corporation  who 
as  such  joins  in  the  execution  of  a 


RECEIVER'S   POWERS. 


§  34 


mortgage  to  secure  several  notes 
payable  to  the  mortgagee,  who  is  not 
stated  therein  to  hold  them  in  trust, 
is  estopped,  as  against  good-faith 
purchasers  from  one  who  purchased 
the  mortgaged  property  in  good 
faith  at  a  sale  by  the  receiver  of  the 
corporation,  to  claim  that  one  of 
such  notes  belonging  to  him  was  still 
secured  by  the  mortgage  because  it 
was  not  included  at  the  sale,  where 
he  had  due  notice  of  the  appointment 
of  the  receiver  and  of  the  sale,  which 
was  advertised  to  be  free  from  en- 
cumbrances. Broicn  v.  Union  De- 
pot mreet  It.  Co.  65  Minn.  508. 

Credit  on  purchase  price. 

A  purchaser  at  a  sale  by  an  as- 
signee and  receiver  in  insolvency  un- 
der the  Mississippi  statute,  which 
was  made  with  the  understanding 
that  all  prior  liens  were  to  be  dis- 
charged by  the  purchase  price,  is  en- 
titled to  a  credit  for  the  amount  he 
has  been  obliged  to  pay  as  surety  on 
a  forthcoming  bond  given  by  the  re- 
ceiver to  secure  the  release  of  the 
property  from  attachment,  if  no  oth- 
er creditor  or  the  receiver  has  any 
claim  superior  to  that  of  the  attach- 
ing creditors;  but  if  there  are  such 
superior  claims  the  credit  must  be 
limited  to  the  balance.  Weems  v. 
Love  Mfg.  Co.  74  Miss.  831. 

Property  not  in  custodia  leg  is  after 
sale. 

r'roperty  purchased  at  a  receiver's 
sale  is  not  in  custodia  legis,  so  as  to 
preclude  its  seizure  under  legal  proc- 
ess, merely  because  the  court  ap- 
pointing the  receiver  has  retained 
jurisdiction  for  the  purpose  of  seeing 
that  the  purchaser  pays  off,  satisfies, 
and  <lischarges  certain  claims  pend- 
ing and  undetermined  in  that  court. 
Farrners'  d  M.  Nat.  Bank  v.  Scott 
(Tex.  Civ.  App.)   45  S.  W.  26. 

To  save  franchise. 

The  property  involved  in  an  action 
by  creditors  to  set  aside  a  convey- 
ance of  the  property  and  franchises 
of  a  corporation  organized  to  con- 
struct a  public  bridge  is  in  danger  of 
being  lost,  so  as  to  justify  tlie  ap- 
pointment of  a  receiver  to  sell  the 


same  pending  the  action,  where  oth- 
erwise the  franchises  will  be  for- 
feited for  noncompletion  of  the 
bridge  within  the  required  time. 
Boston  Investment  Co.  v.  Pacific 
Short-Line  Bridge  Co.  104  Iowa,  311. 

When  may  object. 

A  banking  corporation  for  which 
a  receiver  has  been  appointed  to  wind 
up  its  affairs  under  the  provisions 
of  Neb.  Comp.  Stat.  chap.  8,  may  be 
heard  to  resist  an  application  for  an 
order  on  the  receiver  to  sell  its  real 
estate,  and  is  not  estopped  because 
it  consented  to  the  appointment  of 
the  receiver  in  the  first  instance, 
when  the  order  consented  to  did  not 
fix  the  terms,  conditions,  or  time  of 
sale.  State,  German  Sav.  Bank,  v. 
Faiccett  (Neb.)  78  N.  W.  636. 

Rescission;  effect  of. 

Upon  the  resale  of  property  sold 
by  a  receiver  acting  under  an  order 
of  the  court,  but  directed  resold  be- 
cause the  first  sale  was  improvident- 
ly  made  under  a  mistake  of  fact,  the 
first  purchaser  is  entitled  to  be  re- 
paid the  purchase  price  paid  by  him, 
and  interest  thereon,  and  his  reason- 
able costs  and  expenses  in  defending 
the  sale  made  to  him.  Horse  Springs 
Cattle  Co.  V.  Schofield,  9  N.  M.  — , 
49  Pac.  954.  Citing  Williamson  v. 
Dale.  3  Johns.  Ch.  293;  Duncan  v. 
Dodd,  2  Paige,  101. 

Purchaser  cannot  attack. 

The  purchaser  at  a  receiver's  sale 
is  estopped  from  asserting  the  in- 
validity of  receivers'  certificates  is- 
sued by  consent  of  all  parties  to  the 
suit,  and  used  in  preserving  the 
property.  Central  Trust  Co.  v. 
Sheffield  d  B.  Coal,  Iron  &  R.  Co.  44 
Fed.  Rep.  526. 

Sale  of  securities. 

A  sale  of  securities  by  a  receiver  is 
authorized.  Re  Newark  Sav.  Inst. 
(N.  J.  Eq.)  8  Cent.  Rep.  564. 

Sale  of  property  of  a  corporation. 

An  order  providing  for  a  receiv- 
er's sale  of  property  belonging  to  a 
corporation,  dirc^cting  him  to  require 
of  tlie  purchaser  an  immediate  pay- 

33 


§  34 


RECEIVERSHIPS— SUPPLEMENT. 


ment  of  $G,000,  and  then  to  accept 
the  first-mortgage  bonds  to  the  ex- 
tent of  $20,000,  and  that  the  "bal- 
ance due  on  tlie  purchase  price"  he 
shall  arrange  to  secure  within  thirty 
days,  requires  the  property  to  be 
sold  for  more  than  $2(;,000,  $20,000 
of  whicli  tlie  purchaser  has  the  priv- 
ilege of  paying  for  in  bonds,  but  is 
not  required  to  do  so.  Slaughter  V. 
Strothcr,  99  Ga.  G33. 

Order  for  sale;  when  made. 

The  court  will  not  decree  a  sale  of 
property  by  a  receiver  until  a  party 
claiming  title  has  a  hearing.  Lane 
V.  Lutz,  1  Keyes,  203. 

Order  for  sale  set  aside,  when. 

An  order  which  authorized  a  re- 
ceiver to  sell  cattle,  based  upon  great 
and  material  errors  as  to  their  num- 
ber and  value,  will  be  set  aside  and 
a  resale  ordered,  although  the  receiv- 
er acted  under  a  mistake  of  fact. 
Horse  Springs  Cattle  Co.  v.  Scho- 
field  9  N.  M.  — ,  49  Pac.  954.  Cit- 
ing McGown  V.  Sandford,  9  Paige, 
290;  Broicn  v.  Frost,  10  Paige,  243; 
Anderson  v.  Foulke,  2  Harr.  &  G. 
355 ;  Blackburn  v.  Selma  R.  Co.  3 
Fed.  Rep.  G89;  Deford  v.  Macwatty, 
82  Md.  168;  Graff  am  v.  Burgess, 
117  U.  S.  180,  29  L.  ed.  839;  Schroe- 
der  V.  Young,  161  U.  S.  337,  40  L.  ed. 
724. 

Receiver  appointed  to  make  sale. 

Marvine  v.  Drexel,  68  Pa.  362. 

Sale  to  pay  taxes. 

A  receiver  will  be  allowed  to  sell 
at  public  or  private  sale  the  person- 
al property  of  the  receivership,  in  a 
state  where  overdue  taxes  constitute 
a  lien  which  must  be  first  paid  out 
of  the  proceeds,  and  pay  such  taxes 
as  quickly  as  possible  from  the  pro- 
ceeds. Fletcher  v.  Harney  Peak  Tin- 
Min.  Co.  84  Fed.  Rep.  555. 

As  a  whole^  ivhen. 

The  court  may  appoint  a  receiver  of 
a  railroad  company  upon  a  cross  pe- 
tition by  a  lienholder  in  a  suit  to 
marshal  the  liens  and  sell  the  prop- 
erty, although  such  petition  is  filed 
after  a  decree  finding  the  priority  of 
34 


liens  and  ordering  sale  of  property 
levied  upon,  where  no  sale  has  been 
made  for  want  of  bidders;  and  such 
receiver  may  be  directed  to  sell  the 
property  of  the  company  as  a  whole, 
where  the  whole  is  necessary  to 
carry  on  its  enterprise.  Mathers  v. 
Cincinnati  R.  Tunnel  Co.  12  Ohio  C. 
C.  136. 

Attack  of  sale;  ground  of. 

There  is  no  right  of  action  in  a 
corporation  to  recover  property  sold 
by  a  receiver  except  for  fraud.  New 
Castle  'Northern  R.  Co.  v.  New 
Castle  &  S.  Valley  R.  Co.  152  Pa.  96. 

Attack  of  sale;  when  made. 
Relief  against  the  purchaser  at  a 
receiver's  sale,  charging  collusion 
with  the  receiver,  should  be  in  the 
action  when  the  receiver  is  ap- 
pointed. Lockwood  V.  Reese,  7ft 
Wis.  404. 

Ratification  of  sale. 

The  unauthorized  act  of  receivers 
of  a  corporation  appointed  in  pro- 
ceedings for  its  voluntary  dissolu- 
tion, in  making  a  sale  of  the  prop- 
erty on  an  order  granted  without  no- 
tice to  the  attorney  general,  is  rati- 
fied where  the  court,  on  the  full  dis- 
closure of  the  facts,  and  with  notice 
to  the  attorney  general,  approves 
and  confirms  the  sale.  Johnson  v. 
Rayner,  25  App.  Div.  598. 

Private  sale  ratified  if  assented  to 
by  all  parties  in  interest,  though 
the  decree  required  public  sale.  Yet- 
zer  V.  Applcgate,  85  Iowa,  121. 

Sale  of  manufactured  products. 

A  receiver  authorized  to  operate 
a  plant,  and  sell  the  manufactured 
products,  and  pay  into  court  the  pro- 
ceeds above  the  cost  of  production, 
cannot  pay  the  operating  expenses 
from  the  money  received  from  the 
sale  of  real  estate  and  deprive  the 
wage  claimants  of  their  lien.  Gil- 
lespie V.  Blair  Glass  Co.  189  Pa.  50. 

Distribution  of  proceeds;  liens  first 
paid. 

The  proceeds  of  a  sale  by  a  receiv- 
er of  property  of  a  corporation,  on 
which  one  of  the  creditors  had  a  lien 
at    the    time   the    receiver    was   ap- 


RECEIVER'S   POWERS. 


S  34 


pointed,  and  the  amount  remaining 
of  such  proceeds  applicable  to  the 
lien  after  payment  of  expertses  and 
charges,  should  be  made  to  appear 
before  dividing  the  proceeds  of  the 
entire  corporate  property,  where 
the  proceeds  of  the  sale  of  all  the 
property  have  been  mingled  to- 
gether. Re  F.  X.  Muller  c£-  Co.  47  N. 
Y.  Supp.  277. 

What  sale  includes. 

A  receiver's  sale  of  all  assets  with- 
in the  jurisdiction  of  the  court  in- 
cludes debts  due  from  nonresidents. 
Loney  v.  Penniman,  43  Md.  130. 

Effect  of  sale  as  to  surety. 

Failure  of  a  receiver  in  selling 
property  under  a  decree  of  court,  to 
retain  a  lien  for  the  purchase  money 
as  authorized  by  statute  and  the  de- 
cree, will  not  release  a  surety  on  the 
note  given  for  the  purchase  money, 
since  the  surety  himself  will  be 
chargeable  with  neglect  in  failing  to 
see  that  the  lien  was  retained,  and 
the  receiver  was  under  no  affirmative 
duty  to  the  surety.  Joyce  v. 
Cockrill,  92  Fed.  Rep.  838. 

Judgment  creditors  of  an  insol- 
vent corporation,  who  permit  its 
property  to  be  sold  by  the  receiver 
subject  to  a  mortgage  given  by  the 
corporation  to  one  of  its  own  direct- 
ors, thereby  lose  their  right  to  object 
to  the  mortgage  on  that  ground,  and 
have,  after  the  confirmation  of  the 
sale,  no  right  to  have  such  mortgage 
set  aside  to  which  the  purchaser  at 
the  sale  can  be  subrogated.  Rich- 
ards V.  Haliday,  92  Fed.  Rep.  798. 

Effect  as  to  liens. 

A  sale  of  property  by  a  receiver  of 
a  corporation  does  not  in  Pennsyl- 
vania devest  the  lien  of  a  prior  mort- 
gage securing  bonds  of  the  corpora- 
tion, where  no  notice  has  been  given 
to  the  mortgagee  or  the  holder  of  the 
bonds  of  the  application  for  tlie  order 
to  sell.  Fidelity  Title  d  T.  Co.  v. 
Schenley  Park  d  H.  R.  Co.  189  Pa. 
3G3. 

Subject  to  liens. 

A  sale  by  a  receiver  under  an  or- 
der not  mentioning  liens  is  subject  to 


the  liens.     Hackensack  Water  Co.  v. 
De  Kay,  36  N.  J.  Eq.  548. 

When  free  from  liens. 

A  purchaser  of  railroad  property 
from  one  who  purchased  at  a  sale  by 
a  receiver  takes  it  free  from  claims 
against  the  receiver,  unless  it  is  or- 
dered otherwise  by  the  terms  of 
sale.  Houston,  E.  &  W.  T.  R.  Co.  v. 
IS! orris  (Tex.  Civ.  App.)  41  S.  W. 
708. 

When  void. 

A  sale  of  assets  of  an  insolvent 
firm  by  the  receiver  thereof,  without 
other  authority  than  that  contained 
in  a  decree  which  requires  him  to  sell 
such  assets  on  a  certain  day,  is  not 
merely  irregular,  but  absolutely 
void.  Ackerman  v.  Ackerman,  50 
Neb.  54. 

A  sale  by  a  receiver  in  collusion 
with  the  insolvent  debtor  is  void  as 
to  creditors,  and  the  receiver  is  li- 
able for  the  full  value  of  the  prop- 
erty. An  ex  parte  order  confirming 
such  sale  will  be  set  aside.  Re  Shea, 
57  Minn.  415. 

When   voidable. 

A  party  cannot  complain  of  a  pur- 
chase by  a  receiver  as  an  individual 
of  what  he  sold  as  receiver,  or  his 
purchase  as  receiver  of  Avhat  he  sold 
as  an  individual,  where  he  consented 
beforehand  to  such  transaction  and 
it  was  clearly  for  the  benefit  of  the 
trust  property.  Patterson  v.  Ward, 
6  N.  D.  609. 

A  purchase  by  a  receiver,  as  agent 
of  another,  of  property  sold  at  his 
own  sale,  made  under  order  of  court, 
is  voidable  at  the  election  of  a  party 
having  a  beneficial  interest  in  the 
property.  Carr  v.  Houser,  46  Ga. 
477. 

Who  are  bound  by  sale. 

An  agreement  by  the  receiver  of 
an  insolvent  corporation  to  retain 
from  the  proceeds  of  a  sale  of  the 
corporate  property  an  amount  suffi- 
cient to  pay  city  taxes  due  from  the 
corporation,  in  order  to  induce  the 
city  to  refrain  from  attacking  as 
fraudulent  a  transfer  of  the  property 
by  the  corporation,  and  to  induce  the 
purchaser  to  make  the  purchase,  is 

35 


§  34 


RECEIVERSHIPS— SUPPLEMENT. 


liinding  upon  the  ereditors  of  tlie  cor- 
poration for  whom  the  receiver 
acted,  and  wlio  were  desirous  that 
the  sale  should  be  made,  so  long  as 
they  retain  the  benefits  of  the  sale, 
even  though  the  receiver  exceeded 
his  authority  in  making  such  agree- 
ment. Union  Trust  Co.  v.  Mahley, 
113  Mich.  478. 

When  made. 

A  sale  of  personal  property  may 
be  ordered  before  the  rights  of  par- 
ties are  determined,  but  not  so  of  real 
estate.  Cole  v.  M'Rac,  G  Rand.  (Va.) 
C44. 

The  leave  of  the  court  to  sell  real 
property  of  an  insolvent  corporation 
in  the  hands  of  a  receiver,  under  an- 
execution  on  a  judgment  recovered 
before  his  appointment,  is  implied 
by  its  unqualified  refusal  to  continue 
an  injunction  against  the  sale.  Pel- 
letier  v.  Greenville  Lumber  Co.  123 
N.  C.  59G. 

The  court  may  properly  order  an 
immediate  sale  of  the  property  and 
franchises,  in  a  suit  to  set  aside  a 
conveyance  by  a  corporation,  in  or- 
der to  prevent  a  forfeiture  of  fran- 
chises. Boston  Investment  Co.  v. 
Pacific  Short-Line  Bridge  Co.  104 
lowa^  311. 

An  exception  by  a  purchaser  to  the 
confirmation  of  a  private  sale  of  the 
chattels  and  leasehold  estate  of  a 
corporation  by  its  receiver,  on  the 
ground  that  two  attachments  were 
levied  upon  the  property  before  it 
went  into  the  receiver's  hands,  is 
properly  overruled  where  the  court 
ordered  the  receiver  to  settle  with 
the  attaching  creditors.  Brook- 
field  v.  Sharpe   (Md.)   41  Atl.  1072. 

The  court  may  in  a  proper  ease 
permit  a  sale  of  real  property  of  an 
insolvent  corporation  in  the  hands  of 
a  receiver,  under  an  execution  issued 
upon  a  valid  judgment  recovered  be- 
fore the  receiver's  appointment.  Pel- 
let ier  v.  Greenville  Lumber  Co.  123 
N.  C.  596. 

How  made. 

An  order  to  sell  the  business  and 
all  personal  property  as  a  whole  is 
erroneous  and  not  calculated  to  sell 
the  property  to  the  best  advantage. 
Case  v.  Fish,  63  Wis.  475,  497. 
36 


How  enforced. 

A  sale  by  a  receiver  of  a  judgment 
as  an  asset  may  be  enforced  by  spe- 
cific performance.  Re  Dcnison,  114 
N.  Y.  021. 

Expenses  paid  by  purchaser,  when. 

A  court  which,  in  decreeing  the 
sale  of  a  railroad  in  possession 
of  a  receiver,  requires  the  pur- 
chaser, who  is  a  mortgagee,  to  pay 
the  expenses  of  the  receivership  as 
part  of  the  purchase  price,  and  gives 
lienholders  the  right  to  resort  to 
property  not  covered  by  the  liens  for 
deficiency,  will  be  'held  to  have  in- 
tended that  the  claims  against  the 
receivership  should  be  extinguished 
by  payment,  where  to  permit  the 
purchaser  to  hold  them  as  claims 
against  the  property  would  enable  it 
to  appropriate  the  whole  of  the  prop- 
erty not  subject  to  liens,  to  the  ex- 
clusion of  other  lien  claimants.  Mor- 
gan's L.  &  T.  R.  &  8.  8.  Co.  V.  Moran, 
91  Fed.  Rep.  22,  33  C.  C.  A.  313. 

Reservation  of  jurisdiction,  upon 
ordering  a  railroad  in  the  hands  of  a 
receiver  to  be  turned  over  to  the  pur- 
chaser at  foreclosure  sale,  for  the 
purpose  of  enforcing  payment  of  all 
the  receiver's  liabilities,  will  include 
power  to  hear  and  determine  ques- 
tions touching  the  receiver's  liabil- 
ity for  injuries  caused  by  the  receiv- 
er's mismanagement  or  negligence. 
Central  Trust  Co.  v.  Colorado  M.  R. 
Co.  (C.  C.  D.  Colo.)  1  Denver  Legal 
Adv.  490. 

Purchaser  not  liable  when. 

The  purchaser  at  a  judicial  sale  la 
not  liable  on  a  contract  by  the  re- 
ceiver for  supplies,  and  may  assume 
or  repudiate  the  same.  8ioss  Iron 
&  8.  Co.  V.  South  Carolina  d  G.  R. 
Co.  42  U.  S.  App.  748,  85  Fed.  Rep. 
133,  29  C  C.  A.  50. 

Purchase  by  receiver. 

A  purchase  by  the  receiver  at  his 
own  sale,  as  agent  of  another,  is  void- 
able at  the  election  of  a  party  in  in- 
terest.    Carr  v.  Houser,  46  Ga.  477. 

A  sale  to  a  receiver  of  property 
over  which  he  is  appointed  will  not 
be  upheld.  Eyre  v.  McDonnell,  15  Ir. 
Ch.  Rep.  534. 


RECEIVER'S  POWERS. 


§§  36-3S 


A  receiver  cannot,  without  special 
leave  of  the  court,  become  the  pur- 
chaser of  lands  over  which  he  is  re- 


ceiver.    Alven  V.   Bond,  Flan.  &   K. 
196,  3  Ir.  Eq.  Rep.  305. 


Page  104,  sec.  36. — Power  to  lease. 


The  court  may  order  receiver  to 
take  a  lease  of  another  road,  or  even 
order  him  to  build  another,  if  neces- 
sary for  the  preservation  and  pro- 
tection of  the  property.  Gilbert  v. 
Washington  City,  V.  U.  &  G.  S.  B. 
Co.  33  Gratt.  580. 

Reference  to  master  to  determine 
if  receiver  should  lease.  Gibbons  v. 
Hoivell,  3  Madd.  409. 

The  court  has  power  to  authorize 
a  receiver  in  a  partition  proceeding 
to  lease  the  property.  Weeks  v. 
Weeks,  106  N.  Y.  626. 

Statutory  receivers  have  no  power 
to  lease  the  railroad  over  which  they 


are  appointed;  nor  can  such  a  lease 
be  ratified.  State  v.  McMinnville 
&  M.  R.  Co.  6  Lea,  369. 

The  court  refused  to  authorize  a 
receiver  to  surrender  a  lease  and 
make  a  new  one  for  less  rent.  Duty 
of  receiver  to  advertise  for  tenant, 
etc.  Lorillard  v.  Lorillard,  4  Abb. 
Pr.  210. 

The  court  has  no  power  to  declare 
void  a  lease  made  by  receiver  in  good 
faith,  in  accordance  with  the  pro- 
visions of  a  will,  in  the  interests  of 
the  beneficiaries  of  such  will.  Bay- 
ly V.  Gaines  (Va.)  2  S.  E.  739. 


Page  108,  sec.  37. — Power  over  property  in  foreign  jurisdiction. 


A  receiver  of  rents  in  India  may 

be  appointed  in  England.     v. 

Lindsey,  15  Ves.  Jr.  91. 

Courts  exercise  jurisdiction  in  re- 
lation to  lands  abroad,  where  the  par- 
ties are  within  control.  Massie  v. 
Watts,  6  Cranch,  148,  3  L.  ed.  181; 
Ward  V.  Arredondo,  Hopk.  Ch.  213, 
14  Am.  Dec.  543;  Le  Roy  v.  Rogers, 


3  Paige,  236 ;  Hawley  v.  James,  7 
Paige,  218,  32  Am.  Dec.  623  ;  Sutphen 
v.  Foivler,  9  Paige,  280;  Briggs  v. 
French,  1  Sumn.  504;  Congden  v. 
Lee,  3  Edw.  Ch.  307. 

In  England  the  court  has  enter- 
tained jurisdiction  to  settle  bound- 
aries in  Jamaica.  Tulloch  v.  Hart- 
ley, 1  Younge  &  C.  Ch.  Cas.  114. 


Page  111,  sec.  38. — Power  to  impeach  fraudulent  acts  of  debtor. 


Fraudulent  mortgages. 

A  receiver  in  supplementary  pro- 
ceedings may  avoid  an  invalid  mort- 
gage in  behalf  of  the  creditors  he 
represents.  Hedges  v.  Polhemus,  9 
Misc.  680;  Mandeville  v.  Avery,  124 
N.  Y.  376;A'Mser  v.  Wright,  52  N.  J. 
Eq.  825. 

A  receiver  of  an  insolvent  corpo- 
ration may  assail  a  chattel  mortgage 
executed  by  the  corporation  because 
of  the  failure  to  refile  it  as  required 
by  the  New  York  statute.  Farmers' 
Loan  d  T.  Co.  v.  Baker,  20  Misc.  387. 

The  receiver  of  the  property  of  a 
corporation  may  avoid  a  prior  chat- 


tel mortgage  upon  the  corporate 
property,  on  the  ground  that  it  was 
not  filed  as  required  by  the  law  re- 
lating to  such  mortgages.  Bayne 
v.  Brewer  Pottery  Co.  90  Fed.  Rep. 
754. 

Fraudulent  conveyances. 

The  receiver  of  an  insolvent  debt- 
or may  avoid  a  sale  by  such  debtor  of 
his  personal  property  to  defraud  his 
creditors  by  demanding  of  the  fraud- 
ulent vendee  a  return  of  the  prop- 
erty, and  may  replevy  the  proj)crty, 
or  sue  the  vendee  for  its  value,  upon 
the  refusal  of  such  demaiul,  witliout 
first  bringing  an  equitable  action  to 

37 


§  40 


RECEIVERSHIPS— SUPPLEMENT. 


set  aside  the  sale.  Rossman  v. 
Mitchell  (Minn.)  75  N.  W.  1053,  De- 
nyin}^  Koliearing  in  70  N.  W.  48. 

Without  an  action  for  that  pur- 
pose the  receiver  is  in  no  position  to 
question  the  validity  of  a  transfer. 
Be  Castle,  2  N.  Y.  S.  R.  302. 

The  receiver  of  an  insolvent  com- 
pany may  by  suit  or  defense  avoid 
anj-  instrument  which  is  a  fraud  on 
creditors.  Graham  Button  Co.  v. 
Spielmann,  50  N.  J.  Eq.  120. 

A  receiver  appointed  in  an  action 
by  the  creditors  of  a  firm  in  aid  of  an 
assignment  for  creditors  by  the  firm 
to  set  aside  a  prior  transfer  to  a  cor- 
poration cannot  properly  be  treated 
as  a  receiver  of  the  corporation,  al- 
though he  entertains  the  belief  that 
he  is  such  a  receiver,  and  has  so  de- 
scribed himself  in  certain  papers. 
Badger  v.  Sutton,  30  App.  Div.  294. 

Notice  under  New  York  statute  to 
parties  with  property  in  their  posses- 
sion to  turn  over  is  not  a  prerequi- 
site to  a  suit  by  him  to  compel  an  ac- 
counting for  property  transferred. 
Sticfel  V.  Hiew  York  Novelty  Co.  25 
Misc.  221. 

A  receiver  in  supplementary  pro- 
ceedings of  the  property  of  a  foreign 
corporation  has  the  same  right  as 
any  other  receiver  of  a  corporation, 
under  N.  Y".  Laws  1858,  chap.  314,  §§ 
1,  2.  Stephens  v.  Meriden  Britan- 
nia Co.  13  App.  Div.  268. 

A  receiver  in  a  supplemental  pro- 
ceeding has  no  right  to  bring  suit 
to  set  aside  a  conveyance  to  hinder, 
delay,  or  defraud  creditors.  Hayner 
V.  Foioler,  16  Barb.  300. 

A  receiver  may  repudiate  the  ille- 
gal transfer  of  securities.  Ohio  v. 
Leavitt,  7  N.  Y.  328. 

Before  a  receiver  can  disaffirm  a 


fraudulent  conveyance,  he  must  show 
a  judgment  and  execution  returned, 
as  in  such  case  he  does  not  repre- 
sent the  corporation,  but  the  credit- 
ors. Buckley  v.  Harrison,  10  Misc. 
083. 

A  receiver  is  the  only  one  who  can 
attack  a  fraudulent  conveyance. 
Angell  v.  Pickard,  61  Mich.  561. 

Fraudulent  judgmetits. 

A  receiver  of  a  corporation  is  not 
estopped  to  assail  a  confession  of 
judgment  by  the  corporation  on  the 
ground  that  it  was  made  while  the 
corporation  was  insolvent,  by  an  or- 
der of  the  court  approving  the  report 
of  a  former  receiver  of  the  corpora- 
tion, which  falsely  represented  that 
all  of  the  debt,  except  a  balance 
upon  the  judgment,  had  been  paid, 
permitting  him  to  turn  over  the 
goods  in  his  hands  to  the  corpoi'ation 
subject  to  the  lien  of  the  judgment, 
and  discharging  him  as  receiver. 
Compton  V.  Schwabacher  Bros,  d  Co. 
15  Wash.  306. 

A  receiver  of  the  goods  of  a  debtor 
is  properly  appointed  under  N.  C. 
Code,  §  379,  subd.  1,  in  proceedings 
to  restrain  the  sale  of  such  property 
by  one  to  whom  the  debtor  has  con- 
fessed judgment  and  who  has  seized 
the  same  under  execution,  where 
there  is  evidence  that  such  judg- 
ment was  confessed  for  the  purpose 
of  defrauding  creditors,  and  the 
debtor  has  no  property  in  the  state 
subject  to  execution,  and  that  the 
sheriff  sold  the  property  under  such 
execution  after  the  issuance  of  the 
restraining  order  to  the  judgment 
creditors,  who  still  have  the  property 
or  its  proceeds.  Stern  v.  Austern, 
120  N.  C.  107. 


Page  117,  sec.  40. — Power  to  issue  certificates. 


Formal  notice  of  an  application 
for  the  issuance  of  receivers'  certifi- 
cates which  shall  be  prior  to  existing 
liens  need  not  be  given  to  the  hold- 
ers of  such  liens,  provided  its  equiva- 


lent is  given  and  fhey  are  allowed  the 
opportunity  of  contesting  the  appli- 
cation. Crosby  v.  Morristoion  <&  C. 
G.  R.  Co.  (Tenn.  Ch.  App.)  42  S.  W. 
507. 


30 


RECEIVEK'S  POWERS. 
Page  117,  sec.  41. — Power  to  appeal. 


S  41 


It  is  not  an  unbending  rule  that  a 
receiver  is  not  allowed  to  appeal 
from  an  order  to  turn  over  property 
and  funds.  Thus,  if  he  is  ordered  to 
turn  over  more  than  he  has  in  cus- 
tody, it  is  essential  to  the  protection 
of  his  rights  that  he  be  allowed  to 
appeal.     How  v.  Jones,  60  Iowa,  70. 

An  order  that  a  receiver  invest 
funds  is  appealable.  Collins  v. 
Case,  25  Wis.  651. 

A  receiver  appointed  in  a  suit  to 
foreclose  a  mortgage  on  a  railroad 
may  appeal  from  a  judgment  against 
him  for  damages  for  personal  in- 
juries. Thorn  V.  Pittard,  8  U.  S. 
App.  597,  62  Fed.  Rep.  232,  10  C.  C. 
A.  352. 

Where  a  decree  appointing  a  re- 
ceiver decides  the  right  to  possession 
of  property  in  contest,  and  the  com- 
plainant is  entitled  to  have  it  im- 
mediately carried  into  effect,  it  is 
final  and  appealable.  Winthrop 
Iron  Co.  V.  Meeker,  109  U.  S.  180,  27 
L.  ed.  898. 

An  appeal  may  be  taken  from  an 
order  to  a  receiver  appointed  to  set- 
tle partnership  affairs,  to  pay  either 
or  both  members,  upon  request,  for 
services  in  conducting  the  firm  busi- 
ness, without  reference  to  the  state 
of  the  accounts  between  them  as 
shown  by  the  firm  books,  the  pay- 
ments to  be  accounted  for  on  final 
settlement,  where  the  state  of  the  as- 
sets is  such  that  the  payments,  if 
erroneous,  cannot  be  restored.  Tay- 
lor V.  Sweet,  40  Mich.  736. 

An  appeal  may  be  taken  by  re- 
ceivers for  a  corporation,  either  in 
their  own  names  or  that  of  the  cor- 
poration, from  an  order  continuing 
an  action  against  them,  made  in  a 
case  pending  when  the  appointment 
was  made.  People  v.  Troy  Steel  & 
I.  Co.  82  Hun,  303. 

An  appeal  by  a  receiver  from  an 
order  granted  on  an  intervening  pe- 
tition is  proper  when  it  is  in  the  na- 
ture of  an  adversary  proceeding. 
Dillingham  v.  Hawk,  23  U.  S.  App. 
273,  60  Fed.  Rep.  494,  23  L.  R.  A. 
617. 

A  motion  in  vacation  for  the  revo- 
cation of  an  ex  parte  appointment  of 


a  receiver,  which  was  made  in  vaca- 
tion, is  permitted  by  a  reasonable 
construction  of  Mo.  Laws  1895,  p.  91, 
providing  for  an  appeal  from  an  or- 
der refusing  to  revoke  or  change  an 
interlocutory  order  appointing  a  re- 
ceiver. St.  Louis,  K.  &  S.  R.  Co.  v. 
Wear,  135  Mo.  230,  sub  nom.  State, 
St.  Louis,  K.  &  S.  R.  Co.,  v.  Wear,  33 
L.  R.  A.  341. 

An  order  appointing  a  receiver  is 
appealable  as  a  final  judgment,  with- 
in the  meaning  of  Utah  Const  art.  8, 
§  9,  as  the  question  whether  an  or- 
der is  appealable  depends  on  its  ef- 
fect on  the  rights  of  the  parties, 
rather  than  the  stage  of  the  litiga- 
tion. Ogden  City  v.  Bear  Lake  & 
River  Watertcorks  &  Irrig.  Co.  16 
Utah,  440,  41  L.  R.  A.  305. 

A  receiver  may  appeal  in  his  in- 
dividual capacity  from  an  order 
which  determines  that  after  his  dis- 
charge from  office  he  will  be  per- 
sonally liable  for  obligations  which 
he  has  contracted  officially.  Re 
Premier  Cycle  Mfg.  Co.  70  Conn.  473. 

The  creditors  of  an  insolvent  cor- 
poration, part  of  the  assets  of  which 
consist  of  the  stock  in  another  in- 
solvent corporation,  may  appeal 
from  the  allowance  of  claims  against 
the  latter  corporation  by  the  receiver 
thereof,  where  such  receiver  is  also 
receiver  of  the  other  corporation. 
Blake  v.  Domestic  Mfg.  Co.  (N.  J. 
Eq.)  14  Bkg.  L.  J.  550,  38  Atl.  241. 

A  corporation  can  appeal  suspen- 
sively  from  an  order  appointing  a  re- 
ceiver for  it.  Metropolitan  Bank  v. 
Commercial  Soap,  C.  &  S.  Manufac- 
tory, 48  La.  Ann.  1383. 

Mandamus  will  not  lie  in  Michi- 
gan to  review  an  order  for  the  ap- 
pointment of  a  receiver.  Scott  v. 
Speed,  58  Mich.  312. 

An  attaching  creditor  whose  right 
to  intervene  has  been  denied  in  a 
proceeding  to  appoint  a  receiver  has 
no  appeal.  He  may  resort  to  pro- 
hibition. State,  J.  M.  Arthur  Mach. 
Co.,  V.  Snohomish  County  Super.  Ct. 
7  Wash.  77. 

Objections  to  the  preliminary 
affidavit  in  supplementary  jiroceed- 
ings  cannot  be  raised  on  an  appeal 

39 


§  41 


RECEIVERSHIPS— SUPPLEMENT. 


from  the  order  appointing  the  re- 
ceiver, when  not  made  in  the  trial 
court.  Union  Bank  v.  Sargent,  53 
Barb.  422,  35  How.  Pr.  87. 

An  order  by  the  supreme  court  of 
New  York,  granted  u])on  the  appli- 
cation of  a  receiver,  extending  the 
time  for  presentation  of  chiinis,  is 
discretionary,  and  therefore  not  ap- 
pealable. People,  Atty.  Gen.,  v.  ;Sfe- 
curity  L.  Ins.  d  Annuity  Co.  79  N. 
Y.  2G7. 

No  appeal  lies  under  Miss.  Code, 
§  2311,  from  an  order  removing  a  re- 
ceiver. Hanon  v.  Weil,  69  Miss. 
476. 

An  appeal  will  not  lie,  in  the  ab- 
sence of  statutory  authority,  from 
an  order  substituting  one  person  for 
another  as  receiver.  International 
Bldg.  L.  &  Invest.  Union  v.  McOoni- 
gle,  72  111.  App.  399. 

An  ap])eal  from  an  order  substitut- 
ing one  person  for  another  as  re- 
ceiver is  not  authorized  by  111.  act 
1887,  providing  that  whenever  an  in- 
terlocutory order  is  entered  "ap- 
pointing a  receiver,"  an  appeal  may 
be  taken   therefrom.     Ihid. 

A  receiver  cannot  appeal  from  an 
order  removing  him  from  office,  on 
the  ground  that  a  finding  of  facts 
therein  states  that  he  mismanaged 
the  property  in  various  particulars, 
and  that  his  business  reputation  may 
be  thereby  damaged,  where  he  asked 
to  have  such  finding  made,  and  there 
was  no  necessity  for  it.  Re  Premier 
Cycle  Mfg.  Co.  70  Conn.  473. 

A  receiver  cannot,  either  as  such 
or  individually,  appeal  from  an  or- 
der removing  him  from  office,  where 
the  court  had  jurisdiction  to  make 
it.     Ibid. 

A  receiver  cannot  appeal  from  an 
order  removing  him  from  office,  on 
the  ground  that  it  contains  a  finding 
which  may  be  construed  to  import 
that  he  is  personally  liable  for  cer- 
tain bills  contracted  by  him  as  re- 
ceiver, as  such  finding  cannot  be 
used  against  him  on  any  subsequent 
accounting,  or  in  any  other  suit. 
Ibid. 

A  receiver  has  no  right  to  appeal 
from  an  order  denying  a  motion 
made  pending  a  hearing  upon  a  pe- 
tition for  his  removal,  authorizing 
him  to  sell  certain  property  of  the 

40 


estate  at  auction,  and  from  the  pro- 
ceeds pay  debts  which  he  had  con- 
tracted in  the  management  of  the 
business.     Ibid. 

An  appeal  will  not  lie  by  a  rail- 
road coini)any  from  the  portion  of  an 
order  denying  a  petition  for  the  pay- 
ment of  debts  incurred  for  current 
expenses  before  the  receivers'  ap- 
pointment, out  of  the  assets  in  his 
'  hands,  which  declares  that  the  com- 
pany is  indebted  to  the  petitioners, 
as  such  provision  would  not  bind  the 
company  in  any  proceedings  taken 
for  the  collection  of  the  claim. 
Guarantee  Trust  d  8.  D.  Co.  v. 
Philadelphia,  It.  d  N.  E.  R.  Co.  31 
App.  Div.  511. 

A  receiver  cannot  appeal  from  a 
decree  allowing  certain  just  claims 
preference  to  a  mortgage,  on  the 
ground  that  there  had  been  no  diver- 
sion of  income,  where  neither  the 
trustee  nor  the  bondholders  object. 
Bosivorth  V.  Terminal  R.  Asso.  53 
U.  S.  App.  302,  80  Fed.  Rep.  969,  26 
C.  C.  A.  279. 

The  objection  that  the  receiver  ap- 
pointed to  rent  out  land  until  it 
could  be  sold  in  partition  proceed- 
ings was  a  solicitor  in  the  case  and 
interested  in  the  land  as  an  heir  is 
not  available  on  appeal  in  the  parti- 
tion proceedings  after  the  receiver 
has  made  final  settlement, — especial- 
ly where  no  specific  wrong  by  him  is 
pointed  out.  Rogers  v.  Rogers 
(Tenn.  Ch.  App.)    42  S.  W.  70. 

The  creditors  of  an  insolvent  cor- 
poration, part  of  the  assets  of  which 
consist  of  the  stock  in  another  in- 
solvent corporation,  maj^  appeal 
from  the  allowance  of  claims  against 
the  latter  corporation  by  the  receiver 
thereof,  where  such  receiver  is  also 
receiver  of  the  other  corporation. 
Blake  v.  Domestic  Mfg.  Co.  ( N.  •  J. 
Eq.)    14  Bkg.  L.  J.  550,  38  Atl.  241. 

Time  within  which  appeal  taken. 

An  appeal  must  be  taken  within 
the  time  allowed  by  statute.  Rus- 
sell V.  First  Nat.  Bank,  65  Iowa, 
242. 

A  delay  of  eight  years  in  appealing 
from  a  receiver's  disallowance  of  a 
claim  is  a  bar  to  relief.  Leo  v. 
Green,  52  N.  J.  Eq.  1. 


EECEIVER'S  POWERS. 
Page  119,  sec.  42. — Miscellaneous  powers. 


§  42 


A  receiver  under  the  direction  and 
authority  of  the  court  has  power  to 
continue  the  payment  of  bounties. 
Re  Rcddington,  1  Molloy,  256. 

To  sell  horses  as  perishable  prop- 
erty. Howell  V.  Frances  ( N.  J.  Eq. ) 
9  Atl.  379. 

To  proceed  and  act  for  all  credit- 
ors. Angell  v.  Silsiury,  19  How.  Pr. 
48. 

To  complete  an  unfinished  portion 
of  a  railroad.  Kennedy  v.  St.  Paul 
&  P.  R.  Co.  2  Dill.  448. 

And  may  apply  to  court  for  in- 
structions. Re  Knickerbocker  Bank, 
19  Barb.  002. 

The  court  in  possession  through  its 
receiver  exercises  the  power  of  the 
board  of  directors  of  an  insolvent  in- 
surance company  in  addition  to  the 
powers  conferred  by  statute.  Rand, 
McN.  &  Co.  V.  Mutual  F.  Ins.  Co.  58 
111.  App.  528. 

The  receiver  has  no  power  to  trans- 
fer to  a  foreign  jurisdiction  ques- 
tions concerning  the  distribution  of 
assets.  Reynolds  v.  Stockton,  43  N. 
J.  Eq.  211. 

Or  to  condemn  property  for  rail- 
road purposes.  Minneapolis  <&  St. 
L.  R.  Co.  V.  Minneapolis  d  W.  R.  Co. 
61  Minn.  502. 

The  receiver  of  a  nonresident  as- 
sociation is  not,  as  matter  of  right, 
entitled  to  appear  and  defend  in  at- 
tachment proceedings  against  it, 
where  its  nonresident  assignee  has 
appeared  and  moved  to  have  the  pe- 
tition made  more  definite,  and  has 
thereafter  made  default,  although 
the  receiver's  answer  was  filed  be- 
fore the  default  was  entered  against 
the  association  and  its  assignee. 
Hedrick  v.  McElroy  (Iowa)  76  N. 
W.  716. 

A  sheriff  appointed  receiver  of  the 
property  of  a  judgment  debtor  as 
permitted  by  the  Kansas  statute  has 
the  same  authority  as  any  other  ap- 
pointee would  have.  Teats  v.  Bank 
of  Herington,  58  Kan.  721. 

A  receiver  is  entitled,  the  same  as 
any  other  party  in  an  action  to 
which  he  is  a  party,  to  a  trial  by 
jury  on  questions  of  fact,  the  right 
to  which  is  guaranteed  by  the  Texas 


Constitution.  Bamm  v.  /.  Stone  & 
Sons  Live-Stock  Co.  13  Tex.  Civ. 
App.  414. 

A  receiver  of  a  national  bank  can- 
not recover  upon  notes  made  for  the 
accommodation  and  advantage  of  the 
bank  with  full  notice  to  its  manag- 
ing officer,  as  he  stands  in  the  shoes 
of  the  bank.  Stapylton  v.  Teague, 
52  U.  S.  App.  577,  85  Fed.  Rep.  407, 
29  C.  C.  A.  229. 

In  an  action  upon  a  promissory 
note,  brought  by  one  who  purchased 
it  in  good  faith  at  a  judicial  sale 
made  under  the  authority  and  with 
the  sanction  of  the  court,  an  inter- 
vening receiver  who  sets  up  title  to 
the  note  cannot  be  permitted  to  col- 
laterally impeach  such  sale,  where 
the  parties  at  whose  suit  he  was  ap- 
pointed had  opportunity  to  seize  the 
assets  before  the  sale  or  intervene 
in  the  actions  which  led  up  to  it. 
Anderson  v.  Chicago  Title  d  T.  Co. 
101  Wis.  385. 

The  power  of  a  receiver  to  incur 
obligations  for  supplies  and  ma- 
terials incidental  to  the  business, 
with  permission  of  the  court,  follows 
as  a  necessary  incident  to  the  re- 
ceivership. Cake  V.  Mohun,  164  U.  S. 
311,  41  L.  ed.  447;  Ellis  v.  Vernon 
Ice,  Light  &  W.  Co.  86  Tex.  109. 

A  receiver  of  a  corporation,  with 
only  the  power  specified  in  N.  Y. 
Code  Civ.  Proc.  §  1788,  is  a  mere  cus- 
todian and  manager  of  the  property 
under  direction  of  the  court  during 
the  pendency  of  the  action,  and  can- 
not discharge  an  employee  under  con- 
tract with  the  corporation,  or  au- 
thorize a  deputy  to  do  so.  Murray 
V.  Cantor,  18  Misc.  389. 

A  receiver  and  manager  of  a  com- 
pany cannot  annul  its  contracts. 
Re  Marria(/e  [1896]  2  Ch.  603,  65 
L.  J.  Ch.  N.  S.  839,  75  L.  T.  N.  S. 
169. 

A  receiver  in  chancery  who  wrong- 
fully enters  into  a  partnership  with 
anotluM-  cannot  set  up  his  want  of  au- 
thority to  enter  into  such  partner- 
ship as  a  ground  for  maintaining  an 
action  at  law  against  his  partner  for 
a  sum  alleged  to  be  due  by  account, 
where  such  partner  would  otherwise 

41 


§  42 


RECEIVERSHIPS— SUPPLEMENT. 


be  entitled  to  a  partnership  account- 
ing. Etowah  Min.  Co.  v.  Christo- 
pher, 112  Ala.  554. 

A  receiver  has  no  power  to  waive 
the  equitable  rights  of  contractors. 
Kciley  v.  Dusenbury,  10  Jones  &  S. 
238. 

Or  to  allow  an  offset  purchased 
for  that  purpose  after  his  appoint- 
ment. Van  Dyke  v.  McQuade,  85 
N.  Y.  616. 

A  receiver  in  a  suit  in  affirmance 
of  an  assignment  is  not  permitted  to 
come  in  and  open  up  a  decree  in  an- 
other suit,  where  the  assignment  is 
set  aside  as  fraudulent  and  void. 
Wheeler  v.  Wheedon,  9  How.  Pr.  293. 

A  receiver  cannot  reach  a  surplus 
income  created  by  a  person  other 
than  the  debtor.  Such  power  is  in 
the  creditor  only  in  a  direct  proceed- 
ing. Levey  v.  Bull,  47  Hun,  350; 
Tolles  v.  Wood,  99  N.  Y.  616;  Mann- 
ing v.  Evans,  19  Hun,  500. 

A  receiver  may  remove  a  cause 
from  a  state  court  to  a  Federal  court 
when  he  is  a  Federal  court  receiver. 
Evans  v.  Dillingham,  43  Fed.  Rep. 
177. 

His  power  ceases  in  an  appeal  in 
an  ejectment  suit,  when  the  rights  of 
parties  are  finally  declared,  after 
which  he  holds  for  the  successful 
party.  Garniss  v.  San  Francisco 
Super.  Ct.  88  Cal.  413. 

The  acts  of  a  receiver  cannot  be 
questioned  in  a  collateral  proceed- 
ing. Bradley  v.  Marine  River  Phos- 
phate Min.  d  Mfg.  Co.  3  Hughes, 
26. 

Receivers  of  a  national  banking 
association,  as  such,  have  not  the 
privilege  in  all  cases  of  being  sued 
in  the  United  States  courts,  and  can- 
not remove  such  cases  against  them 
from  state  to  United  States  courts. 
Bird  V.  Cockrem,  2  Woods,  32. 

The  power  of  a  receiver  is  meas- 
ured by  the  order  of  appointment. 
Grant  v.  Davenport,  18  Iowa,  194. 

But  may  be  enlarged  from  time  to 
time.  State  v.  Edgefield  &  K.  R.  Co. 
6  Lea.  353. 

And  in  all  cases  he  is  bound  by  his 
instructions  and  orders.  Burroughs 
V.  Bunnell,  70  Md.  18. 

The  receiver    is    a    ministerial  of- 
ficer.    Lafayette  Bank   v.   Bucking- 
ham, 12  Ohio  St.  419. 
42 


And  as  such  is  not  required  to  ren- 
der professional  services  as  a  lawyer. 
Olson  v.  State  Bank,  72  Minn.  320. 

The  receiver  in  the  management  of 
receivership  duties  has  discretionary 
power.  Morley  v.  Snow  (Mich.)  41 
L.  R.  A.  817,  5  Det.  L.  N.  200. 

A  trustee  in  a  mortgage  executed 
to  a  building  and  loan  association  for 
which  a  receiver  has  been  appointed 
may  sell  the  land  under  a  power 
contained  in  the  mortgage,  but  must 
jiay  over  all  the  proceeds  of  the  sale 
to  the  receiver,  although  it  exceeds 
the  amount  of  the  mortgage,  as  the 
liability  of  the  borrowing  member 
cannot  be  known  until  it  is  ascer- 
tained to  what  amount  the  associa- 
tion is  insolvent.  Thompson  v. 
North  Carolina  Bldg.  c6  L.  Asso.  120 
N.  C.  420. 

If  a  receiver  to  collect  has  no  au- 
thority to  pay  debts,  but  does  so  with 
the  knowledge  of  the  parties,  and  no 
objection  is  made  at  the  time,  they 
cannot  afterwards  object.  Kellar 
V.  Williams,  3  Rob.   (La.)   321. 

A  receiver  may  ratify  a  sale  made 
after  insolvency  or  suspension  of 
business,  though  the  act  is  void  un- 
der statute.  Suydam  v.  Bank  of 
New  Brunswick,  3  N.  J.  Eq.  114. 

The  power  conferred  upon  the  di- 
rectors of  an  insurance  company  by 
a  premium  note  by  which  the  maker 
promised  to  pay  the  company  a  cer- 
tain sum  of  money,  "in  such  pro- 
portions and  at  such  time  or  times 
as  the  directors  of  said  company 
may,  agreeable  to  their  charter,  re- 
quire," passes  to  a  receiver  of  the 
company  appointed  by  the  court  of 
chancery  in  proceedings  taken  pursu- 
ant to  the  New  Jersey  statute, 
against  the  company  as  an  insolvent 
corporation.  Meley  v.  Whitaker,  61 
N.  J.  L.  602,  Affirming  38  Atl.  840. 

The  power  of  the  court  to  appoint 
a  receiver  to  collect  the  assets  of  a 
mutual  benefit  association  does  not 
change  the  character  of  the  contract 
between  the  association  and  its  mem- 
bers, so  as  to  make  them  debtors  for 
assessments,  when  by  the  contract 
they  were  not  so.  Lehman  v.  Clark, 
174  111.  279,  43  L.  R.  A.  648,  Revers- 
ing 71  111.  App.  366. 

A  receiver  to  collect  rents  has 
power    until    he  is   discharged,    al- 


RECEIVER'S  POWERS. 


§  43 


though  the  suit  has  abated.  'New- 
man V.  Mills,  1  Hogan,  291. 

A  mortgagee  does  not  exhaust  his 
remedy  by  a  foreclosure  and  sale, 
but  a  receiver  may  be  thereafter  ap- 
pointed to  collect  the  rents  and  prof- 
its during  the  period  of  redemption 
and  apply  them  upon  an  ascertained 
deficiency,  when  the  mortgagor  is  in- 
solvent. First  Nat.  Bank  v.  Illinois 
Steel  Co.  174  111.  140,  Affirming  72 
111.  App.  640. 

A  receiver  appointed  under  Minn. 
Gen.  Stat.  1894,  chap.  70,  in  an  ac- 
tion for  the  sequestration  of  the  as- 
sets of  an  insolvent  corporation,  has 
no  authority,  except  in  cases  where 
it  is  otherwise  provided  by  statute, 
to  enforce  the  individual  liability  of 
the  stockholders  of  the  corporation 
for  its  debts.  Minneapolis  Baseball 
Co.  V.  City  Bank,  06  Minn.  441,  38 
L.  R.  A.  415. 

The  right  of  receivers  of  insolvent 
banking  corporations  appointed  un- 
der Minn.  Laws  1895,  chap.  145,  § 
20,  to  enforce  the  stockholders'  lia- 
bility, is  primarilv  exclusive  of  the 
right,  under  Minn.  Gen.  Stat.  1894, 
chap.  76,  to  enforce  such  liability; 
but  the  creditors  may  for  good  cause 
shown  be  permitted  by  the  court  in 
which  the  insolvency  proceedings  are 
pending  to  enforce  such  liability 
when  the  receivers  neglect  to  do  so. 
Anderson  v.  Seymour,  70  Minn.  358. 

A  receiver  to  whom  a  court  of  com- 
petent jurisdiction  orders  the  pay- 
ment of  assessments  by  stockholders 
has  no  authority  to  consent  to  a  de- 
cree in  another  state  for  the  payment 
of  such  obligations  to  the  creditor 
in     whose    suit    he    was    appointed. 


Castleman  v.  Templeman,  87  Md. 
540,  41  L.  R.  A.  367. 

The  receiver  of  a  corporation,  in 
the  absence  of  statutory  authority, 
cannot  sue  to  enforce  a  liability  cre- 
ated by  statute  against  stockholders 
in  favor  of  creditors,  independently 
of  what  they  owe  the  corporation  on 
the  amount  of  their  stock.  Gainey 
V.  Gilson,  149  Ind.  58. 

The  court  has  power  to  order  a 
state  treasurer  to  pay  over  to  a  re- 
ceiver money  held  in  his  hands  as  a 
bank  fund.  Danhy  Bank  v.  State 
Treasurer,  39  Vt.  92. 

The  receiver  of  an  insolvent  cor- 
poration has  no  right  to  file  a  motion, 
in  assignment  proceedings  by  it,  for 
the  dismissal  of  such  proceedings  on 
the  ground  that  the  assignment  for 
creditors  was  made  while  the  pro- 
ceedings for  the  appointment  of  the 
receiver  were  pending.  Flint  v. 
Poicell,  10  Colo.  App.  66. 

A  receiver  cannot  assign  an  inter- 
est in  a  patent  right.  Gordon  v. 
Anthony,  16  Blatchf.  234. 

And  he  has  no  right  to  a  partition 
of  property,  but  may  have  dower  as- 
signed. Tayne  v. Becker,  87  N.  Y.  153. 

Liquidating  commissioners  of  a 
defunct  corporation  cannot  as  such 
contest  debts  of  copartnerships  from 
the  consolidation  of  which  the  cor- 
poration was  formed,  and  whose  as- 
sets it  took  possession  of,  and  whose 
indebtedness  it  assumed  to  pay,  on 
the  ground  that  more  than  the  legal 
rate  of  interest  was  included  in  set- 
tlement of  the  account  by  such  firm, 
although  dividends  to  other  credit- 
ors are  reduced.  Re  Leeds  &  Co.  49 
La.  Ann.  501. 


Page  121. — Receiver's  possession. 


The  possession  of  the  receiver  un- 
der the  direction  of  the  court  is  the 
possession  of  the  party  entitled  to 
the  rents  and  profits.  Horlock  v. 
Smith,  ]  1  L.  J.  Ch.  N.  S.  157,  6  Jur. 
478. 

And  after  his  discharge  his  posses- 
sion is  that  of  the  party  in  interest. 
Ibid. 

In  supplementary  proceedings  the 
judge  has  control,  under  the  New 
York  Code,  over    the    assets    in    the 


hands  of  a  receiver.  Webber  v.  Hob- 
ble, 13  How.  Pr.  382. 

A  receiver  cannot  devest  himself 
of  trust  powers.  Mann  v.  Fairchild, 
2  Keyes,   100. 

He  must  not  interfere  in  litigation 
between  parties.  Comyn  v.  Smith,  1 
Hogan,  81. 

The  claim  of  an  equity  or  lien  on 
property  held  by  an  officer  of  a  cor- 
poration to  secure  a  debt  to  himself 
does  not  defeat  the  jurisdiction  of  a 

43 


§  43 


RECEIVERSHIPS— SUPPLEMENT. 


court  which  has  appointed  a  receiver 
for  the  corpoiation  in  a  suit  to  wliich 
the  ollicer  is  a  party,  after  hearing 
on  due  notice  and  appearance,  to  or- 


der him  to  turn  over  such  property 
to  the  receiver.  Tin.sley  v.  Ander- 
son, 171  U.  S.  101,  43  L.  ed.  91. 


Page  121,  sec.  43. — How  disturbed. 


After  a  receiver  has  been  ap- 
pointed and  has  become  vested  with 
the  title  to  all  assets,  the  creditor  in 
whose  behalf  he  has  been  appointed 
lias  no  right  to  intervene  and  seize 
upon  part  of  the  estate.  Passavant 
v.  Boicdoin,  GO  Hun,  433;  American 
Trust  iC-  8av.  Bank  v.  Frankenthal, 
55  111.  App.  400 :  Parker  v.  Brown- 
ing, 8  Paige,  388 ;   Wardle  v.  Lloyd, 

2  IMolloy,  388;  State,  Remington 
Paper  Co.,  v.  Ellis,  45  La.  Ann.  1418; 
Tink  V.  Rundle,  10  Beav.  318;  Ames 
V.  Birkenhead  Docks,  20  Beav.  332, 
1  Jur.  N.  S.  529;  Klauber  v.  San 
Diego  Street  Car  Co.  95  Cal.  353; 
Dorman  v.  Dorman,  3  Ir.  Eq.  Rep. 
385. 

Unless  the  title  of  a  receiver  of  a 
state  court  is  impeached  under  the 
bankrupt  act,  his  possession  of  the 
assets  will  not  be  interfered  with  by 
the  Federal  court  in  bankruptcy 
proceedings.  Re  Price  (1899)  92 
Fed.  Rep.  987  ;  Alden  v.  Boston,  H. 
&  E.  R.  Co.  (1871)  5  Nat.  Bankr. 
Reg.  230;  Clark  v.  Bininger   (1870) 

3  Nat.  Bankr.  Reg.  518. 

Funds  vested  in  a  receiver  four 
months  prior  to  the  bankrupt  pro- 
ceedings will  not  be  interfered  with 
by  the  bankrupt  court.  Re  Meyer 
(1899)    1  Nat.  Bankr.  News,  293. 

A  receiver  in  possession  of  mort- 
gaged premises  in  foreclosure  pro- 
ceedings prior  to  the  commencement 
of  bankruptcy  proceedings  cannot 
be  dispossessed  by  the  bankrupt 
court.  Davis  v.  Alabama  &  F.  R.  Co. 
1  Woods,  661. 

After  property  is  taken  into  the 
possession  of  a  court,  no  other  court 
can  interfere  with  the  possession. 
Hammond  v.  Tarver  (Tex.  Civ.  App.) 
31  S.  W.  841. 

A  receiver  in  supplementary  pro- 
ceedings becomes  the  legal  assignee 
of  the  property  in  the  order  men- 
tioned, and  the  debtor  cannot  inter- 
fere with  it.  Turner  v.  Holden,  94 
N.  C.  70. 
44 


Where  a  receiver  is  in  possession, 
other  persons  are  not  permitted  to 
enter  without  permission,  under  a 
claim  not  theretofore  exercised. 
Johnes  v.  Claughton,  Jac.  573. 

A  sale  of  land  by  the  trustee  in  a 
deed  of  trust,  vmder  a  power  con- 
tained therein,  while  all  the  property 
of  the  mortgagor  is  in  the  hands  of 
a  receiver,  is  void.  Scott  v.  Craw- 
ford, 16  Tex.  Civ.  App.  477. 

The  sale  of  property  under  execu- 
tion while  in  the  hands  of  a  receiver 
is  void,  though  the  levy  is  made  be- 
fore the  appointment.  Walling  v. 
Miller,  108  N.  Y.  173. 

When  a  receiver  is  in  possession  of 
property,  in  a  suit  involving  the 
right  of  possession  merely,  the  sale 
of  such  property  by  another  court  is 
not  an  interference  with  the  posses- 
sion, lliekox  V.  Holladay,  29  Fed. 
Rep.  226. 

A  judgment  creditor  will  not,  in 
general,  be  allowed  to  enforce  his 
judgment  by  sale  of  property  in  the 
hands  of  a  receiver.  Mercantile 
Trust  Co.  v.  Baltimore  &  0.  R.  Co. 
79  Fed.  Rep.  389. 

Property  in  the  hands  of  a  re- 
ceiver cannot  be  attached.  Adams 
V.  Roman  (unreported),  cited  in 
Adams  v.  Hackett,  7  Cal.  204. 

Execution  cannot  issue  on  a  judg- 
ment against  a  receiver.  Arnold  v. 
Penn,  11  Tex.  Civ.  App.  325. 

But  a  receiver  has  no  right  to  the 
l^ossession  of  property  actually  at- 
tached and  in  the  possession  of  at- 
taching creditors.  State,  Perkins, 
v.  Graham,  9  Wash.  528. 

A  receivers'  possession  is  not  to  be 
interfered  with  by  suits  or  other 
legal  proceedings  without  leave.  De 
Graffenried  v.  Brunswick  &  A.  R.  Co. 
57  Ga.  22. 

An  action  may  be  maintained  by 
the  direction  of  the  governor  for  the 
sole  purpose  of  determining  the  ques- 
tion of  title  to  certain  lands  in  con- 
trover.sy  between  the  state  and  a  des- 


RECEIVER'S   POSSESSION. 


§  43 


ignated  railway  company,  although 
such  company  and  the  lands  in  con- 
troversy are  in  the  custody  of  a  re- 
ceiver appointed  by  the  Federal 
court,  and  such  court  has  not  given 
permission  to  sue.  Houston  &  T.  C 
R.  Co.  v.  State  (Tex.  Civ.  App.)  39 
S.  W.  390. 

The  possession  of  property  by  a 
receiver  in  a  state  court  is  no  bar  to 
a  bill  by  a  creditor  in  a  Federal 
court.  Rejall  Greenwood,  00  Fed. 
Rep.  784. 

The  court  cannot  permit  an  at- 
tachment to  be  levied  upon  personal 
property  capable  of  manual  delivery, 
of  a  corporation,  after  the  appoint- 
ment of  a  receiver,  because  of  a  false 
denial  by  certain  persons  to  the 
sheriff  that  they  had  such  property 
of  the  corporation  in  their  posses- 
sion, as  such  denial  and  the  conse- 
quent failure  of  the  sheriff  to  take 
the  property  into  his  actual  custody 
do  not  constitute  a  substitute  for  the 
actual  custody,  which,  under  X.  Y. 
Code  Civ.  Proc.  §  049,  is  essential  to 
a  levy  on  such  property.  Robinson 
V.  Columbia  Spinning  Co.  23  App. 
Div.  499. 

That  a  firm  made  a  number  of 
fraudulent  transfers  of  property  a 
short  time  before  the  commencement 
of  an  action  for  the  dissolution  of  the 
partnership  and  the  appointment  of 
a  receiver  does  not  necessarily  es- 
tablish that  the  appointment  of  a 
temporary  receiver  in  the  action  un- 
der an  agreement  of  the  parties  was 
collusive  and  obtained  for  the  pur- 
pose of  hindering,  delaying,  and  de- 
frauding creditors,  so  as  to  take  the 
assets  of  the  firm  out  of  the  control 
of  the  court  and  subject  them  to 
le\^  by  creditors.  Myers  v.  Myers, 
18  Misc.  003. 

The  arrest  of  a  receiver  in  attend- 
ance on  court  will  not  be  permitted. 
Bratazon  v.  Teynham,  2  Ir.  Ch.  Rep. 
503. 

The  court  will  by  injunction  re- 
strain the  enforcement  of  a  judgment 
against  property  in  possession  of  a 
receiver.  Gardner  v.  Caldwell,  16 
Mont.  221. 

Uov;  acquired  or  enforced. 

A  writ  of  assistance  will  be  issued 
to   put  a   receiver   in   possession   of 


leased  premises  after  the  lessee's 
rights  have  terminated,  where  it  be- 
comes necessary  to  enable  him  to 
turn  the  premises  over  to  the  person 
entitled  thereto;  but  the  application 
for  such  writ  must  be  made  by 
some  party  to  the  cause  other  than 
the  receiver.  Stephenson  v.  Giltenau, 
5  Ohio  N.  P.  419. 

When  the  petition  for  the  appoint- 
ment alleged  that  the  property  of  a 
corporation  had  been  transferred  to 
an  alleged  new  company  not  made  a 
party,  the  court  has  no  right  to  grant 
a  writ  putting  the  receiver  in  posses- 
sion. St.  Louis,  K.  &  S.  R.  Co.  v. 
Wear,  135  Mo.  230,  sub  nom.  State, 
St.  Louis  K.  &  S.  R.  Co.,  v.  Wear,  33 
L.  R.  A.  341. 

A  rule  may  be  entered  to  show 
cause  why  real  estate  should  not  be 
surrendered  to  a  receiver,  and  en- 
force rights  of  the  receiver  against  a 
party  accused  of  interfering  with  his 
possession  or  management,  unless 
the  answer  sets  up  some  right  or  title 
of  which  a  jury  trial  is  claimed. 
Sullivan  v.  Colby.  34  U.  S.  App.  432, 
71  Fed.  Rep.  400,  18  C.  C.  A.  193. 

The  court  cannot  through  a  re- 
ceivership interfere  with  a  United 
States  marshal  in  possession  under 
admiralty  process.  Tliompson  v. 
Van  Vechten,  5  Duer,  018. 

A  court  will  compel  the  treasurer 
of  a  corporation  to  turn  over  the 
funds  of  the  company,  or  punish  by 
fine  or  imprisonment.  Edrinyton  v. 
Pridham,  05  Tex.  012. 

An  assignee  who  has  not  obtained 
possession,  but  has  left  the  assignor 
in  possession,  will  be  required  to  de- 
liver it  to  a  receiver.  Eastern  Nat. 
Bank  v.  Hulshizer,  2  N.  Y.  S.  R.  115. 

A  court  of  equity  in  another  state, 
on  a  bill  filed  by  a  receiver  of  a  benev- 
olent society,  can  order  the  trustees 
of  the  local  branch  of  the  association 
to  pay  over  the  funds  in  its  hands  to 
the  receiver.  Failcy  v.  Talbee,  55 
Fed.  Rep.  892. 

When  the  custodian  for  a  pur- 
chaser of  property  at  a  sheriff's  sale 
is  not  before  the  court  the  debtor, 
who  is  in  possession,  will  not  be  di- 
rected to  deliver  the  property  to  a  re- 
ceiver. Robeson  v.  Ford,  3  Edw.  Ch. 
441. 

A  receiver    of    a    corporation    aj>- 

45 


§  43 


RECEIVERSHIPS— SUPPLEMENT. 


pointed  after  an  assignment  for 
creditors  by  such  corporation,  in  a 
proceeding  for  its  dissolution  com- 
moncod  before  such  assignment,  can- 
not by  motion  compel  the  assignee  to 
deliver  possession  of  corporate  prop- 
erty, lie  Muehlfeld,  IG  App.  Div. 
401. 

A  receiver  cannot  be  put  in  posses- 
sion of  property  on  the  application 
of  a  party  who  is  not  himself  en- 
titled to  possession  and  has  no  inter- 
est in  the  property.  Huerstel  v. 
Lorillard,  G  llobt.  200,  7  How.  Pr. 
251. 

The  court  may  compel  delivery  of 
assets  to  the  receiver,  though  the 
party  in  possession  is  under  indict- 
ment for  stealing  the  same.  Tolle- 
son  V.  Greene,  83  Ga.  499. 

Property  of  a  debtor  who  has 
fraudulently  confessed  judgment  in 
favor  of  one  who  purchased  such 
property  at  a  sale  under  execution 
issued  thereon  still  belongs  to  such 
debtor,  and  should  be  delivered  to  a 
receiver  appointed  in  proceedings  to 
restrain  the  execution  sale.  Stern 
V.  Austern,  120  N.  C.  107. 

Heirs  to  whom  the  legal  title  to 
real  estate  forming  part  of  a  trust 
and  situated  in  another  state  has 
passed  will  be  directed  to  convey  to 
a  receiver  appointed  of  the  personal 
property  of  the  trust  within  the 
jurisdiction,  where  the  question  as  to 
whether  or  not  the  trust  has  termi- 
nated has  been  reserved  for  final  hear- 
ing, and  all  parties  interested  are 
parties  to  the  suit,  and  it  is  neces- 
sary that  such  real  estate  be  con- 
served pending  the  litigation;  wheth- 
er or  not  such  conveyance  will  give 
the  receiver  authority  which  will  be 
recognized  in  such  other  state,  where, 
owing  to  the  fact  that  there  is  no 
litigation  in  such  other  state,  the 
courts  of  that  state  have  no  power 
in  the  premises.  Hogg  v.  Hoag,  80 
Fed.  Rep.  595. 

When  an  order  is  to  deliver  prop- 
erty the  demand  must  be  made  by 
the  receiver  personally.  McComb  v. 
Weaver,  11  Hun,  271. 

When  a  receiver  demands  prop- 
erty, if  the  demand  is  otherwise 
good,  objection  cannot  be  taken  at 
the  trial  that  he  did  not,  when  de- 
mand was  made,  exhibit  evidence  of 
46 


his  appointment,  if  refusal  to  de- 
liver was  not  made  on  that  ground. 
Livingston  v.  titoessel,  3  Bosw.  19. 

Mortgagees  entitled  to  possession 
will  be  excused  from  turning  it  over 
to  a  receiver  when  they  are  willing 
to  give  security  for  the  excess. 
Weihl  V.  Atlanta  Furniture  Mfg.  Co. 
89  Ga.  297. 

The  general  practice  of  the  deliv- 
ery of  property  to  a  receiver  under 
the  old  chancery  practice  and  under 
the  Code, — discussed.  Dickerson  v. 
Van  Tine,  1  Sandf.  724. 

A  receiver  of  an  insolvent  cor- 
poration is  entitled  to  the  possession 
of  money  paid  into  court  under  an 
execution  on  a  judgment  against  the 
corporation  rendered  in  favor  of  a 
director  for  the  purpose  of  giving 
him  an  illegal  preference.  Tennant 
V.  Avplehy   (N.  J.  Eq.)   41  Atl.  110. 

A  person  claiming  against  a  re- 
ceiver should  be  examined  pro  in- 
teresse  suo.  Davis  v.  Greathed,  1 
Jae.  &  W.  17G. 

One  in  jDossession  of  lumber  be- 
longing to  a  corporation,  claiming  a 
lien  thereon  under  N.  C.  Code,  § 
1783,  for  manufacturing  the  same, 
should  not  be  required  to  turn  the 
same  over  to  a  receiver  of  the  cor- 
poration, before  a  determination  of 
the  question  as  to  his  right  to  a  lien. 
Huntsman  v.  Linville  River  Luinh&r 
Co.  122  N.  C.  583. 

Contempt. 

It  is  contempt  of  court  to  disturb' 
the  possession  of  a  receiver.  Ken- 
nedy V.  Indianapolis,  C.  c£-  L.  R.  Co. 
2  Flipp.  704. 

To  punish  a  person  for  contempt 
in  interfering  with  the  receiver's  pos- 
session, the  proof  must  be  clear  and 
beyond  reasonable  doubt.  United 
States  V.  Jose,  63  Fed.  Rep.  951. 

It  is  a  contempt  of  court  to  cause 
a  receiver's  arrest  for  violating  a 
town  ordinance,  though  the  ordi- 
nance is  void.  United  States  v.  Mur- 
phy,  44  Fed.  Rep.  39. 

When  the  court  is  without  juris- 
diction the  refusal  to  obey  does  not 
render  the  person  liable  for  con- 
tempt. St.  Louis,  K.  d  S.  R.  Co.  v. 
Wear,  135  Mo.  230,  sub  nom.  State, 
St.  Louis,  K.  d  S.  R.  Co.,  v.  Wear,  33- 
L.  R.  A.  341. 


RECEIVER'S  POSSESSION. 


§  43 


A  debtor  cannot  be  punished  for 
failure  to  turn  over  property  to  a 
receiver  when  neither  the  order 
appointing  nor  any  subsequent  or- 
der directs  him  to  turn  it  over. 
Watson  V.  Fitsjsimmons,  5  Duer,  G29. 

Where  the  estate  over  which  a  re- 
ceiver is  appointed  expires,  the  re- 
mainderman may  enter  without  con- 
tempt. Britton  v.  M'Donnell,  5  Ir. 
Eq.  Rep.  275. 

A  receiver  of  a  railroad  who  ousts 
one  immediately  after  possession  of 
a  portion  of  the  railroad's  right  of 
way  has  been  restored  to  him  under 
a  writ  of  possession  is  not  guilty  of 
a  contempt  of  the  orders  or  process 
of  the  court,  where  he  was  not  a 
party  to  the  action,  and  not  in  priv- 
ity with  the  defendant.  Atioood  v. 
State,  59  Kan.  728. 

A  receiver  cannot  be  punished  as 
for  contempt  for  not  obeying  an  or- 
der made  in  another  court.  Merritt 
V.  Sparling,  88  Hun,  491. 

A  receiver  may  be  punished  for 
contempt.  The  proceeding  is  crimi- 
nal in  its  nature.  Thus  the  question 
of  contempt  does  not  dejiend  on  in- 
tention. Cartwright's  Case,  114 
Mass.  230. 

A  judgment  debtor  who  interferes 
with  the  possession  and  control  of 
his  business  by  a  receiver  after  such 
possession  was  yielded  by  him  is 
guilty  of  contempt.  Sainberg  v. 
Weinberg,  25  Misc.  327. 

A  judgment  debtor  for  whom  a  re- 
ceiver has  been  appointed  may  be  ad- 
judged guilty  of  contempt  in  dis- 
obeying an  order  to  attend  a  hearing 
before  the  circuit  court  commission- 
er for  examination,  although  a  peti- 
tion taken  by  him  to  stay  the  receiv- 
ership proceedings  is  pending,  where 
no  temporary  stay  preventing  the 
judgment  creditor  from  proceeding 
has  been  made.  Central  Nat.  Bank 
V.  Graham  (Mich.)  5  Det.  L.  N.  591, 
76  N.  W.  1042. 

One  who  claims  to  be  the  owner  of 
a  chattel  mortgage  upon  a  lease  of 
premises  and  the  property  thereon 
used  in  the  conduct  of  a  business  is 
guilty  of  contempt  of  court,  and  may 
properly  be  ordered  to  deliver  up  the 
property,  where  in  an  action  to  dis- 
solve the  yjartnership  a  receiver  had 
been    appointed    whose    representa- 


tive the  chattel  mortgagee  turned 
out  of  possession,  locking  the  door 
upon  him.  Levy  v.  Stanion,  53  N. 
Y.  Supp.  472. 

The  right  to  institute  proceedings 
to  punish  a  former  receiver  as  for 
contempt  in  failing  to  pay  over  the 
amount  due  on  his  accounting  to  his 
successor  passes  to  a  surety  on  his 
bond  who  pays  such  amount  and  re- 
ceives in  pursuance  of  an  order  of 
the  court  an  assignment  of  all  the 
rights  and  remedies  of  the  successor. 
People,  Lawyer's  Surety  Co.,  v.  An- 
thony,  7  App.  Div.  132. 

The  proper  practice  is  for  the  re- 
ceiver to  institute  proceedings  to  set 
aside  transfers,  and  not  by  contempt 
for  failure  to  turn  over.  Ex  parte 
Eollis,  59  Cal.  405. 

A  receiver  of  a  bank  whose  ap- 
pointment was  invalid  because  of  the 
prior  appointment  of  another  re- 
ceiver on  the  same  date  in  another 
proceeding  is  not  punishable  as  for 
contempt  in  taking  and  retaining 
possession  of  the  assets,  where  he  be- 
lieved in  good  faith  that  his  appoint- 
ment was  valid.  Worth  v.  Pied- 
mont Bank,  121  N.  C.  343. 

The  court  has  jurisdiction  to  re- 
quire an  oflicer  of  a  corporation  who 
is  a  party  to  the  action  to  turn  over 
property  of  the  corjjoration  to  a  re- 
ceiver appointed  in  the  action;  and 
disobedience  thereof  renders  him  li- 
able for  contempt,  although  he  has  a 
lien  upon  the  property  and  the  judg- 
ment is  therefore  erroneous.  Ex 
parte  Tinsley,  37  Tex.  Crim.  App. 
517. 

Though  the  court  may  not  punish 
a  contempt  in  interfering  with  the 
possession  of  property  by  a  receiver, 
and  removing  a  building  therefrom, 
by  imprisonment  of  indefinite  dura- 
tion, it  may  coerce  obedience  to  its 
order  to  restore  possession  to  the  re- 
ceiver and  return  the  house,  by  im- 
prisoning the  contumacious  party 
until  he  shall  comply.  Delozier  v. 
Bird,  123  N.  C.  689. 

To  punish  for  contempt  for  non- 
delivery to  a  receiver,  an  order  to 
deliver  is  a  necessary  prerequisite. 
Demand  alone  is  not  sullicient. 
Tinkey  v.  Langdon,  60  How.  Pr.  180. 

47 


§  51 


RECEIVERSHIPS— SUPPLEMENT. 


Surrender  of  possession. 

A  court  having  possession  of  the 
property  of  a  corporation  operating 
a  street  railway  will  not  by  the  pos- 
session of  its  receiver  prevent  the 
city  from  taking  such  course  with 
respect  to  a  remedy  as  it  may  be  ad- 
vised, where  if  the  receivership  is  re- 
moved the  city  may  urge  reasonable 
arguments  in  support  of  its  right  to 
oust  the  compan}'  from  occupation  of 
its  streets:  but  will,  where  the  com- 
pany is  a  mere  tenant  at  will  in  the 


streets,  order  redelivery  by  the  re- 
ceiver of  possession  of  the  tracks  and 
property  in  the  streets,  and  let  the 
company  take  the  risk  of  operating 
the  invalid  portions  of  its  road,  and 
the  city  that  of  any  course  it  may  see 
fit  to  pursue.  Louisville  Trust  Co. 
V.  Cincinnati  Inclined  Plane  R.  Co. 
78  Fed.  Rep.  307. 

Possession  may  be  delivered  to 
mortgagees  where  it  is  shown  that 
the  property  is  not  worth  more  than 
the  mortgages.  Scott  v.  Crawford, 
16  Tex.  Civ.  App.  477. 


Page  136,  sec.  51. — As  to  tenants;  rents. 


A  receiver  may  be  appointed  for 
rents  until  the  devisee's  title  vests. 
Rogers  v.  Ross.  4  Johns.  Ch.  388 ; 
Pritchard  v.  Fleetwood,  1  Meriv.  55. 

A  mortgagee  of  land  is  entitled  as 
against  subsequent  mortgagees  to 
the  appointment  of  a  receiver  of  the 
1  ents  and  profits  pendente  lite,  where 
he  shows  that  his  security  is  preca- 
rious and  liable  to  prove  inadequate. 
Ross  V.  Yernam,  G  App.  Div.  246. 

A  person  taking  possession  of 
mortgaged  property,  knowing  of  the 
mortgage  and  that  the  mortgagor 
cannot  pay,  may  be  required  to  sur- 
render or  pay  rent  to  a  receiver  ap- 
pointed to  collect  the  rents  and 
profits  for  the  benefit  of  the  mort- 
gagee. Mutual  L.  Ins.  Co.  v.  Spicer, 
12  Hun,  117. 

It  is  the  duty  of  a  receiver  to  col- 
lect rents,  but  not  to  assume  the 
management  of  actions.  Callaghan 
V.  Reardon,  Sausse  &  S.  682. 

A  receiver  is  entitled  to  rents  in 
arrears.  Codrington  v.  Johnstone,  1 
Beav.  524. 

The  court  cannot,  on  the  appli- 
cation of  a  receiver,  remit  rents  or 
make  reductions.  Robinson  v.  Shear- 
er, Hayes  &  J.  799. 

An  estate  by  the  curtesy  will  pass 
to  a  receiver  and  entitle  him  to  rent. 
Beamish  v.  Holt,  2  Robt.  307. 

A  receiver  cannot  enforce  rent  by 
attachment  from  a  lessee  who  has 
assigned  his  interest.  Cane  v. 
Bloomfield,   1  Hogan,  345. 

A  receiver  is  entitled  to  the  ar- 
rears of  rent  unpaid  when  the  order 
48 


of  reference  is  made.  Hollier  v. 
Hedges,  2  Ir.  Ch.  Rep.  370. 

A  receiver  is  not  entitled  to  rents 
due  at  the  time  of  the  appointment. 
M'Loughlin  v.  Longan,  4  Ir.  Eq.  Rep, 
325. 

A  tenant  may  be  required  to  pay 
rent  to  a  receiver.  Hohson  v.  Sher- 
wood, 19  Beav.  575. 

If  a  tenant  has  once  paid  rent  to  a 
receiver,  a  letter  demanding  subse- 
quent rent  is  all  that  is  necessary. 
Brown  v.  O'Connor,  2  Hogan,  77. 

N.  Y.  Code  Civ.  Proc.  §  2408,  con- 
strued with  reference  to  rents  of 
realty  not  occupied  by  debtor.  Ver- 
mont Marble  Co.  v.  Wilkes,  62  N.  Y. 
S.  R.  121. 

After  filing  notice  of  lis  pendens 
in  Wisconsin  in  a  foreclosure  pro- 
ceeding a  tenant  has  no  right  to  pay 
a  year's  rent  in  advance,  and  on  the 
subsequent  appointment  of  a  receiv- 
er will  be  required  to  surrender  or 
pay  rent.  Gaynor  v.  Blewett,  82 
wis.  313. 

A  motion  for  an  order  requiring 
the  tenants  of  mortgaged  premises 
to  surrender  possession  to  the  tem- 
porary receiver  appointed  in  a  fore- 
closure action  under  N.  Y.  Code  Civ. 
Proc.  §  714,  cannot  be  resisted  on  the 
ground  that  the  owner  of  the  equity 
of  redemption  has  not  been  served 
with  summons  and  complaint,  where 
an  order  for  publication  of  the  sum- 
mons against  her  has  been  made. 
Citizens'  Sav.  Batik  v.  Wilder,  1 1 
App.  Div.  63. 

Order   against   husband  and   wife 


RECEIVER'S   POSSESSION. 


§  51 


to  pay  rents,  when.  Dugro  v.  Vandc- 
tvater,  35  App.  Div.  471. 

A  contractor  who  constructs  a 
building  under  a  contract  with  a  re- 
mainderman appointed  by  tlic  court 
under  the  Kentucky  statute  as  an 
agent  for  other  remaindermen  cannot 
hold  the  other  remaindermen  person- 
ally liable,  or  have  a  mechanic's  lien 
for  the  amount  due  iiim  ir  excess  of 
that  which  he  has  received  from  the 
jiroceeds  of  a  loan  which  such  agent 
was  directed  to  make  for  the  pur- 
poses of  improvement,  though  the 
court  may,  as  a  matter  of  equity,  ap- 
point a  receiver  to  apply  the  rents 
for  his  reimbursement.  Itiuld  v.  Lit- 
tell.  20  Ky.  L.  Rep.  162,  Modifying 
on  Rehearing  20  Ky.  L.  Rep.  158. 

A  receiver  of  land  directed  to  be 
sold  may  be  appointed  by  the  court 
to  collect  the  rents  and  hold  the  same 
subject  to  further  order  of  the  court, 
although  there  has  been  no  appeal 
from  judgment  directing  the  sale, 
where  a  stay  of  execution  has  been 
obtained  until  the  decision  of  a  mo- 
tion for  new  trial,  Kreling  v.  Kre- 
ling,  118  Cal.  413. 

A  receiver  to  collect  the  rents  and 
profits   of   morts;aged   premises   and 


apply  them  on  the  mortgage  indebt- 
edness will  be  appointed  where  the 
mortgagor  in  possession  is  insolvent, 
and  has  failed  to  pay  the  taxes  and 
costs  of  insurance,  and  there  is  a 
question  as  to  whether  the  mort- 
gaged premises  will  prove  adequate 
security  for  the  amount  of  the  mort- 
gage debt.  Winkler  v.  Magdeburg, 
100  Wis.  421. 

A  receiver  is  properly  appointed 
to  receive  the  rents  of  land  during 
the  pendency  of  a  foreclosure  suit 
under  a  contract  for  its  purchase, 
and  should  pay  over  the  amount 
thereof  to  the  complainant  in  such 
suit,  where  the  purchaser  seeks  to 
avoid  the  payment  of  the  purchase 
price,  and  the  contract  provides  that 
on  the  failure  of  the  purchaser  to 
pay  any  instalment  when  due  the 
vendor  may  re-enter  and  repossess 
the  premises.  Belding  v.  Meloche, 
113  Mich.  223. 

In  an  application  for  an  injunc- 
tion to  restrain  certain  parties  from 
collecting  rents  from  real  estate  in 
which  bankrupts  have  any  legal  in- 
terest, injunction  should  be  granted 
and  a  receiver  appointed.  Keenan 
V.  Shannon,  9  Nat.  Bankr.  Reg.  441. 


Page  140. — Receiver's  title. 


A  receiver  does  not  occupy  the  po- 
sition of  an  innocent  bona  fide  holder 
for  value.  Briggs  v.  Merrill,  58 
Barb.  389. 

A  receiver  acquires  title  by  legal 
process,  and  not  in  the  regular 
course  of  dealing  in  commercial 
paper.  Briggs  v.  Merrill,  58  Barb. 
389;  Dubois  v.  Cassidy,  75  N.  Y.  298. 

A  receiver's  title  is  no  better  than 
the  corporation  he  represents.  Cut- 
ting V.  Damerel,  88  N.  Y.  410. 

A  transfer  by  order  of  court  to  a 
receiver  is  not  governed  by  the  Cal- 
ifornia insolvent  act  of  1852.  Naglee 
v.  Lyman,  14  Cal.  450. 

A  judgment  in  an  action  brought 
to  enforce  the  right  of  a  creditor  to 
have  his  debt  paid  out  of  the  defend- 
ant's property,  though  in  fact  in  fa- 
vor of  a  receiver  appointed  by  a.n 
interlocutory  judgment,  docs  not 
vest    in    the    receiver    any    interest 


which  may  be  ordered  sold  by  the  re- 
ceiver, but  he  must  collect  the  judg- 
ment, if  possible.  Goldberg  v.  Sll- 
berstein,  19  App.  Div.  428. 

The  appointment  of  a  receiver  of 
a  corporation  which  has  made  an 
equitable  assignment  of  a  judgment 
to  be  recovered  against  stockholders 
will  give  such  receiver  no  right  to 
such  judgment  as  an  asset  of  the 
company.  Clark  v.  Sigua  Iron  Co. 
39  U.  S.  App.  753,  81  Fed.  Rep.  310, 
26  C.  C.  A.  423. 

Property  in  factor's  hands. 

The  receiver  of  a  corporation  suc- 
ceeds to  the  title  of  property  of  the 
corporation  in  possession  of  a  factor, 
subject  to  the  lien  for  advances  in 
favor  of  tlip  latter  with  which  it  was 
burdened  before  his  appointment. 
Cameron  v.  Crouse,  11  App.  Div. 
391. 

49 


§  58 


RECEIVERSHIPS— SUPPLEMENT. 


Property  previously  transferred. 

A  receiver  acquires  no  interest  in 
property  previously  transferred  by 
the  debtor  by  virtue  of  the  order  ap- 
pointing him,  but  merely  a  right  of 
action  to  set  aside  the  transfer,  if  it 
was  in  fraud  of  creditors.  Thomas 
V.  Van  Meter,  164  111.  304. 

Insurance  policies. 

The  duly  appointed  and  qualified 
receiver  of  a  debtor  is  vested  with 
the  legal  title  to  insurance  policies 
payable  to  the  debtor  or  his  estate. 
Rciinolds  V.  .'Etna  L.  Ins.  Co.  28  App. 
Div.  591. 

Title  of  foreign  receiver. 

In  New  York  the  title  of  a  foreign 
receiver  is  upheld  on  the  principle  of 
comity.  If  the  title  is  by  virtue  of 
a  voluntary  conveyance  or  transfer  it 
is  sustained  as  against  all,  includ- 
ing even  domestic  creditors;  but  if 
it  depends  on  a  foreign  statute  or 
judgment  it  is  sustained  against  all 
except  domestic  creditors.  Subject 
to  their  superior  rights  the  receiver 
can  reduce  to  possession  all  the 
property  of  the  defendant  in  that 
state,  and  can  bring  replevin  for  that 
purpose,  or  trover  to  recover  dam- 
ages for  conversion.  Notes  and  ac- 
counts may  be  collected  by  the  ordi- 
nary proceedings,  the  court  regard- 
ing the  receiver  as  representing  the 
original  owner  and  opening  their 
doors  to  him  as  they  do  to  a  domes- 
tic receiver.  Mahon  v.  Ongley  Elec- 
tric Co.  156  N.  Y.  196;  citing  Barth 
V.  Backus,  140  N.  Y.  230,  23  L.  R.  A. 
47 ;  V under poel  v.  Gorman,  140  N. 
Y.  563,  24  L.  R.  A.  548 ;  Toronto  Gen- 
eral Trust  Co.  V.  Chicago,  B.  d  Q.  R. 
Co.  123  N.  Y.  37 ;  Re  Waite,  99  N.  Y. 
433  ;  Ockerman  v.  Cross,  54  N.  Y^.  29 ; 
Petersen  v.  Chemical  Bank,  32  N.  Y. 
21,  88  Am.  Dec.  298;  Willitts  v. 
Waite,  25  N.  Y.  577  ;  Hoyt  v.  Thomp- 
son, 19  N.  Y.  207;  Hoyt  v.  Thomp- 
son, 5  N.  Y.  320;  'Neio  Jersey  Pro- 
tection &  Lombard  Bank  v.  Thorp, 
6  Cow.  47 ;  Runk  v.  yS'^.  John,  29 
Barb.  585;  Pugh  v.  Hurtt,  52  How. 
Pr.  22 ;  Middlebrook  v.  Merchant's 
Bank,  3  Keyes,  135;  Smith  v.  Tif- 
fany, 16  Hun,  552. 

And  every  remedy  will  be  afforded 
50 


to  gather  in  the  assets,  unless  it 
would  interfere  with  the  policy  of 
the  state  or  impair  the  rights  of  its 
own  citizens.  A  state  that  does  not 
discriminate  between  its  own  citi- 
zens and  those  of  a  foreign  state  dis- 
charges all  the  obligations  required 
by  the  rule  of  curtesy.  Mobon  v. 
Ongley  Electric  Co.  156  N.  Y.  196. 
A  foreign  receiver  has  no  title  to 
property  of  the  debtor  in  Wisconsin, 
and  cannot  maintain  an  action  to  set 
aside  a  fraudulent  conveyance.  Fil- 
kins  V.  Nunnemachcr,  81  Wis.  91. 

To  terminals. 

Where  a  railroad  obtains  a  lease 
of  terminal  facilities  in  a  city,  and 
then  leases  its  road,  including  such 
facilities,  after  which  a  receiver  la 
appointed  for  it,  which  results  in  dis- 
solution of  the  latter  lease,  if  the 
receiver  procures  insurance  on  the^ 
property  included  in  such  terminal 
facilities  "on  account  of  whom  it 
may  concern;  loss  payable  to  re- 
ceivers," he  has  such  title  as  enables 
him  to  sue  on  the  policy.  Liverpool 
d-  L.  cG  G.  Ins.  Co.  v.  McNeill,  59  U. 
S.  App.  499,  89  Fed.  Rep.  131,  32  C. 
C.  A.  173. 

Property  in  another  state. 

A  conveyance  of  the  property  of  a 
corporation  to  a  receiver,  under  a  de- 
cree which  three  quarters  of  its 
shareholders  had  sought  and  none 
opposed,  is  to  be  deemed  voluntary 
for  the  purpose  of  determining  its 
effect  on  the  title  of  personal  prop- 
erty in  another  state.  Ward  v.  Con- 
necticut Pipe  Mfg.  Co.  71  Conn.  345, 
42  L.  R.  A.  706. 

Where  receivers  of  an  insolvent 
Pennsylvania  corporation  have  taken 
possession  of  all  its  property  and 
assets,  a  Massachusetts  creditor  can- 
not attach  its  property  in  New  Jer- 
sey. The  propert}^  lias  passed  to  the 
receivers.  Merchants'  Nat.  Bank  v. 
Pennsylvania  Steel  Co.  57  N.  J.  L. 
336;  Weil  v.  Bank  of  Burr  Oak,  76 
Mo.  App.  34. 

Deposits   of   a  foreign   building   so- 
ciety. 

Securities  deposited  by  a  foreign 
building    and    loan    association    "in 


RECEIVER'S   TITLE. 


§  58 


trust  for  the  benefit  and  security  of 
its  members  in  this  state,"  in  order 
to  obtain  the  right  to  do  business  in 
the  state  under  the  Wisconsin  stat- 
ute (Sanb.  &  B.  Ann.  Stat.  §§  2014a, 
2014b),  will  be  sold  or  collected  in 
case  of  insolvency  and  the  proceeds 
applied  according  to  the  trust,  and 
the  residue  only  turned  over  to  the 
receiver  apjjointed  in  the  state  of  in- 
corporation. Lewis  V.  American 
Sav.  c£-  L.  Asso.  98  Wis.  203,  39  L. 
R.  A.  559. 

Patents. 

A  receiver  under  R.  I.  Pub.  Stat. 
chap.  237,  §  13,  is  entitled  to  a  pat- 
ent right  of  the  debtor.  Keach  v. 
Chadtcick,  14  R.  I.  571. 

Claims  assigned. 

A  receiver  who  has  duly  qualified 
is  vested  with  the  legal  title  to 
claims  which  have  been  assigned  by 
the  debtor  subsequent  to  the  filing 
of  the  order  appointing  the  receiver. 
Fitzpatrick  v.  Moses,  34  App.  Div. 
242. 

Exempt  property. 

An  assignment  to  a  receiver  should 
except  exempt  property.  Cogger  v. 
Howard,  1  Barb.  Ch.  368. 

Rents. 

The  right  to  collect  rent  passes  to 
a  receiver.  Stephen  v.  Reibling,  45 
111.  App.  40. 

Property  of  corporation. 

An  order  appointing  a  receiver  of 
a  corporation  gives  him  the  title  of 
the  property.  Dickey  v.  Bates,  13 
Misc.  489. 

Rights   of  action. 

A  right  of  action  passes  to  a  re- 
ceiver. Rand  v.  Wright,  141  Ind. 
220. 

Manufactured  articles. 

Articles  manufactured  for  re- 
ceivers belong  to  the  receivers  in 
trust  for  creditors  and  stockholders. 
Merchants'  ^at.  Bank  v.  Pennsyl- 
vania Steel  Co.  57  N.  J.  L.  336. 

Checks. 
Ihe  appointment  of  a  receiver  of  a 


corporation  after  the  transmission  of 
a  check  to  it  in  payment  of  a  con- 
tract to  be  periormed  by  it,  but  be- 
fore the  check  has  been  cashed,  does 
not  authorize  the  drawer  to  stop 
payment  on  the  check,  in  the  absence 
of  fraud.  Rouse  v.  Calvin,  76  111. 
App.  362. 

A  corporation  whose  checks  dur- 
ing the  illness  of  its  treasurer  are, 
without  further  authority  from  such 
treasurer  than  a  direction  to  the 
clerk  of  another  company  in  which 
he  was  a  stockholder  to  turn  one 
such  check  into  the  funds  of  the  lat- 
ter company,  taken  possession  of  by 
the  latter  company,  and  the  proceeds 
used  in  buying  goods  in  the  regular 
course  of  business,  may,  where  the 
latter  company  becomes  insolvent 
and  goes  into  the  hands  of  a  receiver, 
recover  from  such  receiver  the 
amount  of  the  checks  so  used.  York 
X.  York  Market  Co.  (N.  H.)  37  Atl. 
1038. 

Property  purchased  conditionally. 

The  receiver  of  a  corporation  to 
which  personal  property  is  sold  on 
condition  that  the  title  shall  pass 
only  on  payment  of  a  specified  price 
IS  not  the  "personal  representative"' 
of  the  corporation,  within  Conn. 
Pub.  Acts  1895,  chap.  212,  §  2,  pro- 
viding that  all  conditional  sales  of 
personal  property  which  are  not 
made  in  conformity  with  the  provi- 
sions of  §  1  shall  be  held  to  be  ab- 
solute sales,  except  as  between  the 
vendor  and  the  vendee  or  their  per- 
sonal representatives,  and  all  such 
property  shall  be  subject  to  attach- 
ment and  execution  for  the  debts  of 
the  purchaser  the  same  as  any  other 
unexempt  property.  Re  Wilcox  & 
H.  Co.  70  Conn.  220. 

Legal  and  equitable  interests. 

Under  the  English  judicature  act 
of  1873  a  receiver  may  be  apjjointed 
over  tlie  whole  of  phiintiff's  security, 
both  legal  and  equitable.  Pease  v. 
Fletcher,  L.  R.  1  Ch.  Div.  273. 

Insurance  money. 

Insurance  money  for  property  ex- 
empt destroyed  by  fire  does  not  pass 
to  tlie  receiver.     Jt  is  after-acquired 

51 


§  58 


RECEIVERSHIPS— SUPPLEMENT. 


property.     Sands  v.  Roberts,  8  Abb. 
Pr.  343. 

Seat  in  cotton  exchange. 

The  right  to  a  seat  in  the  New 
York  Cotton  E.vchange  passed  to  ihe 
receiver  under  supplementary  pro- 
ceedings, and  he  may  redeem  the 
same  from  a  pledgee.  Poivell  v. 
Waldron,  89  N.  Y.  328,  42  Am.  Rep. 
301. 

Joint  property. 

One  of  the  parties  to  an  action  for 
the  appointment  of  a  receiver,  who 
concedes  that  it  is  proper  to  appoint 
a  receiver  to  take  charge  of  and  sell 
property  belonging  jointly  to  the 
parties,  and  divide  the  proceeds  be- 
tween them,  may  properly  be  re- 
quired to  pay  over  to  the  receiver 
money  in  his  hands,  arising  from  a 
sale  by  him  of  other  property  which 
had  belonged  to  himself  and  the  oth- 
er party,  the  title  to  which  they  had 
derived  by  virtue  of  the  same  trans- 
action as  that  by  which  they  ac- 
quired the  ownership  of  the  property 
turned  over  to  the  receiver,  where 
there  has  been  no  accounting  and 
settlement  as  to  the  property  sold. 
Whitley  v.  Berry,  105  Ga.  251. 

Securities  deposited  with  state. 

The  receiver  of  an  insolvent  life 
insurance  company  has  no  right  to 
the  securities  deposited  with  the  su- 
perintendent of  the  insurance  de- 
partment. Ruggles  v.  Chapman,  59 
N.  Y.  163.  See  People,  Ruggles,  v. 
Chapman,  64  N.  Y.  557. 

Property     purchased     with     bank's 
money.. 

The  receiver  of  a  national  bank  is 
entitled  to  a  surrender  of  such  prop- 
erty as  has  been  purchased  with 
money  of  the  bank.  If  it  can  be 
shown  that  money  in  a  general  fund 
belonged  to  the  bank,  and  was  ap- 
propriated to  buy  property,  it  may 
be  reached.  Peters  v.  Bain,  133  U. 
S.  670,  33  L.  ed.  696. 

Title  not  impeached. 

The  title  of  a  receiver  cannot  be 
impeached  by  a  third  party  for  ir- 
regularity prior  to  the  assignment 
62 


to  the  receiver.     Richards  v.  Allen, 
3  E.  D.  Smith,  399. 

2Htle  if  debtor  dies. 

The  death  of  the  judgment  debtor 
before  the  appointment  of  a  receiver 
in  supplementary  proceedings  pre- 
vents title  vesting  in  the  receiver, 
and  lien  on  the  property.  RanJcin 
V.  Minor,  72  N.  C.  424. 

Title  pendente  lite. 

The  appointment  of  a  receiver 
pendente  lite  of  a  corporation  does 
not  devest  the  corporation  of  title 
to  the  property  undisposed  of  by  the 
receiver,  so  as  to  prevent  it  from 
maintaining  an  action  to  recover  for 
the  loss  of  merchandise  occasioned 
by  the  negligence  of  a  common  car- 
rier. Mutual  Breioing  Co.  v.  New 
York  &  C.  P.  Ferry  Co.  16  App.  Div. 
149. 

A  temporary  receiver  of  a  corpora- 
tion, appointed  under  N.  Y.  Code  Civ. 
Proc.  §  2423,  to  collect  and  receive 
debts,  and  preserve  the  property, 
and  sell  or  otherwise  dispose  of  the 
property  as  directed  by  the  court, 
is  not  within  N.  Y.  Laws  1883,  chap. 
378,  §§  2,  3,  relating  to  receivers  of 
corporations  appointed  under  stat- 
utory authority,  where  the  title  to 
the  property  is  vested  in  such  receiv- 
ers. Smith  V.  Eighth  Ward  Bank, 
31  App.  Div.  6. 

The  title  to  the  property  of  a  gas- 
light company  obtaining  its  fran- 
chises from  the  city  does  not  pass 
to  a  receiver  pendente  lite.  Brook- 
lyn V.  Jourdan,  7  Abb.  N.  C.  23. 

A  receiver  pendente  lite  takes  no 
title,  but  possession  only.  He  has 
no  right  to  sue  to  recover  property. 
Feller  v.  Maddock,  11  Misc.  297. 

A  receiver  pendente  lite  has  only 
the  right  to  the  possession  of  the 
property  in  controversy  as  an  officer 
of  the  court,  the  title  thereto  re- 
maining where  it  was  when  the  re- 
ceiver was  appointed.  Devlin  v. 
Neio  York,  4  Misc.  106. 

Land  held  in  trust. 

Land  held  in  trust  does  not  pass 
to  the  receiver  so  that  he  may  sell 
the  same.  Jackson  v.  Horton,  126 
111.  566. 

A    receiver   in   supplemental    pro- 


RECEIVER'S   TITLE. 


§  58 


ceedings  has  no  interest  in  real  es- 
tate held  Iq  trust  for  the  debtor. 
Bold  V.  Dean,  48  N.  J.  Eq.  193. 

Land  sold  for  taxes. 

No  valid  title  can  be  acquired  at 
a  sale  for  taxes  of  land  which  is  in 
possession  of  a  receiver.  Virginia 
T.  d  C.  Steel  d  I.  Co.  v.  Bristol  Land 
Co.  88  Fed.  Rep.  134. 

Supplementary  proceedings. 

A  receiver  appointed  in  a  common 
law  court  in  supplementary  pro- 
ceedings is  vested  in  New  Jersey  to 
title  to  personalty  only.  Skinner  v. 
Terhune,  45  N.  J.  Eq.  505. 

Property  subsequently  acquired. 

A  receiver  takes  no  title  to  prop- 
erty acquired  after  appointment. 
]\orc7-oss  V.  Hollingsicorth,  83  Hun, 
127. 

A  receiver  acquires  title  only  to 
property  of  debtor  owned  at  the  time 
the  proceeding  was  instituted.  Camp- 
bell  V.  Ge7iet,  2  Hilt.  290. 

Proceeds  of  sale. 

The  receiver  of  an  insolvent  cor- 
poration has  no  interest  in  the  dis- 
tribution of  the  money  arising  from 
the  sale  of  premises  mortgaged  by 
the  corporation  to  protect  an  in- 
dorser  of  notes  for  the  corporation, 
where  such  indorser  has  the  right  to 
foreclose  the  mortgage.  Miller  v. 
Miller  Knitting  Co.  23  Misc.  404. 

When  title  vests. 

A  mere  order  of  appointment  of  a 
receiver  does  not  confer  upon  him 
title  to  the  property  of  the  debtor. 
Thomas  v.  Van  Meter,  164  111.  304. 

In  New  York  the  title  of  debtor 
vests  in  the  receiver  on  his  appoint- 
ment, as  to  personalty,  but  not  as  to 
realty.  People,  Williams,  v.  Hul- 
hurt,  5  How.  Pr.  440. 

In  supplemental  proceedings  the 
receiver  is  vested  with  title  to  the 
property  and  effects  of  the  debtor 
from  the  time  of  filing  the  orders. 
Rose  V.  Baker,  99  N.  C.  323. 

The  title  of  a  receiver  relates  to 
the  entry  of  the  order  of  appoint- 
ment, and  not  to  the  approval  of  the 
bond.     Connecticut   River  Bkg.    Co. 


V.  Rockbridge,  Co.  73  Fed.  Rep.  709; 
May  hard  v.  Bond,  67  Mo.  315. 

Auxiliary  receiver. 

An  auxiliary  receiver  of  a  foreign 
corporation  is  a  mere  custodian  of 
the  property  to  preserve  the  same, 
and  has  only  the  power  conferred  by 
the  order  appointing.  Buckley  v. 
Harrison,   10  Misc.  083. 

An  auxiliary  receiver  is  not  the 
holder  of  the  legal  title,  and  is  not 
entitled  to  disaffirm  fraudulent 
transfers.     Ibid. 

Title  subject  to  defenses. 

A  receiver  of  a  bank  holds  a  note 
and  mortgage  taken  by  the  bank  or 
for  its  benefit  subject  to  the  same 
defenses  that  applied  to  the  banic  it- 
self. Hatch  V.  Johnson  Loan  &  T. 
Co.  79  Fed.  Rep.  828. 

Contest  by  nonresidents. 

Nonresident  creditors  of  a  corpo- 
ration in  the  hands  of  a  receiver, 
when  they  are  not  residents  of  the 
state  in  which  the  receiver  is  ap- 
pointed, have  the  same  right  to  con- 
test the  receiver's  title  to  property 
that  domestic  creditors  have.  Liyi- 
ville  V.  Haddcn  (Md.)  43  L.  R.  A. 
222. 

Property  pledged. 

The  court  cannot  compel  a  cred- 
itor to  turn  over  to  a  receiver  prop- 
ert}^  which  was  pledged  to  secure  a 
loan  when  it  was  solvent.  National 
Exch.  Bank  v.  Benbrook  School  Fur- 
nishing Co.  (Tex.  Civ.  App.)  27  S. 
W.  297. 

Money  on  deposit. 

Money  deposited  with  a  banker, 
derived  from  the  sale  by  the  sheriff 
on  attachments  on  which  he  was  to 
pay  interest,  where  the  pledgee  sub- 
sequently fails  and  assigns  for  the 
benefit  of  creditors,  will  not  be  or- 
dered turned  over  to  a  subsequent 
receiver.  Coleman  v.  Salisbury,  52 
Ga.  470. 

Trust  funds. 

The  amount  collected  on  claims 
due  a  corporation,  by  its  bookkeeper 
under  an  agreement  between  the  cor- 

53 


§  69 


RECEIVERSHIPS— SUPPLEMENT. 


poration  and  a  bank  that  the  chiinis 
shall  be  set  aside  and  used  to  reim- 
burse the  bank  for  advancements, 
and  as  a  matter  of  convenience  shall 
be  collected  by  the  Ijookkeeper  and 
be  under  his  control,  is  impressed 
with  an  equitable  trust  in  favor  of 
the  bank  as  against  a  receiver  of  the 
corporation.  Atlantic  Trust  Co.  v. 
Carbondale  Goal  Co.  99  Iowa,  234. 

By  assignment. 

By  an  assignment  directed  by  the 
court  the  legal  title  passes  inde- 
pendent of  the  appointment.  Welter 


V  ./.  B.  Pace  Tobacco  Co.  2  N.  Y. 
Supp.  2!)2. 

An  assignment  to  a  receiver  is  in 
the  nature  of  a  mortgage,  and  falls 
as  soon  as  the  object  of  the  suit  is  ac- 
complished, and  no  reassignment  is 
necessary.  Anderson  v.  Treadwell, 
1  Edm.  Sel.  Cas.  201. 

Where  stock  in  a  corporation  is 
ordered  to  be  assigned  to  a  receiver, 
and  a  power  of  attorney  given  to  the 
receiver,  and  this  is  done,  the  receiv- 
er is  vested  with  the  legal  title. 
Weller  v.  J.  B.  Pace  Tobacco  Co.  2 
N.  Y.  Supp.  292. 


Page   152,  sec.  69. — Suits  by  receivers;   authority   of  the   court 

necessary. 


A  receiver  cannot  sue  without 
leave  of  the  court  appointing  him. 
Viqo  Peal  Estate  Co.  v.  Reese,  21 
Ind.  App.  20. 

Where  debt  is  due  the  receiver  of- 
ficially. Bowen  v.  Needles  Nat. 
Bank,  76  Fed.  Rep.  176. 

Where  waste  has  been  committed. 
Nangle  v.  Fingall.  1  Hogan,  142. 

Leave  is  in  discretion  of  the 
court.  Wisener  v.  Myers,  3  Pa. 
Dist.  R.  687 ;  South  Carolina  R.  Co. 
v.  People's  Sav.  Inst.  64  Ga.  18 ; 
Compton  V.  Schwabacher  Bros.  & 
Co.  15  Wash.  306;  Gadsden  v. 
Whaley,  14  S.  C.  210. 

When  entitled  to  sue.  Porker  v. 
Broicn,  10  Misc.  161 ;  Woods  v.  Ellis, 
85  Va.  471. 

The  receiver  does  not  represent 
creditors  securing  the  appointment, 
under  N.  Y.  Code,  §  317,  authorizing 
a  recovery  for  costs  and  making 
them  collectable  out  of  the  estate, 
fund,  or  party  represented.  McHarg 
V.  Donelly,  27  Barb.  100. 

The  receiver  will  be  required  to 
bring  an  independent  suit  to  deter- 
mine the  rights  of  third  parties  to 
property.  Colton  v.  Bigelow,  41  N. 
J.  L.  206;  Boicery  8av.  Bank  v. 
Richards,  3  Hun,  366. 

And  to  recover  property  in  posses- 
sion of  his  predecessor.  Holland 
Trust  Co.  v.  Consolidated  Oas  &  E. 
L.  Co.  85  Hun,  454. 

And  to  set  aside  a  levy  on  receiv- 
ership property  made  after  his  ap- 
54 


pointment  and  before  qualification. 
Andreics  v.  Paschen,  67  Wis.  413. 

And  to  recover  money  received 
by  a  creditor  from  a  bank  after  his 
appointment.  State  Bank  v.  First 
Nat.  Bank,  34  N.  J.  Eq.  450,  458. 

The  right  of  a  person  not  a  party 
to  the  suit  cannot  be  devested  in  a 
summary  proceeding.  Nason  v. 
Blennerhassctt ,  1  Hogan,  402. 

The  remedy  of  the  receiver  under 
the  New  York  Code  of  Civil  Proced- 
ure is  not  to  move  to  vacate  or  mod- 
ify an  attachment,  but  by  equitable 
actions.  Ross  v.  Wigg,  100  N.  Y. 
243. 

Where  the  books  of  a  corporation 
have  by  means  of  mesne  convey- 
ances passed  to  a  third  party,  the 
receiver  of  the  corporation  can  only 
obtain  possession  by  an  action 
against  the  present  owner,  and  not 
by  summary  proceedings.  Olmsted 
v.  Rochester  d  P.  R.  Co.  40  Hun,  552. 

A  receiver  has  such  special  and 
qualified  interest  in  pi'operty  of 
which  he  acquires  possession  that 
he  may  maintain  an  action  for 
wrongful  taking  and  conversion,  but 
he  cannot  do  so  if  he  has  never  ac- 
quired possession.  Kehr  v.  Hall, 
117  Ind.  405. 

The  directors  of  a  corporation 
have  no  standing  by  virtue  of  their 
relation  as  parties  to  the  contem- 
plated action,  and  independently  of 
their  interest  as  stockholders  to  con- 
serve the  assets  of  the  corporation, 


SUITS  BY  RECEIVERS— DEFENSES  TO. 


to  resist  an  application  by  a  receiver 
for    leave   to    sue    them.     People  v. 


Cowvmercial  Bank,  G  App.  Div.  194; 
Kimball  v.  Ives,  30  Hun,  5G8. 


Pag-e  160,  sec.  72. — Receiver's  power  to  sue  in  his  own  name. 


A  receiver  may  sue  in  his  own 
name.  Davis  v.  Industrial  Mfg.  Co. 
114  N.  C.  321,  23  L.  R.  A.  322; 
T] eland  v.  Haugan,  70  Minn.  349; 
Cockrill  V.  Cooper,  58  U.  S.  App. 
C)48,  sub  nom.  Cockrill  v.  Abeles,  86 
Fed.  Rep.  .505,  30  C.  C.  A.  226 ;  Na- 
tional Bank  of  the  Metropolis  v.  Ken- 
nedy, 17  Wall.  19,  21  L.  ed.  554. 


Power  to  sue  in  his  own  name  may 
be  granted.  Hardwick  v.  Hook,  8 
Ga.  354. 

A  receiver  has  no  power  to  sue  in 
his  own  name.  Htafe,  Fichtenkamm, 
V.  Gambs,  68  Mo.  289,  296. 


Page  163,  sec.  73. — Power  of  receivers  to  sue  in  foreign  jurisdiction. 


See  Schultz  v.  Phenix  Ins.  Co. 
11  Fed.  Rep.  375;  Howarth  v.  Ell- 
wanger,  86  Fed.  Rep.  54 ;  Wyman 
V.  Eaton,  107  Iowa,  214,  43  L.  R.  A. 
695;  Hale  v.  Hardon.  89  Fed.  Rep. 
283;  Johnston  v.  Rogers,  19  Ky.  L. 
Rep.  1272;  Merchants'  Nat.  Bank  v. 
McLeod,  38  Ohio  St.  174. 

^uit  to  enjoin. 

An  action  will  lie  by  the  receiver  of 
a  national  bank  to  restrain  the  pros- 
ecution of  suits  by  a  large  number 
of  persons  having  in  their  possession 
pass  books  purporting  to  have  been 
issued  by  the  bank,  but  which  were  in 
fact  issued  by  another  bank,  and  to 
have  the  pass  books  canceled  and 
surrendered,  and  an  adjudication 
that  the  receiver  is  not  liable  there- 
for, and  a  determination  of  the 
rights  and  liabilities  of  the  respec- 
tive parties,  under  the  principles  ap- 
plicable to  a  bill  of  peace  for  the 
prevention  of  a  multiplicity  of  suits. 
Kellogg  v.  Siple,  11  App.  Div.  458. 

A  receiver  under  lease  may  enjoin 
a  sublessee  from  doing  an  act  where- 
by the  title  of  his  lessor  would  be 
affected.  Mason  v.  Mason,  Flan.  & 
K.  429. 

Where  plaintiff  in  a  foreclosure 
suit  is  not  a  party  to  the  action  in 
which  a  receiver  is  appointed,  he  can- 
not be  enjoined  by  the  latter.  Wal- 
ton V.  Grand  Belt  Copper  Co.  56  Hun, 
211. 

The  receiver  of  a  railroad  cannot 


enjoin  proceedings  in  admiralty 
growing  out  of  collision  of  a  vessel. 
Damages  in  such  case  cannot  be  con- 
veniently, if  at  all,  applied  in  courts 
of  equity  or  law.  Paxson  v.  Cun- 
ningham, 21  U.  S.  App.  466,  63  Fed. 
Rep.  132,  11  C.  C.  A.  111. 

Substitution  of  receiver. 

The  receiver  of  a  national  bank  is 
entitled  to  be  substituted  as  sole  de- 
fendant in  all  actions  pending  at  the 
time  of  his  appointment.  The  bank 
after  the  appointment  cannot  appeal 
a  case  pending.  Sioux  Falls  Nat. 
Bank  v.  First  Nat.  Bank,  6  Dak.  113, 
Reversed  on  other  grounds  in  150  U. 
S.  231,  37  L.  ed.  1063. 

An  application  by  a  receiver  of  a 
corporation  which  has  not  been  dis- 
solved, to  be  substituted  for  the  cor- 
poration as  plaintiff  in  a  pending  ac- 
tion, is  properly  refused  in  the  exer- 
cise of  the  court's  discretion  under 
N.  Y.  Code  Civ.  Proc.  §  756,  where 
the  plaintiff's  attorney  has  a  much 
larger  money  interest  in  the  recov- 
ery than  the  plaintiff  or  its  receiver, 
and  the  attorney  of  the  defendant 
was  instrumental  in  having  the  re- 
ceiver appointed.  Shaped  Sea)nless 
Stockinq  Co.  V.  Snow  Church  Co.  19 
Misc.  421. 

The  receiver  of  a  corporation  ap- 
pointed in  an  action  by  a  judgment 
creditor  for  the  sequestration  of  its 
property  is  not  entitled  as  of  right  to 
be  substituted  for  the  corporation  as 

55 


§  73 


liECElVERSHlPS— SUPPLEAIENT. 


plaintiir  in  a  pending  action,  but  the 
application  for  such  relief  is  within 
N.  Y.  Code  Civ.  Proc.  §  756,  under 
which  the  order  of  substitution  is 
discretionary.     Ibid. 

To  justify  the  substitution  of  a  re- 
ceiver as  plaintiff,  so  much  of  the 
record  as  establishes  the  fact  of  due 
appointment  and  qualification  is  all 
that  is  required.  Seymour  v.  New- 
man, 77  Mo.  App.  578. 

The  burden  of  proof  is  on  defend- 
ants in  an  action  by  a  bank,  where 
persons  claiming  to  have  been  ap- 
pointed receivers  of  the  bank  are  pe- 
titioning to  be  substituted  as  parties 
plaintiir,  and  produce  a  copy  of  the 
order  of  their  appointment,  attested 
by  the  clerk  and  under  seal  of  the 
court,  to  show  that  the  court  had  no 
jurisdiction  of  the  subject-matter  of 
the  appointment  of  receivers.     Ibid. 

The  receiver  is  entitled  to  be  sub- 
stituted for  the  debtor  in  pending 
suits.  Re  Wilds,  6  Abb.  N.  C.  307 ; 
Searcy  v.  Stubbs,  12  Ga.  437  ;  Kitt- 
redge  v.  Osgood,  161  Mass.  384. 

The  order  substituting  may  pro- 
vide that  the  receiver  shall  make  no 
change  in  attorneys  without  applica- 
tion to  the  court.  Re  Wilds,  6  Abb. 
N.  C.  307. 

In  an  action  begun  the  receiver 
may  continue  prosecution  without 
substitution,  so  long  as  there  is  no 
dissolution.  United  States  Vinegar 
Co.  V.  Spamer,  143  N.  Y.  676. 

Foreign  receivers;  receivers  of  for- 
eign corporations. 

It  is  not  the  policy  of  Illinois  to 
permit  foreign  receivers  to  remove 
from  its  jurisdiction  the  pi'operty  of 
foreign  corporations,  so  as  to  require 
it?  citizens  to  go  into  a  foreign  juris- 
diction to  assert  their  rights.  Hunt 
V.  Gilbert,  54  111.  App.  491;  Heyer 
\.  Alexander,  108  111.  385;  May  v. 
First  Nat.  Bank,  122  111.  551 ;  Wood- 
ward V.  Brooks,  128  111.  222,  3  L.  R. 
A.  702 ;  Henderson  v.  Schaas,  35  111. 
App.  155;  Webster  v.  Judah,  27  111. 
App.  294 ;  Ford  v.  Holbrook,  50  111. 
App.  547,  Affirmed  in  153  111.  633, 
27  L.  R.  A.  324. 

The  privilege  of  a  foreign  receiver 
to  exercise  extra-territorial  powers 
is  derived  wholly  from  the  doctrine 
of  comity,  and  this  comity  is  accord- 
56 


ed  except  where  domestic  policy  or 
rights  of  domestic  creditors  are  in- 
volved. Hunt  V.  Gilbert,  54  111.  App. 
491. 

A  foreign  receiver  may  prove  a 
debt  in  bankruptcy.  Ex  parte  Nor- 
wood, 3  liiss.  504. 

A  foreign  receiver  cannot  by  cer- 
tificates bind  property  wholly  in  an- 
other state.  Pool  V.  Farmers  Loan 
d  T.  Co.  7  Tex.  Civ.  App.  334. 

The  expiration  of  the  period  of  lim- 
itation in  the  interval  between  the 
institution  of  a  suit  on  a  demand  by 
a  foreign  receiver  and  the  filing  of  an 
original  amended  petition  by  the 
creditors  after  the  discharge  of  the 
receiver  bars  the  action,  as  a  foreign 
receiver  cannot  sue  and  maintain  an 
action  in  Texas,  and  the  commence- 
ment of  the  suit  by  him  did  not  op- 
erate to  suspend  the  running  of  the 
statute.  Kellogg  v.  Leivis,  10  Tex. 
Civ.  App.  668. 

A  receiver  appointed  by  a  foreign 
court  to  settle  the  affairs  of  an  insol- 
vent partnership  is  not  entitled  to 
remove  partnership  assets  from  the 
state,  as  against  resident  garnishing 
creditors  of  the  partnership  or  of  its 
individual  members,  unless  it  ap- 
pears that  the  partnership  has  not 
been  settled,  and  that  the  fund  is 
needed  for  that  purpose  independent 
of  any  claim  of  the  debtor  partner 
thereto.  Grogan  v.  Egbert,  44  W. 
Va.  75. 

An  attachment  by  a  local  creditor, 
of  a  judgment  for  a  receiver  of  a  for- 
eign corporation  against  a  Pennsyl- 
vania corporation,  on  the  day  before 
issuance  of  execution  and  making  of 
the  levy,  entitles  him  to  the  fund  if 
sufficient  to  pay  the  attachment,  in 
preference  to  the  receiver,  as  the  lat- 
ter's  rights  are  no  higher  than  those 
of  the  corporation,  and  the  princi- 
ples of  interstate  comity  do  not  ap- 
ply when  the  attaching  creditor  is  a 
citizen  of  the  state.  Verona  Tool 
Works  V.  E.  S.  Greely  Go.  6  Pa.  Dist. 
R.  638. 

A  member  of  a  foreign  insolvent 
mutual  benefit  association  for  which 
a  receiver  has  been  appointed  in  the 
state  of  its  incorporation  will  not  be 
allowed  to  subject  property  of  the 
association  in  another  state  to  the 
payment  of  his  certificate,  which  ma- 


SUITS  BY  RECEIVERS— DEFENSES  TO. 


§  73 


tured  after  the  commencement  of  the 
receivership  action,  thougli  before 
the  receiver's  api3ointment,  but  will 
be  relegated  to  his  right  to  share  in 
the  distribution  of  the  assets  in  the 
receivership  action,  where  it  is  ap- 
parent that  he  will  be  accorded  such 
right  if  he  takes  proper  steps. 
Wheeler  v.  Dime  Sav.  Bank,  116 
Mich.  271. 

The  doctrine  of  interstate  comity 
is  not  applicable  to  a  foreign  receiv- 
ership of  an  insolvent  partnership 
where  the  evidence  tends  to  show 
that  it  is  a  mere  cover  to  enable  a 
debtor  partner  to  dispose  of  his  own 
property  in  the  state  in  hindrance 
and  fraud  of  creditors;  but  such  re- 
ceivership will  be  deemed  void  as  to 
creditors  or  purchasers  for  value, 
without  notice.  Grogan  v.  Egbert, 
44  W.  Va.  75. 

Recognition  of  a  foreign  receiver  is 
by  comity.  Lett  v.  Thiirber-Why- 
land  Co.  4  Pa.  Dist.  R.  239. 

A  foreign  receiver  has  recognition 
in  our  courts,  by  the  doctrine  of 
comity,  t'alk  v.  Janes,  49  N.  J.  Eq. 
484. 

A  foreign  receiver  will  be  recog- 
nized by  comity  when  domestic  citi- 
zens are  not  affected.  Merchants 
Nat.  Bank  v.  McLeod,  38  Ohio  St. 
174. 

Where  by  the  rules  of  a  foreign 
mutual  benefit  society  the  reserve 
fund  in  the  local  branches  in  other 
states  is  under  the  control  of  the 
supreme  lodges,  and  a  receiver  is  ap- 
pointed in  the  home  state  of  the  cor- 
poration, and  ancillary  receivers  for 
the  branches,  equity  will  decree  that 
the  reserve  fund  of  the  local  branches 
in  the  hands  of  the  ancillary  receiv- 
ers be  turned  over  to  the  general  re- 
ceiver. Ware  v.  Supreme  Sitting, 
0.  of  I.  H.   (N.  J.  Eq.)   28  Atl.  1041. 

Where  members  of  an  association 
in  different  states  are  bound  by  a 
common  contract  and  the  court  at 
the  domic!  1  appoints  a  receiver  on 
account  of  insolvency,  trust  funds 
in  a  local  branch  may  be  turned  over 
to  the  home  receiver.  Duricard  v. 
Jewett,  4G  La.  Ann.  700. 

A  creditor  who  obtains  a  judg- 
ment in  Canada  against  property 
therein,  upon  a  contract  made  and 
performable  in    one    of    the  United 


States,  between  parties  domiciled 
therein,  cannot  be  allowed  to  execute 
his  judgment  against  property  of  the 
defendant  which  has  passed  into 
Canada,  where  one  of  the  conditions 
and  consequences  of  the  contract  un- 
der the  laws  of  the  state  is  that  the 
right  of  execution  and  sale  of  the 
property  of  the  defendant  shall  cease 
on  the  appointment  of  receivers,  and 
receivers  have  been  apointed  by  the 
courts  of  the  state.  Barker  v.  Cen- 
tral Vermont  R.  Go.  Rap.  Jud.  Que- 
bec, 13  C.  S.  2. 

Appointment    of. 

An  action  for  the  appointment  of 
a  receiver  of  a  foreign  corporation 
and  to  set  aside  an  assignment  may 
be  made  without  previous  demand  on 
the  corporation.  Walter  v.  F.  E. 
MeAlister  Co.  21  Misc.  747. 

Whether  after  a  foreign  corpora- 
tion doing  business  in  New  Jersey 
has  passed  into  the  hands  of  a  re- 
ceiver in  the  state  of  its  domicil  a 
receiver  will  be  appointed  in  the  for- 
mer state,  and,  if  so,  whether  the 
domiciliary  receiver  will  be  ap- 
pointed there,  depend  on  the  amount 
and  kind  of  business  done  in  the 
state,  and  whether  any  special  inter- 
est of  the  creditors  or  citizens  in  the 
state  is  likely  to  be  involved  in  the 
settlement.  Irwiti  v.  Granite  State 
Provident  Asso.  50  N.  J.  Eq.  244. 

A  temporary  receiver  for  a  foreign 
corporation  may  be  appointed  with- 
out notice,  where  the  corporation 
has  no  authorized  agent  in  the  state 
upon  whom  notice  can  be  served^ 
and  if  the  cause  is  delayed  until  no- 
tice can  be  had  by  publication,  all 
the  assets  of  the  corporation  within 
the  state  will  have  been  removed 
from  the  jurisdiction  of  the  court. 
Security  Sav.  &  L.  Asso.  v.  Moore, 
151  Ind.  174. 

An  action  by  a  stockholder  for  the 
appointment  of  a  receiver  of  tlic  lo- 
cal assets  of  a  foreign  corporation 
may  be  maintained  upon  its  insol- 
vency, when  it  has  oflicers,  creditors, 
and  property  within  the  state,  and 
has  made  an  assignment  therein,  and 
its  afi'airs  have  passed  into  the  hands 
of  a  receiver  appointed  within  the 
state  of  its  domicil.  Walter  v.  F. 
E.  MeAlister  Co.  21  Misc.  747. 

67 


■S  73 


RECEIVERSHIPS— SUPPLEMENT. 


An  order  appointing  a  receiver  of 
an  insolvent  corporation  may  be 
niade  without  notice,  where  tiie  com- 
plainant is  unable  to  get  service  of 
notice  on  the  ollieers  of  such  corpora- 
tion. Limlgrcn-Malian  Chemical 
Fire  Engine  Co.  v.  Revere  Rubber 
Co.  70  Ili.  App.  379. 

After  jurisdiction  obtained 
against  a  foreign  corporation  by  its 
appearance  and  judgment  a  receiver 
may  be  appointed.  De  Bemer  v. 
Dreio,  57  Barb.  438. 

The  appointment  in  a  foreign 
state  will  not  defeat  rights  of  at- 
taching creditor  of  the  state  where 
the  property  is  situated,  or  credit- 
ors of  other  states.  John  Ray  Clark 
Co.  V.  Tohi/  Valley  Supply  Co.  3  Pa. 
Dist.  R.  518. 

The  appointment  of  a  foreign  re- 
ceiver will  not  be  made  where  it  will 
be  against  the  interest  of  citizens  of 
the  state.  Borton  v.  Brines-Chase 
Co.   175  Pa.   209. 

A  nonresident  stockholder  of  a  for- 
eign corporation  may  maintain  an 
action  for  the  appointment  of  a  re- 
ceiver of  its  property  within  the 
state,  although  its  affairs  are  in  the 
hands  of  a  receiver  appointed  by  the 
courts  of  its  domicil,  since  the  plain- 
tiff does  not  sue  as  a  representative 
of  the  corporation.  Walter  v.  F.  E. 
McAlister  Co.  21  Misc.  747. 

Jurisdiction. 

Where  the  rights  of  domestic 
creditors  are  not  involved  the  courts 
will  remit  the  assets  to  a  foreign  re- 
ceiver for  distribution  in  Pennsylva- 
nia. Keun  v.  Supreme  Sitting,  0.  of 
I.  H.  3  Pa.  Dist.  323. 

The  courts  of  Massachusetts  will 
not  protect  against  an  assignment  of 
credits  to  a  foreign  receiver  of  a  for- 
eign corporation,  an  attachment  of 
credits  made  by  a  nonresident  cred- 
itor after  the  assignment.  Witters 
V.   Globe  Sav.  Bank,   171  Mass.  425. 

A  foreign  receiver  who  has  ob- 
tained possession  of  property  within 
the  jurisdiction  of  the  court  appoint- 
ing him  will  be  protected  in  such  pos- 
session in  any  jurisdiction  into 
which  he  may  take  the  property. 
Robertson  v.  Stead,  135  Mo.  135,  33 
L.  R.  A.  203. 

A  receiver  in  New  Jersey  of  a  for- 
58 


eign  corporation  for  which  a  receiver 
has  been  appointed  in  the  state  of  its 
domicil  is  amenable  only  to  the  di- 
rection of  the  courts  of  New  Jersey, 
and  not  to  the  direction  of  the  domi- 
ciliary receiver.  Irwin  v.  Granite 
State  Provident  Asso.  56  N.  J.  Eq. 
244. 

Foreign  statutory  trustees  dis- 
cussed.    Re  Waite,  99  N.  Y.  433. 

Suits  by  and  against. 

A  receiver  appointed  by  a  chan- 
cery court  in  one  state  of  the  prop- 
erty, business,  and  assets  of  a  build- 
ing and  loan  association,  under  a  de- 
cree adjudging  the  corporation  in- 
solvent, and  directing  the  winding 
up  of  its  affairs,  and  directing  him 
to  bring  any  and  all  suits  necessary 
for  the  collection  of  its  assets  that 
they  may  be  distributed  inpayment  of 
its  debts  and  among  its  shareholders, 
may  sue  in  a  Federal  court  in  anoth- 
er state  upon  a  note  and  mortgage 
given  by  a  shareholder,  where  all  the 
debts  have  been  paid.  Rogers  v. 
Riley,  80  Fed.  Rep.  759.  Citing 
Hurd  v.  Elizabeth,  41  N.  J.  L.  1 ; 
Metzner  v.  Bauer,  98  Ind.  427. 

The  principles  of  comity  do  not  ap- 
ply to  an  action  by  a  foreign  receiver 
of  a  foreign  mutual  insurance  com- 
pany acting  under  a  decree  in  the 
foreign  jurisdiction  making  an  as- 
sessment on  premium  notes,  even  if 
otherwise  applicable,  where  the  notes 
were  taken  for  insurance  on  property 
in  the  state  while  the  company  was 
doing  business  within  the  state  in 
violation  of  McClain's  (Iowa)  Code, 
§  1144,  prohibiting  foreign  insurance 
companies  from  doing  business  with- 
out compliance  with  the  conditions 
therein  mentioned.  Parker  v.  Lamb 
&  Sons,  99  Iowa,  265,  34  L.  R.  A. 
704. 

A  receiver  of  a  foreign  nation  can- 
not sue  in  Texas.  Moreau  v.  Du  Bel- 
let  (Tex.  Civ.  App.)  27  S.  W.  503. 

The  commencement  of  an  action 
by  a  foreign  receiver  in  Texas,  where 
such  receivers  are  not  entitled  to  sue, 
does  not  suspend  the  running  of  the 
statute  of  limitations.  Kellogg  v. 
Leicis,  16  Tex.  Civ.  App.  668. 

A  receiver  of  a  foreign  corporation 
properly  appointed  in  the  state 
where  such  corporation  is  domiciled 


SUITS  BY  RECEIVERS— DEFENSES  TO. 


§  77 


may  maintain  an  action  in  New  York 
as  a  matter  of  comity  and  interstate 
curtesy  to  obtain  possession  of  the 
propertj'  of  such  corporation  within 
the  latter  state.  Mahon  v.  Ongley 
Electric  Co.  24  App.  Div.  50. 

A  receiver  appointed  in  a  foreign 
state  may  maintain  a  suit  in  the 
courts  of  the  state  of  Missouri  con- 
cerning the  property  of  his  estate  as 
against  all  foreign  creditors,  without 
regard  to  whether  they  have  a  com- 
mon domicil  with  him.  Weil  v.  Bank 
of  Burr  Oak,  7G  Mo.  App.  34. 

A  receiver  of  a  foreign  corpora- 
tion, appointed  in  the  state  of  its 
domicil,  may  institute  in  the  courts 
of  West  Virginia  suits  in  his  own  or 
the  corporate  name,  for  debts  or 
claims  due  the  corporation,  living 
V.  Bentley  &  G.  Furniture  Co.  (W. 
Va.)  31  S.  E.  92o;  Swing  v.  Park- 
ersburg  Veneer  &  Panel  Co.  (W.  Va.) 
31  S.  E.  926. 

Tlie  receiver  of  a  loreign  corpora- 
tion, appointed  and  residing  in  the 
state  of  its  domicil,  cannot  maintain 
an  action  against  the  corporation  for 
the  sole  purpose  of  having  an  ancil- 
lary receiver  appointed  in  New  Y'ork, 
in  which  state  the  corporation  has 
property.  Mahon  v.  Ongley  Electric 
Co.  156  N.  Y'.  190,  Reversing  24  App. 
Div.  41. 

The  receiver  of  a  foreign  corpora- 
tion appointed  by  a  foreign  jurisdic- 
tion will  not  be  permitted  to  bring 
suit  in  the  Missouri  courts,  where 
this  will  operate  to  permit  the  re- 
ceiver to  take  property  out  of  the 
state  to  the  injury  of  domestic  cred- 
itors. Waters-Pierce  Oil  Co.  v. 
American  Exch.  Bank,  71  Mo.  App. 
653. 

The  receivers  of  a  foreign  railroad 


corporation  may  be  served  with  proc- 
ess in  an  action  for  damages  accru- 
ing in  the  operation  of  the  road  by 
them,  in  the  same  manner  as  the  cor- 
poration might  have  been  served  be- 
fore their  appointment.  Hill  v.  Bal- 
timore c(-  O.  R.  Co.  7  Pa.  Dist.  R.  473. 

The  fact  that  a  foreign  corporation 
is  in  the  hands  of  a  receiver  is  not 
sufficient  cause  for  quashing  attach- 
ment proceedings  against  it.  Vogt 
V.  Covenant  Bldg.  d  L.  Asso.  21  Pa. 
Co.  Ct.  351. 

The  insolvency  of  a  foreign  corpo- 
ration, the  affaiis  of  which  are  in  the 
hands  of  a  receiver  appointed  in  its 
domicil,  will  not  prevent  a  nonresi- 
dent stockholder  from  maintaining 
an  action  in  the  state  to  set  aside  an 
assignment  executed  by  the  corpora- 
tion therein  to  a  resident,  since  the 
corporate  officers  are  the  parties  im- 
plicated. Walter  v.  F.  E.  McAlister 
Co.  21  Misc.  747. 

A  foreign  receiver  may  be  substi- 
tuted in  a  pending  suit  on  terms  that 
will  protect  resident  creditors.  Na- 
tional Trust  Co.  V.  Murpliy,  30  N.  J. 
Eq.  408. 

A  foreign  receiver  has  a  special 
property  in  assets  delivered  into  his 
possession  in  the  jurisdiction  where 
he  was  appointed,  which  will  author- 
ize him  to  maintain  suit  for  their  re- 
covery even  against  the  claim  of  do- 
mestic creditors  who  attach  the 
property  after  he  has  brought  it  into 
the  United  States.  Robertson  v. 
Stead,  135  Mo.  135,  33  L.  R.  A.  203. 

A  foreign  receiver  may  sue  on  de- 
mand due  him,  when  domestic  cred- 
itors are  not  aflfected  by  it  or  the  do- 
mestic policy  involved.  Castlcman 
V.  Tetnpleman,  87  Md.  546,  41  L.  R. 
A.  367. 


Page  173,  sec.  77. — Suits  against  stockholders  on  unpaid  subscrip- 
tions. 


A  depositor  may  enforce  by  action 
the  liability  of  a  stockholder  of  an 
insolvent  bank,  and  such  right  is  not 
reserved  to  the  receiver.  Millisock 
v.  Moore,  76  Mo.  App.  528. 

A  receiver  has  power  to  maintain 
suit  against  stockholders  for  unpaid 
subscriptions.  Wyman  v.  WiUiains, 
52  Neb.  833. 


One  who  purchases  stock  in  a  bank 
cannot  avoid  his  liability  for  an  as- 
sessment by  a  receiver  of  the  bank, 
by  alleging  that  no  part  of  the  orig- 
inal capital  was  ever  paid  for  as  re- 
quired by  law.  Wallace  v.  Hood,  89 
Fed.  Rep.  11. 

The  individual  liability  for  debts 
of  the  corporation,  jJiovidod  by  Kan. 

59 


§  80 


RECEIVERSHIPS— SUPPLEMENT. 


Gen.  Stat.  II  1192,  is  not  to  be  en- 
forced at  the  suit  of  a  receiver,  but 
by  the  individual  creditors.  Dexter 
V.  Edmands,  89  Fed.  Rep.  467. 

A  receiver  may  maintain  an  action 
to  enforce  the  liability  of  stockhold- 
ers to  pay  calls  for  assessments 
made  by  him,  under  the  order  of  the 
court,  for  the  payment  of  the  debts 
of  the  corporation.  Gaincy  v.  Gil- 
son,  149  Ind.  58. 

The  procedure  prescribed  by  Minn. 
Gen.  Stat.  1894,  chap.  76,  'in  pro- 
ceedings by  creditors  to  enforce  the 
liability  of  stockholders  of  an  in- 
solvent bank,  governs  a  proceeding 
by  a  receiver  appointed  under  Minn. 
Gen.  Stat.  chap.  145,  §  20,  to  enforce 
such  liability,  and  an  order  of  the 
court  authorizing  the  institution  of 
such  a  proceeding  by  liim  is  not  a 
necessary  preliminary.  Ueland  v. 
Hail  (J an,  70  Minn.  349. 

The  liability  of  stockholders  for 
the  debts  of  the  corporation,  imposed 
by  the  Kansas  laws,  is  not  an  asset 
of  the  corporation  which  may  be 
sued  for  by  a  receiver.  Brown  v. 
Trail,  89  Fed.  Rep.  641. 


The  liability  of  stockholders  of  an 
insolvent  bank  under  Iowa  Acts  18th 
Gen.  Assem.  chap.  208,  §  1,  making 
them  liable,  in  addition  to  the 
amount  of  stock  held  by  them,  to  an 
amount  equal  to  their  respective 
shares  for  all  liabilities  of  the  bank 
accruing  while  they  remained  such 
stockholders,  may  be  enforced  by  a 
receiver  of  the  bank,  instead  of  by  the 
creditors,  appointed  to  collect  and 
distribute  such  fund.  State,  Stone, 
V.  Union  Stock  Yards  State  Bank, 
103  Iowa,  549,  citing  Story  v.  Fur- 
man,  25  N.  Y.  214;  Wilson  v.  Book, 
13  Wash.  070. 

For  power  to  sue  stockholders,  see 
Van  Steemoyck  v.  Sackett,  17  Wis. 
646;  Elderkin  v.  Peterson,  8  Wash. 
674. 

A  creditor  of  a  limited  partnership 
association  of  which  a  receiver  has 
been  appointed  is  not  thereafter  en- 
titled to  issue  execution  on  his  judg- 
ment against  subscribers  to  stock  of 
the  association  whose  subscriptions 
are  not  paid  up.  Rouse  v.  Detroit 
Cyele  Co.  Ill  Mich.  251,  38  L.  R.  A. 
794.    ■ 


Page  179,  sec.  80. — Suits  in  distraint. 


Bennett  v.  Robins,  5  Car.  &  P.  379 ; 
Shelly  V.  Pelham,  1  Dick.  120;  Lucas 
V.  Mayne,  1  Hogan,  394;  Hughes  v. 
Hughes  1  Ves.  Jr.  161,  3  Bro.  Ch. 
Eden's  ed.  87  note;  Brandon  v. 
Brandon,  5  Madd.  473. 


For  suit  on  bond  taken  in  viola- 
tion of  order  of  court — see  O'Oor- 
man  v.  Sabin,  62  Minn.  40. 


Right  of  receivers  to  sue  generally. 


The  bank  comptroller,  and  not  the 
receiver,  is  the  proper  person  to 
bring  suit  under  Wis.  Rev.  Stat, 
chap.  71,  §  33.  Rusk  v.  Van  Nos- 
trand,  21  Wis.  161,  Overruling  Van 
Steenwyck  v.  Sackett,  17  Wis.  646. 

A  receiver's  right  cannot  be  ques- 
tioned when  he  was  ordered  to  effect 
a  settlement  and  his  action  was  per- 
mitted by  the  court.  Metropolitan 
'Nat.  Bank  v.  Commercial  State  Bank, 
104  Iowa,  682. 

As  to  the  form  of  action  by  re- 
ceivers, the  proper  parties,  and  the 
liability  of  stockholders  in  an  in- 
solvent insurance  company — see  Os- 
good V.  Lay  tin,  3  Keyes,  521. 

Under  the  English  practice  it  was 
proper  to  refer  the  question  of  suit 

60 


by  the  receiver  to  a  master  for  de- 
termination. Sturgeon  v.  Douglas, 
1  Hogan,  400. 

A  tenant  served  with  order  to  pay 
rent  to  a  receiver  can  pay  to  no  one 
else.  Russell  v.  Baker,  1  Hogan, 
180. 

The  right  of  the  receiver  to  sue, 
as  a  general  rule,  is  limited  by  the 
right  existing  in  the  debtor.  Smith 
V.  Woodruff,  1  Hilt.  402. 

And  when  his  right  to  sue  is  ques- 
tioned he  may  sue  and  defend  in  the 
name  of  the  debtor.  Smith  v.  United 
States  Exp.  Co.  135  111.  279. 

He  cannot  require  an  accounting 
of  the  debtor  as  an  executor.  Wor- 
rail  V.  Driggs,  1  Redf.  449. 


SUITS  BY  RECEIVERS— DEFENSES  TO. 


S  80 


And  cannot  maintain  an  action  to 
recover  the  value  of  property  sold  by 
a  bankrupt.  Lansing  v.  Manton,  14 
Xat.  Bankr.   Reg.   127. 

And  as  receiver  of  a  partnership 
cannot  recover  money  due  one  part- 
ner and  a  third  person.  Wheat  v. 
Bank  of  California,  119  Cal.  4. 

And  cannot  maintain  an  action  to 
recover  the  value  of  property  alleged 
to  have  been  transferred  by  an  in- 
solvent in  violation  of  an  insolvency 
act.  Tibbets  v.  Cohn,  116  Cal.  365. 
Citing  Lansing  v.  Manton,  14  Nat. 
Bankr.  Reg.  127;  Sutherland  v.  Da- 
vis, 10  Nat.  Banlvr.  Reg.  424;  Re 
Steadman,  8  Nat.  Bankr.  Reg.  319. 

And  a  bill  by  a  receiver  against 
himself  as  a  stockholder  will  not  be 
sustained.  Wiswell  v.  Starr,  48  Me. 
401. 

And  where  the  receiver  has  already 
prosecuted  a  sviit  the  plaintiff  for 
whose  benefit  the  suit  was  brought 
by  the  receiver  cannot  sue.  Tinkham 
v.  Borst,  24  How.  Pr.  246. 

It  has  been  held  that  except  where 
the  legal  title  has  been  transferred 
to  him  the  receiver  cannot  sue  in  his 
own  name.  Wisener  v.  Myers,  3  Pa. 
Dist.  R.  687. 

An  attachment  against  a  tenant, 
and  distress,  cannot  both  be  prose- 
cuted by  the  receiver  at  the  same 
time.  Nugent  v.  Nugent,  1  Hogan, 
169. 

A  debt  due  the  sheriff  cannot  be 
recovered  by  the  receiver  against 
him  individually.  Norcross  v.  Hol- 
lingsicorth,  83  Hun,  127. 

A  receiver  may  be  appointed  to 
conduct  a  litigation  at  law  specially, 
if  it  appears  that  the  interest  of  cred- 
itors will  be  better  protected  than  by 
allowing  receivers  of  the  estate  to  do 
so.  Vandergrift  v.  Interstate  8.  B. 
Co.  43  W.  N.  C.  247. 

On  application  it  is  proper  to  au- 
thorize a  receiver  to  employ  counsel 
to  advise  him  as  to  his  defense;  but 
the  opinion  of  such  counsel  is  not 
conclusive.  Troy  Sav.  Bank  v.  Mor- 
rison, 27  App.  Div.  423. 

And  he  may  be  directed  to  discon- 
tinue a  suit.  Merritt  v.  Lyon,  16 
Wend.  421. 

As  a  condition  to  a  recovery  of  se- 
curities illegally  exchanged  by  a  cor- 
poration over  which  he  is  appointed. 


the  receiver  is  only  required  to  ten- 
der back  such  securities  as  have 
come  to  his  hands  as  receiver.  Hayne 
v.  Metropolitan  Trust  Co.  67  Minn. 
245. 

But  the  receiver  is  not  required 
to  put  the  other  party  in  statu  quo, 
or  return  the  money  received,  wliore 
he  sues  to  set  aside  a  mortgage  as  in 
contravention  of  insolvent  laws. 
Moore  v.  Avierican  Loan  d  T.  Co.  SO 
Fed.  Rep.  49. 

The  right  to  sue  is  dependcut  on 
the  receiver  having  given  bond  it  re- 
quired by  the  order.  Seymour  v. 
Newman,  77  Mo.  App.  578. 

The  receiver  of  a  national  bank,  in 
order  to  sue  for  an  ordinary  debt, 
will  not  be  required  to  get  an  order 
from  the  comptroller  of  the  cur- 
rency. National  Bank  of  the  Me- 
tropolis V.  Kennedy,  17  Wall.  19,  21 
L.  ed.  554. 

Where  a  receiver  has  been  ap- 
pointed under  the  national  currency 
act,  the  bank  still  continuing  to 
exist,  suit  is  properly  instituted 
against  it,  and  the  defense  is  made 
by  it.  Security  Bank  v.  National 
Bank  of  the  Commonicealth,  1  Hun, 
287;  cf.  Bank  of  Bethel  v.  Pahqui- 
oque  Bank,  14  Wall.  383,  20  L.  cd. 
840. 

Nonresident  receivers  of  national 
banks  are  required  to  give  security 
for  costs  under  U.  S.  Rev.  Stat.  § 
1001.  Piatt  V.  Adriance,  90  Fed. 
Rep.  772. 

He  may  bring  a  suit  in  equity  to 
set  aside  a  prior  voluntary  assign- 
ment and  to  remove  the  assignee. 
Morgan  v.  South  Milwaukee  Lake 
Vieio  Co.  100  Wis.  465. 

And  to  enforce  the  common-law  li- 
ability of  stockholders,  to  the  same 
extent  as  the  corporation.  Gainey 
V.  Gilson,  149  Ind.  58. 

And  to  collect  a  note  given  for 
stock  liability.  Hepburn  v.  Kincan- 
non,  74  Miss.  691. 

The  receiver  of  an  insolvent  in- 
dorser  on  a  note  may  sue  the  orig- 
inal obligor  and  recover  a  dividend 
paid  to  the  holder  thereof.  Mercan- 
tile Nat.  Bank  v.  Macfarlane,  71 
Minn.  497. 

And  on  a  note  payable  to  a  bank  of 
which  he  is  receiver  he  may  sue  in 
his  own  name  as  receiver,  or  in  the 

61 


§  81 


RECEIVERSHIPS— SUPPLEMENT. 


name  of  the  bank.  Chicago  Fire 
Proofing  Co.  v.  I'ark  Sat.  Bank,  145 
111.  481;  Xational  Hank  of  the  Me- 
tropolis V.  Kcn>irdi/,  17  Wall.  I'J,  21 
L.  ed.  554. 

And  to  recovor  money  collected  on 
a  jndgment  confessed  by  a  corpora- 
tion with  the  view  of  giving  a  pref- 
erence. Nealis  v.  American  Tube  d 
Iron  Co.  150  N.  Y.  42. 

And  to  redeem  demised  premises 
taken  for  nonpayment  of  rent.  Bien 
V.  Bixby  (Sup.  Ct.  App.  Term)  18 
Misc.  415;  Fitzpatrick  v.  Eyre,  1  IIo- 
gan,  171. 

And  to  terminate  tenancies  on  no- 
tice. Doe,  Marsack,  v.  Read,  12 
East,  58. 

And  may  assail  the  debtor's  fraud- 
ulent transactions.  Pender  v.  Mai- 
lett,  122  N.  C.  1G3;  Chamberlain  v. 
O'Brien,  46  Minn.  80. 

The  receiver  in  supplementary  pro- 
ceedings may  bring  suit  for  conver- 
sion against  a  mortgagee  who  took 
possession  under  a  void  mortgage. 
Stephens  v.  Meriden  Britannia  Co. 
13  App.  Div.  268. 

And  to  collect  an  assessment  levied 


by  the  board  of  directors.  JVgman 
V.  Williams,  53  Neb.  670. 

In  an  action  by  a  receiver  of  an 
insolvent  bank  to  recover  a  stock  as- 
sessment, a  claim  of  the  stockholder 
that  entitles  him  to  be  paid  in  full 
entitles  him  to  offset  the  amount. 
Welles  V.  titout,  38  Fed.  Rep.  807. 

A  receiver  may  defend  against  an 
attachment.  Paine  v.  HoUiday,  68 
Miss.  2!)8. 

But  he  should  not  bring  attach- 
ment wliere  he  knows  there  is  a  dis- 
pute about  the  tenure.  Pread  v. 
Lewis,  2  Molloy,  369. 

He  may  bring  actions  to  determine 
conflicting  claims.  Ornies  v.  Baker, 
17  N.  Y.  Week.  Dig.  104. 

A  receiver  has  power  prima  facie 
to  sue  to  set  aside  a  fraudulent  mort- 
gage under  2  Wash.  Code,  S  331. 
Titlow  V.  Cascade  Oatmeal  Co.  15 
Wash.  652. 

The  validity  of  an  assignment  for 
benefit  of  creditors  should  be  chal- 
lenged by  the  receiver  of  the  insol- 
vent corjjoration,  and  not  by  a  stock- 
holder. Walter  V.  F.  E.  McAlister 
Co.  21  Misc.  747. 


Page  180,  sec.  81. — Defenses  to  actions  brought  by  receivers. 


A  defense  that  might  have  been 
made  against  the  defendant  may  be 
made  against  the  receiver.  Wardle 
V.  Hudson,  96  Mich.  432;  Moise  v. 
Chapman,  24  Ga.  249. 

And  so  as  to  set-off.  Van  Wagoner 
V.  Paterson  Gaslight  Co.  23  N.  J.  L. 
283. 

An  action  by  the  receiver  of  a  bank 
will,  in  the  absence  of  any  allegation 
of  the  insolvency  or  indebtedness  of 
the  bank,  be  treated  as  though  it  was 
brought  directly  by  the  bank,  as  un- 
der 2  Hill's  (Wasii.)  Code,  §  326,  a 
receiver  may  be  appointed  for  other 
purposes  than  the  winding  up  of  an 
insolvent  concern.  Shuey  v.  Holma, 
20  Wash.  13. 

The  defense  is  not  available  in  an 
action  on  a  note  by  the  receiver  of  a 
bank,  appointed  under  Neb.  Comp. 
Stat.  chap.  8,  §  34,  that  such  note 
was  executed  by  the  maker  to  enable 
one  indebted  to  the  corporation  in 
62 


excess  of  the  maximum  limit  to  in- 
dorse the  same  to  the  bank  in  place 
of  the  illegal  excess  of  his  indebted- 
ness, as  such  transaction  was  a  fraud 
on  creditors  and  depositors.  Har- 
rington  v.  Connor,  51  Neb.  214. 

An  order  directing  a  receiver  in 
supplementary  proceedings  to  bring 
suit  on  a  specified  claim  in  favor  of 
the  judgment  debtor,  and  "holding 
the  same  subject  to  the  further  or- 
der" of  the  court,  is  not  objection- 
able on  the  ground  that  such  judg- 
ment debtor  is'  entitled  to  a  home- 
stead in  such  claim.  Globe  Phos- 
phate Co.  V.  Pinson,  52  S.  C.  185. 

In  the  absence  of  mismanagement 
or  bad  faith  in  prosecuting  an  ac- 
tion, a  motion  for  security  for  costs 
will  not  be  sustained  against  a  re- 
ceiver. Kimberly  v.  Stewart,  22 
How.  Pr.  281 ;  Kimberly  v.  Black- 
ford, 22  How.  Pr.  443.  See  Kimber- 
ly V.  Goodrich,  22  How.  Pr.  424. 


SUITS  AGAINST  THE  RECEIVER.  §§  82.  83 

Page  182,  sec.  82. — Suits  against  receivers;  generally. 


Equitable  relief  is  obtained  in  the 
same  court  in  which  the  receiver  was 
appointed.  Not  so,  however,  as  to 
legal  relief.  National  Bank  v.  Rich- 
mond Factory,  91  Ga.  284. 

When  the  receiver  exercises  the 
francliises  of  the  corporation  he  is 
subject  to  the  suit  as  the  company. 
Ball  V.  Mahry.  91  Ga.  781. 

An  independent  action  cannot  be 
maintained  upon  a  pre-existing 
claim  due  from  an  insolvent  corpo- 
ration against  its  receiver,  appointed 
under  Minn.  Gen.  Stat.  1894,  §  .5900, 
for  the  recovery  of  judgment  or  to 
have  the  claim  allowed  from  the 
trust  fund.  Buffum  v.  Hale,  71 
Minn.   190. 

A  receiver  exercising  the  fran- 
chises of  a  corporation  subjects  him- 
self to  the  same  obligations  as  the 
corporation.  Hence  mandamus  will 
lie  to  compel  him  to  construct  a  street 
crossing.  Fort  Dodge  v.  Minneapo- 
lis &  Ht.  L.  R.  Co.  87  Iowa,  389. 

A  person  prejudiced  by  the  act  of 
a  receiver  should  apply  for  relief  in 
the  court  in  which  the  receiver  was 
appointed.  Searle  v.  Choat,  L.  R. 
25  Ch.  Div.  723. 

A  suit  brought  against  a  receiver 
both  individually  and  in  his  official 
capacity  cannot  be  sustained. 
Brandt  v.  Siedler,  10  Misc.  234. 


The  owner  of  commercial  paper  de- 
posited in  a  bank  under  circum- 
stances rendering  its  receipt  a  fraud 
may  be  relieved  from  an  election 
made  by  proving  the  claim  as  a  gen- 
eral creditor  in  ignorance  that  the 
better  remedy  of  pursuing  the  pro- 
ceeds in  the  hands  of  the  receiver  of 
the  bank  is  permitted  by  the  law, 
where  no  detriment  lias  been  occa- 
sioned bj^  such  action  to  other  par- 
ties, which  will  create  an  estoppel. 
Standard  Oil  Co.  v.  Hawkins,  46  U. 
S.  App.  115,  74  Fed.  Rep.  395,  20  C. 
C.  A.  4G8,  33  L.  R.  A.  739. 

A  suit  will  lie  against  an  insolvent 
railroad  company  after  the  appoint- 
ment of  a  receiver,  for  the  killing  of 
an  animal  by  a  train,  as  the  title  to 
the  property  is  not  changed.  State 
V.  Port  Royal  d  A.  R.  Co.  84  Fed. 
Rep.  67. 

Service  on  a  station  agent,  being 
good  as  to  the  corporation,  is  good 
as  to  its  receiver.  Proctor  v.  Mis- 
souri, K.  &  T.  R.  Co.  42  Mo.  App. 
124. 

But  service  on  the  receiver  in  a 
petition  in  bankruptcy  is  not  suffi- 
cient. Re  Flowers,  65  L.  J.  Q.  B.  N. 
S.  079,  75  L.  T.  N.  S.  306. 


Page  183,  sec.  83. — Order  of  court  necessary. 


Unless  authorized  by  statute  the 
court  appointing  a  receiver  will  not 
permit  him  to  be  sued  without  leave. 
Reed  v.  Richmond  &  A.  R.  Co.  (Va.) 
4  S.  E.  587  ;  Piper  v.  Straiten  (Tex.) 
7  S.  W.  45 ;  De  Graff enried  v.  Bruns- 
wick &  A.  R.  Co.  57  Ga.  22 ;  Carrey 
V.  Spencer,  72  N.  Y.  S.  R.  108. 

A  suit  cannot  be  maintained  in 
the  Federal  court  against  a  receiver 
appointed  in  a  state  court,  without 
leave.  Rejall  v.  Greenhood,  60  Fed. 
Rep.  784. 

The  equitable  remedies  of  all  cred- 
itors should  be  asserted  in  the  case 
in  which  the  appointment  is  made. 
National  Bank  v.  Richmond  Factory, 
91  Ga.  284. 


The  resignation  of  a  receiver  does 
not  render  it  necessary  to  get  per- 
mission to  prosecute  against  his 
successor.  Fordyce  v.  Dixon,  70 
Tex.  694. 

An  answer  in  the  nature  of  a  cross 
action  against  a  receiver  is  only  by 
leave  of  court.  Kortjohn  v.  Seimers, 
29  Mo.  App.  271. 

The  method  for  the  ascertainment 
of  disputed  claims  against  a  dis- 
solved corporation,  prescribed  by  the 
New  York  statute  authorizing  pro- 
ceedings for  the  voluntary  dissolu- 
tion of  corporations,  is  not  exclusive, 
and  the  court  may  in  a  proper  case 
authorize!  an  action  to  bo  brought 
against  a  receiver  who  disputes  the 

63 


§  83 


llECEIVERSHIPS— SUPPLEMENT. 


validity  of  a  claim.  Ludington  v. 
Thompson,  153  N.  Y,  499,  Ailirming 
4  App.  Div.  117. 

The  declaration  must  allege  that 
leave  to  sue  was  obtained.  St.  Louis, 
A.  t6  S.  It.  Co.  V.  Hamilton,  158  111. 
366;  Keen  v.  Breckenridge,  90  Ind. 
69;  Mulcahcy  v.  Strauss,  151  111.  70. 

A  mere  allegation  in  the  complaint 
in  an  action  in  a  state  court  against 
the  receiver  of  a  railroad  company 
appointed  by  a  Federal  court,  that 
defendant  claims  some  title  to  the 
land  in  suit  for  which  plaintiff 
brings  an  action,  is  insuflicint  to 
give  the  court  jurisdiction  unless 
leave  to  sue  has  been  obtained,  un- 
der act  of  Congress  August  13,  1888, 
§  3.  Bennett  v.  Northern  P.  R.  Co. 
17  Wash.  534.  Citing  Barton  v. 
Barbour,  104  U.  S.  126,  26  L.  ed.  672; 
Davis  V.  Grajj,  16  Wall.  203,  21  L.  ed. 
447 ;  Central  Trust  Co.  v.  East  Ten- 
nessee, V.  &  G.  R.  Co.  59  Fed.  Rep. 
523;  McNulta  v.  Lochridge,  141  U. 
S.  327,  35  L.  ed.  796;  Re  Tyler,  149 
U.  S.  164,  37  L.  ed.  689;  Eddy  v. 
Lafayette,  4  U.  S.  App.  247,  49  Fed. 
Rep.  807,  1  C.  C.  A.  441;  Stvope  v. 
Villard,  61  Fed.  Rep.  417;  Comer  v. 
Felton.  01  Fed.  Rep.  731.  Distin- 
guishing Missouri  P.  R.  Co.  v.  Texas 
P.  R.  Co.  41  Fed.  Rep.  311.  Criticis- 
ing Broivn  v.  Ranch,  1  Wash.  497. 

An  attachment  suit  against  a  for- 
eign building  and  loan  association  is 
not  cut  off  by  the  fact  that  it  has 
gone  into  the  hands  of  a  receiver  in 
its  home  state.  Southern  B.  d  L. 
Asso.  V.  Price,  88  Md.  155,  42  L.  R.  A. 
206. 

The  appointment  of  a  receiver  for 
a  lessor  of  land,  to  collect  the  debts 
due  such  lessor,  will  not  prevent  a 
purchaser  of  the  premises  at  an  ex- 
ecution sale  against  such  lessor  from 
bringing  an  action  to  recover  rent 
due  under  the  lease.  Griffith  v.  Bur- 
lingame,  18  W^ash.  429. 

Leave  to  sue  a  receiver  for  a  claim 
which  he  admits  will  not  be  granted, 
■where  his  refusal  to  pay  at  the  time 
is  due  to  his  uncertainty  as  to 
whether  he  possesses  sufficient  as- 
sets to  pay  all  the  creditors  in  full. 
Re  Machivirth,  15  App.  Div.  65. 

The  appointment  of  a  receiver  will 
not  prevent  foreclosure  of  a  prior 
mortgage.  Real  Estate  Title  Ins.  & 
64 


T.  Co.  V.  Mahoning  Rolling  Mill  Co. 
6  Pa.  Dist.  R.  409. 

The  appointment  of  a  receiver  of 
a  corporation  will  not  prevent  a  suit, 
judgment,  and  execution  where  he  is 
carrying  on  the  corporate  business. 
Hid. 

An  action  to  establish  the  valid- 
ity of  a  claim  against  an  insolvent 
bank  may  be  brought  in  a  court  of 
competent  jurisdiction  against  both 
the  insolvent  bank  and  the  receiver, 
or  against  either,  and  if  against  the 
receiver  jointly  or  alone  he  may  be 
directed  by  the  judgment  to  recognize 
the  claim  and  provide  for  its  pay- 
ment with  the  other  claims  against 
the  bank,  and  if  against  the  bank 
alone  it  is  binding  upon  the  receiver. 
Denton  v.  Baker,  48  U.  8.  App.  235, 
79  Fed.  Rep.  189,  24  C.  C.  A.  476. 

An  action  at  law  may  be  main- 
tained against  a  receiver  of  a  na- 
tional bank  upon  a  judgment  ob- 
tained against  the  bank  in  a  state 
court,  and  the  receiver  directed 
therein  to  recognize  the  claim  and 
provide  for  its  payment  with  other 
claims  against  the  bank,  as  man- 
damus will  not  lie  to  enforce  such 
claim.     Ihid. 

An  application  for  leave  to  levy 
an  execution  on  assets  of  a  firm  in 
the  hands  of  a  receiver  appointed  in 
an  action  for  an  accounting  after  the 
dissolution  of  the  firm  should  be 
granted,  even  if  the  firm  is  insolvent, 
where  the  receiver  was  appointed  with 
the  consent  of  both  parties  to  the 
action,  and  the  intention  was  not  to 
wind  up  the  affairs  of  the  firm  with 
the  greatest  possible  speed,  but  to 
continue  the  business  for  the  benefit 
of  the  parties,  resulting  in  the  hin- 
dering and  delaying  of  creditors  if 
the  assets  are  held  exempt  from  exe- 
cution. Schloss  v.  Schloss,  14  App. 
Div.  333. 

If  a  claim  is  properly  cognizable 
in  the  court  appointing  a  receiver, 
leave  should  not  be  given  to  sue  the 
receiver.     Re  Ilerbst,  63  Hun,  247. 

Leave  will  not  be  granted  policy 
holders  in  an  insolvent  insurance 
company  to  sue  the  receiver  because 
their  policies  contain  a  clause  re- 
quiring suit  to  be  brought  within  a 
specified  period,  as  their  rights  are 
fixed   by   the   decree   of   dissolution, 


SUITS  AGAINST  THE  RECEIVER. 


g  84 


and  the  limitation  ceases  to  operate. 
Com.  V.  Niagara  Mut.  F.  Ins.  Co.  6 
Pa.  Dist.  GGO. 

A  suit  for  the  flooding  of  neigh- 
boring property  by  a  dam  and  pump 
cannot  be  maintained  against  a  re- 
ceiver who  has  merely  used  it  as  it 
came  into  his  hands  after  continu- 
ous use  by  the  company  and  various 
prior  receivers  as  necessary  to  the 
operation  of  the  property,  unless  the 
suit  is  limited  to  the  acts  of  the  lat- 
er receiver  alone.  Jones  v.  Schlap- 
hack,  81  Fed.  Rep.  274. 

An  agent  of  a  corporation  for  a 
specified  term  of  years  cannot  main- 
tain an  action  against  the  receiver 
of  such  corporation  on  its  being  de- 
clared insolvent  and  its  charter  for- 
feited, for  damages,  because  he  was 


not  continued  in  his  employment  as 
agent  after  the  receiver  was  ap- 
pointed. Rosenhaum  v.  United 
States  Credit  Hystem  Co.  60  N.  J.  L. 
294.  Citing  Farrow  v.  Wilson,  L. 
R.  4  C.  P.  744;  Spalding  v.  Rosa,  71 
N.  Y.  40,  27  Am.  Rep.  7 ;  People  v. 
Glohe  Mut.  L.  Ins.  Co.  64  How.  Pr. 
240 :  People  v.  Glohe  Mut.  L.  Ins.  Co. 
91  N.  Y.  174. 

A  motion  to  abate  an  action  com- 
menced against  the  receivers  of  a 
railroad  company  will  be  sustained 
where  more  than  a  year  has  elapsed 
since  tlie  death  of  the  original  re- 
ceivers and  the  appointment  of  a  re- 
ceiver de  bonis  non,  without  any  at- 
tempt having  been  made  to  revive 
the  action  against  him.  Hutchings 
T.  Eddy,  6  Kan.  App.  490, 


Page  186,  sec.  84. — Exceptions  to  the  rule. 


By  acts  of  Congress  of  1887-88,  § 
3,  leave  to  sue  receivers  appointed 
by  Federal  courts  is  not  required, 
and  tliis  applies  to  any  court. 
Louisville  8.  R.  Co.  v.  Tucker,  20 
Ky.  L.  Rep.  1303. 

An  action  may  be  maintained 
without  leave  by  the  direction  of  the 
governor,  for  the  sole  purpose  of  de- 
termining the  question  of  title  to 
certain  lands  in  controversy  between 
the  state  and  a  designated  railway 
company  in  the  custody  of  a  re- 
ceiver appointed  by  a  Federal  court. 
Houston  &  T.  C.  R.  Co.  v.  State 
(Tex.  Civ.  App.)  39  S.  W.  390. 

But  such  a  receiver  cannot  with- 
out such  leave  be  sued  in  a  state 
court  in  an  action,  the  purpose  of 
which  is  to  take  from  his  control 
property  belonging  to  the  corpora- 
tion or  held  by  it  under  a  claim  of 
ownership  when  the  receiver  took 
possession.  HolUfield  v.  Wriqhts- 
ville  d  T.  R.  Co.  99  Ga.  365;  Meyer 
v.  Harris,  61  N.  J.  L.  83. 

And  this  act  applies  to  actions  for 
negligence  of  the  receiver,  his  em- 
ployees, and  agents.  Hill  v.  Balti- 
more d  0.  R.  Co.  7  Pa.  Dist.  R.  473. 

The  power  of  the  court  to  protect 
its  receiver  is  not  limited  by  the 
above  act.  Statcler  v.  California 
'Nat.  Bank,  77  Fed.  Rep.  43. 


The  act  applies  to  a  territorial  re- 
ceiver. Wheeler  v.  Smith,  81  Fed. 
Rep.  319. 

The  act  does  not  apply  when  the 
purpose  of  the  suit  is  to  establish 
title  to  personal  property  placed  and 
then  in  the  receiver's  possession. 
J.  I.  Case  Plow  Works  v.  Finks,  52 
U.  S.  App.  253,  81  Fed.  Rep.  529,  26 
C.  C.  A.  46;  Trumbull  v.  Makeever, 
9  Colo.  App.  350 ;  Dillingham  v.  An- 
thony,  73  Tex.  47,  3  L.  R.  A.  634; 
Fordyee  v.  Withers,  1  Tex.  Civ.  App. 
540. 

The  leave  to  sue  generally  required 
may  be  waived  by  the  entry  of  ap- 
jjearance  without  objections.  Flen- 
tham  v.  Stcivard,  45  Neb.  640;  Mul- 
caheyv.  Strauss,  151  111.  70;  Elkhart 
Car  Works  Co.  v.  Ellis,  113  Ind.  215; 
Ohio  d  M.  R.  Co.  V.  Nickless,  71  Ind. 
271;  Hubbell  v.  Curran,  9  How.  Pr. 
424. 

Neither  an  original  assignee  nor 
his  successor  is  a  receiver  so  as  to 
require  leave  of  court  before  bring- 
ing suit  against  him,  in  view  of 
Mont.  Code  Civ.  Proc.  §§  4510-4535, 
regulating  common-law  assigninciits 
for  the  benefit  of  creditors,  and  §§ 
950-95(1,  rehiting  to  receivers.  Hub- 
cock  v.  Maxwell,  21  Mont.  507. 

Leave  of  the  court  appointing  a 
foreign  receiver  is  not  necessary  in 

65 


§  84 


RECEIVERSHIPS— SUPPLEMENT. 


garnishment  proceedings  against 
him.  Fhelan  v.  Ganchin,  5  Colo. 
14. 

Suit  may  be  brought  to  foreclose 
a  mortgage,  against  receivers,  with- 
out leave  of  court.  American  Loan 
d  T.  Co.  V.  Central  Vermont  R.  Co. 
84  Fed.  Rep.  917. 

Leave  of  court  is  not  required  in 
order  to  sue  the  corporation  over 
which  a  receiver  is  appointed.  Real 
Estate  Title  ins.  &  T.  Co.  v.  Mahon- 
ing Rolling  Mill  Co.  6  Pa.  Dist.  409. 

The  cases  are  not  uniform,  but  the 
weight  of  authority  seems  to  be  that 
failure  to  obtain  leave  to  sue  is  not 
a  jniisdictional  fact.  Mulcahey  v. 
St7-auss,  151  111.  70;  St.  Joseph  cG 
D.  C.  R.  Co.  V.  Smith,  19  Kan.  225; 
Chautauqua  County  Bank  v.  Risley, 
19  N.  Y.  309,  75  Am.  Dec.  347  ;  Kin- 
ney y.  Crocker,  18  Wis.  75;  Lyman 
v.  Central  Vermont  R.  Co.  59  Vt. 
167;  Allen  v.  Central  R.  Co.  42 
Iowa,  683;  Tobias  v.  Tobias,  51 
Ohio  St.  519. 

It  is,  however,  in  the  Federal 
courts.  Flcntham  v.  Steward,  45 
Neb.  640;  Wisjcall  v.  Sampson,  14 
How.  52,  14  L.  ed.  322;  Barton  v. 
Barbour,  104  U.  S.  120,  26  L.  ed. 
672. 

Right  of  substitution. 

The  court  may  permit  a  receiver 
to  be  substituted  in  a  pending  action. 

The  court  may  permit  the  plain- 
tiff in  an  action  commenced  against 
an  elevated-railroad  company  to  re- 
cover the  rental  and  fee  damages  to 
their  property,  to  proceed  with  the 
same  against  the  receiver  pendente 
lite  appointed  in  an  action  to  fore- 
close a  mortgage  given  by  the  com- 
pany, and  to  make  such  receiver  a 
defendant.  Re  Jacobson,  23  App. 
Div.  75. 

But  this  is  not  necessary  to  enable 
the  plaintiff  to  obtain  judgment. 
Knauer  v.  Globe  Mut.  Ins.  Co.  14 
Jones  &  S.  370. 

A  receiver  in  supplementary  pro- 
ceedings is  not  entitled  to  be  sub- 
stituted as  a  defendant  in  lieu  of 
the  judgment  debtor  in  an  action  by 
creditors.  Ross  v.  Wigg,  100  N.  Y. 
243. 

Garnishment. 

A  receiver  is  subject  to  garnish- 
ee 


ment,  where,  pfior  to  the  service  of 
the  writ  upon  him,  the  court  had  or- 
dered him  to  turn  over  all  the  prop- 
erty to  the  owner.  Russell  v.  Mil- 
le.tt,  20  Wash.  212. 

As  a  general  rule  a  receiver  can- 
not be  garnished  without  leave  of 
court.  Citizens'  Commercial  &  Sav. 
Bank  v.  Bay  Circuit  Judge,  110 
Mich.  033 ;  People,  Tremper,  v. 
Brooks,  40  Mich.  333;  McGoican  v. 
Myers,  60  Iowa,  99. 

A  contract  completed  by  the  re- 
ceiver and  money  due  him  as  receiv- 
er are  not  subject  to  garnishment 
against  the  debtor.  Cooke  v. 
Orange,  48  Conn.  401. 

A  judgment  creditor  of  a  company 
to  which  a  receiver  appointed  by  the 
Federal  court  is  alleged  to  be  in- 
debted for  rent  cannot,  for  want  of 
privity  between  the  parties,  and 
without  leave  of  the  court  making 
such  appointment,  maintain  garn- 
ishment proceedings  in  a  state  court 
to  appropriate  the  amount  due  to 
the  payment  of  his  judgment,  since 
the  suit  does  not  refer  to  any  act  or 
transaction  of  the  receiver  concern- 
ing the  property  committed  to  his 
care  in  respect  to  which  he  is  lia- 
ble under  act  of  Congress  of  March 
3,  1887,  as  corrected  by  the  act  of 
August  13,  1888,  without  such  leave. 
Glover  v.  Thayer,  101  Ga.  824. 

But  it  has  been  held  that  a  for- 
eign receiver  may  be  garnished. 
Wilson  V.  Glfford,  12  Ohio  C.  C.  597. 

A  garnishment  summons  served  on 
one  in  his  individual  capacity  does 
not  bind  any  property  or  money 
held  by  him  as  a  receiver.  Fleming 
V.  Gillespie,  7  Okla.  430. 

In  an  attachment  execution  issued 
after  a  judgment  has  been  obtained 
against  the  defendant,  a  national 
bank  or  its  receiver  may  be  sum- 
moned as  garnishee;  and  such  at- 
tachment is  not  prohibited  by  U.  S. 
Rev.  Stat.  §  5242,  providing  that  no 
judgment  or  execution  shall  issue 
against  such  bank  or  its  property 
before  final  judgment.  Conicay  v. 
Schall,  42  W.  N.  C.  328. 

Where  the  property  and  business 
of  a  corporation  are  in  the  hands  of 
a  receiver  he  is  the  person  to  serve 
in  garnishment  against  the  corpora- 


SUITS  AGAINST  THE  RECEIVER. 


§§  88,  89 


tion.     Phelan    v.    Oanebin,    5    Colo. 
14. 

Indebtedness  due  by  receivers  ap- 
pointed in  a  Federal  court  may  be 
garnished  in  a  state  court,  but  no 
executory  process  can  be  issued  by 
the  court  against  such  receivers. 
The  payment  can  only  be  made  on 
application  to  the  court  appointing 
the  receiver.  Invin  v.  McKechnie, 
58  Minn.  145,  26  L.  R.  A.  218. 

Injunction. 

The  receiver,  being  an  officer  of 
court,    may    be    restrained.     Lehigh 


Coal  d  Xav.  Co.  v.  Central  R.  Co. 
42  N.  J.  Eq.  591. 

The  court  will  enjoin  a  receiver 
from  exercising  the  fi-anchises  of  a 
corporation  granted  by  the  legisla- 
ture. Brooklyn  v.  Jourdan,  7  Abb. 
N.  C.  2;^. 

Receivers  of  a  railroad  company 
were  restrained  from  diverting 
freight  traffic  from  another  railway, 
in  view  of  a  similar  decision  in  an- 
other circuit  relating  to  the  same 
subject-matter.  Grand  Trunk  R. 
Co.  V.  Central  Yerrnont  R.  Co.  84 
Fed.  Rep.  GG. 


Page  194,  sec.  88. — Eeceiver's  defenses. 


It  is  no  defense  to  an  action 
against  receivers,  that  they  had  re- 
linquished control,  where  they  do 
not  show  that  their  accounts  have 


been  acted  on  and  that  a  decree  dis- 
charging them  has  been  entered. 
Fordyce  v.  Clancy,  2  Tex.  Civ.  App. 
24. 


Page  195,  sec.  89. — Character  of  judgment  against  receiver. 


A  personal  judgment  will  not  be 
rendered  against  a  receiver.  Marsh 
V.  Hiissey,  4  Bosw.  614. 

A  judgment  against  a  receiver  of 
a  railroad  company  for  damages  for 
breach  of  an  agreement  constituting 
the  consideration  for  a  portion  of  its 
right  of  way  may  direct  him  to  pay 
the  amount  thereof  out  of  any  funds 
in  his  hands,  and  provide  that,  if  it 
is  not  paid  and  the  court  appointing 
the  receiver  refuses  to  order  it  paid, 
the  receiver  having  money  subject 
to  the  payment  thereof,  an  order  of 
sale  shall  issue  thereon  as  in  other 
cases  of  the  foreclosure  of  vendors' 
liens.  Levy  v.  Tatum  (Tex.  Civ. 
App.)  43  S.  W.  941. 

The  court  rendering  a  judgment 
against  tlie  receiver  of  a  railroad 
company  for  damages  for  the  breach 
of  a  contract  of  the  company  to  main- 
tain a  station  at  a  certain  point  in 
consideration  of  land  for  its  right 
of  way  may  establish  the  same  as  a 
lien  upon  the  right  of  way  and  road- 
bed in  the  nature  of  a  vendor's  lien, 
where  the  receiver  has  taken  posses- 
sion of  the  line  and  is  operating  it. 
Ibid. 

Judgment  may  be  rendered  against 


a  receiver  until  he  is  finally  dis- 
charged. Houston  d  T.  C.  R.  Co. 
V.  Strycharski  (Tex.  Civ.  App.)  35 
S.  W.  851,  Affirmed  in  Part  and  Re- 
versed in  Part  in  37  S.  W.  415. 

A  judgment  in  a  state  court 
against  a  receiver  binds  only  such 
property  as  is  in  his  custody  in  the 
state  in  which  the  judgment  is  ren- 
dered. Reynolds  v.  Stockton,  140 
U.  S.  254,  35  L.  ed.  464. 

The  title  of  the  property  of  a  rail- 
road company,  not  being  in  the  re- 
ceiver, it  is  not  affected  by  judg- 
ment against  him.  Abbey  v.  Inter- 
national d  G.  N.  R.  Co.  5  Tex.  Civ. 
App.  261. 

Judgment  against  a  receiver  can- 
not be  carried  into  effect  except  as 
directed  by  the  court.     Ibid. 

Where  a  suit  is  defended  by  a  re- 
ceiver in  the  name  of  the  bank  over 
which  he  is  receiver  he  is  barred  by 
the  judgment  of  the  court  as  if  he 
had  defended  in  his  own  name. 
Smith  V.  United  States  Exp.  Co.  135 
111.  279;  Bennitt  v.  Wilminrjton 
Star  Min.  Co.  119  111.  9;  Chamber- 
lain v.  Preble,  11  .Mien,  370;  Craig 
v.  Ward,  36  Barb.  377. 

67 


§  109  RECEEVERSHIPS— SUPPLEMENT. 

Page  199,  sec.  109. — Liability  of  receiver,  generally. 


The  receiver  is  not  liable  where 
goods  are  sold,  under  the  order  of 
court,  at  auction  at  a  loss.  Esk- 
ridge  v.  Rushicorth,  3  Colo.  App. 
5G2. 

On  a  lease  where  there  is  no  adop- 
tion or  what  in  law  is  equivalent. 
Com.  V.  Franklin  Ins.  Co.  115  Mass. 
278. 

Or  for  services  after  delay 
amounting  to  laches.  Daniell  v. 
East  Boston  Ferry  Co.  (Mass.)  31 
N.  E.  711. 

Or  for  neglect,  in  a  court  of  chan- 
cery.    Keene  v.  Gaehle,  56  Md.  343. 

Or  for  a  claim  filed  after  distribu- 
tion. Gaehle  v.  Snowden,  56  Md. 
343. 

Or  where  he  has  exercised  ordi- 
nary care.  Hamm  v.  J.  Stone  & 
Sons  Live  Stock  Co.  13  Tex.  Civ. 
App.  414. 

Or  on  a  judgment  rendered  after 
his  discharge.  Fordyce  v.  Du  Bose, 
87  Tex.  78. 

Or  on  a  lease  after  his  refusal  to 
accept,  if  he  does  so  in  a  reasonable 
time.  Nelson  v.  Kalkhoff,  60  Minn. 
305. 

Or  for  money  deposited,  if  he  exer- 
cises ordinary  care.  Barton  v.  Ridge- 
icay,  92  Va.  163. 

Or  for  tax  against  stockholders. 
People  V.  Wall  Street  Bank,  39  Hun, 
525. 

Or  when  he  uses  his  best  judg- 
ment. Hynes  v.  McDermott,  14 
Daly,  104. 

Or  on  his  contract  as  receiver. 
Vanderlilt  v.  Central  R.  Co.  43  N. 
J.  Eq.  669. 

Nor  is  he  liable  on  the  uncom- 
pleted contracts  of  the  person  or  cor- 
poration over  whom  he  is  receiver. 
Casey  v.  Northern  P.  R.  Co.  15 
Wash.  450;  Central  Trust  Co.  v. 
East  Tennessee  Land  Co.  79  Fed. 
Rep.  19. 

A  receiver  of  a  corporation  is  not 
bound  to  assume  its  contracts,  exe- 
cute them  so  far  as  they  remain  un- 
executed, and  discharge  all  liabili- 
ties which  have  accrued  under  them, 
merely  because  such  company  ap- 
pears to  be  solvent.  Empire  Dis- 
tilling Co.  V.  McNulta,  46  U.  S.  App. 
68 


578,  77  Fed.  Rep.  700,  23  C.  C.  A. 
415. 

Or  to  immediately  pay  a  judg- 
ment. Lesser  v.  Lesser,  45  N.  Y. 
Supp.  211. 

Or  for  material  and  repairs  or- 
dered by  a  lessee.  Estabrook  v. 
Stevenson,  50  Neb.  378. 

Or  upon  the  guaranty  of  sales  of 
coal.  Daube  v.  Philadelphia  &  R. 
Coal  d  1.  Co.  46  U.  S.  App.  591,  77 
Fed.  Rep.  713,  23  C.  C.  A.  420. 

Or  for  interest  on  money  due  for 
supplies  sold,  which  the  purchaser 
should  pay.  Southern  R.  Co.  v. 
Carnegie  Steel  Co.  42  U.  S.  App. 
145,  76  Fed.  Rep.  492,  22  C.  C.  A. 
289. 

Or  for  injury  on  a  branch  road 
prior  to  appointment.  Dillon  v. 
Oregon  Short  Line  &  U.  N.  R.  Co. 
75  Fed.  Rep.  949. 

Or  for  a  settlement  of  a  trust 
fund  where  he  has  acted  in  good 
faith,  in  the  absence  of  fraud.  Neel 
V.  Carson,  18  Ky.  L.  Rep.  691. 

Or  on  a  contract  to  furnish  a  city 
with  light,  where  there  would  be  a 
loss.  General  Electric  Co.  v.  Whit- 
ney, 41  U.  S.  App.  165,  74  Fed.  Rep. 
664,  20  C.  C.  A.  674. 

Or  under  special  statutes  fixing 
the  liabilities  of  railroad  companies. 
Robinson  v.  Huidekoper,  98  Ga.  306. 

Or  for  personal  injury  growing 
out  of  the  negligence  of  a  coemployee, 
though  the  company  applied  for  a 
receiver.  Brown  v.  Comer,  97  Ga. 
801. 

Or  for  the  lease  of  land  by  a  rail- 
road company  where  an  order 
amounting  to  a  stipulation  has  been 
entered  into  with  the  lessor.  Thomas 
V.  Cincinnati,  N.  0.  &  T.  P.  R.  Co. 
11  Fed.  Rep.  667. 

Or  for  uncompleted  contracts. 
Vanderbilt  v.  Central  R.  Co.  43  N.  J. 
Eq.  669. 

And  he  is  not  subject  to  penalties. 
Bonner  v.  Franklin  Co-Operative 
Asso.  4  Tex.  Civ.  Rep.  166;  United 
States  V.  Harris,  78  Fed.  Rep.  290; 
United  States  v.  Harris,  57  U.  S. 
App.  259,  85  Fed.  Rep.  533,  29  C.  C. 
A.  327. 

Or    on   a  lease  by   reason   of   his 


LIABILITY  OF  RECEIVER. 


109 


possession  of  the  premises.  Farm- 
ers Loan  d  T.  Co.  v.  Northern  P. 
R.  Co.  58  Fed.  Rep.  257;  Central 
Trust  Co.  V.  Wabash,  St.  L.  d  P.  R. 
Co.  34  Fed.  Rep.  259. 

Or  for  goods  consigned  when  the 
funds  cannot  be  followed  into  any 
property  or  money  in  the  hands  of 
the  receiver.  Henika  v.  Heinemann^ 
90  Wis.  478. 

Or  for  costs.  St.  John  v.  Denison, 
9  How.  Pr.  343:  But  see  Cook  v. 
Sharman,  8  Ir.  Eq.  Rep.  515. 

Or  for  conversion  of  property 
taken  and  sold  under  orders  of  court. 
Tapscott  V.  Lyon,  103  Cal.  297. 

Nor  is  he  personally  liable,  when 
the  sale  is  by  joint  receivers  to  a  per- 
son with  whom  one  of  the  receivers 
had  an  agreement  to  become  a  part- 
ner and  afterwards  did  become  a 
partner,  in  the  absence  of  bad  faith, 
for  the  difference  between  the  actual 
value  and  the  price  for  which  it  was 
sold.  Wagner  v.  Sioifts  Iron  d  S. 
Works,  16  Ky.  L.  Rep.  273. 

Or  to  pay  the  rent  under  a  lease 
where  it  does  not  appear  that  there 
are  sufficient  funds  to  pay.  Empire 
DistilUnq  Co.  v.  McNulta,  46  U.  S, 
App.  578,  77  Fed.  Rep.  700,  23  C.  C. 
A.  415. 

Or  for  rent  for  full  term  of  prem- 
ises taken  possession  of  under  orders 
of  court.  De  Wolf  v.  Royal  Trust 
Co.  72  111.  App.  411,  Reversed  in  173 
111.  435. 

Nor  is  he  bound  to  adopt  the  con- 
tracts of  a  car  trust  by  reason  of 
possession  taken.  Central  Car 
Trust  Co.  V.  Harris,  55  U.  S.  App. 
452,  84  Fed.  Rep.  535,  28  C.  C.  A. 
488. 

A  receiver  is  not  liable  for  con- 
tempt in  violating  the  orders  of  an- 
other court.  Atwood  v.  State,  59 
Kan.  728. 

Or  for  loss  of  stock  on  the  range 
and  buildings  uninsured.  Hamm  v. 
J.  Stone  d  Sons  Live  Stock  Co.  13 
Tex.  Civ.  App.  414. 

Receivers  of  a  railroad  company 
are  not  liable  for  taxes  accruing 
during  a  time  in  which  such  compa- 
ny was  in  possession  of  and  enjoyed 
the  revenues  of  another  road  upon 
which  such  taxes  constituted  a  prior 
lien,  where  their  connection  with 
such  other  road  has  been  severed  by 


the  appointment  of  a  separate  re- 
ceiver in  an  entirely  distinct  suit, 
unless  they  have  assets  of  such  other 
road,  or  have  diverted  its  revenues 
to  the  improvement  or  betterment  of 
the  road  held  by  them,  or  to  the  pay- 
ment of  the  bonds  secured  thereon, 
as  their  liability  for  such  taxes  can 
only  be  as  an  obligation  carrying  a 
first  lien  upon  the  property  upon 
which  it  is  chargeable.  Comer  v. 
Polk  County,  52    U.    S.    App.    399, 

81  Fed.  Rep.  921,  27  C.  C.  A.  1. 
Nor   are   receivers   criminally  lia- 
ble under   the  Interstate  Conunerce 
Act.     United  States  v.  De  Coiirsey, 

82  Fed.  Rep.  302. 

A  chattel  mortgagee  who  permits 
the  mortgaged  property  to  go  into 
the  venture  of  a  continuance  of  the 
business  by  the  receiver  of  the  mort- 
gagor must  bear  the  loss,  where  the 
property  is  consumed  by  the  liabili- 
ties of  such  venture.  Sturivold  v. 
George  Vehr  Parlor  Frame  Co.  5 
Ohio  N.  P.  37. 

A  receiver  who  unlawfully  appro- 
priates money  which  comes  into  his 
hands  as  receiver,  or  fails  to  account 
for  and  pay  over  the  same  on  de- 
mand, is  not  within  Kan.  Comp. 
Laws  1889,  H  2220,  providing  that  if 
any  "agent"  shall  neglect  or  refuse 
to  deliver  to  his  "employer  or  em- 
I^loyers."  on  demand,  any  money 
Avhich  has  come  into  his  possession 
by  virtue  of  such  emplojTnent,  he 
shall  on  conviction  be  punished. 
State  V.  Hubbard,  58  Kan.  797,  39  L. 
R.  A.  800. 

A  receiver  is  not  liable  for  a  tort 
committed  by  the  company  before 
his  appointment.  Northern  P.  R. 
Co.  V.  Heflin,  48  U.  S.  App.  502,  83 
Fed.  Rep.  93,  27  C.  C.  A.  460. 

The  court  does  not  so  decide,  but 
thinks  the  receiver  should  not  be  lia- 
ble for  money  in  failing  bank,  any 
more  than  if  robbed  of  it.  Lady 
Shaftesbury's  Case,  Prec.  in  Ch.  558, 
2  Eq.  Cas.  Abr.  691. 

A  receiver  was  held  not  liable  to 
judgment  creditor  for  losses  on  his 
judgment  caused  by  expenses,  in  Sec- 
ond Ward  Sav.  Bank  v.  Henes,  100 
Wis.  480. 

The  expenses  of  a  receivership 
growing  out  of  a  contest  over  a  fund 
may   be   avoided   by   depositing   the 

69 


§  110 


RECEIVERSHIPS— SUPPLEMENT. 


fund  in  court.  Continental  Nat. 
Bank  v.  Myerle,  24  App.  Div.  154. 

Expenses  of  an  expert  aceountant 
will  be  ordered  i)aid  by  the  receiver, 
where  a  large  sum  was  realized  to 
the  receivership  fund  thereby.  /S'ands 
V.  E.  8.  Greeley  &  Co.  83  Fed  Rep. 
772. 

The  income  of  funds  in  the  hands 
of  a  receiver  is  not  liable  for  fees  of 
a  special  commissioner  for  selling 
property  under  a  foreclosure,  in  a 
contest  between  mortgagees  and  gen- 
eral creditors.  Randolph  v.  Farm- 
er's Loan  d  T.  Co.  91  Tex.  605,  Re- 
versing 41  S.  W.  113. 

The  term  "judicial  costs,"  to  which 
a  claim  for  taxes  upon  property  in 
the  custody  of  a  receiver  is  alone 
inferior,  does  not  include  the  cost  of 
keeping  and  taking  care  of  unpro- 
ductive property  for  over  three 
years  by  the  receiver, — especially 
where  it  does  not  appear  that  there 
is  not  sufficient  property  to  pay  both. 
Ledoux  V.  La  Bee,  83  Fed.  Rep.  761. 

Where  the  receiver  acts  under  the 
authority  and  orders  of  court  of 
competent  jurisdiction  he  is  not 
personally  liable.  Remington  Paper 
Co.  v.  Watson,  49  La.  Ann.  1296. 

The  order  of  court  does  not  al- 
ways   relieve    the    receiver    as    such 


from  liability.  Levy  v.  Tatum 
(Tex.  Civ.  App.)   43  S.  W.  941. 

The  liability  of  the  receiver  of  an 
insolvent  national  bank  cannot  be 
adjudicated  in  an  action  brought  to 
revive  a  dormant  judgment  against 
the  bank,  to  which  he  is  made  a  par- 
ty. City  IV at.  Bank  v.  Svnnk  (Tex. 
Civ.  App.)  49  S.  W.  130. 

It  is  error  to  submit  the  question 
as  to  a  receiver's  liability  for  rents, 
upon  a  jury  trial  of  the  receiver's  ex- 
ceptions to  a  master's  report  upon 
an  accounting  by  him,  where  the 
master  found  that  he  was  not  liable 
for  rents,  and  neither  party  excepted 
to  the  report  in  that  respect.  Ilamm 
V.  J.  Stone  (6  Sons  Live  Stock  Co.  13 
Tex.  Civ.  App.  414. 

For  acts  within  the  line  of  his 
duty  the  receiver  is  only  liable  offi- 
cially, and  the  judgment  is  against 
him  oflicially  and  enforceable  out  of 
the  receivership  property.  Schmidt 
V.  Gayner,  59  Minn.  303. 

A  receiver  of  a  corporation  is  not 
relieved  from  liability,  either  person- 
ally or  upon  his  official  bond,  because 
of  the  disqualification  for  interest  of 
the  judge  who  appointed  him.  Unit- 
ed States  Nat.  Bank  v.  National 
Bank,  6  Okla.  163. 


Page  205,  sec.  110. — Must  obey  orders  of  court. 


A  receiver  will  be  compelled  to 
carry  out  a  judgment  directing  the 
reconveyance  of  land  to  a  specified 
party  provided  for  therein,  notwith- 
stanaing  the  commencement  of  an 
action  by  other  parties  in  respect  to 
such  property,  in  the  absence  of  any 
proceedings  to  enjoin  the  carrying 
out  of  the  same.  Pierce  v.  Lees,  17 
App.  Div.  346. 

The  receiA^er  of  a  leasehold  must 
pay  from  subrents  the  head  rent, 
and  may  do  so  without  order  of 
court.  Balfe  v.  Blake,  1  Ir.  Ch.  Rep. 
365. 

A  railroad  company  which  be- 
comes the  agent  and  representative 
of  a  receiver  to  operate  a  line  of  rail- 
road, with  knowledge  of  the  interests 
of  a  car  trust  in  the  rolling  stock 
upon  such  line,  agreeing  to  pay  "all 
70 


the  expenses  of  said  operations," 
and  a  receiver  subsequently  ap- 
pointed of  such  company,  are  liable 
for  a  reasonable  compensation  for 
the  use  of  the  cars,  although  not  lia- 
ble for  unpaid  instalments  for  the 
purchase  price  of  the  cars.  Ce7i- 
tral  Car  Trust  Co.  v.  Harris,  55  U. 
S.  App.  452,  84  Fed.  Rep.  535,  28  C. 
C.  A.  488. 

The  receiver,  being  an  officer  of 
court,  may  be  required  to  hand  over 
property  in  his  possession.  Smith 
V.  Dayton,  94  Iowa,  102. 

Lack  of  funds  in  the  hands  of  a  re- 
ceiver of  a  railroad  company  was 
held  to  be  no  defense  to  a  motion  to 
compel  him  to  perform  a  judgment 
requiring  the  railroad  company  to 
construct  a  crossing  over  plaintiff's 
premises,  where  a  copy  of  the  judg- 


LIABILITY  OF  RECEIVER. 


§  HI 


merit  had  been  served  upon  him. 
An  order  directing  a  compliance  or 
surrender  of  tlie  premises  to  plain- 
tiff was  proper.  Peckham  v.  Dutch- 
ess County  R.  Co.  145  N.  Y.  385. 

A  receiver  in  supplementary  pro- 
ceedings is  under  the  control  of  the 
court  rendering  the  judgment, 
though  he  was  appointed  by  the  coun- 
ty judge.  Pool  V.  Safford,  14  Hun, 
369. 

A  corporation  cannot  maintain  an 
action  at  law  upon  a  contract  made 
with  it  guaranteeing  payment  for 
coal  purchased  from  it,  for  the 
amount  of  coal  sold  by  receivers  of 
its  property,  if  sales  made  by  the 
receivers  are  within  the  guaranty, 
without  an  assignment  of  the  con- 


tracts of  sale  by  the  receivers,  or  dev- 
olution of  their  title  by  an  order 
of  the  court  discharging  them  and  re- 
storing the  property  to  the  company. 
Daube  v.  Philadelphia  d  R.  Coal  &  I. 
Co.  40  U.  S.  App.  591,  77  Fed.  Rep. 
713,  23  C.  C.  A.  420. 

In  the  case  of  a  receivership  of  a 
national  bank  the  filing  of  a  petition 
by  him  in  a  Federal  court  does  not 
operate  to  make  him  an  officer  of 
that  court,  or  to  place  the  assets  of 
the  bank  within  the  control  of  the 
court  in  the  sense  in  which  control 
is  acquired  where  a  receiver  is  ap- 
pointed by  the  court.  Ex  parte 
Chetwood,  IG5  U.  S.  443,  41  L.  ed. 
782. 


Page  206,  sec.  111. — Liability  for  use  of  property,  etc. 


A  receiver  is  liable  for  a  conver- 
sion of  property  in  the  possession  of 
the  firm  over  whose  property  he  was 
appointed.  Smith  v.  Hartog,  23 
Misc.  353. 

Where  a  receiver  operating  an  en- 
tire system  of  railroad  converts  the 
property  of  a  third  person,  and  uses 
it  to  improve  a  division  of  the  rail- 
road, the  fact  that  such  division  is 
subsequently  placed  in  the  hands 
of  another  receiver  will  not  relieve 
the  receiver  who  made  the  conver- 
sion, or  the  road  responsible  for  his 
acts,  from  liability  for  the  conver- 
sion. Central  of  Ga.  R.  Co.  v.  Hitch- 
cock, 91  Fed.  Rep.  209,  33  C.  C.  A. 
453. 

The  receiver  is  liable  for  a  trust 
fund  in  the  hands  of  the  party  for 
whom  he  is  receiver.  Reynolds  v. 
JEtna  L.  Ins.  Co.  28  App.  Div.  591. 

When  a  receiver  makes  an  unau- 
thorized disposition  of  the  trust  fund 
confided  to  him,  to  a  person  cogniz- 
ant of  the  breach  of  it,  who  invests 
the  money,  such  person  becomes  a 
trustee  in  invitum  of  such  fund. 
(roldthicaite  v.  Ellison,  99  Ala.  497. 

Collections  paid  to  the  receiver  of 
a  bank  may  be  a  trust  fund.  First 
Nat.  Bank  v.  Armstrong,  42  Fed. 
Rep.   193. 

He  is  liable  for  waste.  Turner  v. 
Peoria  d  H.  R.  Co.  95  111.  134,  35 
Am.  Rep.  144. 


A  receiver  cannot  be  compelled  to 
pay  over  money  to  an  attaching 
creditor  under  N.  Y''.  Laws  1883, 
chap.  378,  §  8,  in  a  district  other 
than  that  in  Avhich  he  was  appointed 
and  without  notice  to  the  attorney 
general.  GilUg  v.  George  C.  Tread- 
well  Co.  151  N.  Y.  552,  Reversing 
9  App.  Div.  624. 

Money  paid  to  a  receiver  can  only 
be  refunded  by  order  of  court.  Gee- 
ty  v.  Campbell,  2  Robt.  664. 

A  receiver  of  a  national  bank  will 
be  directed  to  pay  dividends  accumu- 
lated upon  stock  attached,  so  far  as 
possible,  in  suits  in  a  state  court, 
upon  a  joint  acquittance  and  indem- 
nity bond  tendered  by  a  person  hav- 
ing color  of  title  and  a  defendant  in 
the  attachment  who  joins  in  the  peti- 
tion for  payment  to  such  person. 
Soivles  V.  National  Union  Bank,  82 
Fed.  Rep.  696. 

A  receiver  is  liable  for  money 
paid  as  a  dividend  to  a  person  not  en- 
titled to  it  when  ordinaiy  care  would 
have  prevented  it.  Todd  v.  Meding, 
56  N.  J.  Eq.  83. 

Money  {)aid  by  a  station  agent  for 
overcharges  on  freight  should  be  re- 
turned to  him  from  the  money  in 
the  hands  of  the  receiver  of  the  rail- 
road. Grand  Trunk  R.  Co.  v.  Cen- 
tral Vermont  R.  Co.  88  Fetl.  Rep. 
636. 

And  so  when  he  pays  money  witli- 

71 


§  113 


RECEIVERSHIPS— SUPPLEMENT. 


out  order  of  court  to  a  person  not 
entitled  to  priority.  Re  Osceola 
Milling  Co.  Hi  Mo.  App.  23. 

A  receiver  of  an  infant's  estate, 
required  to  invest  it  and  report  an- 
nually, was  held  liable  for  the  loss 
of  money  deposited  in  another  state, 
as  receiver,  on  which  interest  was 
paid,  where  no  report  to  the  court 


was  made,  and  the  bank  failed. 
State,  Collins,  v.  Gooch,  97  N.  C.  186. 

Money  wrongfully  paid  to  a  bank 
over  which  the  receiver  is  appointed 
must  be  returned  by  him.  People  v. 
Madison  Square  Bank,  75  Hun,  114. 

And  so,  where  it  is  wrongfully 
paid  to  the  receiver.  Barker  v. 
Clark,  12  Abb.  Pr.  X.  S.  100. 


Page  208,  sec.  113. — Liability  for  personal  injury. 


The  receiver  of  a  short  line  of  road 
is  not  liable  for  injuries  by  a  receiver 
of  the  whole  line,  including  the  short 
line,  when  the  operation  is  for  the 
benefit  of  creditors  of  the  whole 
system.  Jones  v.  Schlapback,  81 
Fed.  Rep.  274. 

An  action  for  damages  for  bodily 
injuries  sustained  through  the  negli- 
gence of  a  railroad  company  within 
the  year  preceding  the  appointment 
of  a  receiver  of  the  company,  and  an 
order  directing  him  to  pay  all  lia- 
bilities for  such  injuries,  and  giving 
leave  generally  to  all  persons  to 
bring  suit  against  the  receiver  in 
other  courts  of  competent  jurisdic- 
tion without  previous  permission  of 
the  court  appointing  him, — may  be 
maintained  against  a  receiver  in  a 
state  court,  without  obtaining  spe- 
cial leave  therefor.  Walker  v. 
Green   (Kan.  App.)   55  Pac.  281. 

Nor  are  the  net  earnings  of  the 
receiver  liable  for  damages  of  the 
company.  DextervUle  Mfg.  &  B.  Co. 
V.  Case,  4  Fed.  Rep.  873. 

A  receiver  of  a  railroad  is  a 
"fellow  servant"  under  IMinn.  Gen. 
Stat.  1894,  §  2701,  and  is  liable  for 
an  injury  to  an  employee.  Mikkel- 
son  V.  Truesdale,  03  Minn.  137. 

An  action  against  a  receiver  of  a 
railroad  corporation  is  within  the 
provisions  of  Ohio  act  April  2,  1890, 
making  railroad  companies  liable  in 
certain  cases  for  the  negligence  of 
fellow  servants  or  employees  who 
have  power  or  authority  to  direct  or 
control  the  one  injured.  Pevree  v. 
Van  Dusen,  47  U.  S.  App.  339,  78 
Fed.  Rep.  693,  24  C.  C.  A.  280. 

The  words  "any  railroad"  in  Tex. 
Rev.  Stat.  1859,  art.  3017,  giving  a 
right  of  action  when  the  death  of  any 
person  is  caused  by  the  negligence  or 
72 


carelessness  of  a  receiver  in  charge 
or  control  of  any  railroad,  his  serv- 
ants, or  agents, — include  street  rail- 
ways. Bammel  v.  Kirby  (Tex.  Civ. 
App.)   47  S.  W.  392. 

The  exception  made  to  the  com- 
mon-law rule  precluding  recovery 
from  a  master  for  injuries  sustained 
through  the  negligence  of  a  coem- 
ployee,  by  Ga.  Civ.  Code,  §  2323,  in 
case  of  injuries,  did  not,  prior  to  the 
2)assage  of  Ga.  act  December  16, 
1895,  extend  to  an  employee  of  a  re- 
ceiver of  a  railroad  company;  and 
a  recovery  cannot  be  had  for  an  in- 
jury sustained  by  such  employee  be- 
fore the  passage  of  that  act.  Barry 
V.  MeGhee,  100  Ga.  759. 

An  action  for  personal  injuries  be- 
fore the  appointment  of  a  receiver 
cannot  be  maintained  against  him. 
It  must  be  brought  against  the  cor- 
poration. Finance  Co.  v.  Charles- 
ton, C.  &  C.  R.  Co.  46  Fed.  Rep.  508. 

Personal  injuries  inflicted  through 
the  negligence  of  a  receiver  are  pay- 
able from  the  current  receipts.  Tex- 
as P.  R.  Co.  V.  Johnson,  76  Tex.  421 ; 
Ryan  v.  Hayes,  62  Tex.  42:  Barton 
V.  Barbour,  104  U.  S.  130.  26  L.  ed. 
675;  Kain  v.  Smith,  80  N.  Y.  470; 
Hale  V.  Frost,  99  U.  S.  389,  25  L.  ed. 
419. 

In  a  suit  against  receivers  for 
personal  injury,  where  no  personal 
judgment  is  asked,  it  is  not  impor- 
tant whether  the  defect  causing  the 
injury  existed  when  they  were  ap- 
pointed, or  not,  or  whether  they  had 
sufficient  time  to  repair  it.  Bonner 
V.  Mayfield,  82  Tex.  234. 

Joint  liability  of  corporation  and  re- 
ceiver. 

The  rule  in  regard  to  the  joint 
liability  of  the  receiver  and  the  cor- 


LIABILITY  OF  RECEIVER. 


SS  114,  118 


poration  over  which  he  is  appointed 
does  not  apply  to  a  corporation 
where  the  portion  of  the  road  on 
which  the  injury  happened  has  been 
taken  out  of  the  hands  of  the  cor- 
poration and  put  in  the  hands  of  the 
receiver.  Lock  v.  Franklin  d  E. 
Turnpk.  Co.  100  Tenn.  163. 

One  having  a  just  cause  of  action 
for  injuries  caused  by  the  manage- 
ment of  a  locomotive  engine  may 
bring  his  action  against  both  the 
railroad  company  and  receivers  ap- 


pointed to  take  charge  of  its  prop- 
erty, in  order  to  establish  his  de- 
mand in  one  action  against  which- 
ever is  legally  liable.  Union  P.  R. 
Co.  V.  Smith,  .59  Kan.  80. 

When  a  railroad  is  in  the  hands  of 
and  being  operated  by  a  receiver, 
neither  the  company  nor  the  receiver 
is  liable  for  an  injury  to  one  em- 
ployee by  another  employee.  Young- 
blood  V.  Comer,  97  Ga.  152 ;  Hender- 
son V.  Walker,  55  Ga.  481 :  Thurman 
\.  Cherokee  R.  Co.  50  Ga.  376. 


Page  211,  sec.  114. — Liability  for  negligence. 


A  receiver  is  liable  for  negligence 
in  the  operation  of  a  railroad  to  the 
same  extent  as  the  corporation.  Con- 
tinental Trust  Co.  V.  Toledo,  8t.  L. 
d  K.  C.  R.  Co.  89  Fed.  Rep.  637; 
Rouse  V.  Harry,  55  Kan.  589. 

The  provision  of  Mass.  Pub.  Stat. 
chap.  112,  §  214,  that  every  railroad 
corporation  shall  be  responsible  in 
damages  to  one  whose  property  is  in- 
jured by  fire  communicated  by  its 
locomotive  engines,  is  applicable  to 
receivers  and  authorizes  an  action 
against  them.  Wall  v.  Piatt,  169 
Mass.  398. 

And  a  Federal  receiver  is  required 
to  operate  and  manage  according  to 
the  requirement  of  the  valid  laws  of 
the  state.  Peirce  v.  Van  Dusen,  47 
U.  S.  App.  339,  78  Fed.  Rep.  693,  24 
C.  C.  A.  280. 


Although  the  liability  of  a  receiver 
of  a  railroad  is  official,  and  not  per- 
sonal, and  a  judgment  against  him 
is  payable  out  of  the  trust  property 
and  funds  brought  within  the  cus- 
tody of  the  court,  a  mere  allegation 
by,  such  receiver  that  the  property 
and  funds  have  passed  out  of  his  pos- 
session and  beyond  his  control  will 
not  constitute  a  good  defense  in  an 
action  against  him  for  personal  in- 
juries alleged  to  have  been  negligent- 
ly inflicted,  where  it  does  not  appear 
that  the  receivership  has  terminated. 
Erb  V.  Popritz,  59  Kan.  264. 

Generally  a  receiver  is  responsible 
for  neglect  only,  but  if  he  by  his  ap- 
pointment assumes  the  duties  of  a 
guardian  his  liability  will  be  meas- 
ured by  that  of  a  guardian.  State, 
Collins,  V.  Gooch,  97  N.  C.  186. 


Page  217,  sec.  118. — Liability  for  supplies,  labor,  etc. 


It  is  the  duty  of  a  receiver  to  pay 
wages  from  the  first  money  in  his 
hands,  under  N.  Y.  Laws  of  1885, 
chap.  370.  Brown  v.  A.  B.  C.  Fence 
Co.  52  Hun,  151. 

The  receiver  by  his  contracts  may 
make  himself  personally  liable. 
Walsh  V.  Raymond,  58  Conn.  251. 

A  receiver  who,  without  an  order 
of  court  employs  a  person  to  manage 
a  hotel  owned  by  the  company  over 
whose  property  he  is  receiver,  and 
afterwards  leases  it  to  the  manager 
without  notice  to  a  person  furnish- 


ing the  hotel  with  supplies,  becomes 
personally  liable.  Saylcs  v.  Jour- 
don,  19  N.  Y.  S.  R.  349. 

A  receiver  of  a  railroad  company 
is  liable,  not  only  for  coal  received 
after  his  appointment  from  unloaded 
cars,  but  for  coal  which  was  in  the 
bins  at  the  date  of  his  appointment, 
and  which  he  took  possession  of 
and  used  in  the  operation  of  the  road. 
Virginia  d  A.  Coal  Co.  v.  Central  R. 
d  Bkg.  Co.  30  U.  S.  App.  203 ;  Clark 
V.  Central  R.  d  Bkg.  Co.  00  Fed.  Rep. 
803,  14  C.  C.  A.  112. 

78 


§§  119-124  RECEIVERSHIPS— SUPPLEMENT. 

Page  218,  sec.  119. — Liability  for  money  deposited  in  bank. 

A  receiver  is  liable  for  money  de-       Ficener  v.  Bott,  20  Ky.  L.  Rep.  632. 
posited  ill  a  bank  without  authority. 

Page  219,  sec.  120. — For  costs  and  expenses. 


A  receiver  may  be  allowed  inter- 
est on  moneys  advanced.  lie  Bush- 
ell,  L.  R.  23  Ch.  Div.  75. 

A  receiver  is  not  personally  liable 
for  expenses  in  unreasonably  de- 
fending' an  action,  when  no  notice 
was  {jiven  that  an  application  for 
such  jjurpose  would  bo  made.  First 
Nat.  Bunk  v.  Washburn,  20  App. 
Div.  518. 

His  liability  for  costs  is  the  same 


as  his  principal's.  Columbia  Ins.  Co. 
V.  Stevens,  37  N.  Y.  530. 

A  receiver  is  chargeable  with  costs 
personally  for  improperly  and  in  bad 
faith  contesting  a  claim.  Bourdon 
V.  Martin,  74  Hun,  246. 

Costs  may  be  awarded  against  a 
receiver  personally  where  he  acts 
carelessly  and  without  permission  of 
the  court.  Re  Castle,  2  N.  Y.  S.  R. 
362. 


Page  220,  sec.  121. — For  rents. 


The  receiver  of  a  national  bank  ap- 
pointed by  the  comptroller  of  the 
currency  is  not  responsible  to  the 
owner  of  real  estate  for  rents  re- 
ceived by  him  and  paid  into  the 
United  States  Treasury  under  U.  S. 
Rev.  Stat.  §  5234.  HUz  v.  Jenks, 
123  U.  S.  297,  31  L.  ed.  156. 

Defendant  can  collect  rents  of  a 
receiver  on  giving  security  to  him. 
Garr  v.  Hill,  5  N.  J.  Eq.  639. 


A  receiver  is  chargeable  with  rents 
for  such  time  as  he  occupies  the 
premises  demised.  Frank  v.  New 
York,  L.  E.  d  W.  R.  Co.  122  N.  Y. 
197. 

A  landlord  is  entitled  to  an  order 
on  a  receiver  for  rent  up  to  the  time 
of  the  declaration  of  insolvency,  not 
exceeding  one  year.  Wood  v.  Mc- 
Cardell,  F.  &  W.  Carriage  Co.  49  N. 
J.  Eq.  433. 


Page  224,  sec.  124. — Liability  on  leases. 


Continued  possession  of  the  prem- 
ises by  the  receiver,  under  the  order 
of  court,  is  sufficient  notice  to  the 
landlord  of  the  receiver's  intention 
to  carry  out  the  lease.  Link  Belt 
Machinery  Co.  v.  Hughes,  174  111. 
155.  Affirming  62  111.  App.  318. 

Retaining  possession  of  the  prem- 
ises for  more  than  three  months 
makes  the  receiver  liable  for  the  re- 
mainder of  the  term.  De  Wolf  v. 
Royal  Trust  Co.  173  ill.  435,  Revers- 
ing 72  111.  App.  411. 

Continued  occupation  of  the  prem- 
ises without  any  act  of  disaffirmance, 
or  notice  to  the  lessor  that  he  would 
not  be  bound  by  the  lease,  binds  the 
receiver  to  pay  the  stipulated  rent. 
Link  Belt  Machinery  Co.  v.  Hughes, 
174  111.  155,  Afl'g  62  111.  App.  318. 

Express  words  of  adoption  are 
not  required.  Central  Trust  Co.  v. 
Continental  Trust  Co.  58  U.  S.  App. 
604,  86  Fed.  517,  30  C.  C.  A.  23-5. 

Adoption  may  be  implied  from  the 
74 


receiver's  unequivocal  acts  inconsist- 
ent with  the  landlord's  right  of  re- 
entry, and  indicating  an  intention  to 
adopt  the  lease  and  conform  to  its 
condition.  Spencer  v.  World's  Col- 
umbian Exposition,  163  111.  117. 

Taking  possession  with  full  au- 
thority, and  using  leased  property 
with  knowledge  of  the  lease  and  its 
burdens,  binds  the  receiver  as  as- 
signee of  the  lease.  Easton  v.  Hous- 
ton <£•  T.  C.  R.  Co.  38  Fed.  Rep.  784. 

Receivers  are  liable  for  the  rentals 
of  branch  roads  operated  as  an  en- 
tire system.  Central  R.  &  Bkg.  Co. 
v.  Farmers'  Loan  d  T.  Co.  79  Fed. 
Rep.  158. 

The  payment  of  rent  by  a  receiver 
on  premises  formerly  occupied  by  the 
company  for  which  he  is  receiver,  up 
to  and  including  a  fixed  date,  fixes 
his  liability  by  acceptance  for  rents 
^subsequent.  Moore  v.  Higgins,  2 
Silv.  Sup.  Ct.  298. 

Receivers  authorized  by  the  court 


LIABILITY  OF  RECEIVER. 


§  125 


to  continue  a  contract  for  rental  and 
repairs  are  not  released  from  liabil- 
ity wiihout  notice  to  the  lessor  by 
ceasing  to  use  the  cars  operated  un- 
der the  lease.  Mercantile  Trust  d 
Deposit  Co.  V.  Southern  Iron  Car 
Line  Co.  .113  Ala.  543. 

If  the  receiver  becomes  liable  for 
the  rent  according  to  the  terms  of 
the  lease,  the  rerenting  of  the  prem- 
ises after  he  vacates  does  not  relieve 
him  from  liability  for  the  dimin- 
ished amount  of  rent,  on  the  ground 
that  it  is  contingent.  People  v. 
Haint  yichols  Bank,  151  N.  Y.  592. 

A  receiver  who  occupies  the  leased 
premises  during  the  remaining  por- 
tion of  the  term  must  pay  the  stip- 
ulated rent.  Spencer  v.  World's 
Columbian  Exposition,  1G3  111.  117; 
Morrison  v.  Blackall,  68  111.  App. 
504. 

A  reference  to  ascertain  the  rea- 
sonable rental  is  not  necessary  where 
the  receiver   has  adopted  the   lease. 


Spencer  v.  World's  Columbian  Ex- 
position, 163  111.  117. 

A  receiver  has  a  reasonable  time 
to  determine  Avhether  he  will  adopt 
a  lease;  but  where  the  lessor  de- 
mands immediate  surrender  or  adop- 
tion and  several  months  elapse  be- 
fore determination,  the  receiver  must 
pay  full  rental  while  occupying. 
Farmers'  Loan  <&  T.  Co.  v.  Northern 
P.  R.  Co.  58  Fed.  Rep.  257. 

A  receiver  of  a  railroad  is  liable 
for  the  reasonable  rental  value  of 
the  use  and  enjoyment  of  terminal 
facilities  supplied  by  another  com- 
pany and  indispensable  to  the  suc- 
cessful operation  and  management  of 
the  road,  enhancing  the  income  and 
value  of  the  property  in  the  receiv- 
er's hands,  although  not  necessarily 
at  the  rate  fixed  by  the  contract  by 
the  railroad  company.  Savannah,  F. 
cC-  IF.  It.  Co.  V.  Jacksonville,  T.  &  K. 
W.  R.  Co.  52  U.  S.  App.  51,  79  Fed, 
Rep.  35,  24  C.  C.  A.  437. 


Page  224,  sec.  125. — Liability  on  contracts  other  than  leases. 


The  receiver  is  not  permitted  to 
repudiate  the  existing  contracts  of 
the  corporation  over  which  he  is  ap- 
pointed. Worthington  v.  Oak  & 
Highland  Park  Improv.  Co.  100 
Iowa.  39. 

And  he  is  liable  for  damages  grow- 
ing out  of  his  refusal  to  complete 
contracts.  Moore  v.  Potter,  155  N. 
Y.  481,  Reversing  87  Hun,  334. 

If  he  adopts  the  contract  and  re- 
ceives the  benefit,  he  must  pay  the 
contract  price.  Spencer  v.  World's 
Columbian  Exposition,  163  111.  117. 


But  he  has  a  right,  subject  to  the 
order  of  the  court,  to  determine 
whether  he  will  perform  an  execu- 
tory contract,  and  has  a  reasonable 
time  in  which  to  determine.     Ibid. 

He  must  perform  his  own  con- 
tracts. Wahash,  St.  L.  d  P.  R.  Co. 
v.  Central  Trust  Co.  22  Fed  Rep. 
269. 

If  the  receiver  rescinds  a  sale,  he 
must  pay  the  purchaser  reasonable 
counsel  fees.  Drake  v.  Ooodridqe,  6 
Blatchf.  531. 


Liability  in  other  cases. 


A  receiver  of  a  corporation,  in  the 
absence  of  any  sulticient  explanation 
of  the  circumstances,  is  properly  sur- 
charged with  the  difTcrence  between 
the  appraised  value  of  goods  and  the 
amount  for  which  they  were  sold, 
where  he  had  a  prospective  interest 
in  the  firm  which  purchased  the 
same.  French  v.  Pittsburgh  Vehicle 
&  Harness  Co.  184  Pa.  161. 

If  a  receiver  is  derelict  in  paying 


out  money  when  he  ought,  he  is  li- 
able for  interest.  Johnson  v.  Moon, 
82  Ga.  247. 

And  so  where  he  refuses  to  pay  a 
lawful  claim.  People  v.  E.  Reming- 
ton <£•  Sons,  59  Hun,  307. 

A  receiver  is  liable  for  his  tortious 
acts.  Gutsch  v.  Mcllhargey,  69 
Mich.  377. 

A  receiver  may  be  liable  as  such 
for  acts  of  his  attorney  and  agents, 


§  125 


RECEIVERSHIPS— SUPPLEMENT. 


payable  from  fund  in  court,  but  not 
personally.  Morris  v.  Hiler,  57  How. 
Pr.  322. 

Where  a  A-alid  statute  or  ordi- 
nance requires  a  corporation  to  do 
a  particular  thing,  its  receiver  is  al- 
so liable,  as  in  the  case  of  building 
fences  along  a  railroad.  Ohio  tG  M. 
R.  Co.  V.  Russell,  115  111.  52. 

Or  the  construction  of  a  railroad 
crossing.  Fort  Dodge  v.  Minneapo- 
lis c6  St.  L.  R.  Co.  87  Iowa,  380. 

The  receiver  in  a  mortgage  fore- 
closure is  liable  only  for  the  net  pro- 
ceeds of  crops  harvested  by  him. 
Locke  V.  Klunker,  123  Cal.  231. 

A  public  nuisance  erected  by  a  re- 
ceiver may  be  removed,  such  as  a 
fence  in  the  highway,  but  not  by  in- 
junction. Fcltun  V.  Ackerman,  22 
U.  S.  App.  154,  01  Fed.  Rep.  225,  9 
C.  C.  A.  457. 

He  is  liable  for  taxes  assessed 
against  an  insolvent  bank  for  which 
he  is  receiver.  Hamacker  v.  Com- 
mercial Bank,  95  Wis.  359. 

It  is  the  duty  of  the  judge  by 
whom  the  receiver  of  an  insolvent 
corporation  was  appointed,  upon  a 
proper  application  of  the  tax  col- 
lector, to  order  the  receiver  to  sell 
enough  of  the  property  to  raise  the 
money  with  which  to  pay  overdue 
taxes,  where  the  corporation  is  al- 
ready two  years  in  default  in  the 
payment  of  the  state  and  county 
taxes,  and  the  taxes  for  a  third  year 
will  soon  become  due.  Dysart  v. 
Brown,  100  Ga.  1. 

That  all  the  income  derived  by  a 
receiver  from  carrying  on  the  busi- 
ness of  a  corporation  is  requisite  to 
the  operation  of  such  business  is  no 
legal  excuse  for  his  failure  to  pay 
state  and  county  taxes  for  which  the 
corporation  is  two  years  in  default. 
Ibid. 

A  receiver  of  an  assessment  insur- 
ance company,  who  petitions  the 
court  for  leave  to  pay  death  claim- 
ants, and  carefully  avoids  giving  to 


persistent  members  notice  of  his  ap- 
plication, or  an  opportunity  to  be 
heard  thereon,  will  not  be  protected 
as  to  jjayiiiciit  to  such  death  claim- 
ants, made  in  pursuance  of  an  order 
granted  upon  such  application.  Peo- 
ple V.  Fainilij  Fund  ISoc.  31  App.  Div. 
IGG. 

The  receiver  of  a  mutual  insur- 
ance company  cannot  allow  losses 
occurring  after  the  entry  of  the  de- 
cree of  forfeiture  of  the  charter.  In- 
surance Comrs.  v.  Commercial  Mut. 
Ins.  Co.  20  R.  I.  7. 

A  receiver  of  a  mutual  insurance 
company  may  recognize  claims  tiled 
with  the  company  in  the  same  man- 
ner as  is  required  by  the  decree, 
though  they  have  never  been  pre- 
sented to  him  according  to  the  de- 
cree, if  he  is  satisfied  that  they  are 
just.     Ihid. 

The  receivers  of  the  property  of 
the  Union  Pacific  Railroad  Conl- 
pany,  who  are  also  appointed  receiv- 
ers of  the  property  of  the  constitu- 
ent corpoiation  forming  with  it  the 
Union  Pacific  system,  took  the  prop- 
erty of  each  corporation  charged 
with  a  trust  for  tne  benefit  of  its 
own  creditors  and  stocknolders,  and 
could  not  divert  the  income  or  prop- 
erty of  the  Union  Pacific  Railroad 
Company  to  pay  a  deficit  incurred 
by  the  operation  of  a  constituent 
railroad.  Ames  v.  Union  P.  R.  Co. 
74  Fed.  Rep.  335. 

In  determining  whether  there  has 
been  a  diversion  of  current  income 
by  a  railroad  company  to  the  pay- 
ment of  interest  on  a  second  mort- 
gage debt,  or  in  present  improvement 
on  the  mortgaged  property,  income 
applied  to  payment  on  senior  mort- 
gages is  properly  excluded  from  con- 
sideration. Belknap  v.  Central 
Trust  Co.  47  U.  S.  App.  663,  suh 
nom.  Central  Trust  Co.  v.  East  Ten- 
nessee, V.  d  G.  R.  Co.  80  Fed.  Rep. 
624,  26  C.  C.  A.  30. 


Liability  of  parties  other  than  receiver. 


Where  a  receiver  is  discharged 
and  the  property  turned  back  by  a 
consent  decree  subject  to  all  claims 
and  liabilities,  the  company  is  liable 
76 


for  all  injuries  growing  out  of  neg- 
ligence. Missouri,  K.  &  T.  R.  Co. 
V.  Chilton,  7  Tex.  Civ.  App.  183; 
Texas  &  P.  R.  Co.  v.  Bloom,  23  U.  S. 


LIABILITY  OF  RECEIVER. 


§125 


App.  143,  60  Fed.  Rep.  979,  9  C.  C. 
A.  300. 

Where  a  railroad  is  run  on  the 
joint  account  of  a  receiver  of  part 
and  lessees  of  part,  it  is  liable  for 
injury  to  a  passenger,  committed  by 
a  servant,  the  ticket  being  in  the 
name  of  the  company.  Washington, 
A.  &  G.  R.  Co.  V.  Broum,  17  Wail. 
445,  21  L.  ed.  675. 

A  railroad  company  is  not  liable 
for  the  negligence  of  a  receiver 
operating  a  railroad  under  direction 
of  the  court.  Hoice  v.  St.  Clair,  8 
Tex.  Civ.  App.  101. 

A  corporation  to  which  its  prop- 
erty and  control  of  its  affairs  have 
been  returned  by  a  receiver  is  not 
liable  for  personal  injuries  caused  by 
negligence  in  the  operation  of  its 
electric  plant  during  the  receiver- 
ship. Bartlett  v.  Cicero  Light,  H. 
<e  P.  Co.  69  111.  App.  576. 

That  a  railroad  was  in  the  hands 
of  a  receiver  is  a  defense  to  an  action 
against  it  for  personal  injury.  Trin- 
ity &  S.  B.  Co.  V.  Brown,  91  Tex. 
673. 

A  railway  company  is  not  liable 
for  an  injury  caused  by  the  man- 
agement of  a  locomotive  engine, 
where  receivers  are  in  entire  and  ex- 
clusive control  of  the  property. 
Union  P.  R.  Co.  v.  Smith,  59  Kan. 
80. 

If  the  appointment  is  procured  by 
collusion  between  the  company  and 
its  creditors,  or  if  the  road  is  oper- 
ated by  the  receiver  appointed  by  a 
court  without  jurisdiction,  the  cor- 
poration will  be  liable  for  the  acts 
of  the  receiver.  Texas  d  P.  R.  Co. 
V.  Johnson,  76  Tex.  421. 

A  railroad  company  is  not  liable 
to  penalties  for  neglect  to  feed  ani- 
mals being  shipped  when  in  the 
hands  of  receivers.  Texas  &  P.  R. 
Co.  V.  Barnhart,  5  Tex.  Civ.  App. 
601. 

The  Texas  act  of  March  19,  1889, 
providing  that  when  a  receiver  is 
discharged  and  the  property  restored 
the  owner  shall  be  responsible  for 
all  liabilities,  is  not  unconstitution- 
al. Missouri,  K.  &  T.  R.  Co.  v.  Chil- 
ton, 7  Tex.  Civ.  App.  183. 

A  railroad  company  is  liable  for 
the  loss  of  goods  by  a  receiver  when 
he  has  turned  it  back  with  better- 


ments. Houston  c£-  T.  C.  R.  Co.  v. 
McFadden,  91  Tex.  194,  Affirmed  in 
Part  and  Reversed  in  Part  in  42  S. 
W.  593. 

An  action  for  injury  or  death 
caused  by  negligence  of  a  receiver  of 
a  corporation  may  be  brought 
against  the  corporation  after  the 
property  has  been  restored  to  it  on 
the  receiver's  discharge,  and  the 
property  or  fund  charged  with  the 
liability.  Bartlett  v.  Cicero  Light, 
H.  d  P.  Co.  177  111.  68,  42  L.  R.  A. 
715. 

The  rule  in  Texas  is  that  where 
there  is  a  sale  of  the  property  a  rail- 
way company  cannot  be  held  liable 
for  damages  accruing  while  its  jjrop- 
erty  is  in  the  hands  of  a  receiver, 
unless  it  is  alleged  and  proved  that 
earnings  of  the  road  were  invested 
by  the  receiver  in  improvements 
thereon.  Ray  v.  Dillingham  (Tex. 
Civ.  App.)  41  S.  W.  188. 

The  liability  of  a  railroad  com- 
pany for  personal  injuries  is  lim- 
ited by  the  amount  expended  in  bet- 
terments. Texas  P.  R.  Co.  v.  John- 
son, 76  Tex.  421. 

Liability  of  a  railway  company  for 
a  personal  injury  depends  upon  the 
return  of  the  road  by  the  receiver 
improved  by  his  expenditures  for 
betterments.  Texas  d  P.  R.  Co.  v. 
Brick,  83  Tex.  526 ;  Texas  P.  R.  Co. 
v.  Overheiser,  76  Tex.  437;  Texas  P. 
R.  Co.  V.  Johnson,  76  Tex.  421. 

A  railroad  company  which  pro- 
cures or  acquiesces  in  the  withdraw- 
al of  a  receivership  and  the  dis- 
charge of  the  receiver  and  the  can- 
celation of  his  bond,  and  accepts  the 
restoration  of  its  road  largely  en- 
hanced in  value  by  betterments,  may 
be  sued  in  assumpsit  on  a  claim 
which  was  valid  against  the  receiv- 
er, but  not  satisfied  by  him  or  by  the 
court  which  discharged  him, — at 
least  when  it  does  not  claim  that  the 
amount  of  the  betterments  was  less 
than  the  demand  sued  on.  Texas  d 
P.  R.  Co.  V.  Bloom,  164  U.  S.  636,  41 
L.  ed.  580. 

Provision  cannot  be  made  for  pay- 
ment by  a  mortgagor  of  the  compen- 
sation and  expenses  of  a  receiver  of 
the  mortgaged  premises,  appointed 
ex  parte  by  tlie  court  without  au- 
thority, as,  if  any  provision  is  made, 

77 


§  125 


RECEIVERSHIPS— SUPPLEMENT. 


the  paitj'^  who  improperly  procures 
the  appointment  should  be  required 
to  pay.  Couper  v.  tihirley,  44  U.  S. 
App.  586,  75  Fed.  Rep.  168,  21  C.  C. 
A.  288. 

Parties  at  wliose  instance  a  re- 
ceiver is  appointed  may  be  compelled 
to  pay  expenses  incurred  by  him  in 
the  management  of  the  estate,  where 
the  estate  is  insufficient  or  fails. 
Knickerhoclcer  v.  McKindlcy  Coal  & 
Min.  Co.  67  111.  App.  291. 

An  action  against  a  railroad  com- 
pany for  damages  for  persoiuil  in- 
juries received  by  a  ])assenger  on  the 
railroad  when  in  the  hands  of  a  re- 
ceiver, but  which  is  restored  to  the 
company  largely  enhanced  in  value, 
is  not  cut  off  by  failure  to  present 
the  claim  by  intervention  in  the  re- 
ceivership case,  under  an  order  pro- 
viding for  such  claims  and  that  if 
not  so  presented  by  a  certain  date 
they  shall  be  barred  and  not  a  charge 
on  the  property  of  the  company, 
since  this  merely  limits  the  time  for 
intervention,  but  does  not  preclude 
other  remedies  which  may  be  within 
the  reach  of  the  claimants.  Texas 
d-  P.  R.  Co.  V.  Bloom,  164  U.  S.  636, 
41  L.  ed.  580. 

A  carrier  is  not  liable  for  injuries 
to  cattle  shipped  over  its  line  under 
a  contract  made  with  a  receiver  aft- 
er all  the  railroad  property  was  sold 
and  before  its  delivery  to  the  rail- 
road company,  where  no  betterments 
or  permanent  improvements  of  the 
property  with  funds  derived  from 
the  operation  of  the  road  were  made. 
Holman  v.  Galveston,  H.  d  S.  A.  R. 
Co.  14  Tex.  Civ.  App.  499. 

A  railroad  company  is  not  liable 
for  the  acts  of  its  receiver  or  those 
of  his  employees.  Louisville  8.  R. 
Co.  v.  Tucker,  20  Ky.  L.  Rep.  1303. 

A  temporary  receiver  as  such  has 
no  authority  to  continue  the  business 
of  the  concern,  and  unless  he  is  au- 
thorized to  do  so  by  the  court  the  es- 
tate cannot  be  charged  with  liability 
incurred  by  him  in  the  business. 
Appleton  V.  Welch,  20  Misc.  343. 

A  loss  growing  out  of  the  default 
of  a  receiver  must  be  borne  by  the 
estate.     Hutchinson   v.    Massareene, 

2  Ball  &  B.  55;  of.  Ri(/ge  v.  Bowater, 

3  Bro.  Ch.  365. 

The    expenses    of    operating    are 


chargeable  first  on  the  net  income, 
and,  that  being  insufficient,  on  the 
property  or  its  proceeds.  Ellis  v. 
Vernon  Ice,  Light,  &  W.  Co.  86  Tex. 
109. 

The  first  mortgage  bondholders  of 
a  railroad,  purchasing  at  foreclosure 
sale,  are  not  required  to  restore  for 
the  benefit  of  unsecured  creditors  the 
amounts  jsaid  from  the  earnings 
while  in  the  hands  of  receivers  for 
taxes  and  insurance.  Farmers'  Loan 
d  T.  Co.  v.  Fidelity  Ins.  T.  d  8.  D. 
Co.  (Tex.  Civ.  App.)  41  S.  W.  113. 

A  new  corporation  to  whom  rail- 
way property  is  turned  over  by  re- 
ceivers the  day  after  the  accident  of 
which  plaintiff  complains  is  not  li- 
able therefor,  since  the  receivers 
were  neither  its  agents  nor  servants,, 
but  were  put  in  control  of  the  prop- 
erty by  an  adverse  act.  Archambeau 
V.  Ncto  York  d  N.  E.  R.  Co.  170 
Mass.  272. 

A  purchaser  of  a  railroad  under  a 
mortgage  foreclosure  is  liable  to  a 
passenger  who  sustained  personal 
injuries  in  a  collision  of  two  trains, 
while  the  road  was  operated  by  re- 
ceivers, appointed  by  the  United 
States  district  court,  where  the  de- 
cree of  that  court  directing  fore- 
closure required  the  purchaser,  as  a 
part  of  the  purchase  price  and  in  ad- 
dition to  the  sum  paid,  to  pay  all  li- 
abilities incurred  by  the  receivers 
before  delivery  of  possession  of  the 
property.  Atchison,  T.  d  8.  F.  R. 
Co.  V.  Cunningham,  59  Kan.  722. 

A  purchaser  of  a  railroad  from  a 
prior  purchaser  at  a  receiver's  sale 
is  not  liable  for  personal  injuries  ac- 
cruing during  the  operation  of  the 
road  by  the  receiver,  where  the  evi- 
dence fails  to  show  whether  the  bet- 
terments relied  upon  to  charge  it  were 
made  before  or  subsequent  to  the  re- 
ceiver's sale,  and  there  is  no  evi- 
dence tending  to  show  that  it  had 
any  interest  in  the  property  or  any 
control  over  the  same  when  the  in- 
juries were  sustained.  Houston 
Electric  8treet  R.  Co.  v.  Bell  (Tex. 
Civ.  App.)  42  S.  W.  772. 

A  purchaser  at  foreclosure  sale  of 
a  railroad  in  the  hands  of  a  receiver 
is  liable  for  personal  injury  between 
the  date  of  confirmation  and  the 
date  of  delivery,  to  the  extent  of  the 


LIABILITY  OF  RECEIVER. 


125 


permanent  improvement  made  dur- 
ing such  period,  but  not  prior  there- 
to. Crawford  v.  Houston  <&  T.  C.  R. 
Co.  89  Tex.  89. 

A  claim  for  injury  from  the  neg- 
ligent ojaeration  of  a  railroad,  on 
which  judgment  was  rendered 
against  the  receiver  after  which  he 
settled  his  accounts  and  paid  over 
under  the  order  of  court  the  balance 
in  his  hands,  did  not  stand  on  a  foot- 
ing with  the  expenses  of  the  receiv- 
ership, and  no  lien  was  created  on 
the  property;  and  a  purchaser  at 
the  foreclosure  sale  was  not  liable. 
White  V.  Keokuk  &  D.  M.  R.  Co.  52 
Iowa,  97. 

The  purchaser  of  a  railroad  is  li- 
able for  damages  caused  by  negli- 
gence of  a  receiver,  if  betterments 
upon  the  road  by  the  receiver  subse- 
quent to  the  sale,  and  the  earnings 
turned  over  to  the  purchaser,  ex- 
ceeded in  value  the  liabilities  im- 
posed upon  the  purchaser  by  the  de- 
cree of  the  court  and  the  operating- 
expenses  of  the  receiver  and  claims 
for  damages  against  him.  Houston 
d  T.  C.  R.  Co.  V.  KelUj  (Tex.  Civ. 
App.)  35  S.  W.  878. 

The  purchaser  of  a  railroad  in  the 
hands  of  a  receiver,  whose  contract 
makes  it  liable  for  the  obligations 
of  the  receiver,  is  liable  to  pay  a 
judgment  entered  against  the  re- 
ceiver on  a  supersedeas  bond  which 
he  had  executed  to  appeal  a  judg- 
ment against  the  railroad, — especial- 
ly where  the  road  was  improved  and 
bettered  while  in  the  hands  of  the 
receiver  to  an  amount  in  excess  of 
such  judgment.  Missouri,  K.  &  T. 
R.  Co.  V.  Lactj,  13  Tex.  Civ.  App. 
391. 

The  purchaser  of  a  railroad  from 
a  receiver  is  liable  for  the  negligent 
loss  of  cotton  shipped  over  such  road 
after  the  sale  of  the  road  and  its  con- 
firmation, although  it  was  still  being 
operated  by  the  receiver  and  no  bet- 
terments or  improvements  were 
made  during  such  period,  where  it 
continued  to  be  operated  by  the  re- 
ceiver diiectly  in  opposition  to  the  or- 
ders of  the  court  and  for  the  express 


benefit  of  the  purchaser.  Houston 
&  T.  C.  R.  Co.  v.  Bath,  17  Tex.  Civ. 
App.  G97. 

Purchasers  on  foreclosure  of  the 
property  of  a  railroad  company,  who 
have  assumed  jjayment  of  debts  due 
by  the  receiver,  must  pay  in  full  a 
debt  due  to  an  association  in  which 
they  own  a  half  interest,  where  by 
the  mutual  agreement  by  which 
such  association  was  formed  all  the 
earnings  were  to  go  first  into  the 
hand  of  the  agents,  and  the  several 
interests  of  the  principals  do  not 
arise  until  the  accounts  in  the  haiids 
of  the  agents  are  made  up.  State 
V.  For't  Royal  d  A.  R.  Co.  79  ied. 
Rep.  397. 

A  railroad  mortgagee  is  not  liable 
for  unpaid  wages  or  other  obliga- 
tions incurred  by  a  receiver  ap- 
pointed at  the  mortgagee's  instance 
in  a  foreclosure  suit,  although  the 
trust  fund  is  insufficient  to  pay  them, 
unless  such  responsibility  was  im- 
posed by  the  court  as  a  condition  of 
the  appointment  or  the  continuance 
of  the  receiver  in  office.  Farmers' 
Loan  &  T.  Co.  v.  Oregon  P.  R.  Co. 
31  Or.  237,  38  L.  R.  A.  424. 

Although  a  receiver  of  a  corpora- 
tion, appointed  by  trustees  in  a 
mortgage  pursuant  to  a  power  there- 
in contained,  providing  that  such  re- 
ceiver shall  be  the  agent  of  the  com- 
pany, which  alone  shall  be  liable  for 
his  acts  and  defaults,  ceases  to  be 
the  agent  of  the  company  upon  a 
compulsory  winding-up  order,  he 
does  not  thereupon  become  the 
agent  of  the  trustees  in  the  mort- 
gage, so  as  to  render  them  liable  for 
goods  afterwards  purchased  by  him 
in  carrying  on  the  business.  Gosling 
V.  Gaskell  [1897]  A.  C.  575,  77  L.  T. 
N.  S.  314,  66  L.  J.  Q.  B.  N.  S.  848. 

When  the  order  appointing  is  re- 
versed the  receivers'  fees  must  be 
paid  by  the  unsuccessful  party,  and 
iiot  from  property.  Weston  v.  Watts, 
45  Hun,  219. 

A  defendant  is  not  liable  for  loss 
of  property  in  the  hands  of  a  receiv- 
er.    Lee  v.  Cone,  4  Coldw.  392. 


79 


§  133-148  RECEIVERSHIPS— SUPPLEMENT. 

Page  233,  sec.  133. — Effect  of  discharge. 


After  the  discharge  of  a  receiver, 
and  surrender  by  him  of  the  prop- 
erty in  his  hands,  he  is  discharged 


from  further  liability.  New  York 
d  \V.  U.  Teleg.  Co.  v.  Jewett,  115  N. 
Y.  166. 


Page  235,  sec.  146. — Creditors'  bills;  general  nature  of  remedy. 


A  receiver  is  allowed  in  favor  of  a 
purchaser,  in  an  action  to  rescind 
for  fraudulent  misrepresentations. 
Gibhs  y.  David,  L.  R.  20  Eq.  373. 

Receiver  for  rents  appointed  in  a 
creditors'  bill.  Johnson  v.  Wood- 
ruff,  8  N.  J.  Eq.  120,  Affirmed  Id. 
729. 

The  appointment  of  a  receiver  is 
proper  on  filing  a  creditors'  bill. 
Central  Nat.  Bank  v.  Graham 
(Mich.)  5  Det.  L.  N.  591,  76  N.  W. 
1042. 

And  particularly  so  where  the  bill 
is  confessed.  Runals  v.  Harding,  83 
111.  75. 

A  receiver  of  a  corporation  will 
not  be  appointed  on  a  creditors'  bill, 
based  on  a  judgment  recovered 
against  the  corporation  on  notes  ex- 
ecuted by  the  corporation  to  a  di- 
rector, while  solvent,  for  money 
loaned  to  the  corporation,  although 
it  subsequently  became  insolvent  be- 
fore the  judgment  was  taken,  as  a 
director  of  a  solvent  corporation  in 
good  faith  may  loan  it  money,  and 
the  subsequent  insolvency  of  the  cor- 
poration will  not  affect  his  right  to 
recover  the  loan.  Hudlun  v.  Blakes- 
lee,  70  111.  App.  664. 

Leave  to  file  a  creditors'  bill 
against  a  corporation  and  its  receiver 
need  not  be  granted  in  the  action  in 
which  the  receiver  was  appointed, 
but  is  sufficient  when  obtained  in  the 
same  court  in  which  the  receivership 
action  is  pending,  where  the  latter 
was  not  instituted  for  the  purpose  of 
winding  up  the  affairs  of  the  corpo- 
ration and  distributing  its  property 
among  creditors.  Sligh  v.  Sheltoti 
S.  IV.  R.  Co.  20  Wash.' 16. 


A  summons  may  be  issued  against 
a  judgment  debtor  for  whom  a  re- 
ceiver has  been  appointed,  and 
against  whom  a  creditors'  bill  is 
pending,  requiring  him  to  appear  be- 
fore the  circuit  court  commissioner 
for  examination,  although  proof  has 
not  been  made  of  service  of  the  order 
appointing  a  receiver,  where  such  or- 
der directed  the  commissioner  to  is- 
sue a  summons  on  request.  Central 
Nat.  Bank  v.  Graham  ( Mich. )  5  Det. 
L.  N.  591,  76  N.  W.  1042. 

t-nder  a  creditors'  bill,  where  it 
appears  that  there  is  no  personal  es- 
tate, and  that  the  real  estate  must 
be  applied  to  debts,  a  receiver  will 
be  appointed  in  the  first  instance. 
Jones  v.  Pugh,  8  Ves.  Jr.  71. 

Execution  must  issue  to  the  coun- 
ty in  which  the  judgment  debtor  re- 
sides. Strange  v.  Longley,  3  Barb. 
Ch.  650. 

A  proceeding  to  declare  a  debtor 
an  insolvent,  to  set  aside  alleged 
preferences,  and  procure  the  appoint- 
ment of  a  receiver,  brought  under 
Wis.  Laws  1897,  chap.  334,  author- 
izing creditors  holding  claims  aggre- 
gating not  less  than  $200  to  insti- 
tute such  proceeding  within  thirty 
days  after  the  creation  of  the  pref- 
erence, cannot  be  maintained  by 
creditors  whose  claims  aggregate  less 
than  the  required  amount,  nor  can 
their  amount  be  increased  by  the 
costs  incurred  upon  their  reduc- 
tion to  judgment  although  incurred 
within  such  thirty  days.  Woodard 
&  S.  Co.  v.  Milnes,  101  Wis.  329. 


Page  241,  sec.  148. — Fraudulent  conveyances. 


An  injunction  may  properly  be 
granted  and  receivers  appointed  in 
an  action  involving  the  fraudulent 
80 


character  of  a  deed  by  the  executor 
and  sole  heir  of  a  decedent,  to  a  sister 
of  the  latter  in  settlement  of  an  al- 


CREDITORS'  BILLS.  ETC. 


148 


legecl  debt  due  to  such  sister,  where 
there  is  evidence  warranting  a  judge 
in  finding  that  no  such  indebtedness 
ever  really  existed.  Broion  v.  Stan- 
ley, 105  Ga.  469. 

A  receiver  will  not  be  appointed 
in  an  action  brought  by  creditors  in 
their  own  behalf  to  set  aside  a  trans- 
fer of  real  property  as  fraudulent 
against  them.  Harris  v.  Buchner, 
35  App.  Div.  594. 

A  receiver  may  be  appointed  in  an 
action  by  a  judgment  creditor  to  set 
aside  a  fraudulent  conveyance  of  the 
land,  although  the  judgment  debtor 
has  only  an  equity  of  redemption  in 
the  land, — especially  where  the 
fraudulent  grantee  is  in  possession 
of  the  land  and  receiving  the  rents 
thereof.  Freeman  v.  Stuart  (Ala.) 
24  So.  31. 

A  receiver  pendente  lite  will  not 
be  appointed  in  an  action  to  set  aside 
conveyances  of  real  property  as 
fraudulent,  where  it  appears  that 
the  buildings  and  improvements  on 
the  property  are  properly  kept  and 
cared  for  by  the  defendant,  and  that 
he  is  solvent  and  capable  of  respond- 
ing for  all  rents  or  profits  received 
during  the  pendency  of  the  action, — 
especially  if  he  offers  to  enter  into 
a  bond  to  the  plaintiffs  in  such  sum, 
with  such  conditions,  and  with  such 
sureties  as  the  court  may  designate, 
to  account  for  such  rents  and  profits. 
Spolane  v.  Amsterdanisch  Trustees 
Kantoor,  18  Wash.  81. 

A  receiver  appointed  in  a  credit- 
ors' action  to  take  charge  of  prop- 
erty adjudged  to  have  been  fraudu- 
lently mortgaged  by  the  debtor  to  a 
corporation  is  entitled,  as  against 
the  bona  fide  holders  of  bonds  of  the 
corporation  secured  by  the  mortgage, 
whose  rights  are  not  affected  by  the 
decree,  to  interest  upon  the  amount 
paid  by  him  to  take  up  bonds  which 
had  been  pledged  as  collateral  secur- 
ity for  the  debts  of  the  corporation 
and  of  the  debtor  in  adjusting  the 
rights  of  the  respective  parties  in  the 
proceeds  of  the  mortgage.  Badger 
V.  Sutton,  30  App.  Div.  294. 

The  appointment  of  a  receiver  of 
the  property  of  a  debtor  will  not  be 
set  aside  where  the  debtor  does  not 
deny  the  allegations  in  the  bill  charg- 
ing that  specified  deeds  of  trust  were 


made  with  the  intent  to  hinder,  de- 
lay, and  defraud  creditors  and  secure 
a  fictitious  debt,  and  the  trustee  does 
not  deny  that  he  knew  of  such  fraud- 
ulent intent.  Lyle  v.  Commercial 
Nat.  Bank,  93  Va.  487. 

The  appointment  of  a  receiver  in 
an  action  by  judgment  creditors  to 
subject  to  the  lien  of  their  judgments 
personalty  in  the  possession  of  the 
debtor  and  claimed  to  have  been 
fraudulently  mortgaged  will  not  be 
denied  on  the  ground  that  the  plain- 
tiffs have  an  adequate  remedy  at  law 
by  levy  and  sale  under  execution, 
since  such  remedy  is  not  exclusive. 
Hirsch  v.  Israel,  lOG  Iowa,  498. 

A  suit  in  equity  by  judgment  cred- 
itors for  the  purpose  of  subjecting 
personalty  in  the  possession  of  the 
debtor,  and  claimed  to  have  been 
fraudulently  mortgaged,  to  the  pay- 
ment of  the  plaintiff's  judgments, 
affords  a  sufficient  basis  for  the  ap- 
pointment of  a  receiver.     Ibid. 

A  receiver  will  be  appointed  under 
Ohio  Rev.  Stat.  §§  5483,  5484,  where 
the  debtor  has  fraudulently  or  sus- 
piciously transferred  his  property  to 
others  who  hold  and  claim  to  own 
it,  if  there  is  a  strong  possibilty  that 
if  a  receiver  were  appointed  some  of 
the  property  could  be  recovered  and 
its  proceeds  applied  on  the  creditor's 
judgment.  Hayes  v.  Moore,  5  Ohio 
N.  P.  220. 

A  receiver  is  properly  appointed 
to  take  charge  of  property  trans- 
ferred by  a  failing  debtor  in  fraud 
of  creditors.  Bomar  v.  Means,  53 
S.  C.  232. 

Property  in  the  hands  of  a  receiver 
appointed  in  an  action  by  judgment 
creditors  in  aid  of  their  executions 
to  set  aside  certain  transfers  by  the 
debtor  as  fraudulent,  at  the  time  of 
his  discharge,  pursuant  to  a  decree 
adjudging  that  the  only  relief  plain- 
tiff's could  obtain  was  the  removal 
of  the  transfers  as  an  obstruction  to 
the  enforcement  of  their  executions, 
and  that  the  appointment  of  a  receiv- 
er was  improper,  should  be  returned 
to  the  transferees,  and  not  turned 
over  to  the  shcrilf  holding  the  execu- 
tions. Home  Bank  v.  J.  B.  Brewster 
&  Co.  33  App.  Div.  330. 

A  receiver  is  properly  appointed 
pending  a  creditors'  bill,  where  the 

81 


§  149 


RECEIVERSHIPS— SUPPLEMENT. 


property,  botli  tangible  and  intangi- 
ble, is  of  a  kind  easily  put  out  of 
reach,  and  the  amount  involved  is 
A'ery  considerable, — especially  where 
complainant  tenders  a  bond  condi- 
tioned for  the  payment  of  all  dam- 
ages that  may  result  from  the  ap- 
pointment. E.  A.  Moore  Furnilnre 
Co.  V.  l^iussiiif/,  71  111.  App.  GOG. 

Where  a  lien  is  acquired  on  the 
filing  of  a  creditors'  bill,  a  receiver 


is  properly  appointed  upon  an  avei'- 
ment  that  the  appointment  is  neces- 
sary to  preserve  and  eifectuate  the- 
lien,  by  reason  of  the  insolvency  of 
the  debtor  and  the  disposition  of  the 
property  by  the  defendants.  Heard 
V.  Murray,  93  Ala.  127  ;  cf.  Moritz 
V.  Miller,  87  Ala.  331;  Thompson  v. 
Tower  Mfg.  Co.  87  Ala.  733;  aims 
V.  Adams,  78  Ala.  395. 


Page  249,  sec.  149. — Jurisdiction  in  matters  of  assignment. 


A  receiver  is  properly  appointed 
of  an  assigned  estate,  where  the  as- 
sets have  been  transferred  to  a  per- 
son who  has  bought  up  claims 
against  the  estate,  and  is  to  transfer 
the  undisposed-of  portion  of  the  es- 
tate, after  reimbursing  himself  in  an 
agreed  sum,  to  persons  named,  and 
the  insolvency  proceedings  have  been 
discontiniunl.  Warren  v.  Hoice  (111. 
App.)  1  Chic.  L.  ,7.  Wkly.  677. 

A  receiver  may  avoid  an  assign- 
ment of  goods  by  way  of  mortgage, 
made  by  a  corporation,  on  the 
ground  that  it  was  not  recorded 
within  the  time  required  by  law  in 
order  to  make  it  valid  "as  against 
any  other  person  than  the  parties." 
Franklin  Islat.  Bank  v.  Whitehead, 
149  Ind.  5G0,  39  L.  R.  A.  725. 

General  creditors  of  an  assignor 
for  creditors  may,  even  after  final 
judgment,  intervene  in  attachment 
proceedings  instituted  before  the  ex- 
piration of  the  twenty  days  limited 
for  filing  an  inventory,  and  pray  for 
a  distribution  pro  rata  of  the  pro- 
ceeds of  the  property  which  has  been 
sold  under  the  direction  of  the  court, 
among  all  the  assignor's  creditors, 
and  for  the  appointment  of  a  receiver 
to  administer  the  trust,  where  they 
claim  that  the  assignment  is  invalid, 
or  that  the  assigned  property  became 
a  trust  fund  because  of  a  preference 
in  the  assignment,  rendering  the 
same  invalid  under  the  Oklahoma 
statute.  Hockaday  v.  Drye,  7  Okla. 
288. 

When  it  appears  that  an  assign- 
ment will  be  set  aside  on  final  judg- 
ment a  receiver  will  be  appointed. 
People's  Batik  v.  Faueher,  21  N.  Y. 
Supp.  545. 
82 


On  a  bill  filed  for  the  appointment 
of  a  receiver  and  an  injunction  and 
to  set  aside  an  assignment  as  void  as 
to  creditors,  when  no  actual  fraud 
is  shown  and  the  solvency  of  the  as- 
signees is  not  questioned,  it  is  proper 
for  the  court  to  allow  the  assignees 
to  dispose  of  the  property  and  collect 
the  debts  and  hold  the  proceeds  sub' 
ject  to  the  decree  of  court,  though 
the  disposition  of  the  proceeds  under 
the  assignment  is  restrained.  Spring 
v.  Strauss,  3  Bosw.  007. 

The  Illinois  assignment  act  does, 
not  deprive  courts  of  equity  of  juris- 
diction in  creditors'  bills  to  set  aside 
a  fraudulent  assignment  or  a  pref- 
erence made  prior  to  an  assignment, 
and  for  the  appointment  of  a  re- 
ceiver. Strong  v.  Goldman,  8  Biss. 
552. 

A  receiver  of  the  profits  of  an  of- 
fice assigned  for  creditors  will  be  ap- 
pointed pending  a  contest  of  the 
validity  of  the  assignment.  Palmer 
V.  Vaughan,  3  Swanst.  173. 

An  order  appointing  a  receiver 
pendente  lite  in  a  proceeding  under 
3  How.  (Mich.)  Ann.  Stat.  §  8749o, 
providing  for  the  appointment  of  a 
receiver  at  the  instance  of  persons 
having  preferred  claims  under  a  vol- 
untary assignment,  is  improvident 
if  not  an  absolute  nullity.  Hall  v. 
Wayne  Cireuit  Judge,  111  Mich. 
395. 

A  charge  that  an  assignee  for 
the  benefit  of  creditors  declines  tO' 
account  to  them  from  time  to  time 
concerning  the  condition  of  the  trust 
will  not  justify  his  removal  and  the 
appointment  of  a  receiver,  in  the  ab- 
sence of  proof  of  any  misfeasance  or 
misappropriation  of  property,  on  his 


CiiEDlTORS'  BILLS,  ETC. 


§  150 


part,  and  where  the  complaint  is  evi- 
dently inspired  by  the  impatience  of 
creditors.  Dozier  v.  Logan,  101  Ga. 
173. 

An  assignee  for  the  benefit  of  cred- 
itors will  not  be, removed  and  a  re- 
ceiver appointed  in  his  stead,  upon  an 
allegation  that  one  of  the  two  sure- 
ties upon  the  assignee's  bond  is  in- 
solvent.    Ihid. 

Misconduct  on  the  part  of  an  as- 
signee for  creditors  is  ground  for  ap- 
pointment. Goldsmith  v.  Fech- 
heimer,  16  Ky.  L.  Rep.  432. 

A  receiver  will  be  refused  where 
the   assignee   under   the   assignment 


has  ample  power,  and  is  not  charged 
with  misconduct.  Hyde  v.  Weitzner, 
4:5  Minn.  35. 

In  the  absence  of  established 
grounds  for  equitable  interference, 
the  court  will  not,  even  with  the  con- 
sent of  the  assignor  and  the  assignee, 
place  an  assigned  estate  in  the 
hands  of  a  receiver.  Penzel  Grocer 
Co.  v.  Williams,  53  Ark.  81. 

An  assignee  kept  out  of  an  estate 
owing  to  an  old  commission  in  bank- 
ruptcy is  entitled  to  a  receiver  and 
the  rents  and  profits,  while  kept  out 
of  the  use  thereof.  Hollis  v.  Bry- 
ant, 12  Sim.  492. 


Page  251,  sec.  150. — Supplementary  proceedings. 


Pending  attachment  proceedings 
will  not  prevent  the  appointment  of 
a  receiver  in  supplementary  proceed- 
ings. Hanso)i  v.  Tripler,  3  Sandf. 
733. 

Irregularity  in  the  appointment 
of  a  receiver  is  no  ground  for  object- 
ing to  an  examination  concerning 
property  and  effects.  Hoicard  v. 
Palmer,  Walk.  Ch.   (Mich.)   391. 

The  judge  who  makes  the  order 
for  an  examination  of  the  debtor  is 
the  one  to  appoint  a  receiver.  Smith 
V.  Johnson,  7  How.  Pr.  39. 

A  receiver  may  be  appointed  in 
I)roceedings  supplementary  to  execu- 
tion, on  the  examination  of  a  third 
party  indebted  to  the  judgment  debt- 
or. De  Vivier  v.  Smith,  6  N.  Y. 
Civ.  Proc.  Rep.  394,  1  How.  Pr. 
N.  S.  48. 

Under  supplementary  proceedings 
in  New  .Jersey,  after  an  order  for  ex- 
amination is  served,  a  receiver  may 
be  appointed,  though  the  debtor  him- 
self has  not  been  examined.  Cotton 
v.  Bigeloiv,  41  N.  J.  L.  2GG. 

Under  the  New  York  act  of  1874 
there  was  no  power  to  appoint  a  re- 
ceiver except  when  an  order  for  ex- 
amination had  been  made;  and  in  a 
case  in  which  a  receiver  was  ap- 
pointed before  tiie  order  was  made, 
the  appointment  was  held  void. 
Holhrook  v.  Oiglcr,  8  Jones  &  S.  33, 
49  How.  Pr.  289. 

An  order  for  the  examination  of 
a  third  party  in  supplementary  pro- 


ceedings will  be  set  aside  where  it 
appears  that  a  receiver  has  been  ap- 
pointed in  sequestration  proceedings 
against  the  judgment  debtor,  who  is 
entitled  to  all  the  personalty  belong- 
ing to  such  debtor.  Bucki  v.  Bucki, 
26  Misc.  69. 

An  order  appointing  a  receiver  in 
supplementary  proceedings,  and  di- 
recting him  to  bring  suit  for  a  bal- 
ance due  on  a  specified  claim  in  fa- 
vor of  the  judgment  debtor  from  a 
third  person,  is  not  objectionable  on 
the  ground  that  the  balance  due  on 
such  claim  has  been  extinguished  by 
an  agreement  between  the  parties,  as 
such  fact,  if  it  exists,  may  be  shown 
on  the  trial.  Globe  Phosphate  Co. 
V.  Pinson,  52  S.  C.  185. 

A  receiver  in  supplemental  pro- 
ceedings is  only  appointed  to  pre- 
serve property.  Rodman  v.  Harvey, 
102  N.  C.  1. 

In  supplementary  proceeding  a  re- 
ceiver cannot  be  appointed  of  partic- 
ular debts.  Andrews  v.  Glcnville 
Woolen  Co.  11  Abb.  Pr.  N.  S.  78. 

In  supplemental  proceedings  un- 
der the  statute,  against  an  insolvent 
corporation,  there  is  no  preference 
obtained.  Hamtnond  v.  Hudson 
River  Iron  &  ilach.  Co.  11  How.  Pr. 
29. 

A  receiver  in  supplementary  pro- 
ceedings may  maintain  an  action  to 
set  aside  a  transfer  of  property  by 
the  judgment  debtor  with  intent  to 
give  a  preference  to  certain  credit- 

6i 


§  150 


RECEIVERSHIPS— SUPPLEMENT. 


ors,  under  N.  Y.  Laws  1858,  chap. 
314,  authorizing  the  receiver  of  the 
property  of  an  insolvent  individual 
to  set  aside  such  a  transfer.  Stiefel 
V.  Berlin,  28  App.  Div.  103. 

A  receiver  appointed  in  proceed- 
ings supplementary  to  execution  may 
maintain  an  action  to  set  aside  a 
transfer  of  property  by  an  insolvent 
limited  partnership  as  preferential. 
Stiefel  v.  Berlin,  20  Misc.  194. 

Tlie  authority  conferred  upon  a  re- 
ceiver by  N.  Y.  Laws  1858,  chap.  314, 
as  amended  by  N.  Y.  Laws  1894, 
chap.  740,  to  follow  specific  property 
transferred  in  fraud  of  creditors,  and 
recover  it  or  its  value,  does  not  en- 
title a  receiver  in  supplementary 
proceedings  to  sue  at  law  to  recover 
damages  for  a  fraudulent  conspiracy 
to  prevent  the  collection  of  the  debt. 
Ward  v.  Petric,  157  N.  Y.  301. 

An  appointment  in  supplementary 
proceedings  vests  in  the  receiver  all 
the  property,  real  and  personal,  and 
rights  of  action  of  the  debtor.  Re 
Wilds,  6  Abb.  IST.  C.  307. 

A  judgment  debtor  who  makes 
payments  upon  a  mortgage  on  land 
belonging  to  his  wife  has  an  equi- 
table right  to  a  lien  upon  the  land 
for  the  money,  and  such  lien  is  in 
substance  and  effect  personalty  to 
which  a  receiver  in  supplementary 
proceedings  may  make  claim.  Walsh 
v.  Rosso   (N.  J.  Eq.)  41  Atl.  669. 

He  has  no  claim  upon  property  ac- 
quired subsequent  to  the  date  of  the 
order  of  appointment.  Thorn  v.  Fel- 
lows, 5  N.  Y.  Week.  Dig.  473. 

The  debtor  may  be  required  to  pay 
to  the  receiver  a  balance  of  a  bank 
account  standing  in  the  name  of  his 
wife,  which  is  managed  as  his  own 
under  power  of  attorney  from  her. 
See  N.  Y.  Code  Civ.  Proe.  §  2447. 
Weld  V.  Sage,  34  App.  Div.  471. 

On  motion  for  the  appointment 
the  court  has  no  right  to  adjudicate 
the  receiver's  right  to  money.  Manice 
v.  Smith,  5  N.  Y.  Week.  Dig.  255. 

The   receiver   represents   all   cred- 
itors.    Bostwick  V.  Beizer,  10  Abb. 
Pr.  197. 
84 


In  a  proceeding  supplementary  to 
execution  under  the  New  York  Code 
a  receiver  may  be  appointed  al- 
though the  only  property  discovered 
is  subject  to  execution.  Heroy  v. 
Gibson,  10  Bosw.  591. 

In  supplementary  proceedings  the 
duties  of  the  receiver  end  when  the 
judgment  is  paid  or  fully  secured. 
Gifford  V.  Rising,  59  Hun,  42. 

In  supplementary  proceedings  the 
judge  cannot  order  property  of  the 
debtor  to  be  delivered  to  the  cred- 
itor on  his  giving  the  debtor  a  re- 
ceipt. Dickinson  v.  Onderdonk,  18 
Hun,  479. 

He  may  be  required  to  give  secur- 
ity for  costs.  Welch  v.  Bogert,  3  N. 
Y.  Week.  Dig.  402. 

A  receiver  in  supplementary  pro- 
ceedings is  not  authorized  to  main- 
tain an  action  at  law  to  recover  dam- 
ages for  a  fraudulent  conspiracy  to 
prevent  the  collection  of  the  debt, 
carried  into  effect  prior  to  the  com- 
mencement of  the  proceedings  in 
which  the  receiver  was  appointed. 
Ward  V.  Petrie,  157  N.  Y.  301. 

A  judgment  debtor  is  entitled  to 
notice  of  the  application  for  appoint- 
ment. Clark  V.  Savage,  5  N.  Y. 
Week.  Dig.  193;  Vandeburgh  v.  Gay- 
lord,  7  N.  Y.  Week.  Dig.  136. 

A  receiver  appointed  for  a  corpo- 
ration in  proceedings  supplementary 
to  execution,  who  has  taken  posses- 
sion of  its  assets,  including  a  policy 
of  insurance  issued  by  an  employers' 
accident  liability  insurance  com- 
pany, is  a  necessary  party  to  an  ac- 
tion against  the  corporation  and  the 
insurer  by  an  employee  of  the  former 
to  recover  for  negligent  injuries. 
Moore  v.  Los  Angeles  Iron  &  S.  Co. 
89  Fed.  Rep.  73. 

A  receiver  may  avoid  an  assign- 
ment of  a  chose  in  action.  Coleman 
V.  Rof,  45  N.  J.  L.  7. 

But  has  no  power  to  take  forcible 
possession  of  property  in  the  hands 
of  a  third  party.  Dewey  v.  Finn, 
18  N.  Y.  Week.  Dig.  558. 


RECEIVERSHIP  IN   FORECLOSURE   OF   MORTGAGES.      §  170 

Page  266,  sec.  170. — Receivership  in  foreclosure  of  mortgages; 

generally. 


When  the  right  to  retain  posses- 
sion is  in  the  mortgagor  and  also  the 
right  to  collect  the  revenues  until 
default,  a  receiver  appointed  in  a  suit 
to  foreclose  the  mortgage  has  no 
right  to  earnings  prior  to  the  filing 
of  the  billj  that  being  the  first  de- 
mand though  the  money  was  not  paid 
till  afterwards.  Hook  v.  Bosworth, 
24  U.  S.  App.  341,  64  Fed.  Rep.  443, 
12  C.  C.  A.  208. 

A  purchaser  at  foreclosure  sale  is 
entitled  to  a  receiver  of  the  rents. 
Atnericari  Freehold  Land  Mortg.  Co. 
v.  Turner,  95  Ala.  272. 

Rents  paid  in  advance  to  a  pur- 
chaser of  mortgaged  premises  in  the 
absence  of  collusion  sustained.  Law- 
rence V.  Conlon,  20  Misc.  44. 

A  mortgagee  who  bids  in  the  prem- 
ises at  foreclosure  sale  for  less  than 
the  amount  due  him  and  obtains  a 
deficiency  decree  for  the  balance  still 
has,  upon  a  proper  showing,  the  equi- 
table right  to  have  the  rents  of  the 
premises  accruing  during  the  re- 
demption period  applied  in  satisfac- 
tion of  the  deficiency,  and  the  ap- 
pointment of  a  receiver  is  the  proper 
procedure  to  secure  him  such  right. 
Boruff  V.  Hinkley,  68  111.  App.  274. 

Discharge  of  mortgage  hy  release  of 
security. 

Whether  a  mortgage  is  discharged 
as  to  subsequent  mortgagees  by  the 
prior  mortgagee's  voluntarily  releas- 
ing part  of  his  security  without  re- 
ducing the  amount  of  his  mortgage 
will  not  be  determined  on  a  motion 
for  the  appointment  of  a  receiver  of 
the  rents  and  profits,  pending  a  pro- 
ceeding to  foreclose  the  prior  mort- 
gage, but  will  be  left  for  determina- 
tion at  the  trial.  Ross  v.  Vernam, 
6  App.  Div.  240. 

Wlien  foreclosure  restrained. 

The  court  appointing  a  receiver  of 
the  property  of  a  corporation  may 
properly  refuse  to  permit  a  foreclos- 
ure sale  under  an  attachment  levied 
before  the  receiver  was  appointed, 
where  there  is  a  mortgage  lien  on 


the  attached  property  prior  to  the 
attachment.  Southwestern  Invest- 
ment Co.  V.  Crawford,  16  Tex.  Civ. 
App.  475. 

When  receivership  extended. 

Where  a  creditor  pending  a  fore- 
closure secures  the  appointment  of  a 
receiver  the  receivership  will  be  ex- 
tended to  the  foreclosure  case,  where 
the  judgment  on  which  the  receiver 
was  appointed  was  obtained  pendente 
lite.  Trye  v.  Aldborough,  1  Ir.  Ch. 
Rep.  660. 

Effect  of  foreclosure. 

A  mortgagee  whose  debt  is  due  and 
defectively  secured  may,  by  filing  a 
bill  to  foreclose  and  procuring  a  re- 
ceiver, obtain  an  equitable  lien  on 
the  unpaid  rents.  Lofsky  v.  Maujer, 
3  Sandf.  Ch.  70. 

Functions  of  receiver  in. 
The  ordinary  duties  of  a  receiver 
in  foreclosure  are  to  collect  rents  and 
preserve  the  property  from  loss  and 
decay.  But  they  are  more  extensive 
in  railway  foreclosures.  New  Jer- 
sey Midland  R.  Co.  v.  Wortendyke, 
27  N.  J.  Eq.  658,  602. 

Rents  in  arrear;  who  entitled  to. 
A  receiver  cannot  in  a  foreclosure 
reach  rents  accrued  and  in  arrears 
prior  to  the  commencement  of  suit. 
Mutual  L.  Lns.  Co.  v.  Belknap,  19 
Abb.  N.  -C.  345. 

Excess  on  foreclosure. 
A  receiver  is  entitled  to  the  excess 
on  foreclosure  as  against  a  creditor 
who  obtains  judgment  after  the  re- 
ceiver's possession.  Jermain  v.  Hen- 
dricks, 100  N.  Y.  279. 

Bond  necessary. 
The  appointment  of  a  receiver  in 
an  action  to  foreclose  a  mortgage  by 
an  order  authorizing  him  to  enter 
on  the  discharge  of  his  duties  "upon 
giving  bond,"  instead  of  requiring 
the  l)ond  to  be  given  before  the  ap- 
pointment as  required  by  Ala.  act 
February  18,  1895,  is  invalid.  Drey- 
spring  V.  Loch,  113  Ala.  263. 

85 


§  172  RECEIVERSHIPS— SUPPLEMENT. 

Page  267,  sec.  172. — Foreclosure;  when  receiver  appointed. 


A  receiver  is  properly  appointed 
during  the  pendency  of  a  foreclosure 
suit  under  a  contract  for  its  pur- 
chase, where  the  purchaser  seeks  to 
avoid  the  payment  of  the  purchase 
price,  and  the  contract  provides  that 
on  the  failure  of  the  purchaser  to 
])ay  any  instalment  when  due  the  ven- 
dor may  re-enter  and  repossess  the 
premises.  Belding  v.  ileloche,  113 
Mich.  223,  Distinguishing  Wagar 
V.  Stone,  36  Mich.  360. 

A  receiver  may  properly  be  ap- 
pointed in  a  suit  to  foreclose  a  title 
bond.  Caudle  v.  Moran,  119  N.  C. 
432. 

A  receiver  is  properly  appointed 
in  an  action  to  foreclose  a  chattel 
mortgage,  on  the  ground  that  it  will 
prevent  a  multiplicitj^  of  suits. 
Wiedemann  v.  8ami  (N.  J.  Eq.)  31 
Atl.  211. 


The  appointment  of  a  receiver  in 
an  action  to  foreclose  a  trust  deed 
securing  a  debt  is  justified  under  the 
same  conditions  in  which  it  would  be 
authorized  if  the  action  was  for  the 
foreclosure  of  a  mortgage.  Pearson 
v.  Kendrick,  74  Miss.  235. 

When  an  assignment  is  subject  to 
lis  pendens  a  petition  for  a  receiver 
should  be  granted.  Arnold  v.  Provi- 
dence Lumber  Co.  (R.  I.)  1  New 
Eng.  Rep.  44. 

An  order  appointing  a  receiver  in 
mortgage  foreclosure  will  not  be  va- 
cated at  the  instance  of  a  trustee  in 
insolvency  of  the  mortgagor's  prop- 
erty, or  save  at  the  instance  of  a 
party  to  the  cause.  Central  Trust 
Co.  V.  Worcester  Cycle  Mfg.  Co.  86 
Fed.  Rep.  35. 


Page  270. — (a)    Where  rents  and  profits  ijledged. 


A  receiver  of  the  rents  and  profits 
will  not  be  appointed  'pendente  lite 
in  an  action  to  foreclose  a  mortgage 
containing  a  clause  providing  for 
such  a  remedy,  in  the  absence  of  any 
allegation  as  to  the  insufficiency  of 
the  securit3^  Jarvis  v.  MeQuaide, 
24  Misc.   17  J   Morrison  v.  Buckner, 


Hempst.    442;    Stetson  v.    'Northern 
Investment  Co.  101  Iowa,  435. 

A  receiver  is  entitled  to  rents  to 
the  end  of  the  redemption  period, 
wnere  the  mortgage  pledges  them  if 
there  is  a  deficiency.  First  Nat. 
Bank  v.  Illinois  Steel  Co.  174  111. 
140,  Affirming  72  111.  App.  040, 


Page  271. — (b)    Where  security  is  inadequate. 


That  a  mortgagee  is  not  entitled  to 
possession  of  tlie  property  before 
foreclosure  will  not  prevent  the  ap- 
pointment of  a  receiver  upon  his  pe- 
tition, if  he  alleges  insolvency  of  the 
mortgagor,  insufficiency  of  the  prop- 
erty to  pay  the  debt,  and  a  deteri- 
oration of  the  property  in  the  mort- 
gagor's hands.  American  Nat.  Bank 
V.  Northwestern  Mut.  L.  Ins.  Co.  89 
Fed.  Rep.  GIO,  32  C.  C.  A.  275. 

Where  plaintiff  shows  a  prima 
facie  right  and  the  security  is  scant, 
a  receiver  pendente  lite  will  be  ap- 
pointed. Phillips  V.  Eiland,  52  Miss. 
721 ;  Kelly  v.  Butler,  1  Ir.  Eq.  Rep. 
86 


435;  Marshall  c6  /.  Bank  v.  Cady 
(Minn.)   77  N.  W.  831. 

Plaintiff  in  an  action  to  foreclose 
a  mortgage  for  unpaid  interest  is  en- 
titled to  the  appointment  of  a  re- 
ceiver, although  the  principal  is  not 
due,  where  the  mortgage  is  inade- 
quate security  for  the  principal  and 
interest,  and  the  parties  personally 
liable  upon  the  bond  are  not  respon- 
sible. Veerhof  v.  Miller,  30  App. 
Div.  355. 

The  court  is  authorized  by  Cal. 
Code  Civ.  Proc.  §  564,  to  appoint  a 
receiver  in  a  foreclosure  action  to 
take  and  hold  the  rents  and  profits 


RECEIVERSHIP   IN  FORECLOSURE   OF  MORTGAGES.     §  172 


to  secure  the  debts,  where  the  secur- 
ity is  insufficient,  iicott  v.  Hotch- 
kiss,  115  Cal.  89. 

The  mortgagor's  assignment  for 
creditors  does  not  defeat  the  mort- 
gagee's right  under  the  Indiana  stat- 
.utes  to  the  appointment  of  a  receiv- 
er pending  an  action  to  foreclose  the 
mortgage,  if  tlie  security  is  inade- 
<iuate.  Sweet  d-  C.  Co.  v.  Union  Nat. 
Bank,  149  Ind.  305. 

A  receiver  may  be  appointed  on  re- 
fusal to  apply  rents  on  interests  due 
on  the  mortgage  where  there  is  scant 
securitv.  Stockman  v.  Wallis,  30  N. 
J.  Eq.  449. 

A  receiver  will  be  appointed,  un- 
der Mansf.  (Ark.)  Dig.  §  5289,  in  an 
action  to  foreclose  an  equitable  mort- 
gage, where  the  mortgagor  and  his 
grantee  are  insolvent  and  the  secur- 
ity is  scant.  Wcis  v.  Neel  (Ark.) 
14  S.  W.  1097;  Bristow  v.  ffome 
Bldg.  Co.  91  Va.  18. 

In  foreclosure  a  receiver  will  be 
appointed  where  there  is  inadequate 
security,  imminent  danger  of  waste, 
removal,  or  destruction,  or  where 
rents,  etc.,  have  been  expressly 
pledged  for  the  payment  of  the  debt. 
Morrison  v.  Buckner,  Hempst.  442. 

A  petition  subsequent  to  a  per- 
sonal judgment  and  decree  of  fore- 
closure of  a  mortgage  for  the  ap- 
pointment of  a  receiver  of  the  rents 
and  profits  of  the  land  is  sufficient 
under  the  Indiana  statute,  where  it 
appears  therefrom  that  the  property 
is  inadequate  to  secure  the  debt,  that 
the  debtor  is  insolvent,  that  the 
mortgagors  do  not  occupy  the  prop- 
erty, and  that  the  security  is  in  peril 
from  lapse  of  insurance  and  the  ma- 
turity of  taxes.  Harris  v.  United 
States  Sav.  Fund  c£-  Invest.  Co.  146 
Ind.  265. 

A  receiver  will  be  apjiointed  where 
the  land  is  deteriorating.  Bailey 
V.  Bailey,  10  Ky.  L.  Rep.  793. 

A  receiver  of  the  property  of  a 
foreign  corporation  is  properly  ap- 
pointed in  an  action  to  foreclose  the 
same,  where  it  appears  that  the  rents 
of  the  mortgaged  premises  are 
pledged  for  the  payment  of  the  debt, 
that  they  are  not  iaeing  applied,  and 
that  the  corporation  is  insolvent  and 
the  property  insufficient  to  pay  the 
mortgages   and    overdue    taxes,   and 


other  facts  appear  showing  that  the 
rents  are  in  danger  of  being  lost  to 
the  mortgagee.  Stetson  v.  Northern 
Investment  Co.  101  Iowa,  435. 

A  receiver  should  be  appointed  aft- 
er a  sale  under  foreclosure  for  less 
than  the  amount  of  the  decree,  where 
the  mortgage  provides  for  the  ap- 
pointment of  a  receiver  either  before 
or  after  a  sale  leaving  a  deficiency, 
and  there  is  no  party  against  whom 
a  decree  for  the  deficiency  can  be 
made.  Wright  v.  Krcft  (111.  App.) 
2  Chic.  L.  J.  Wkly.  197. 

A  receiver  may  be  appointed  of 
the  rents  and  profits  of  mortgaged 
premises,  where  a  deficiency  is  ascer- 
tained in  the  foreclosure  proceedings, 
a  decree  entered  for  it,  and  execution 
returned  unsatisfied,  and  the  mort- 
gage gives  authority  to  collect  and 
receive  all  rents,  issues,  and  profits. 
Fountain  v.    Woi/ier,  60  111.  App.  529. 

The  provision  of  2  Hill's  (Wash.) 
Code,  §  326,  that  when  mortgaged 
property  is  insufficient  to  discharge 
the  debt  a  receiver  of  the  rents  and 
profits  may  be  appointed  pending 
foreclosure,  was  abrogated  by  Wash. 
Laws  1869,  p.  130,  §  496,  directing 
that  a  mortgagee  shall  not  recover 
possession  of  the  property  without 
a  foreclosure  and  sale  according  to 
law.  Norfor  v.  Bushy,  19  Wash.  450. 

A  receiver  will  be  appointed  when 
plaintiff  is  entitled  to  the  rents,  and 
the  party  in  possession  is  insolvent, 
and  security  scant.  Collins  v.  Ric- 
hart,  14  Bush,  621. 

A  receiver  of  the  rents  and  profits 
of  mortgaged  lands  pending  a  fore- 
closure suit  will  not  be  appointed 
where  a  stranger  is  in  possession  of 
the  land,  claiming  adversely,  unless 
he  is  insolvent  and  in  consequence 
tliereof  there  is  imminent  danger  of 
the  loss  of  the  rents  and  profits. 
Warren  v.  Pitts,  114  Ala.  65. 

A  court  of  equity  has  power  to  ap- 
point a  receiver  to  collect  the  rents 
and  profits  of  the  mortgaged  prem- 
ises and  ap|)ly  them  upon  the  indebt- 
edness, althougli  no  provision  is 
made  thei-efor  in  the  mortgage,  when 
the  premises  are  an  insufficient  se- 
curity and  the  mortgagor  is  insol- 
vent. First  Nat.  Bank  v.  Illinois 
Steel  Co.  174  111.  140,  Affirming  72 
111.  App.  640. 

St 


§  173  RECEIVERSHIPS— SUPPLEMENT. 

Page  276. — (d)  Nonpayment  of  taxes. 


An  agreement  that  on  default 
in  the  payment  of  taxes  and  insur- 
ance the  mortgagee  may  declare  the 
indebtedness  due,  though  not  so  by 
the    tenure    of    the    notes,    and    for 


the  appointment  of  a  receiver,  may 
be  entered  into,  and  the  court  will 
enforce  the  provisions.  Niccolls  v. 
Peninsular  Stove  Co.  48  111.  App.  317. 


Page  277. — (f)  Special  equitable  grounds. 


A  receiver  ought  not  to  be  ap- 
pointed in  an  action  to  foreclose  a 
mortgage,  unless  it  clearly  appears 
that  the  equities  of  the  case  demand 
it,  especially  where  there  is  an  undi- 
vided interest  in  the  land,  not  owned 
by  the  mortgagors,  and  not  covered 
by  the  mortgage.  Holmes  v.  Stix, 
20  Ky.  L.  Rep.  593. 

A  receiver  will  be  appointed  where 
a  mortgage  upon  the  corporate  prop- 


erty is  being  foreclosed,  judgments 
have  been  recovered  against  it,  un- 
der which  levies  have  been  made, 
when  its  management  is  in  the 
hands  of  a  minority  of  its  directors, 
its  business  receipts  are  unaccounted 
for,  and  no  effort  is  being  made  to 
remove  the  company  from  its  peril- 
ous condition.  Ft.  Wayne  Electric 
Corp.  V.  Franklin  Electric  Light  Co. 
57  N.  J.  Eq.  7. 


Page  278. — (j)    Where  indebtedness  not  due,  htit  interest  due. 


A  receiver  and  manager  of  the 
business  of  a  corporation  will  be  ap- 
pointed in  a  debenture  holder's  ac- 
tion where  a  winding-up  petition  has 
been  presented  but  no  order  for  wind- 
ing up  made,  and  there  is  a  possibil- 
ity that  the  property  covered  by  the 
debentures  will  have  to  be  sold  in 
the  near  future,  although  nothing 
has  become  actually  due  upon  the 
debentures,    lie  Victoria  Steamboats 


[1897]  1  Ch.  158,  66  L.  J.  Ch.  N.  S. 
21,  75  L.  T.  N.  S.  374. 

Where  the  suit  is  on  a  judgment 
on  a  bond,  the  interest  only  being 
due,  a  receiver  should  be  appointed 
with  reference  to  the  interest  only. 
Kyerson  v.  Minton,  3  Edw.  Ch.  382. 

A  receiver  may  be  appointed  on 
the  admission  of  a  debtor  that  inter- 
est is  due  and  unpaid.  Page  v. 
Wellesley,  1  Hogan,  179. 


Page  278,  sec.  173. — When  not  appointed. 


On  the  application  for  the  ap- 
pointment of  receivers  in  a  mort- 
gage foreclosure  the  court  should  not 
appoint  receivers  over  other  com- 
panies not  parties  to  the  mortgage. 
Hook  v.  Bosworth,  24  U.  S.  App. 
341,  64  Fed.  Rep.  443,  12  C.  C.  A. 
208. 

An  application  for  the  appoint- 
ment of  a  receiver  pending  proceed- 
ings to  foreclose  a  mortgage  is  prop- 
erly refused  under  2  How.  (Mich.) 
Anno.  Stat.  §  7847.  Fifth  Nat. 
Bank  v.  C.  P.  Kellogg  Co.  5  Det.  L. 
N.  251,  suh  nom.  Fifth  Nat.  Bank 
V.  Pierce,  75  N.  W.  1058. 

The  rule  in  England  formerly  was, 


that  if  a  mortgagee  had  the  legal  es- 
tate a  receiver  would  not  be  ap- 
pointed, a  remedy  at  law  existing; 
but  this  rule  did  not  apply  when 
there  was  a  prior  mortgage.  Ack- 
land  V.  Gravener,  31  Beav.  482. 

Where   legal   title  is  in  mortgagor. 

A  receiver  will  not  be  appointed 
in  foreclosure  proceedings  where  the 
estate  remains  in  the  mortgagor  un- 
til sale.     Guy  v.  Ide,  0  Cal.  99. 

Where  by  terms  of  mortgage  right 
not  given. 

A  stipulation  in  a  mortgage  for 
the  appointment  of  a  receiver  of  the 


RECEIVERSHIP  IN  FORECLOSURE  OF  MORTGAGES.     S  173 


rents  and  profits,  and  their  applica- 
tion to  payment  of  the  amount  due, 
in  case  a  bill  to  foreclose  the  mort- 
gage is  filed,  does  not  authorize  a 
court  of  equity  to  appoint  a  receiver 
under  the  Oregon  statute.  Coiiper 
V.  Shirley,  44  U.  S.  App.  586,  75  Fed. 
Rep.  108,  21  C.  C.  A.  2ss. 

A  clause  mortgaging  the  rents  and 
profits  does  not  require  the  court  to 
appoint  a  receiver  in  an  action  to 
foreclose  the  mortgage;  and  such  an 
application  will  be  denied  notwith- 
standing the  clause,  if  the  land  is  ad- 
equate security.  Brick  v.  Horn- 
beck,  19  Misc.  218. 

Whe7-e  mortgage  or  amount  due  is  in 
dispute. 

An  appointment  will  be  refused  in 
foreclosure  if  the  mortgage  is  im- 
peached. Leahy  v.  Arthur,  1  Ho- 
gan,  92. 

And  before  a  sale,  if  the  security 
is  ample.  Degener  v.  Stiles,  6  N.  Y. 
Supp.  474. 

And  so  when  the  validity  of  the 
mortgage  is  questioned.  Darcy  v. 
Blake,  1  Molloy,  247. 

In  an  action  to  set  aside  a  con- 
veyance absolute  in  form,  but 
claimed  to  be  a  trust  deed,  a  receiver 
of  the  rents  will  not  be  appointed. 
McCool  V.  McNamara,  19  Abb.  N.  C. 
344. 

Where    insolvency    and    inadequacy 
not  shown. 

A  receiver  pending  an  action  to 
foreclose  a  mortgage  should  not  be 
appointed  upon  an  affidavit  of  plain- 
tiff's attorney  stating  that  he  is  in- 
formed by  plaintiff  that  it  is  ex- 
tremely doubtful  whether  the  prem- 
ises will  sell  for  sufficient  to  pay  the 
mortgage  debt,  where  defendant 
swears  positively  that  the  property 
is  worth  much  more  than  sufficient. 
Sickels  V.  Canary,  8  App.  Div.  308. 

The  appointment  of  a  receiver 
pending  foreclosure,  on  the  ground 
that  the  property  is  insufficient  to 
discharge  the  debt,  is  not  warranted 
where,  by  law,  the  mortgage  is  a 
mere  security,  since  under  the  guise 
of  rents  and  profits  it  deprives  the 
mortgagor  of  the  most  valuable  in- 
cidents of  possession  prior  to  a  de- 


cree of  foreclosure  and  sale.     Norfor 
v.  Busby,  19  Wash.  450. 

Where  mortgagee  in  possession. 

A  receiver  will  not  be  appointed 
where  the  mortgagee  is  in  possession 
and  there  is  no  dispute  as  to  the 
amount  due,  or  charge  of  waste  or  in- 
solvency or  conversion.  Schultz  v. 
Jcrrard  (X.  J.  Eq.)  2  Cent.  Rep. 
211. 

When  application  by  a  junior  mort- 
gagee. 

A  receiver  has  been  refused  on  ap- 
plication of  a  second  mortgagee. 
Fhipps  V.  Bishop  of  Bath,  2  Dick. 
608. 

When   mortgagee   not   before   court. 

A  receiver  will  be  refused  when  the 
mortgagee  is  not  before  the  court. 
Price  V.  Williams,  Coop.  Ch.  31. 

In  foreclosure    of    mechanic's    lien. 

A  receiver  will  not  be  appointed  in 
an  action  to  foreclose  a  mechanic's 
lien.  Meyer  v.  Seebald,  11  Abb.  Pr. 
N.  S.  326,  note. 

Ifot  appointed  on  final  decree  before 
appeal. 

The  appointment  of  a  receiver  was 
refused  in  foreclosure  on  final  de- 
cree before  appeal  and  an  application 
for  stay  of  preceedings.  Chadron 
Bkg.  Co.  V.  Mahoney,  43  Neb.  214. 

A^o#   appointed  m,erely  because   ten- 
ants are  numerous. 

The  fact  that  the  tenants  are 
numerous  is  no  ground  for  the  ap- 
pointment of  a  receiver  in  behalf  of 
a  mortgagee.  Sturch  v.  Young,  5 
Beav.  557. 

Where  property  leased  before  mort- 
gage executed. 

The  appointment  of  a  receiver  of  a 
railroad  during  the  pendency  of  an 
action  to  foreclose  a  mortgage  on  the 
railroad  property  is  properly  refused 
in  the  discretion  of  the  court,  where 
the  road  had  been  leased  before  the 
execution  of  the  mortgage.  Louis- 
ville d  N.  It.  Co.  v.  Eakin,  100  Ky. 
745. 

89 


i^§  176-180 


RECEIVERSHIPS— SUPPLEMENT. 


When  receivers     appointed     in     an- 
other foreclosure. 

An  independent  suit  for  foreclos- 
ure of  a  mortgage  and  appointment 
of  receivers  of  the  property  of  a  rail- 
road company  cannot  be  maintained 
where  innnediate  possession  and  the 
displacement  of  receivers  appointed 
by  another  court,  or  their  appoint- 
ment as  receivers  in  the  new  suit,  is 
sought  without  leave  of  the  court  in 
the  original  case  to  file  a  separate 


bill.  American  Loan  c£  T.  Co.  v. 
Central  Vermont  It.  Co.  86  Fed.  Rep. 
390. 

When     mortgagor     in     hankruplcy. 

A  receiver  cannot  be  appointed  in 
an  action  to  foreclose  a  chattel 
mortgage,  where  the  mortgagor  has 
filed  a  petition  in  voluntary  bank- 
ruptcy in  the  United  States  district 
court.  Carpenter  v.  O'Connor,  16 
Ohio  C.  C.  526. 


Page  295,  sec.  176. — Over  what  appointed. 


The  receivcrsliip  need  not  extend 
to  the  entire  property  covered  by  the 


mortgage.     McGrath 
Hogan,  110. 


V.     Veitch,    1 


Page  299,  sec.  179. — Relative  rights  of  senior  and  junior  mort- 
gagees. 


A  second  encumbrancer  is  entitled 
to  a  receiver.  Ilaugan  v.  Netland, 
51  Minn.  52;  Archdeacon  v.  Boioes, 
3  Anstr.  752;  White  v.  Bishop  of 
Peterborough,  3  Swanst.  109. 

The  application  of  a  junior  encum- 
brancer for  tlie  appointment  of  a  re- 
ceiver pending  the  action  to  enforce 
his  encumbrance  stands  upon  more 
favorable  grounds  than  that  of  a 
senior  encumbrancer.  Pearson  v. 
Eendrick,  75  Miss.  416. 

The  fact  that,  pending  an  action 
to  foreclose  a  second  mortgage,  the 
holder  of  the  first  mortgage  has  paid 
the  delinquent  taxes  on  the  property 
and  added  the  amount  thereof  to  his 
mortgage,  which  he  has  foreclosed, 
and  on  the  foreclosure  of  which  he 
has  bid  in  the  property  for  the  full 
amount  due  him,  furnishes  no  ground 
for  the  discharge  of  a  receiver  pen- 
dente lite  appointed  in  proceedings  to 
foreclose  the  second  mortgage,  to 
collect  the  rents  of  the  mortgaged 
premises,  and  apply  them  to  the  pay- 


ment of  such  delinquent  taxes  and 
the  interest  due  on  the  jDrior  mort- 
gage. Farmers'  Nat.  Bank  v.  Back- 
us, 67  Minn.  43. 

The  appointment  of  a  receiver  in 
a  proceeding  to  foreclose  a  second 
mortgage  does  not  preclude  the  ap- 
pointment in  a  proceeding  to  fore- 
close the  first,  the  property  being  the 
same.  Holland  Trust  Co.  v.  Consoli- 
dated Gas  d  E.  L.  Co.  85  Hun,  454. 

The  exclusive  right  of  a  second 
mortgagee  to  the  income  is  limited 
to  a  case  when  the  first  mortgagee 
is  not  a  party.  Miltenberger  v. 
Logansport  R.  Co.  106  U.  S.  286, 
27  L.  ed.  117. 

When  a  receiver  has  been  ap- 
pointed by  a  puisne  encumbrancee 
the  court  will  not  extend  it  to  the 
suit  of  a  prior  encumbrancee.  Broion 
V.  Nolan,  10  Ir.  Eq.  Rep.  57. 

The  court  has  power  to  appoint  re- 
ceiver, though  not  granted  in  an  act 
of  Parliament.  DeWinton  v.  Brecon, 
26  Beav.  533. 


Page  302,  sec.  180. — Receiver  in  behalf  of  annuitants. 


A  receiver  will  be  appointed  for 
arrears  in  an  annuity.  Probasco  v. 
Probasco,  30  N.  J.  Eq.  108. 

The  court  by  the  appointment  of  a 
90 


receiver  of  an  annuity  attaches  the 
rent  due  by  tenants.  Hayden  v. 
Shearmayi,  2  Ir.  Ch.  Rep.  137. 

An  annuitant  is  entitled  to  have 


EECEIVERSHIP    OF   PARTNERSHIPS. 


§§  190,  191 


a  receiver  appointed  over  the  bene- 
fice upon  an  interlocutory  applica- 
tion, made  for  that  purpose,  pre- 
vious LO  the  hearing  of  the  cause. 
Battersby  v.  Eoman,  2  Ir.  Ch.  Rep. 
232. 


A  receiver  may  collect  an  annuity 
in  another  state.  Frazier  v. 
Barnuni,  19  X.  J.  Eq.  olO,  97  -rvm. 
Dec.  OG(J. 


Page  305,  sec.  190. — Partnership;  power  to  appoint  receiver. 


The  power  under  Tex.  Rev.  Stat. 
1895,  art.  1465,  to  appoint  receivers 
in  actions  between  partners,  should 
not  be  exercised  in  the  absence  of  an 
emergency,  without  notice  to  the  ad- 
verse party.  Webb  V.  Allen,  15  Tex. 
Civ.  App.  605. 

The  power  to  appoint  receivers  in 
actions  between  partners,  conferred 
by  Tex.  Rev.  Stat.  1895,  art.  1465,  is 
to  be  exercised  only  in  accord  with 
the  general  practice  and  principles 
of  equit}',  in  cases  where  some  good 


reason  or  necessity  is  shown  for  the 
appointment.     Ibid. 

In  an  action  between  partners, 
where  the  appointment  of  a  receiver 
is  prayed  for,  the  circuit  court  ac- 
quires jurisdiction  of  the  defendant 
where  the  notice  of  motion  is  left 
with  the  defendant's  wife  at  his  resi- 
dence, and  the  defendant  is  not 
shown  to  have  been  without  the 
state, — especially  when  he  appears 
bv  counsel  and  resists  the  motion. 
Allen  V.  Cooley,  53  S.  C.  414. 


Page  306,  sec.  191. — When  appointed. 


Shackelford  v.  Shackelford,  32 
Gratt.  481,  510,  514;  Shulte  v. 
Hoffman,  18  Tex.  678;  Maker  v. 
Bull,  44  111.  97. 

The  executors  of  a  deceased  part- 
ner have  the  right  to  have  a  receiver 
appointed.  Davis  v.  Amer,  3  Drew. 
64. 

A  receiver  is  properly  appointed 
of  goods  belonging  to  a  firm  on  which 
thei"e  are  three  mortgages,  while 
several  unsecured  creditors  are  in- 
terested and  the  partners  are  unable 
to  agree  and  have  applied  for  a  dis- 
solution of  the  partnership.  Rolfe 
v.  Burnham,  110  IMich.  060. 

A  receiver  of  uncollected  accounts 
due  in  a  joint  enterprise  was  ap- 
pointed. Candler  v.  Candler,  Jac. 
225. 

To  entitle  a  partner  who  has  left 
assets  with  a  copartner  for  the  pay- 
ment of  firm  debts  which  the  latter 
assumed,  to  the  appointment  of  a  re- 
ceiver to  prevent  waste  and  misap- 
plication, it  need  not  be  shown  that 
some  partnership  creditor  has  at- 
tempted or  is  about  to  attempt  to 
subject  the  plaintiff  to  liability. 
Allen  V.  Cooley,  53  S.  C.  414. 

A  receiver  of  the  property  of  an  al- 


leged partnership  will  be  appointed, 
although  the  existence  of  the  part- 
nership is  denied  by  the  defendant, 
when  the  court  is  satisfied  from  the 
evidence  in  support  of  the  applica- 
tion that  a  partnership  really  ex- 
isted, Leeds  v.  Toicnsend,  74  111. 
App.  444. 

Insolvency. 

On  insolvency  of  a  firm  one  who 
has  supplied  goods  may  have  a  re- 
ceiver wlien  the  property  sold  is 
about  to  be  turned  over  to  a  new  con- 
cern. Ifite  Natural  Gas  Co.'s  Ap- 
peal, lis  Pa.  436. 

A  member  of  a  partnership  may 
maintain  an  action  to  place  the  af- 
fairs of  the  concern  in  the  hands  of 
a  receiver,  when  the  partnership  has 
become  insolvent  and  other  m'embers 
of  the  firm  are  charged  with  fraud- 
ulent misapplication  and  improper 
conversion  and  waste  of  assets  of  the 
])artnership.  Watson  v.  Bettman, 
88  Fed.  Rep.  825. 

For  fraiid  of  one  partner. 

A  court  will  appoint  a  receiver  for 
property  of  a  partnership,  where 
some  of  the  members  are  guilty  of 

91 


193 


KECEIVERSHIPS— SUPPLEMENT. 


a  fraudulent  misapplication  of 
revenues,  and  there  is  inability  to 
discharge  heavy  claims  against  the 
partnership  and  judgments  against 
its  members,  while  irreconcilable  dif- 
ferences exist  between  the  members 
as  to  the  management  of  the  jjrop- 
erty.  Watson  v.  Bettman,  88  Fed. 
Rep.  825. 

Misappropriation    of   firm  property. 

Misappropriation  of  partnership 
property  justifies  the  appointment  of 
a  receiver.  Coddington  v.  Tappan, 
26  N.  J.  Eq.  141. 

Assignment    by   each  partner. 

When  each  partner  undertakes  to 
make  an  assignment  to  different  as- 
signees a  receiver  will  be  appointed. 
Fox  V.  Curtis,  176  Pa.  52. 

Danger  of  loss. 

A  receiver  of  a  partnership  will  be 
appointed  when  there  is  danger  of 
ultimate  loss.  Wellman  v.  Barker, 
3  Or.  253. 

Conditional  interest. 

A  conditional  interest  in  a  part- 
nership is  suflicient  cause  for  grant- 
ing a  receiver.  Taylor  v.  Bliley,  86 
Ga.   154. 

Death  of  partner. 

A  receiver  of  partnership  property 
is  properly  appointed  after  the  death 


of  one  of  the  partners,  where  the  sur- 
viving partner  has  given  the  admin- 
istratrix of  the  deceased  partner 
notes  for  the  share  of  the  deceased 
partner  which  he  fails  to  pay,  and 
conducts  the  business  in  such  man- 
ner that  the  property  is  greatly  de- 
preciated in  value ;  but  such  receiver 
should  not  be  authorized  to  take 
possession  of  the  individual  property 
of  the  surviving  partner.  Adams  v. 
Hannah,  1)7  Ga.  515. 

Partnership  dissolved. 

A  receiver  of  a  partnership  is 
properly  appointed  during  the  pend- 
ency of  an  action  for  the  settlement 
of  the  partnership  affairs,  where  the 
partnership  has  expired  by  its  own 
limitation,  and  the  partners  do  not 
desire  to  continue  the  business,  and 
representatives  of  five  sixths  of  the 
interest  therein  request  such  ap- 
pointment. Witherhee  v.  Wither- 
hee,  17  App.  Div.  181. 

Exclusion  of  partner. 

A  receiver  will  be  appointed  when 
there  is  a  refusal  to  allow  a  partner 
to  participate.  Wolbert  v.  Harris, 
7  N.  J.  Eq.  605. 

The  exclusion  of  one  partner  from 
his  full  share  in  the  affairs  of  the 
partnership  is  ground  for  the  ap- 
pointment of  a  receiver  for  the  part- 
nership property.  Einstein  v. 
SchneUy,  89  Fed.  Rep.  540. 


Page  308,  sec.  192. — When  not  appointed. 


Tlie  usual  rule  is  not  to  appoint 
a  temporary  receiver  of  a  partner- 
ship the  existence  of  which  is  de- 
nied, until  the  question  of  partner- 
ship vel  non  is  determined.  Guild 
v.  Meyer,  56  N.  J.  Eq.  183. 

A  United  States  circuit  court  will 
not  appoint  a  person  receiver  of  a 
partnership  concern  who  resides  out 
of  its  jurisdiction  in  a  state  where 
none  of  the  partnership  assets  are 
located.  Watson  v.  Bettman,  88  Fed. 
Rep.  825. 

A  plaintiff  is  not  entitled  to  have 
a  receiver  appointed  for  a  partner- 
ship of  which  he  is  not  a  member  or 
creditor,  nor  to  an  account  based  on 
92 


its  receipts  and  expenditures. 
Gtoinn  v.  Lee,  6  Pa.  Super.  Ct.  646, 
42  W.  N.  C.  124. 

A  person  will  not  be  appointed  as 
receiver  of  the  affairs  of  a  partner- 
ship, who  is  interested  in  judgments 
against  its  property,  and  is  con- 
nected by  marriage  with  parties  se- 
cured by  a  deed  of  assignment  for 
the  benefit  of  its  creditors,  and  who 
is  charged  with  cognizance  of  the 
fraudulent  misapplication  of  assets 
by  members  of  the  partnership. 
Watson  V.  Bettman,  88  Fed.  Rep. 
825. 

A  receiver  of  partnership  property 
should  not  be  appointed  because  of 


RECEIVERSHIP    OF   PARTNERSHIPS. 


209 


the  objection  of  complainants,  pend- 
ing a  suit  by  the  surviving  partner 
against  the  representative  of  a  de- 
ceased partner  for  an  accounting 
and  a  sale  of  the  property  with  per- 
mission to  the  complainants  to  pur- 
chase to  enable  them  to  continue  the 
business  in  their  own  interests, 
where  the  complainants  appear  to  be 
abundantly  responsible  and  able  to 
do  justice  on  a  final  accounting,  and 
the  appointment  of  a  receiver  would 
be  detrimental  to  or  destructive  of 
the  business.  Comstock  v.  McDon- 
ald, 113  Mich.  C2G. 

The  court  will  not  appoint  a  re- 
ceiver of  the  assets  of  a  firm  prior  to 
the  expiration  of  the  partnership 
term,  except  for  the  purpose  of  the 
preservation  of  the  assets  in  the  face 
of  a  real  danger  of  loss,  although  the 
disagreements  between  the  partners 
are  such  as  to  justify  the  court  in 
decreeing  a  dissolution.  Wanvick 
V.  Stockton,  55  N.  J.  Eq.  61. 

A  receiver  will  not  be  appointed 
when  the  only  question  is  whether  a 
partnership  has  been  dissolved.  Fair- 
hum  V.  Pearson,  2  Macn.  &  G.  144. 

In  an  action  to  dissolve  a  partner- 
ship, where  it  is  not  alleged  that  the 
defendant  is  insolvent,  and  the  an- 
swer directly  alleges  solvency,  a  re- 
ceiver will  not  be  appointed.  Wales 
V.  Dennis,  9  Wash.  308. 

A  receiver  of  partnership  property 
cannot  be  appointed  where  all  the 
partnership  property  has  been  sold 
under  a  chattel  mortgage,  on  an 
agreement  that  upon  any  sale  by  the 
mortgagee,  who  was  the  purchaser, 
the  residue  above  the  mortgage  debt 
should  belong  to  the  partners,  and 
such  mortgagee  sells  the  property  to 
one  of  the  partners  for  not  more  than 
the  amount  of  the  debt,  even  though 


the  latter  may  sell  it  for  an  amount 
in  excess  of.  the  debt.  Davis  v.  Nis- 
ivonger,  145  Ind.  426. 

Question  of  damage. 
A  receiver  will  not  be  appointed 
over  a  question  of  damage.  There 
must  be  an  account  to  be  adjusted. 
Morrison  v.  Van  Benthuysen,  103 
N.  Y.  675. 

Dissolution  by  consent. 

Where  a  partnership  is  dissolved 
by  mutual  consent  a  court  of  chan- 
cery will  not  place  it  in  the  hands  of 
a  receiver.  Cox  v.  Peters,  13  N.  J. 
Eq.  39. 

A  partner  who,  upon  voluntary 
dissolution  of  a  firm,  accepts  a  per- 
sonal covenant  of  his  copartner  to 
pay  its  liabilities  and  account  to  him 
for  his  interest  in  the  assets,  is  not 
entitled,  in  an  action  for  an  account- 
ing and  the  recovery  of  the  amount 
the  copartner  agreed  to  pay  him,  to 
the  appointment  of  a  receiver  of  the 
property.  Alcott  v.  Vultee,  33  App. 
Div.  245. 

Mere  delay. 
Mere  delay  on  the  part  of  surviv- 
ing partners  will  not  justify  the  ap- 
pointment of  a  receiver.     Collins   v. 
Young,  28  Eng.  L.  &  Eq.  14. 

Abandonment. 
A  partner  who  abandons  the  part- 
nership enterprise  is  not  entitled  to 
the  appointment  of  a  receiver  and  an 
injunction  against  the  collection  or 
receiving  of  partnership  debts  or 
moneys,  where  his  interest  has  been 
sold  under  execution  against  the  firm 
to  a  third  person,  and  the  business 
has  been  carried  on  from  that  time 
under  a  new  firm  name.  Yoos  v. 
Doyle,  4  Lack.  L.  News,  128. 


Page  336,  sec.  209. — Receiver's  power  and  duty. 


To  set  aside  transfer;  distribution. 

A  receiver  appointed  in  supple- 
mentary proceedings  against  a  part- 
nership, who  brings  an  action  to  set 
aside  a  transfer  by  the  partnership 
when  insolvent  with  intent  to  pre- 
fer certain  creditors,  in  violation  of 
1  N.  Y.  Rev.  Stat.  p.  760,  §  20,  is  not 


entitled  to  all  the  proceeds  of  the 
property  so  transferred,  without  re- 
gard to  its  amount,  but  only  to  a 
sufficient  amount  to  pay  the  judg- 
ments upon  which  he  was  appointed 
receiver  and  the  expenses  of  the  re- 
ceivership. Stiefel  v.  Berlin,  28  App. 
Div.  103. 


98 


§  210 


RECEIVERSHIPS— SUPPLEMENT. 


Over  funds  deposited  before  appoint- 
men  t. 

A  receiver  of  a  partnership  ap- 
pointed on  the  same  day  that  a  bank 
l)ahiiK'e  in  tlie  name  of  the  firm  was 
appropriated  by  the  bank,  under  an 
agreement  with  the  depositor  in  pay- 
ment of  sums  due  it,  is  not  entitled 
to  the  fund  as  against  the  bank,  un- 
less it  appears  that  he  was  appointed 
before  the  account  was  closed.  Lon- 
don £  River  Plate  Bank  v.  Hanover 
Nat.  Bank,  3G  App,  Div.  487. 

To  prosecute  and  defend. 

A  receiver  of  partnership  assets 
should  not  be  authorized  in  advance 
to  prosecute  and  defend  without  fur- 
ther order  of  the  court  any  actions 
brought  by  or  against  the  partners 
pertaining  to  the  partnership  busi- 
ness. WitJicrbee  v.  Witherbee,  17 
App.  Div.  181. 

To  prevent  levy  of  attachment. 

A  receiver  appointed  in  good  faith 
to  close  up  the  business  of  a  partner- 
ship and  distribute  its  assets  pro 
rata  among  its  creditors  will  not  be 
required  to  permit  a  levy  on  the 
partnership  property  of  a  writ  of  at- 
tachment by  a  firm  creditor  issued 
before  the  proceedings  for  the  dis- 
solution of  the  partnership  were 
commenced.  Myers  v.  Myers,  15  App. 
Div.  448,  Affirming  18  Misc.  663. 

To  permit  levy  of  execution. 

The  court  appointing  a  receiver  of 
a  solvent  firm  pending  an  action  for 
dissolution  should,  upon  an  applica- 
tion therefor,  though  not  in  the  ac- 
tion for  dissolution  and  not  made 
upon  notice  to  the  partners,  permit 
the  levy  of  an  execution  upon  the  as- 
sets of  the  firm  in  his  hands  under  a 
judgment  against  the  partners.  Re 
Thompson,  10  App.  Div.  40. 


To  sell  property. 

The  jurisdiction  of  a  court  of 
.equity  in  an  action  to  wind  up  a 
partnership  is  not  local  merely,  but 
extends  so  far  as  to  authorize  the  ap- 
pointment of  a  receiver  to  sell  real 
property  constituting  a  part  of  the 
partnership  assets,  even  tlioiigh  it 
may  be  situated  in  another  state. 
Dunlap  v.  Byers,  110  Mich.  109. 

To  question  judgments. 

A  receiver  in  a  suit  between  part- 
ners for  dissolution  cannot  question 
judgments  confessed  by  the  firm  to 
give  preferences.  Weber  v.  Weber,  90 
Wis.  467. 

To  recover  money  or  property. 

The  receiver  of  a  partnership  may 
recover  from  plaintiff  collections 
made  just  prior  to  the  application 
for  the  appointment.  Murphy  v. 
DuBerg,  11  Abb.  N.  C.  112. 

A  receiver  of  partnership  assets, 
appointed  in  a  suit  for  an  account- 
ing between  the  partners,  has  no  au- 
thority to  compel  one  of  the  parties 
to  regain  and  turn  over  to  him  prop- 
erty which  has  passed  out  of  his 
hands  long  before.  Ferguson  v. 
Bruckman,  23  App.  Div.  182. 

To  sell  manufactured  articles. 

The  receiver  of  a  partnership  on 
a  bill  for  dissolution  has  power  to 
sell  manufactured  articles  on  hand. 
Montross  v.  3Iabie,  30  Fed.  Pvcp.  234. 

Whom    the    receiver  represents. 

A  receiver  of  a  partnership  repre- 
sents, not  onlj'^  the  members  of  the 
firm,  but  also  all  the  creditors,  in  an 
action  brought  by  him.  Lees  v.  Dob- 
son,  26  App.  Div.  624. 

A  partnership  receiver  does  not 
represent  creditors  to  such  extent  as 
to  attack  a  chattel  mortgage  given 
by  the  firm.  Walsh  v.  >S7.  Paul 
School  Funiture  Co.  60  Minn.  397. 


Page  338,  sec.  210. — Effect  of  appointment. 


The  appointment  of  a  temporary 
receiver  in  an  action  for  the  dissolu- 
tion of  an  insolvent  partnership  and 
the  appointment  of  a  receiver  puts 
94 


the  firm  assets  under  the  control  of 
the  court  for  pro  rata  distribution 
among  the  general  creditors, — at 
least  where    the    insolvencv    of    the 


RECEIVERSHIP   OF   CORPORATIONS. 


?,  2U 


firm  is  sufficiently  set  up  in  the 
pleadings.  Myers  v.  Myers,  18  Misc. 
G63,  Affirmed  in  15  App.  Div.  448. 

No  partnership  between  two  rail- 
road companies  exists  either  between 
the  parties  or  as  to  third  persons,  be- 
cause the  receiver  of  one  of  the  com- 
panies operates  both  roads  jointly, 
and  part  of  the  gross  receipts  is 
paid  to  the  other  company.  Hous- 
ton t£  T.  C.  R.  Co.  V.  McFadden,  91 
Tex.  194,  Affirming  in  Part  and  Re- 
versing in  Part  40  S.  W.  21G. 

In  a  suit  for  dissolution  of  a  part- 
nership, in  which  a  receiver  has  been 
appointed,  the  court  may  order  a  sale 
of  the  property  where  the  partner- 
ship is  insolvent  and  the  business  is 
being  carried  on  at  a  loss.  Wulff  v. 
San  Joaquin  County  Super  Ct.  110 
Cal.  215. 

An  order  appointing  a  receiver  of 
firm  assets  is  an  equitable  assign- 
ment for  the  benetit  of  the  firm 
creditors.     Re  Hamilton,  26  Or.  579. 

The  appointment  of  a  receiver  to 
take  charge  of  the  assets  of  a  part- 
nership at  the  instance  of  a  creditor 
who  attached  the  same  for  a  debt  of 
tne  firm  does  not  prevent  the  issu- 
ance of  another  order  of  attachment 
without  a  new  affidavit  or  bond,  to 


another  county,  against  land  belong- 
ing to  one  of  the  partners.  Runner 
V.  Scott,  150  Ind.  441. 

A  creditor  of  a  limited  partner- 
ship association  of  which  a  receiver 
has  been  appointed  is  not  thereafter 
entitled  to  issue  execution  on  his 
judgment  against  subscribers  to 
stock  of  the  associa-tion  whose  sub- 
scriptions are  not  paid  up.  Rouse 
V.  Detroit  Cycle  Co.  Ill  Mich.  251, 
38  L.  R.  A.  794. 

A  partner's  book  accounts  or  cash 
on  hand  are  assets  and  property  of 
the  partnership,  within  the  meaning 
of  a  bond  given  by  him  for  the  pur- 
pose of  recovering  possession  of  the 
jjartnership  property  from  a  receiver, 
conditioned  upon  his  accounting  for 
all  the  assets  and  property  of  the 
partnership  then  in  his  possession 
or  under  his  control,  or  which  might 
thereafter  come  into  his  possession, 
as  ascertained  by  the  court.  Larsen 
y.  Winder,  20  Wash.  419. 

A  receivership  in  an  action  to  dis- 
solve a  partnership  will  be  set  aside 
as  void  as  to  the  firm  creditors,  where 
made  with  the  intent  to  hinder,  de- 
lay, and  defraud  them.  Metcalf  v. 
Moses,  35  App.  Div.  59G. 


Receivership  of  corporations. 


Page  350,  sec.  224. — Application;  by  whom  made. 


The  application  for  the  appoint- 
ment of  a  receiver  for  a  street-rail- 
way company  may  be  made  by  a 
mortgagee  for  threatened  loss  of 
franchises.  Union  Street  R.  Co.  v. 
Saginaw,  115  Mich.  300. 

Application  by  a  simple-contract 
creditor,  in  the  absence  of  statute,  is 
not  sufficient.  Smith-Dimmick  Lum- 
ber Co.  V.  Teaf/ue  (Ala.)   24  So.  4. 

Nor  is  the  application  by  a  credit- 
or who  has  aocejjtcd  a  firm  as  payers, 
instead  of  a  coii)oration.  Tenney  v. 
Ballard,  W.  &  B.  Hat  Co.  17  Tex. 
Civ.  App.  144. 

Appointment  may  be  made  on  the 
application  of  a  lessor  of  a  mining 
company  to  whom  there  is  a  large  in- 


debtedness due.  Kanawha  Coal  Co. 
V.  Ballard  &  W.  Coal  Co.  43  W.  Va. 
721. 

And  when  the  corporation  is  insol- 
vent. Oleson  v.  Bank  of  Tacoma,  15 
Wash.  148. 

It  may  be  made  by  a  state's  attor- 
ney in  proceedings  statutory.  State, 
Amsierdamsch  Trustees  Kantoor,  v. 
Spokane  County  Super.  Ct.  15  Wash. 
(i08,  37  L.  R.  A.  111. 

Or  by  one  corporation  for  an  ac- 
counting by  another,  the  property  of 
the  latter  being  in  the  hands  of  trus- 
tees. American  Mortg.  Co.  v.  Sid- 
tray  (III.)  12  Nat.  Corp.  Rep.  727, 
28  Chicago  Leg.  News,  .394. 

Or  l)y  the  state  in  the  interest  of 

95 


§  234 


RECEIVERSHIPS— SUPPLEMENT. 


the  public.  East  Line  <£  R.  River  R. 
Co.  V.  l^tate,  75  Tex.  434;  Texas 
Trunk  R.  Co.  v.  State,  83  Tex.  1. 

Or  on  the  application  of  an  as- 
signee of  an  insolvent  foreign  cor- 
poration. Bitsirell  V.  Supreme  Sit- 
ting of  0.  of  1.  H.  IGl  Mass.  224,  23 
L.  R.  A.  846. 

Stockholders. 

The  appointment  will  not  be  made 
on  the  application  of  a  stockholder 
whore  no  advantage  would  accrue  to 
him.  but  a  loss  to  other  stockholders 
would  ensue.  Robison  v.  Cleveland 
City  R.  Co.  7  Ohio  Dec.  312. 

Or  on  the  application  of  a  bond- 
holder merely  because  of  default  in 
the  interest,  where  the  management 
is  proper  and  the  application  of  the 
funds  judicious.  I'rust  d  Deposit 
Co.  V.  Spartanburg  Waterworks  Co. 
91  Fed.  Rep.  324. 

Or  on  the  application  of  a  stock- 
holder merely  because  of  the  unlaw- 
ful cancelation  of  preferred  stock, 
where  injunction  is  available.  Em- 
pire Hotel  Co.  V.  Main,  98  Ga.  176. 

Or  at  the  suit  of  a  minority  stock- 
holder, when  the  directors  are  acting 
honestly  and  within  the  scope  of 
their  corporate  powers.  Hunt  v. 
American  Grocery  Co.  80  Fed.  Rep. 
70. 

Or  at  the  suit  of  stockholders, 
when  the  appointment  would  hinder 
and  delay  creditors.  Bell  v.  Wood, 
181  Pa.  175. 

Nor  is  the  application  sufficient 
when  made  by  a  stockholder  on  the 
groimd  of  mismanagement  and  in- 
solvency, unless  some  undoubted 
right  belonging  to  him  is  in  danger. 
Gracey  v.  Pittsburgh  Trolley  Co.  28 
Pittsb.  L.  J.  N.  S.  109;  People's  In- 
vestment Co.  V.  Craioford  (Tex.  Civ. 
App.)   45  S.  W.  738. 

Or  by  a  small  stockholder  on  the 
ground  of  a  resolution  conferring 
on  one  stockholder  the  full  manage- 
ment, and  mismanagement.  Rumney 
v.  Detroit  d  M.  Cattle  Co.  (Mich.) 
5  Det.  L.  N.  96,  74  N.  W.  1043. 

Or  by  a  stockholder  alleging  a  dif- 
ference of  opinion  between  him  and 
the  other  stockholders,  who  are  in 
the  majority,  as  to  the  management, 
when  there  is  no  fraud  appearing  on 
96 


the  part  of  the  majority.  Ponca 
Mill  Co.  V.  Mikcscll,  55  Neb.  98. 

Nor  by  a  stockholder  who  claims 
to  be  a  creditor  on  account  of  divi- 
dends on  his  stock,  which  should 
have  accrued.  Lcary  v.  Columbia 
River  d  P.  S.  Nav.  Co.  82  Fed.  Rep. 
775. 

The  appointment  may  be  made  on 
the  application  of  a  stockholder  on 
the  ground  of  mismanagement  and 
misappropriation.  Stevens  v.  South 
Ogden  Land,  Bldg.  d  Improv.  Co.  14 
Utah,  232. 

Minority  bondholders. 

The  minority  mortgage  bondhold- 
ers of  a  street  railroad  are  not  en- 
titled to  a  receiver  on  foreclosure, 
notwithstanding  interest  due  and 
other  liens,  when  the  majority  bond- 
holders refuse  to  request  the  trustee 
to  foreclose,  in  the  absence  of  fraud 
and  when  the  road  is  in  the  hands  of 
a  receiver  of  another  court,  no  prob- 
able danger  appearing.  Lancaster 
V.  Asheville  Street  R.  Co.  90  Fed. 
Rep.  129. 

Judgment  creditors. 

A  receiver  may  be  appointed  at  the 
instance  of  a  judgment  creditor. 
Monarch  Co.  v.  Bank  of  Hardins- 
burg,  20  Ky.  L.  Rep.  92;  United 
Glass  Co.  V.  Vary,  152  N.  Y.  121 ; 
Drey  fuss  v.  Gharleo  Scale  d  Co.  18 
Misc.  551. 

The  application  may  be  made  by  a 
resident  creditor  for  the  appointment 
over  a  foreign  corporation  already  in 
the  hands  of  a  receiver  at  its  domi- 
cil.  Seciirity  Sav.  d  L.  Asso.  v. 
Moore,  151  Ind.  174. 

To  justify  the  appointment  on  the 
application  of  a  creditor,  it  should 
appear  that  he  has  a  valid  claim, 
that  there  are  assets  applicable  to 
its  payment,  that  he  has  exhausted 
his  legal  remedies,  and  that  there  is 
danger  of  loss.  Falmouth  Nat.  Bank 
V.  Cape  Cod  Ship  Canal  Co.  166  Mass. 
5.50. 

Whenever  a  judgment  creditor  of 
a  railway  company  is  unpaid  the  ap- 
pointment of  a  receiver  is  a  matter 
of  right;  and  the  appointment  is 
"necessary"  witMn  the  meaning  of 
the  English  railway    companies    act 


RECEIVERSHIP  OF  CORPORATIONS. 


225 


of  1867.     Re  Manchester  d  M.  R.  Co. 
L.  R.  14  Ch.  Div.  G45. 

The  appointment  of  a  temporary 
receiver  of  a  corporation  at  the  in- 
stance of  a  judgment  creditor  un- 
der Mo.  Rev.  Stat.  1889,  §§  2790- 
2792,  is  justified  upon  a  petition  and 
testimony  showing  that  some  of  the 
officers  have  appropriated  the  funds 
to  the  amount  of  thousands  of 
dollars  to  their  own  use,  and  have 
been  guilty  of  other  improper  acts 
calculated  to  defeat  the  plaintiff's 
demand,  and  no  contradictory 
proof  is  submitted.  Glover  v.  St. 
Louis  Mut.  Bond  Invest.  Co.  138 
Mo.  408. 

Who  appointed. 

The  principal  manager  of  an  in- 
solvent corporation  may  be  ap- 
pointed receiver.  Re  Premier  Cycle 
Mfg.  Co.  70  Conn.  473.  But  see, 
contra,  Middlesex  County  Freehold- 
ers V.  State  Bank,  28  N.  J.  Eq.  166. 

Extension  of  receivership. 

A  receivership  over  so  much  of  a 
line  of  railroad  as  has  been  com- 
pleted may  be  extended  over  other 
parts  thereafter  completed.  Re 
Southern  R.  Co.  Ir.  L.  R.  5  Eq.  165. 

A  receiver  of  all  the  property  of 


a  corporation  of  which  a  receiver  has 
already  been  appointed  cannot  be 
appointed  in  an  action  to  set  aside 
a  transfer  of  property  to  such  corpo- 
ration by  one  against  whom  plaintiff 
had  recovered  judgment, — especially 
where  it  is  not  shown  that  the  prop- 
erty was  transferred  by  such  judg- 
ment debtor.  Schulze  v.  Sizer,  14 
App.  Div.  274. 

The  receiver  appointed  in  an  ac- 
tion for  dissolution  of  a  corporation 
should  be  appointed  in  an  action  to 
foreclose  a  chattel  mortgage  by  the 
same  corporation.  Farmers'  Loan 
i&  T.  Co.  V.  Hotel  Brunswick  Co.  4Z 
N.  Y.  Supp.  350. 

Judgment  required. 

The  appointment  of  a  temporary 
receiver  does  not  obviate  the  neces- 
sity of  judgment  against  the  corpo- 
ration, and  the  return  of  an  execu- 
tion unsatisfied,  in  a  proceeding  to 
enforce  a  stockholder's  liability. 
United  States  Glass  Co.  v.  Levett, 
24  Misc.  429. 

A  creditor  may  maintain  a  suit  to 
enforce  unpaid  subscriptions,  not- 
withstanding the  pendency  of  a  fore- 
closure action  wherein  a  receiver 
has  been  appointed.  Lea  v.  Iron 
Belt  Mercantile  Co.  (Ala.)  24  So.  28. 


Page  355,  sec.  225. — Grounds  for  appointment. 


In  Missouri,  statute  and  extreme 
necessity  will  justify  appointment. 
Ford  V.  Kansas  City  &  I.  Short  Line 
R.  Co.  52  Mo.  App.  439. 

Disagreement  between  stockhold- 
ers as  to  management  is  not  always  a 
ground.  Einstein  v.  Rosenfeld,  38 
N.  .J.  Eq.  309. 

Xonpayment  of  taxes,  sale  for 
taxes,  insolvency,  and  refusal  of 
trustees  to  act  justify  appointment 
of  railway  receiver.  Putnam  v. 
Jacksonville,  L.  &  St.  L.  R.  Co.  61 
Fed.  Rep.  440. 

In  ^lassachusetts,  insolvency  and 
confusion  of  affairs  are  not  suffi- 
cient, as  in  such  case  the  insolvent 
law  affords  a  complete  remedy.  Fal- 
mouth Nat.  Bank  v.  Cape  Cod  Ship 
Canal  Co.  166  Mass.  550. 

Insolvency  alone  is  not  sufficient 


if  it  appears  that  business  is  about 
to  be  resumed  with  safety.  Cook  v. 
East  Trenton  Pottery  Co.  53  N.  J. 
Eq.  29. 

But  where  insolvency  is  shown, 
and  the  rights  of  creditors  are  en- 
dangered, an  appointment  will  be 
made.  Porter  v.  Industrial  Infor- 
mation Co.  5  Misc.  262. 

In  Illinois,  to  justify  the  appoint- 
ment under  §  25  of  the  incorporation 
act,  it  must  be  shown  that  the  sus- 
pension of  business  is  permanent, 
and  not  such  as  arises  from  an 
emergency.  Brabrook  Tailoring  Co. 
v.  Bclding  Bros.  40  ill.  App.  326. 

Tiie  exclusion  of  bondholders  from 
participation  in  the  management  is 
ground  for.  Benedict  v.  St.  Joseph 
d  W.  R.  Co.  19  Fed.  Rep.  173. 

Interest  due  and  unpaid,  taxes 
7  »7 


§  225 


RECEIVERSHIPS— SUPPLEMENT. 


due,  and  judgments  with  failure  to 
elect  ollicers,  are  grounds  for.  Ralph 
V.  n'is/K-r,  100  Mich.  104. 

Appointment  will  not  be  made,  un- 
der tlie  Alabama  statute,  unless  such 
facts  exist  as  call  for  the  general  ex- 
ercise of  chancery  jurisdiction  and 
procedure.  Wcatlicrly  v.  Capital 
City  Water  Co.  115  Ala.  150. 

A])pointment  in  Maryland  is  dis- 
cretionary, and  is  made  only  where 
there  is  fraud,  spoliation,  or  immi- 
nent danger  of  loss.  Steinberger  v. 
Independent  Loan  d  Sav.  Asso.  84 
Md.  625. 

Insolvency  must  exist,  and  debt 
must  be  reduced  to  a  judgment. 
Wallace  v.  ]'ierce-Wallacc  Pub.  Co. 
101  Iowa,  313,  38  L.  R.  A.  122. 

On  the  concurrence  of  the  com- 
pany and  its  execution  creditors,  a 
receiver  will  be  appointed  to  prevent 
the  jeopardizing  of  corporate  assets 
by  sherilf  sales.  Line  v.  Carlisle 
Mfg.  Co.  5  Pa.  Dist.  R.  042. 

In  New  York  a  receiver  of  the 
property  and  effects  of  a  foreign  cor- 
poration, to  wind  up  its  affairs,  will 
not  be  appointed  with  a  view  of 
winding  up,  under  §  1784  of  the  Code. 
Drey  fuss  v.  Charles  Seale  d  Co.  18 
Misc.  551. 

An  appointment  will  not  be  made 
simply  because  there  are  unpaid 
judgments,  taxes,  and  indebtedness, 
if  it  appears  that  the  indebtedness 
will  be  liquidated  by  the  foi'bearance 
of  the  principal  creditors.  Ft. 
Wayne  Electric  Corp.  v.  Franklin 
Electric  Light  Co.  (N.  J.  Eq.)  40 
Atl.  441. 

The  general  allegation  of  expected 
exposure  if  the  corporation  is  not 
wound  up  is  not  sufficient.  It  must 
be  shown  that  there  is  mismanage- 
ment, improper  application  of  funds, 
or  other  acts  of  maladministration. 
Mulqueeney  v.  Shaw,  50  La.  Ann. 
1000. 

Disagreement  as  to  the  manage- 
ment and  conti'ol  is  not  sufficient  to 
warrant  the  appointment  of  a  re- 
ceiver. Wallace  v.  Pierce-Wallace 
Pub.  Co.  101  Iowa,  313,  38  L.  R.  A. 
122. 

A  court  of  equity  may  decree  the 
dissolution  of  an  unincorporated  vol- 
untary association,  and  appoint  a 
receiver.  Lafond  v.  Deems,  1  Abb. 
98 


N.  C.  318;  Hinckley  v.  Blethen,  78 
Me.  221. 

And  so  of  a  club.  Re  St.  Jamea 
Club,  7  Eng.  L.  &  Eq.  140. 

A  corporation  may  be  dissolved 
and  a  receiver  appointed  where  it 
has  misused  its  corporate  authority. 
Slate  V.  Cannon  River  Mfg.  Asso.  07 
Minn.  14. 

Only  by  virtue  of  a  statute  can  the 
management  of  a  business  be  taken 
from  a  corporation.  People,  Port 
Huron  d  G.  R.  Co.,  v.  St.  Clair  Cir- 
cuit Judge,  31  Mich.  456. 

Appointment  as  a  matter  of 
course  follows  a  decree  for  dissolu- 
tion. Tsiichols  V.  Perry  Patent  Arm 
Co.  11  N.  J.  Eq.  126. 

The  appointment  of  a  receiver  of 
a  trading  corporation  is  proper  pend- 
ing litigation  over  its  conduct  and 
management,  between  the  owners  of 
its  stock,  and  where  its  affairs  have 
come  to  a  deadlock.  Sternberg  v. 
Wolff,  56  N.  J.  Eq.  389,  39  L.  R.  A. 
702. 

But  the  appointment  can  only  be 
made  in  a  civil  action.  Clinch  v. 
South  Side  R.  Co.  4  Thomp.  &  C.  224. 

A  receiver  was  properly  appointed,, 
and  an  injunction  against  disposi- 
tion of  property  of  a  corporation 
granted,  where  such  corporation  had 
arranged  with  two  of  its  principal 
creditors  for  additional  credit  by 
them,  secured  by  its  judgment  notes, 
and  a  majority  of  the  directors  of 
such  corporation  were  appointed  by 
such  creditors,  at  the  suit  of  other 
creditors  who,  in  ignorance  of  the 
situation  and  while  there  was  no  ap- 
parent change  of  management  or 
control  of  the  business,  gave  credit 
to  such  corporation  for  large  sums 
for  which  they  received  no  security. 
United  Siates  Rubber  Co.  v.  Ameri- 
can Oak  Leather  Co.  53  U.  S.  App. 
444,  82  Fed.  Rep.  248,  27  C.  C.  A.  118. 

Under  Kan.  Civ.  Code,  §  254,  a  re- 
ceiver may  be  appointed  at  the  suit 
of  a  stockholder,  where  the  corporate 
business  has  been  mismanaged  so 
that  it  has  become  insolvent,  and 
where  officers  have  conspired  to  di- 
vert business  to  another,  dissipate 
its  funds,  and  apply  assets  to  the 
benefit  of  officers.  Re  Lewis,  52  Kan. 
060. 

A  receiver  may  be  appointed  of  the 


RECEIVERSHIP  OF  CORPORATIONS. 


S  226 


property  of  a  corporation  which  has 
transferred  all  its  property  to  a  for- 
eign corporation  in  consideration  of 
the  latter's  assumption  of  all  its  ob- 
ligations and  liabilities,  for  the  en- 
forcement of  a  judgment  resisted  by 
both  companies,  where  the  domestic 
corporation  refuses  to  take  any  steps 
to  compel  the  foreign  corporation  to 
perform  its  agreement  to  pay  the  li- 
ability, and  the  companies  are  com- 
bining and  colluding  to  avoid  the 
judgment  and  defeat  its  payment. 
Bates  V.  International  Co.  84  Fed. 
Rep.  518. 

A  receiver  of  building  and  loan  as- 
sociations may  be  appointed  after  ex- 
piration of  three  years  from  the  dis- 
solution (provided  for  by  statute), 
if  the  application  is  made  before  such 
expiration.  Hatfield  v.  Cummings, 
152  Ind.  280. 

In  determining  whether  a  receiver 
shall  be  appointed  of  a  building  as- 
sociation, unpaid  dues  will  be  con- 
sidered an  asset  of  doubtful  value 
where  the  amount  has  been  suffered 
to  reach  undue  proportions  while  the 
association  was  financially  em- 
barrassed. Com.,  McCormick,  v. 
Pennsylvania  Bldg.  d  L.  Asso.  20  Pa. 
Co.  Ct.  589. 

A  receiver  will  be  appointed  of  a 
national  building  association  which 
has  for  several  years  been  on  the 
verge  of  bankruptcy,  has  been  care- 
lessly managed,  and  whose  expenses 
have  been  out  of  all  proper  pro- 
portion to  the  amount  of  business 
transacted,  and  some  of  whose  offi- 
cers have  preferred  their  own  inter- 
ests to  those  of  the  association.  Ibid. 


The  auditor  of  public  accounts, 
after  giving  notice  to  a  building  and 
loan  association  requesting  it  to  cor- 
rect certain  illegal  practices  speci- 
fied, and  stating  that  the  assets  of 
the  association  are  insufficient  to 
justify  a  continuance  of  business, 
may  maintain  a  bill  for  the  appoint- 
ment of  a  receiver  for  such  associa- 
tion under  the  Illinois  statute,  al- 
though the  attorney  general  gives 
his  opinion  that  a  certain  by-law  of 
the  association  on  which  the  auditor 
based  his  conclusion  as  to  the  illegal 
practice  is  valid.  Illinois  Bldg.  <& 
L.  Asso.  V.  People,  Gare,  173  111.  638. 

A  building  and  loan  association 
which  has  no  creditors  or  liabilities, 
except  its  liability  to  its  stockhold- 
ers on  account  of  its  stock,  is  not 
"insolvent"  within  Minn.  Gen.  Stat. 
1894,  chap.  76,  providing  for  the  ap- 
pointment of  a  receiver  for  corpora- 
tions when  they  are  insolvent,  al- 
though there  is  a  deficiency  in  its 
assets  so  that  it  cannot  mature  the 
stock  or  pay  back  to  stockholders  the 
actual  money  paid  by  them.  Sjoberg 
v.  Security  Sav.  &  L.  Asso.  (Minn.) 
75  N.  W.  1116. 

A  receiver  of  a  building  and  loan 
association  will  be  appointed  pen- 
dente lite,  where  a  void  general  as- 
signment has  been  made  by  the  di- 
rectors without  authority  from  the 
stockholders, — especially  where  the 
new  board  of  directors  has  not  been 
lawfully  elected.  Powers  v.  Blue 
Grass  Bldg.  &  L.  Asso.  86  Fed.  Rep. 
705. 


Page  363,  sec.  226. — When  not  appointed. 


A  receiver  will  not  be  appointed 
over  a  corporation  pending  a  writ  of 
error,  where  collusion  is  shown  and 
no  effort  has  been  made  to  procure 
proper  action  by  the  directors.  Beck- 
er V.  Hoke,  53  U.  S.  App.  306,  80  Fed. 
Rep.  973,  20  C.  C.  A.  282. 

And  so  where  the  directors  are  re- 
liable and  are  closing  up  the  busi- 
ness. City  Pottery  Co.  v.  Yates,  37 
N.  J.  Eq.  543. 

Xor   on   the  application   of  bond- 


holders for  one  quarter  of  the  mileage 
the  other  bondholders  of  three  quar- 
ters of  the  mileage  objecting.  Mer- 
riam  v.  St.  Louis,  C.  G.  &  Ft.  S.  R. 
Co.  130  Mo.  145. 

Nor  on  the  application  of  a  cred- 
itor who  has  been  tendered  the 
amount  due  him.  Miller  v.  Southern 
Land  &  Lumber  Co.  53  S.  C.  364. 

A  receiver  will  not  be  appointed 
for  a  guaranteeing  corporation, 
where   there    ia   no   lien   and    wiiore 

9» 


§g  229,  230 


RECEIVERSHIPS— SUPPLEMENT. 


the  principal  debtor  is  solvent.  Guil- 
martin  v.  Middle  Georgia  d  A.  It.  Co. 
101  Ga.  5(55. 

Nor  on  the  application  of  creditors 
where  there  is  no  insolvency  and  no 
mismanagement  or  waste.  Weath- 
erly  v.  Capital  City  Water  Co.  115 
Ala.  15G. 

Nor  on  the  application  of  the  in- 
habitants of  a  city,  to  carry  on  the 
business  of  a  corporation,  where  the 
the  charter  has  been  forfeited.  Ibid. 

Nor  on  the  application  of  the  at- 
torney general,  when  receivers  have 
already  been  appointed  in  a  proceed- 
ing for  voluntary  dissolution.  Peo- 
ple V.  Murray  Hill  Bank,  10  App. 
Div.  328. 

Nor  when  the  charter  provides  an 
adequate  method  of  winding  up  the 


affairs.  Pringle  v.  Eltringham 
Constr.  Co.  49  La.  Ann.  301. 

A  previous  assignment  by  an  in- 
solvent corporation  is  no  defense  to 
the  appointment  under  the  Texas 
statute.  Milam  County  Co-Op.  Cot- 
ton d  M.  Alliance  v.  Tennent-Strih- 
ling  Shoe  Co.  (Tex.  Civ.  App.)  40  S. 
W.  331. 

The  owner  of  worthless  stock  in 
■  an  insolvent  corporation  cannot  ob- 
tain an  order  to  set  aside  an  order  of 
appointment  on  the  ground  of  col- 
lusion between  the  plaintiff  and  the 
officers  and  directors,  in  the  original 
cause  of  action.  Darragh  v.  H.  Wet- 
ter Mfg.  Co.  49  U.  S.  App.  1,  78  Fed. 
Rep.  7,  23  C.  C.  A.  009,  and  see  Bar- 
ron V.  Berry  (111.)  16  Nat.  Corp. 
Rep.  783. 


Page  371,  sec.  229. — In  foreclosure  proceedings. 


A  receiver  will  not  be  appointed 
in  the  foreclosure  of  a  chattel  mort- 
gage, where  the  defendant  is  solvent. 
Stihcell-Bierce  cG  Smith-Vaile  Co. 
V.  Williainston  Oil  &  Fertilizer  Co. 
80  Fed.  Rep.  08. 


Nor  in  a  foreclosure  proceeding 
against  a  railroad  company,  where 
it  appears  that  prior  to  the  execu- 
tion of  the  mortgage  the  road  had 
been  leased.  Louisville  &  N.  R.  Co. 
V.  Eakin,  100  Ky.  745. 


Page  371,  sec.  230. — Effect  of  appointment. 


As  to  corporate  powers. 

The  closing  of  the  doors  of  a  na- 
tional bank  by  the  comptroller  of  the 
currency  on  account  of  insolvency 
and  the  appointment  of  a  receiver, 
and  placing  him  in  charge  of  its  as- 
sets to  administer  them  for  the  ben- 
efit of  creditors,  do  not  extinguish 
the  corporation  or  work  a  forfeiture 
of  it  charter.  Hutchison  v.  Crutch- 
er,  98  Tenn.  421,  37  L.  R.  A.  89,  cit- 
ing First  Nat.  Bank  v.  National 
Pahquioque  Bank,  14  Wall.  383,  20 
L.  ed.  840 ;  Central  Nat.  Bank  v.  Con- 
necticut Mut.  L.  Ins.  Co.  104  U.  S. 
54,  26  L.  ed.  693 ;  Rosenblatt  v.  John- 
ston, 104  U.  S.  462,  26  L.  ed.  832; 
Chemical  Nat.  Bank  v.  Hartford  De- 
posit Co.  161  U.  S.  1,  40  L.  ed.  595. 

The  appointment  of  a  receiver  so 
far  dissolves  a  corporation  that 
thereafter  no  duty  devolves  on  the 
trustees  to  make  an  annual  re- 
100 


port.  Huguenot  Nat.  Bank  v.  Stud- 
tcell,  74  N.  Y.  621. 

The  appointment  of  a  receiver  does 
not  abate  a  suit  by  the  corporation. 
People,  Illinois  Midland  R.  Co.,  v. 
Barnett  Supervisors,  91  111.  422; 
People  V.  Troy  Steel  d  I.  Co.  82  Hun, 
303 ;  Hasselman  v.  Japanese  Develop- 
ment Co.  2  Ind.  App.  180. 

Nor  does  dissolution  abate  pro- 
ceedings pending.  Hayes  v.  Lycom- 
ing F.  Ins.  Co.  99  Pa.  621. 

The  appointment  does  not  enlarge 
or  restrict  corporate  powers  and 
duties.  The  receiver  is  bound  by  the 
charter.  People  v.  Troy  Steel  & 
I.  Co.  82  Hun,  303;  Safford  v.  Peo- 
ple, 85  111.  558. 

And  does  not  suspend  the  right  of 
a  creditor  to  sue  stockholders.  Pat- 
terson V.  Stewart,  41  Minn.  84,  4  L. 
R.  A.  745. 

Under  a  corporation  created  in 
Connecticut,  domiciled  in  the  United 


RECEIVERSHIP  OF  CORPORATIONS. 


§  231 


States,  debentures  were  secured  on 
land  in  Mexico,  which  land  became 
vested  in  an  English  company  sub- 
ject to  an  express  obligation  to  pay 
off  such  charges  from  the  sale  of  the 
land.  It  was  held  that  the  English 
company  was  responsible  to  the  de- 
benture holders  for  the  proceeds 
coming  into  their  hands.  Mercan- 
tile Invest.  &  General  Trust  Co.  v. 
River  Plate  Trust  Loan,  d  Agency 
Co.  [1892]  2  Ch.  303. 

After  the  appointment,  directors 
cannot  ratify  a  transfer  of  property 
made  without  authority.  Linville  v. 
Eaddcn,  88  Md.  594,  43  L.  R.  A.  222. 

The  appointment  does  not  affect 
legal  proceedings  pending  in  other 
states.  Ward  v.  Connecticut  Pipe 
Mfg.  Co.  71  Conn.  345,  42  L.  R.  A. 
706. 

The  remedy  for  failure  of  a  corpo- 
ration to  fulfil  its  contract  because 
it  is  placed  in  the  hands  of  a  receiver 
is  to  file  an  intervention  in  the  suit 
in  which  the  receiver  is  appointed. 
Malcomson  v.  Wappoo  Mills,  88  Fed. 
Rep.  680. 

Consenting  to  the  appointment  of 
a  receiver  does  not  prevent  the  cor- 
poration from  objecting  to  an  order 


for  additional  power  to  the  receiver. 
State  v.  German  Sav.  Bank,  50  Neb. 
734. 

The  nonperformance  of  a  contract 
cannot  be  recovered  for  if  it  was  oc- 
casioned by  the  appointment  of  a  re- 
ceiver and  injunction  against  the 
further  transaction  of  business.  Mal- 
colmson  v.  Wappoo  Mills,  88  Fed. 
Rep.  680. 

Preferences  of  employees  for  labor. 

The  preference  over  bondholders  of 
an  employee  on  a  street  railroad,  for 
services  as  mechanic,  etc.,  rendered 
within  six  months  next  preceding  the 
appointment,  does  not  arise  in  the 
absence  of  evidence  showing  a  diver- 
sion of  gross  earnings,  or  an  inuring 
benefit  to  the  bondholders  from  such 
service  in  enhanced  values.  Picker- 
ing V.  Townsend   (Ala.)   23  So.  703. 

Lien  of  bank  on  note  deposited. 

The  lien  of  a  bank  upon  a  note  de- 
posited for  collection,  as  against  a 
receiver,  is  limited  to  indebtedness 
then  existing,  and  not  that  which 
may  become  due.  Smith  v.  Eighth 
Ward  Bank,  31  App.  Div.  7. 


Page  375,  sec.  231. — Receiver's  relationship. 


A  receiver  of  an  insolvent  bank 
has  no  greater  rights  than  the  bank 
in  a  fund  against  which  the  bank 
had  given  a  check  which  constituted 
an  equitable  transfer  or  appropria- 
tion of  the  fund.  Fourth  Street 
Bank  v.  Yardley,  165  U.  S.  634,  41 
L.  ed.  855. 

A  receiver  appointed  to  operate  a 
railroad  is  legally  the  agent  of  the 
company  though  under  the  direction 
of  the  court.  Safford  v.  People,  85 
111.  558. 

Presentment  and  demand  of  pay- 
ment made  on  a  receiver  pendente 
lite  of  an  insolvent  bank,  and  notice 
of  nonpayment  by  him,  are  insuffi- 
cient to  bind  an  indorser  of  a  nego- 
tiable certificate  of  deposit  issued 
by  the  bank  before  its  insolvency. 
Jackson  v.  Mclnnis  (Or.)  43  L.  R.  A. 
128. 

A  receiver  of  a  railroad  is  an  of- 
ficer of  the  court.  He  is  a  trustee  for 


bondholders,  etc.  The  books  of  a  re- 
ceiver can  be  examined  on  petition. 
The  examination  must  not  interfere 
with  the  business  of  the  corporation. 
Folder's  Petition,  9  Abb.  N.  C.  268. 

Stockholders  may  be  permitted 
on  motion  to  examine  books  in  the 
hands  of  the  receiver,  and  take  ex- 
tracts therefrom.  People  v.  Cata- 
ract Bank,  5  Misc.  14. 

Plaintiff  as  receiver  not  required 
to  produce  books  for  tiie  inspection 
of  defendant  before  decree.  Maund 
V.  Allies,  4  Myl.  &  C.  503. 

The  opposite  party  in  a  suit 
against  a  railroad  company  is  enti- 
tled to  the  production  of  the  hitter's 
books,  although  it  is  in  the  hands  of 
a  receiver  who  is  entitled  to  the  cus- 
tody of  such  books,  if  he  has  not  ac- 
tually taken  possession  of  them. 
Maxirell  v.  Manitoba  <G  N.  W.  li.  Co. 
11  Manitoba  L.  Rep.  149. 

101 


§  333  RECEIVERSHIPS— SUPPlMeNT. 

Page  380,  sec.  233. — Receiver's  powers  and  duties. 


Persons  dealing  with  a  receiver 
must  take  notice  that  his  powers  are 
limited  and  he  is  constantly  subject 
to  the  orders  of  the  court.  Brunner 
V.  Central  Glass  Co.  18  Ind.  App. 
174. 

A  receiver  does  not  represent  a 
policy  holder  in  a  mutual  fire  insur- 
ance company — when.  Wilhclm  v. 
Parker,  17  Ohio  C.  C.  234. 

He  has  power  to  intervene  in  an 
attachment  suit  instituted  prior  to 
his  appointment.  Andrews  v.  Steele 
City  Bank,  57  Neb.  173. 

And  may  institute  a  suit  in  equity 
to  have  the  bonds  issued  by  the  cor- 
poration declared  void.  See  v.  Hep- 
penhdnter,  55  N.  J.  Kq.  240. 

His  power  is  coextensive  only  with 
the  jurisdiction  of  the  court  appoint- 
ing. Security  Sav.  d  L.  Asso.  v. 
Moore,  151  Ind.  174. 

The  duty  of  a  receiver  under  N.  Y. 
act  of  1849  to  declare  a  dividend  in 
180  days  after  his  appointment — 
declared  in  Re  Hollister  Bank, 
23  X.  Y.  508. 

The  procurement  of  an  order 
validating  the  acts  of  a  receiver  of 
an  insolvent  raili'oad  company  ap- 
pointed by  a  Federal  court,  and  au- 
thorizing the  issuance  of  certificates 
by  such  receiver  for  the  expenses  of 
the  receivership,  is  not  within  the 
scope  of  the  powers  conferred  on  a 
receiver  of  such  company  appointed 
by  a  state  court  after  the  appoint- 
ment of  the  former  receiver  has  been 
held  illegal  for  want  of  jurisdiction, 
where  the  order  appointing  the  state 
court  receiver  empowers  him  to  take 
possession  of  the  railroad  and  its 
property  and  its  toll  and  income, 
and  continue  and  preserve  the  same, 
and  employ  such  necessary  agents 
for  the  purpose  as  may  be  necessary, 
and  contract  as  receiver  for  the  pay- 
ment of  reasonable  sums  necessary 
to  defray  expenses  of  such  services. 


Crosby  v.  Morristoicn  &  C.  G.  R.  Co. 
(Tenn.  Ch.)   42  S.  W.  507. 

The  abatement  of  proceedings  in 
which  receivers  were  appointed  does 
not  affect  assets  already  received  by 
them,  but  only  affects  assets  not  re- 
duced to  possession.  Re  Murray 
Hill  Bank,  14  App.  Div.  318. 

The  assets  of  a  corporation  in  the 
hands  of  a  receiver  are  not  subject 
to  an  equitable  trust  for  the  payment 
of  dividends  declared  by  the  court  in 
a  former  suit  subsequently  dis- 
missed, and  other  dividends  declared 
by  the  corporation  itself  after  the 
termination  of  such  suit,  which  were 
not  paid,  where  the  funds  for  their 
payment  were  unlawfully  and 
wrongfully  diverted  by  the  corpora- 
tion, and  no  part  thereof,  or  the  pro- 
ceeds thereof,  are  in  the  hands  of  the 
receiver.  Rockwell  v.  Portland  Sav. 
Bank,  31  Or.  431. 

The  execution  by  a  corporation  of 
an  assignment  for  creditors,  even 
though  invalid  because  the  general 
manager  of  the  corporation  by  whom 
it  was  made  acted  without  authority, 
constitutes  an  overt  act  of  insolvency 
where  the  directors  and  stockholders 
do  not  object,  which  will  render  the 
assets  of  the  corporation  a  trust 
fund  for  pro  rata  distribution  under 
the  Tennessee  statute;  and  a  receiv- 
er of  the  corporation  subsequently 
appointed,  to  whom  the  assignee 
transfers  by  consent  all  his  rights, 
whether  treated  as  successor  of  the 
assignee  or  not,  is  vested  with  all  the 
interest  of  such  assignee,  and  it  be- 
comes his  duty  to  recover  for  prop- 
erty sold  by  the  assignee.  McClung 
V.  Emhreeville  Freehold,  Land,  Iron 
&  R.  Co.    (Tenn.  Ch.)   42  S.  W.  53. 

The  receiver  of  a  building  and 
loan  association  may  foreclose  a 
mortgage  due  the  association  though 
the  proceeds  are  not  required  to  pay 
its  debts.  Hatfield  v.  Cumtnings, 
152  Ind.  280. 


Page  390. —  (m)  Power  to  make  assessments. 


The  court  has  the  right  to  direct 
a  receiver  to  make  a  call  upon  sub- 
scribers to  pay  up  unpaid  subscrip- 
102 


tions.     Barkaloio  v.  Totten,  53  N.  J. 
Eq.  573. 

A   receiver   in  making  an   assess- 


RECEI  ERSHIP  OF  CORPORATIONS. 


234 


nient  acts  in  a  ministerial  capacity, 
and  not  judicial.  Jackson  v.  Van 
myke,  44  Barb.  116,  note  a. 

Suit  by  a  receiver  to  collect  assess- 
ment. Boicen  v.  Kuehn,  79  Wis.  53 ; 
Pickersgill  v.  Myers,  99  Pa.  602. 

A  judgment  recovered  by  the  re- 
ceiver of  an  insolvent  corporation 
against  each  of  the  corporators,  de- 
termining the  amount  for  which  each 
is  liable  to  creditors,  does  not  au- 
thorize him  to  collect  any  more  from 
each  corporator  than  the  demands  of 
the  creditors  and  the  cost  of  the  re- 
ceivership proceedings  may  require. 
Cole  V.  Adams  { Tex.  Civ.  App. )  1  J. 
A.  319,  49  S.  W.  1052. 

A  receiver  may  be  appointed  to 
make  an  assessment  against  stock- 
holders. Ford  V.  Kansas  City  &  I. 
Short  Line  R.  Co.  52  Mo.  App.  439. 

In  addition  to  liability  on  assess- 
ment, a  member  is  liable  for  a  just 
proportion  of  losses  while  his  policy 
is  in  force.  Sands  v.  Hill,  42  Barb. 
<351. 

A  court  through  a  receiver  has  no 
more  power  to  make  assessments  on 
corporate  stock  than  the  directors. 
Great  Western  Teleg.  Co.  v.  Loewen- 
thal,  154  111.  261. 

An  assessment  by  the  receiver  on 
each  premium  note  for  the  full 
amount  thereof  is  good.  Sands  v. 
Sanders,  28  N.  Y.  416. 

The  making  of  an  assessment  upon 
members  of  a  mutual  benefit  associa- 


tion does  not  make  them  debtors  to 
the  association,  or  entitle  either  it 
or  its  receiver  to  enforce  payment 
thereof  by  suit.  Lehman  v.  Clark, 
174  111.  279,  43  L.  R.  A.  648,  Revers- 
ing 71  111.  App.  366. 

The  cancelation  of  a  policy  in  a 
mutual  insurance  company,  and  the 
return  of  a  premium  note  to  the  in- 
sured, terminate  the  insured's  mem- 
bership and  relieve  him  of  further 
liability  as  to  losses  already  ac- 
crued; and  he  is  not  bound  by  a  de- 
cree to  which  he  was  not  a  party, 
rendered  at  the  instance  of  a  receiver 
of  the  company,  making  an  assess- 
ment upon  the  premium  notes  to  pay 
losses.  Langworthy  v.  Saxony  Mills, 
72  Mo.  App.  363. 

A  second  assessment  may  include 
the  first.  Sands  v.  Sweet,  44  Barb. 
108,  note  a  116. 

The  New  York  act  of  1852,  giving 
receivers  power  to  make  assessments 
upon  premium  notes,  is  constitution- 
al. Hyatt  V.  McMahon,  25  Barb. 
457. 

A  receiver  may  exercise  the  power 
of  the  board  of  directors  in  making 
assessments,  if  it  fails  to  do  so. 
Maxwell  v.  Akin,  89  Fed.  Rep.  178; 
People  V.  United  States  Mut.  Acci. 
Asso.  10  App.  Div.  319. 

In  making  assessments,  a  receiver 
must  make  allowance  for  such  as  are 
uncollectible.  Insurance  Comrs.  v. 
Commercial  Mut.  Ins.  Co.  20  R.  I.  7. 


Page  391,  sec.  234. — Liability  of  receiver. 


The  receiver  and  manager  of  a  cor- 
poration may  contract  for  supplies, 
but  not  for  ten  months  in  advance 
without  the  sanction  of  the  court. 
Brunner  v.  Central  Glass  Co.  18  Ind. 
App.  174. 

Supplies  furnished  to  an  iron  com- 
pany prior  to  the  appointment  are 
not  entitled  to  preference,  as  in  the 
case  of  a  railroad,  where  the  public 
is  interested.  Manhattan  Trust  Co. 
v.  Seattle  Coal  £  I.  Co.  19  Wash.  951. 

A  fund  in  a  bank,  to  be  delivered 
to  the  person  entitled,  becomes  a 
trust  fund  in  the  hands  of  a  receiver. 
Capital  'Sat.  Bank  v.  Coldwater  Nat. 
Bank,  49  Neb.  786. 

A    cash    deposit    fraudulently    re- 


ceived by  an  insolvent  bank  after  its 
officers  knew  of  its  insolvency  can- 
not be  reclaimed  from  its  receiver, 
when  it  went  into  the  general  funds 
of  the  bank  and  cannot  be  identified 
and  separated  from  other  funds  on 
hand  when  tlie  receiver  took  cliarge. 
Bruner  v.  First  Nat.  Bank,  97  Tenn. 
540,  34  L.  R.  A.  532. 

The  funds  of  an  insolvent  bank  in 
the  hands  of  a  receiver  are  not  im- 
pressed with  a  trust  for  the  amount 
of  a  draft  collected  by  it  for  the  liohl- 
er,  in  the  absence  of  any  agreement 
that  the  holder  should  receive  the 
specific  money  collected  by  the  bank, 
although   he  never   specially   agreed. 

103 


^§  236,  241 


KECEIVERSHIPS— SUPPLEMENT. 


to  deposit  the  proceeds  with  the  bank. 
HaUam  v.  TiJlinghast,  19  Wash.  20. 
The  funds  in  the  hands  of  the  re- 
ceiver of  a  mutual  life  association 
are  not  impressed  with  a  trust  for 
the  payment  of  a  death  claim — when. 


People,  Atty.  Gen.,  v.  Life  &  Reserve 
Asso.  150  N.  Y.  94. 

A  receiver  is  liable  for  negligence 
resulting  in  a  collision.  Central 
Trust  Co.  V.  Colorado  M.  R.  Co.  1 
Denver  Leg.  Adv.  496. 


Page  402,  sec.  236. — Suits  by  receiver  to  recover  stock  subscription. 


Tlie  receiver  of  an  insolvent  cor- 
poration hi\^  the  power  to  recover 
from  subscribers  to  its  stock  unpaid 
subscriptions.  Russell  v.  Easter- 
Irook,  71  Conn.  50;  Watterson  v. 
Masterson,  15  Wash.  511;  State  v. 
German  Sav.  Bank,  50  Neb.  734. 

In  a  suit  to  recover  against  the 
stockholders  a  judgment  against  the 
corporation  is  not  a  prerequisite  in 
Minnesota.  Patterson  v.  Stewart, 
41  Minn.  84,  4  L.  R.  A.  745 ;  but  see 
United  States  Glass  Co.  v.  Levett, 
24  Misc.  429. 

Creditors  of  an  insolvent  corpora- 
tion of  which  a  receiver  has  been  ap- 
pointed may  recover  in  an  action 
against  the  stockholders  under  Minn. 
Gen.  Stat.  1894,  chap.  76,  to  enforce 
the  double  liability  of  the  stockhold- 
ers, not  only  their  debts  and  the  stat- 


utory costs  and  disbursements  of  the 
action,  but  also  the  receiver's  ex- 
penses to  an  amount  not  exceeding 
such  statutory  liability.  Harper  v. 
Carroll,  66  Minn.  487,  Modified  on 
Rehearing  in  69  N.  W.  1069. 

Money  paid  by  directors  to  a  re- 
ceiver to  make  good  an  impairment 
of  capital  that  should  be  found  to  ex- 
ist, in  excess  of  the  actual  impair- 
ment, is  properly  applicable  on  a 
subsequent  impairment  under  N.  Y. 
Laws  1892,  chap.  688.  Dyknian  v. 
Keeney,  10  App.  Div.  610. 

Illegality  in  the  subscription  can- 
not be  set  up  and  a  receiver  ap- 
pointed to  the  prejudice  of  other 
stockholders,  where  benefits  have 
been  accepted  growing  out  of  the 
subscription.  Mulqueeney  v.  Shaw, 
50  La.  Ann.  1060. 


Page  415,  sec.  241. — Not  subject  to  collateral  attack. 


The  appointment  of  a  receiver  of  a 
corporation  cannot  be  collaterally 
attacked.  Hatfield  v.  Cummings, 
152  Ind.  280. 


The  acts  of  a  receiver  cannot  be 
questioned  in  collateral  proceedings. 
Bradly  v.  Marine  &  River  Phosphate 
Min.  &  Mfg.  Co.  3  Hughes,  26. 


Page  451. — Receivership  of  railways. 


Application  of  income. 

The  income  of  a  railroad  while  in 
the  hands  of  a  receiver  appointed  at 
the  petition  of  the  mortgagees  will  be 
applied  upon  the  mortgage,  rather 
than  to  the  general  judgment  credit- 
ors of  the  road,  although  the  mortgage 
does  not  expressly  cover  income,  if 
it  authorizes  the  mortgagee  upon  de- 
fault in  payment  of  interest  to  take 
possession  of  the  property.  Central 
Trust  Co.  v.  Chattanooga,  R.  &  C.  R. 
Co.  89  Fed.  Rep.  388. 
104 


A  receiver  on  mortgage  foreclosure 
of  a  division  of  a  railway  is  entitled 
only  to  the  net  earnings  of  the  divi- 
sion after  deducting  its  proportion 
of  the  working  expenses  of  the  whole 
line.  Grey  v.  Manitoba  d  y.'Tf.  R. 
Co.  [1897]  A.  C.  254,  66  L.  J.  P.  C. 
N.  S.  66. 

Where  the  operation  of  a  railroad 
by  a  receiver  has  demonstrated  its 
ability  to  pay  more  than  the  operat- 
ing expenses  and  the  interest  on  the 
first  mortgage,  and  the  receiver  has 
sufficient  on  hand  to  pay  the  delin- 


RECEIVERSHIP  OF  RAILWAYS. 


287 


quent  interest  on  the  first  mortgage, 
the  second  mortgagees  are  entitled 
to  have  it  so  applied.  Peoria,  D.  & 
E.  R.  Co.  V.  Central  Trust  Co.  83 
Fed.  Rep.  910. 

The  purchasers  at  foreclosure  sale 
are  not  entitled  to  surplus  earnings 


of  the  road  in  the  hands  of  a  re- 
ceiver, but  are  entitled  to  cars  and 
other  property  put  on  the  road  by 
the  receiver  to  run  it.  Strang  v. 
Montgomery  d  E.  R.  Go.  3  Woods, 
G13. 


Page  522,  sec.  287. — Receivers'  certificates. 


Issuance. 

The  custody  of  a  contractor  for  the 
building  of  a  telegraph  line,  of  the 
line,  is  not  such  possession  as  will 
prevent  an  order  for  the  issuance  of 
receivers'  certificates  constituting  a 
lien  upon  the  property  of  the  tele- 
graph company  from  taking  effect 
upon  wires  erected  by  such  contract- 
or, where  the  wires  were  furnished 
by  the  company.  Postal  Teleg.  Cable 
Co.  V.  Vane,  53  U.  S.  App.  319,  80 
Fed.  Rep.  961,  26  C.  C.  A.  342. 

Receivers'  certificates  can  be  law- 
fully issued  only  after  due  notice  to 
all  parties  in  interest  and  after  a  full 
hearing.  Re  Cort,  7  Pa.  Dist.  R. 
536. 

Receivers'  certificates  will  be  is- 
sued only  when  the  expenditure  con- 
templated is  absolutely  necessary  to 
preserve  the  property  from  destruc- 
tion or  serious  injury.     Ibid. 

Receivers'  certificates  will  not  be 
issued  to  pay  part  of  a  lien  against 
the  estate  for  the  purpose  of  obtain- 
ing the  consent  of  the  lien  creditor 
to  an  additional  extension  of  time, 
as  the  matter  of  such  extension  is  in 
the  control  of  the  court  independent 
of  such  consent.     Ibid. 

Receivers'  certificates  will  not  be 
issued  in  the  case  of  business  corpo- 
rations, unless  it  appears  that  there 
are  extraordinary  circumstances  suf- 
ficient to  prompt  the  court  to  ta.ke 
such  action.     Ibid. 

Receivers'  certificates  are  issued 
w  ml.  necessary.  Central  Trust  Co. 
V.  Tappan,  2  X.  Y.  S.  R.  635,  6  N.  Y. 
Supp.  919. 

Receivers'  certificates  to  pay  In- 
terest on  railroad  bonds  will  not  be 
authorized  where  there  is  a  claim  of 
priority  over  the  bonds  by  many 
creditors.  Newton  v.  Eagle  &  P. 
Mfg.  Co.  76  Fed.  Rep.  418. 


A  receiver  applying  for  leave  to 
issue  receivers'  certificates  should 
fully  state  to  the  court  the  purpose 
for  which  such  certificates  are  to  be 
issued.     Re  Cort,  7  Pa.  Dist.  R.  536. 

The  court  will  refuse  to  issue  cer- 
tificates for  doubtful  improvements. 
Investment  Co.  v.  Ohio  &  N.  W.  R. 
Co.  36  Fed.  Rep.  48. 

The  court  appointing  a  receiver 
may  authorize  it  to  issue  receiver's 
certificates  to  take  up  outstanding 
tax  certificates  when  it  becomes  ap- 
parent that  it  is  impracticable  for 
the  receiver  to  sell  a  portion  of  the 
land  for  the  purpose  of  redeeming 
from  the  tax  sales  as  conl^emplated 
by  the  decree  appointing  him,  and 
may  subrogate  the  holders  of  the  re- 
ceiver's certificates  to  the  rights  of 
the  former  owners  of  the  tax  certifi- 
cates. Roby  V.  Title  Guarantee  & 
T.  Co.  166  111.  336. 

The  appellate  court  will  not  dis- 
turb the  decision  of  the  trial  court 
permitting  a  receiver  of  a  railroad 
company  to  issue  receiver's  certifi- 
cates for  the  completion  of  the  road, 
unless  there  has  been  manifest  abuse 
of  discretion, — especially  where  a 
very  large  proportion  of  the  bond- 
holders have  consented  thereto,  and 
the  issuance  of  the  certificates  will 
be  without  prejudice  to  the  bondhold- 
ers who  have  not  consented.  Ruther- 
ford V.  Pennsylvania  M.  R.  Co.  178 
Pa.  38. 

A  court  cannot  authorize  the  is- 
suance of  receivers'  certificates  up- 
on the  property  of  a  private  corpo- 
ration owing  no  duty  to  the  public, 
which  shall  be  a  lien  prior  to  that  of 
lien  creditors,  without  their  consent. 
Baltimore  lildg.  &  L.  Asso.  v.  Alder- 
son,  90  Fed.  Rep.  142,  32  C.  C.  A.  542. 

The  court  should  not  direct  the  is- 
sue of  receivers'  certificates  and  de- 
cree them  a  paramount  charge  upon 

105 


§  287 


EECEIVERSHIPS— SUPPLEMENT. 


the  franchises,  earnings,  and  prop- 
erty of  corporations  under  its  con- 
trol, but  its  i)()\vers  in  that  regard 
sliould  be  exeieised  only  after  due 
notice  to  all  the  parties  in  interest 
and  after  a  full  hearing  as  to  the  ne- 
cessity or  propriety  of  the  expendi- 
ture proposed.  Osborne  v.  Bigstone 
Gap  Colliery  Co.  96  Va.  58. 

A  state  court  has  power  to  author- 
ize the  issuance  of  receivers'  certifi- 
cates for  an  insolvent  corporation  by 
ratifying  the  acts  of  the  Federal 
court  in  accordance  with  an  arrange- 
ment between  the  two  courts  that  a 
receiver  of  the  property  should  be 
appointed  by  the  Federal  court  to  act 
until  it  should  be  determined  wheth- 
er the  state  or  the  Federal  court  had 
jurisdiction,  and  that  the  state  court 
should  ratify  his  acts  if  it  should  be 
determined  that  it,  instead  of  the 
Federal  court,  had  jurisdiction. 
Crosby  v.  Morristoum.  d-  C.  G.  R.  Co. 
fTenn.  Ch.  App.)  42  S.  W.  507. 
[Afi"d  by  Sup.  Ct.] 

The  court  can  order  a  receiver  to 
issue  certificates  of  indebtedness,  to 
operate  and  care  for  a  railroad  com- 
pany without  funds.  Central  Trust 
Co.  V.  Taj)pan,  25  N.  Y.  S.  R.  035,  6 
N.  Y.  Supp.  918. 

Validity  of. 

In  a  proceeding  to  test  the  validity 
of  receivers'  certificates,  the  receiver 
who  holds  the  money  to  pay  them  is 
a  necessary  party.  Central  Trust 
Co.  V.  Sheffield  d  B.  Coal,  I.  d  R.  Co. 
44  Fed.  Rep.  520. 

On  intervention  relative  to  the 
validity  of  certificates,  the  receiver 
is  a  necessary  party.     Ibid. 

The  right  of  the  holder  of  shares 
in  a  national  bank  which  has  been 
placed  in  the  hands  of  a  receiver,  to 
have  his  share  certificate  rescinded 
for  fraud,  exists  only  where  his 
equity  is  superior  to  that  of  the 
bank, — as,  where  no  credit  was  given 
to  the  bank  after  he  acquired  his 
stock.  Wallace  v.  Hood,  89  Fed. 
Rep.  11. 

Receivers'  certificates  without  con- 
sideration cannot  be  enforced,  either 
at  the  suit  of  the  payee  or  a  holder 
for  value.  Turner  v.  Peoria  d  H.  R. 
Co.  95  111.  134. 

106 


Payment. 

The  matter  of  ordering  the  final 
payment  of  receivers'  certificates  is- 
sued under  the  order  of  a  circuit 
court  which  has  entertained  juris- 
diction of  an  ancillary  suit,  and  of 
determining  what  sums  are  due 
thereon,  with  the  compensation  of 
the  receiver,  will  be  relegated  to  that 
court  by  the  court  in  which  the  orig- 
inal suit  is  brought.  Doe  v.  North- 
icestern  Coal  d  T.  Co.  78  Fed.  Rep. 
02. 

Certificates  are  not  payable  from 
any  particular  fund.  Neafie's  Ap- 
peal (Pa.)  11  Cent.  Rep.  180. 

No  preference  under. 

Persons  taking  receivers'  certifi- 
cates issued  under  order  of  court  not 
making  them  a  prior  lien  to  all  other 
claims,  in  place  of  prior  certificates 
which  are  ordered  to  be  made  such 
prior  lien,  are  not  entitled  to  the 
preference  given  under  the  first  or- 
der. Lewis  V.  Linden  Steel  Co.  183 
Pa.  248. 

The  holder  of  certificates  of  de- 
posit issued  by  an  insolvent  national 
bank  is  not  entitled  to  a  preference  in 
funds  in  the  receiver's  hands,  because 
he  presented  the  certificates  for  pay- 
ment before  the  bank  had  closed  its 
doors,  and  the  cashier  was  about  to 
pay  the  same  out  of  the  bank's  funds 
when  he  was  forbidden  by  the  presi- 
dent to  do  so.  St.  Mary's  Church 
v.   National  Bank,  23  Misc.  588. 

The  beneficiary  in  a  certificate  is- 
sued by  a  mutual  aid  association  is 
not  entitled  to  a  preference  in  the  as- 
sets in  the  hands  of  a  receiver  of  the 
association,  by  reason  of  an  assess- 
ment having  been  made  to  pay  the 
certificate,  even  if,  under  the  consti- 
tution and  by-laws  of  the  associa- 
tion, there  was  a  special  application 
of  the  assessment  to  the  payment  of 
the  certificate,  where  the  fund  repre- 
sented by  the  assessment  did  not 
reach  the  receiver's  hands.  People 
V.  Grand  Lodqe  of  E.  0.  of  M.  A.  150 
N.  Y.  533,  Affirming  88  Hun,  021. 

Receivers'  certificates  issued  under 
an  order  which  does  not  give  them 
priority  over  other  liens  are  not  en- 
titled to  a  preference  over  debts  con- 
tracted by  the  receiver  in  carrying 


RECEIVERSHIP  OF  RAILWAYS. 


§  287 


on  the  business  under  an  order  of 
court.  Lewis  v.  Linden  Steel  Co.  183 
Pa.  248. 

Since  the  act  of  1889,  p.  56,  Texas 
receivers'  certificates  liave  priority 
over  mortgages.  Ellis  v.  Vernon  Ice, 
Light  tt  W.  Co.  86  Tex.  109. 

A  lien  of  a  creditor  for  supplies 
furnished  a  collier  company,  which 
has  been  reported  and  confirmed 
without  objection,  and  is  further  se- 
cured under  the  provisions  of  a  trust 
deed  executed  by  the  company  in  fa- 
vor of  its  creditors,  should  not  be 
subordinated  to  receivers' certificates 
issued  under  decrees,  which  the  lien 
claimant  had  no  opportunity  to  re- 
sist. Osborne  v.  Bigstone  Gap  Col- 
liery Co.  96  Va.  58. 

Not  negotiable. 

Receivers'  certificates  are  not  ne- 
gotiable as  a  promissory  note,  nor 
assignable  so  as  to  create  a  liability 
against  the  assignor  or  indorser,  nor 
are  thev  bills  of  exchange.  McCurdy 
V.  Boiccs,  88  Ind.  583. 

Certificates  a  first  lien. 

Effect  should  be  given  to  an  order 
authorizing  the  receiver  of  an  in- 
solvent corporation  to  borrow  money 
on  certificates  which  shall  be  a  first 
lien  on  the  property  and  assets  of 
the  corporation,  by  allowing  the 
sums  borrowed  to  be  paid  out  of  the 
proceeds  of  a  sale  of  the  corporate 
propertv.  Re  F.  X.  Muller  &  Co.  47 
N.  Y.  Supp.  277. 

Receivers'  certificates  may  be 
made  a  first  lien.  Karn  v.  Rorer 
Iron  Co.  86  Va.  754. 

The  paramount  lien  of  receivers' 
certificates  may  be  recognized  by  a 
mortgage  trustee.  Kent  v.  Lake  Su- 
perior Ship  Canal  R.  £  Iron  Co.  144 
U.  S.  In,  36  L.  ed.  352. 

Purchasers  of  property  on  which 
receivers"  certificates  have  been 
made  a  prior  lien  are  not  permitted 
to  deny  the  validity  of  the  certifi- 
cates. Central  Trust  Co.  v.  Shef- 
field d-  li.  Coal,  I.  &  R.  Co.  44  Fed. 
Rep.  526. 

Receivers'  certificates  for  repairs 
on  road  become  a  first  lien.  Ex  parte 
Mitchell,  12  S.  C.  83. 


Debentures  made  a  lien. 


The  debentures  of  a  receiver,  is- 
sued to  complete  a  railroad,  may  be 
made  a  lien  on  the  road  and  lands  of 
the  company.  Kennedy  v.  St.  Paul 
d  P.  R.  Co.  2  Dill.  448. 

Liability  of  purchaser  for. 

For  liability  of  purchaser  of  a  rail- 
road for  certificates — see  Stevens  v. 
Union  Trust  Co.  57  Hun,  498. 

What  covered  by. 

Strung  wires  are  not  deprived  of 
their  charcter  as  lines  of  telegraph 
within  an  order  directing  receivers' 
certificates  to  be  secured  by  a  trust 
deed  on  all  the  lines  of  telegraph  be- 
tween certain  places,  because  the 
foreman  of  the  contractor  for  their 
erection  had  detached  and  grounded 
them.  Postal  Teleg.  Cable  Co.  v. 
Vane,  53  U.  S.  App.  319,  80  Fed.  Rep. 
961,  26  C.  C.  A.  342. 

Rights  of  holders. 

Certificate  holders  in  a  mutual  in- 
surance association  who  were  mem- 
bers of  a  local  branch  in  another 
state,  the  receiver  of  which  was  pre- 
vented by  the  local  court  from  com- 
plying with  the  order  of  the  court  in 
which  the  principal  receivership  was 
pending  directing  all  local  branches 
and  receivers  to  pay  to  the  principal 
receiver  by  a  certain  date  all  funds 
in  their  hands  or  be  barred  from  re- 
ceiving any  distribution  on  the 
claims  represented  by  them  until  all 
other  claims  had  been  paid, — should 
be  allowed  to  intervene  after  the 
date  specified,  if  the  funds  are  still 
undistributed;  and  share  on  equal 
terms  with  the  other  certificate  hold- 
ers, due  allowance  being  made  for 
any  amount  they  may  have  received 
from  the  local  receiver,  for  the  dif- 
ference, if  any,  between  the  amount  ot 
assessments  paid  by  the  two  classes 
and  for  any  unnecessary  expenses 
incurred  in  the  administration  of  the 
funds  by  the  local  court,  where  the 
order  is  by  its  own  terms  subject  to 
modification  at  any  time  "as  justice 
may  require,"  and  the  court  has  al- 
ready extended  the  time  in  favor  of 
other  receivers  and  local  I)ranches. 
Cowen  v.  Failey,  149  Ind.  382. 

107 


§§  300,  301 


RECEIVERSHIPS— SUPPLEMENT. 


When  receivers  and  managers  is- 
sue negotiable  obligations,  witli  the 
knowledge  and  consent  of  the  parties 
in  interest,  they  are  estopped  as  to 


bona  fide  holders  to  deny  that  they 
are  what  they  purport  to  be.  Lang- 
don  V.  Vermont  tC-  C.  R.  Co.  53  Vt. 
228. 


Page  526,  sec.  300. — Receivership  in  decedent's  estates. 


Page  527. — (b)  Contest  ovek  wills. 


A  receiver  may  be  appointed. 
Montgomery  v.  Clark,  2  Atk.  378; 
Marr  V.  Littleicood,  2  Myl.  &  C.  454; 
Jones  V.  Goodrich,  10  Sim.  327  ;  Wat- 
kins  V.  Brent,  1  Myl.  &  C.  97 ;  Whit- 
icorth  V.  Whyddon,  2  Macn.  &  G.  52 ; 
Podmore  v.  Gunning,  5  Sim.  485. 

Pending  the  probate  of  a  will  the 
court  will  appoint  a  receiver,  but  the 
appointment    of    receivers  elsewhere 


than  in  the  probate  division  is  dis- 
couraged. Re  Parker,  54  L.  J.  Ch. 
N.  S.  694. 

Reversionary    interest    under    will. 

A  receiver  was  appointed  in  re  a 
wife's  reversionary  interest  under  a 
will.  Fuggle  v.  Bland,  L.  R.  11  Q. 
li.  Div.  711. 


Page  528,  sec.  301. — As  to  executors  and  administrators. 


A  court  of  equity  will  not,  as  a 
general  rule,  interfere  with  the  ad- 
ministration of  estates  by  placing 
the  assets  thereof  in  the  hands  of  a 
receiver,  but  it  will,  at  the  instance 
of  heirs  or  the  sureties  upon  the  ad- 
ministrator's bond,  if  there  is  danger 
of  loss  or  other  injury  to  their  in- 
terests, afford  such  extraordinary 
relief  as  may  be  necessary  to  prevent 
the  same.  Thompson  v.  Orser,  105 
Ga.  482. 

A  receiver  will  not  be  appointed  of 
a  decedent's  estate  because  an  execu- 
tor has  become  bankrupt  since  the 
death  of  the  testator,  where  there  is 
a  coexecutor  willing  to  act.  Boioen 
v.  Phillips  [1897]  1  Ch.  174,  66  L.  J. 
Ch.  N.  S.  165. 

In  a  suit  against  executors  for  an 
accounting,  a  receiver  may  be  ap- 
pointed. Bickford  v.  Chalker,  I 
Eng.  L.  &  Eq.  113. 

A  receiver  will  not  be  appointed, 
however,  on  application  of  a  devisee 
under  a  contested  will,  except  in  a 
clear  case  of  right  of  recovery  and 
when  there  is  danger  of  loss.  Clark 
v.  Deiv,  1  Russ.  &  M.  103. 

A  receiver  was  appointed  on  ac- 
count of  laches  of  heirs  who  had 
been  substituted  as  trustees  to  exe- 
cute a  devise  to  charity.  Atty.  Gen. 
v.  Bowyer,  3  Ves.  Jr.  714. 

108 


The  court  will  not  interfere,  by  the 
appointment  of  a  receiver,  with  an 
executor,  unless  waste  of  assets  is 
shown.  Re  Wells,  L.  R.  45  Ch.  Div. 
569. 

The  removal  of  an  executor  from 
the  state  of  his  appointment,  leaving 
his  cestui  que  trust  and  the  trust 
estate  behind,  will  justify  the  inter- 
ference of  a  court  of  equity  by  the 
appointment  of  a  receiver  on  the  ap- 
plication of  the  cestui  que  trust. 
Elting  v.  First  Nat.  Bank,  173  111. 
308,  Affirming  68  111.  App.  204. 

A  receiver  may  be  appointed  over  a 
life  estate.  M'Craith  v.  Qtiin,  It. 
Rep.  7  Eq.  324. 

A  receiver  will  not  be  appointed 
of  the  separate  estate  of  a  married 
woman  with  a  restraint  on  anticipa- 
tion, where  the  plaintiff  obtained 
leave  to  enter  final  judgment  for  a 
debt  against  her,  but  delayed  enter- 
ing it  for  three  months,  when  he 
knew  that  arrears  had  just  become 
due,  and  then  entered  judgment  and 
applied  for  a  receiver.  Colyer  v. 
Isaacs,  11  L.  T.  N.  S.  198. 

If  a  tenant  for  life  neglects  to 
keep  down  taxes  and  make  necessary 
repairs,  a  receiver  will  be  appointed. 
Murch  V.  J.  O.  Smith  Mfg.  Co.  47  N. 
J.  Eq.  193. 

The  existence  of   a   suit   to   recall 


RECEIVERSHIP  OVER  TRUST  PROPERTY. 


§  306 


probate  is  not  ground  tor  appoint- 
ing a  receiver.  Newton  v.  Ricketts, 
10  Beav.  525. 

Where  a  husband  was  permitted 
by  trustees  to  receive  rent  belonging 
tc  his  Avife,  and  the  trustees  after- 
wards insisted  on  receiving  it  them- 
selves, the  husband  was  not  entitled 
to  a  receiver.  Wiles  v.  Cooper,  9 
Beav.  294. 

A  receiver  is  not  granted  over  an 
estate,  where  no  grounds  are  shown 
why  an  administrator  could  not  be 
appointed  immediately.  Jones  v. 
Frost,  3  Madd.'l. 

A  receiver  pendente  lite  cannot  be 
appointed  of  the  estate  of  a  testator, 
where  a  caveat  has  been  entered  and 
warned,  and  appearance  has  been  en- 
tered, but  no  writ  has  been  issued. 
Salter  v.  Salter,  65  L.  J.  P.  D.  &  A. 
N.  S.  117  [1896]  P.  291,  75  L.  T.  N. 
S.  7. 

The  administration  of  an  estate  by 
a  receiver  is  not  purely  in  rem,  and 
the  acts  of  the  receiver  and  orders  of 
court  are  not  binding  on  persons  not 
parties.  J.  W.  Dann  Mfg.  Co.  v. 
Parkhurst,  125  Ind.  317. 

In  a  suit  to  carry  into  execution 
the  trusts  of  a  will  a  receiver  will 
not  be  appointed  over  the  lands  in  pos- 


session of  the  heir  at  law,  unless  he 
admits  the  will  or  until  it  is  proved 
against  him.  Dobbin  v.  Adatns,  8 
Ir.  Eq.  Rep.  157. 

Advance  by  executors  to  the  widow 
of  less  than  half  of  the  cash  on  hand, 
which  was  prima  facie  a  community 
fund,  does  not  authorize  the  appoint- 
ment of  a  receiver  pending  an  action 
by  the  heirs  to  recover  their  alleged 
interest  in  the  estate,  and  for  parti- 
tion, upon  the  ground  of  misapplica- 
tion of  the  funds  and  refusal  to  al- 
low the  plaintiffs  free  access  to  the 
books  of  deceased,  where  the  widow's 
interest  in  the  estate  is  apparently 
largely  in  excess  of  the  amount  paid 
her,  and  she  was  otherwise  without 
means  of  support.  Harris  v.  Hicks, 
13  Tex.  Civ.  App.  134. 

That  one  of  three  executors  of  an 
estate  without  bond  has  been  seen  a 
few  times  playing  cards  for  money 
is  not  sufficient  cause  for  the  appoint- 
ment of  a  receiver  pending  an  action 
by  the  heirs  to  recover  their  alleged 
interest  in  the  estate,  and  for  parti- 
tion, where  a  large  number  of  busi- 
ness and  professional  men  in  the 
community  where  such  executor  lives 
affirm  his  integrity  of  character  and 
his  entire  fitness  for  the  trust.  Ibid. 


Receivership  over  trust  property. 
Page  540,  sec.  306. — Receiver  in  lieu  of  trustee. 


The  general  rule  is  that  a  receiver 
may  be  appointed  in  lieu  of  trustees, 
when  trustees  are  negligent  and 
guilty  of  a  breach  of  duty  as  such. 
Boyd  V.  Murray,  3  Johns.  Ch.  48 ;  Re 
Pontius,  26  Hun,  232;  Etowah  Min. 
Co.  V.  Wills  Valley  Min.  &  Mfg.  Co. 
106  Ala.  492;  Neumian  V.  Newman, 
2  Bro.  Ch.  92  (Belt's  ed.)  note  7; 
Davis  V.  Browne,  2  Del.  Ch.  188. 

Or  when  creditors  are  entitled  to 
an  estate  over  certain  charges. 
M'Garry  v.  White,  Jr.  L.  R.  16  C.  L. 
322. 

Or  when  a  trustee  goes  out  of  the 
jurisdiction  of  the  court  to  which  he 
is  amenable.  Noad  v.  Backhouse,  2 
Younge  &  C.  Ch.  Cas.  529. 

Or  when  the  unfitness  of  trustees 


is  shown.  Janeway  v.  Green,  16 
Abb.  Pr.  215.  note. 

Or  when  an  action  is  pending  to 
determine  the  distributive  shares. 
Carson  v.  Powers,  52  U,  S.  App.  622, 
sub  noni.  Carson  v.  Combe,  86  Fed. 
Rep.  202,  29  C.  C.  A.  660. 

But  in  the  absence  of  mismanage- 
ment or  incompetency,  a  receiver 
will  not  be  appointed  if  the  trustee 
has  sufficient  power.  Buxton  v. 
Monkhouse,  Coop.  Ch.  41 ;  Barkley  v. 
Reay,  2  Hare,  308. 

Nor  where  the  trustee  is  willing  to 
give  security.  Branch  v.  Ward,  114 
N.  C.  148. 

A  receiver  will  not  be  appointed  at 
the  suit  of  trustees  upon  a  showing 
that  one  to  whom  they  sold  land  has 

109 


§§  310-317 


RECEIVERSHIPS— SUPPLEMENT. 


failed  to  pay  a  large  part  of  the  pur- 
chase money  and  is  insolvent,  but  re- 
mains in  possession  of  the  property, 
receiving  the  profits  thereof,  where 
an  order  of  resale  of  the  premises  di- 
rected by  the  court  remains  unexe- 
cuted by  them,  and  the  defendant  has 
not  been  heard  in  response  to  the 
application  made.  Anderson  v.  Ce- 
cil, 80  Md.  490. 

"Trustees"  appointed  in  Ohio  to 
wind  up  the  affairs  and  pay  the  debts 
of  an  insolvent  mutual  lire  insurance 
company  of  that  state,  with  the  gen- 
eral powers  of  receivers  in  Wiscon- 
sin, are  within  Wis.  Laws  1893,  chap. 
293,  requiring  all  foreign  mutual  fire 
insurance  companies  which  have 
been  declared  insolvent  and  of  which 
a  "receiver"  has  been  appointed,  to 
collect  all  claims  from  policy  hold- 
ers Within  the  state  for  premiums  or 
assessments  within  six  months  aft- 
er the  passage  of  the  act.  Mansfield 
V.  William  Becker  Leather  Co.  93 
Wis.  656. 


The  court  will  appoint  a  receiver 
over  trust  funds  in  the  hands  of  a 
dc  facto  trustee,  even  if  no  fraud  or 
misconduct  is  shown.  Fidelity  Ins. 
&  T.  Co.  V.  Uuhcr,  13  Phila.  52. 

A  trustee  invested  with  power  to 
sell  the  property  of  an  insolvent 
corporation  and  to  collect  demands 
due  it  is  properly  appointed  receiver 
to  take  charge  of  its  real  estate  until 
the  validity  of  liens  thereon  can  be 
adjudicated.  Weigand  v.  Alliance 
Supply  Co.  44  W.  Va.  133. 

A  receiver  may  be  appointed  in  an 
action  by  a  husband  against  his  wife 
to  enforce  the  terms  of  an  antenup- 
tial contract,  whose  execution  the 
answer  admits,  but  alleges  that  it 
was  procured  by  fraud,  to  collect  the 
rents  of  real  estate  which  the  wife 
covenanted  to  convey  to  a  trustee 
for  the  purjiose  of  carrying  out  the 
settlement,  where  the  person  named 
in  the  contract  as  trustee  has  refused 
to  act.  De  Rustafjaell  v.  De  Rustaf~ 
jaell,  43  W.  N.  C.  56. 


Page  547,  sec.  310. — Lunatics'  estates. 


Where  no  one  can  be  found  to  act 
as  committee  for  a  lunatic  a  receiver 
will  be  appointed.  Ex  parte  Warren, 
10  Ves.  Jr.  622;  Ex  parte  Billing- 
hurst,  1  Ambl.  104. 

The  appointment  of  a  receiver  to 
prevent  the  mismanagement  or  waste 


of  an  alleged  lunatic's  property  dur- 
ing the  pendency  of  a  proceeding  for 
a  commission  de  lunatico  inquirendo 
rests  in  the  sound  discretion  of  the 
court  in  which  the  inquiry  is  pend- 
ing.    Re  Misselwitz,  177  Pa.  359. 


Miscellaneous  receiverships. 
Page  548,  sec.  315. — As  between  vendor  and  vendee. 


Where  an  unpaid  vendor  of  land 
taken  by  a, railroad  company  has 
commenced  an  action  to  enforce  his 
lien,  he  is  not  entitled  to  a  receiver 
until  he  gets  judgment,  though  the 
company  admits  its  liability.  Lati- 
mer  v.  Aylesbury  &  B.  R.  Co.  L.  R. 
9  Ch.  Div.  385. 


To  collect  taxes. 

Courts  of  equity  have  no  jurisdic- 
tion to  collect  taxes  or  appoint  a  re- 
ceiver for  that  purpose.  Pierce 
County  V.  Merrill,  19  Wash.  175. 


Page  549,  sec.  317. — In  partition  and  between  tenants  in  common. 


Parties  jointly  interested  in  the 
profits  of  a  business  are  entitled  to 
a  receiver  of  tiie  books  and  papers 
necessary  to  wind  up  the  concern, 
110 


where  it  is  conceded  that  an  account- 
ing is  required.  Davidge  v.  Coe,  22 
Jones  &  S.  360. 

A     tenant  in  common     owning    a 


MISCELLANEOUS   RECEIVERSHIPS. 


§§  318,  320 


third  interest  in  an  office  building 
is  not  entitled  to  a  receiver  in  a  suit 
for  accounting,  where  his  cotenants 
protest  and  there  is  no  showing  of 
fraud,  entanglement  of  accounts,  or 
exclusion  from  a  due  share  of  the  net 
profits.  Kcll  V.  Murdock,  4  Ohio  N. 
F.  247,  6  Ohio  Dec.  390. 

A  receiver  was  appointed  in  a 
divorce  suit,  of  property  held  under 
agreement  for  joint  occupancy. 
Baggs  v.  Baggs,  55  Ga.  590. 

An  application  by  one  tenant  in 
common  for  a  receiver  was  refused 
where  the  prayer  of  the  bill  for  an 
accounting  and  a  sale  and  division  of 
the  chattels  was  not  sustained  by 
the  evidence.  Blood  v.  Blood,  110 
Mass.  545. 

Tenants  in  common  are  not  en- 
titled to  a  receiver  as  against  an- 
other tenant  in  common,  unless  the 
latter  has  been  excluded.  Giving 
notice  to  tenants  to  pay  to  him  only 
is  not  an  exclusion.  Tyson  v.  Fair- 
dough,  2  Sim.  &  Stu.  142. 

Where  one  in  possession  of  joint 
property  is  insolvent  and  is  collect- 
ing the  rents  and  using  the  same,  a 
receiver  is  proper.  Roche  v.  Roche, 
3  N.  Y.  S.  R.  500. 

Such  ill-will  and  hostility  between 
the  joint  owners  of  property  as  pre- 
vents unity  of  action  in  its  manage- 
ment will  not  warrant  the  court  in 
placing  it  in  the  hands  of  a  receiver, 


when  neither  of  the  owners  is  ex- 
cluded from  the  property.  Lamas- 
ter  V.  Elliott,  53  Neb.  424. 

Dissensions  between  two  persons 
who  are  equal  owners  of  the  stock  of 
a  corporation  and  are  also  its  officers 
will  not  justify  the  appointment  of 
a  receiver  so  long  as  no  actual 
wrong  is  committed  by  either  of 
them.  Wallace  v.  Pierce-Wallace 
Pub.  Co.  101  Iowa,  313,  38  L.  R.  A. 
122. 

A  decree  appointing  a  receiver  in 
partition  proceedings  is  an  interloc- 
utory one,  and  it  is  not  reversible 
on  error.  Brachtendorf  v.  Kehm,  72 
111.  App.  228. 

A  receiver  will  not  be  appointed 
in  a  partition  proceeding  where  the 
party  in  possession  is  solvent.  Pierce 
V.  Pierce,  55  Mich.  029. 

And  so  where  the  tenant  in  posses- 
sion is  financially  responsible  and  is 
willing  to  account,  and  no  demand 
has  been  made.  Bathman  v.  Bath- 
man,  79  Hun,  477. 

Strong  hostility  between  the  ten- 
ants in  common,  with  probability  of 
future  injury,  is  ground  for  the  ap- 
pointment. Goldberg  v.  Richards, 
5  Misc.  419. 

A  receiver  in  a  partition  proceed- 
ing may  maintain  suit  against  a  co- 
owner  for  rent  under  a  lease  from 
the  receiver.  Smith  v.  Lavelle,  13 
Misc.  528. 


Page  551,  sec.  318. — In  suits  for  specific  performance. 


In  a  suit  for  specific  performance 
the  receiver  of  the  contracting  party 
is  the  only  necessary  party.  South- 
ern Exp.  Co.  V.  Western  N.  C.  R.  Co. 
99  U.  S.  191,  198,  25  L.  ed.  319,  320. 

A  receiver  and  manager  of  a  hotel 
business  may  be  appointed  in  a  suit 
for  specific  performance  of  a  contract 
for  the  sale  of  the  lease,  furniture, 
and  goodwill  of  the  business,  but  he 
can  take  no  chattels  other  than  those 
which  would  pass  by  an  assignment 


of  the  lease.  Poole  v.  Doiones,  76  L. 
T.  N.  S.  110. 

A  receiver  was  appointed  in  a  suit 
for  specific  performance.  Reade  v. 
Hamlin,  62  N.  C.  (Phill.  Eq.)  128; 
Boehm  v.  Wood,  Turn.  &  R.  332,  2 
Jac.  &  W.  236. 

A  receiver  was  appointed  in  case 
of  a  bill  for  specific  performance,  on 
application  of  the  vendor,  where  the 
purchaser  was  insolvent.  Hall  v. 
Jenkinson,  2  Ves.  &  B.  125. 


Page  551,  sec.  320. — In  ejectment  suits. 


A  receiver  will  be  appointed  under 
the  English  judicature  act  1873,  § 
25,  subs.  8,  in  an  ejectment  suit  in 
which  the  title  to  real  property  is  in 


dispute,  where  it  appears  tliat  the 
plaintiir  will  probably  succeed  in  the 
action,  and  that  the  tenants  on  the 
land  will  run  the  risk  of  iiaving  to 

111 


321 


RECEIVERSHIPS— SUPPLEMENT, 


pay  their  rents  twice  if  a  receiver  ia 
not  appointed.  John  v.  John,  07  L. 
J.  Ch.  N.  S.  GIG;  Foxicell  v.  Van- 
Grutten  [1897]  1  Ch.  04,  75  L.  T.  N. 
S.  311,  308,  OG  L.  J.  Ch.  N.  S.  53. 

In  a  strong  case  a  receiver  may  be 
appointed.  Givatkin  v.  Bird,  52  L.  J. 
Q.  B.  N.  S.  263 ;  Whittcorth  v.  Wof- 
fort,  73  Ga.  259 ;  Garniss  v.  San 
Francisco  Super.  Ct.  88  Cal.  413. 

A  receiver  will  be  appointed  of  the 
royalty,  rents,  and  profits  of  min- 
ing property  involved  in  an  action 
of  ejectment,  where  it  is  not  pro- 
posed to  disturb  the  lessee,  and  there 
is  no  direct  legal  responsibility  on 
the  part  of  anj^one  to  respond  in 
damages,  and  the  value  of  the  prop- 
erty is  being  greatly  lessened  by  its 
operation,  and  the  defendants  have 
commenced  their  mining  operations 
in  face  of  notices  served  of  the  claim 
of  the  plaintiffs.  TJlman  v.  Clark, 
75  Fed.  Rep.  808. 

It  has  been  held,  however,  that  a 
receiver  will  not  be  appointed  in  an 
action  to  recover  possession  of  real 


estate.  Guernsey  v.  Poivers,  9  Hun, 
78. 

The  discretion  of  the  court  to  ap- 
point a  receiver  in  ejectment  should 
not  be  exercised  where  there  is  no 
evidence  of  waste,  although  de- 
fendant is  impecunious.  Foxwell  v. 
Van  Grutten  [1897]  1  Ch.  04,  75 
L.  T.  N.  S.  311,  308,  OG  L.  J.  Ch.  M. 
S.  53. 

And  judgment  must  have  been  ren- 
dered. Burdell  v.  Burdell,  54  How. 
Pr.  91. 

Where  land  is  sold  by  a  person  to 
a  railroad  company,  and  its  road  is 
constructed  thereon,  and  default  is 
there  made,  it  is  proper  to  appoint 
a  receiver  and  order  possession  to  be 
delivered  to  him.  Mumis  v.  Isle  of 
Wight  R.  Go.  L.  R.  5  Ch.  414. 

A  tenant  may  intervene  in  a  re- 
ceivership appointed  in  an  action  of 
ejectment  brought  by  his  landlord 
against  a  person  who  ejected  the  ten- 
ant. Ex  parte  Breedlove  (Ala.)  24 
So.  363. 


Page  552,  sec.  321. — In  alimony  suits. 


An  action  by  a  wife  for  mainte- 
nance without  a  divorce,  in  which  it 
is  also  sought  to  set  aside  transfers 
made  by  the  husband  to  defeat  plain- 
tiff's rights  to  maintenance  out  of  his 
property,  is  by  reason  of  the  inad- 
equacy of  purely  legal  remedies  so 
much  a  subject  of  equitable  cog- 
nizance that  it  carries  with  it  the 
right  to  have  a  receiver  appointed 
under  the  general  provision  of  Cal. 
Code  Civ.  Proc.  §  5G4,  for  the  ap- 
pointment of  receivers  in  all  cases 
"where  receivers  have  been  hereto- 
fore appointed  by  the  usages  of 
courts  of  equity."  Murray  v.  Mur- 
ray, 115  Cal.  266,  37  L.  R.  A.  626. 


Trustees  should  not  be  appointed 
to  take  possession  of  a  husband's 
property  and  close  up  his  estate, 
where  he  has  deserted  his  wife,  re- 
fused to  support  her,  and  has  prop- 
erty which  he  is  about  to  dispose  of 
without  providing  for  her  mainte- 
nance, as  the  attachment  authorized 
in  such  cases  by  the  Pennsylvania 
statute  is  an  original  process  and 
has  no  relation  to  domestic  attach- 
ments or  the  practice  thereunder. 
Longhotham  v.  Longhotham,  18  Pa. 
Co.  Ct.  460. 


Mechanics'  lien. 


Another  ground  for  the  appoint- 
ment of  receivers  is  in  a  mechanic's 
lien  proceeding,  where  by  statute  a 
receiver  is  provided  for. 

An  order  authorizing  a  receiver 
appointed  in  an  action  to  enforce  a 
112 


mechanic's  lien,  to  reduce  the  rental 
under  a  lease  in  force  at  the  time  of 
his  appointment,  is  unauthorized, 
and  he  is  not  entitled  to  a  credit  for 
the  amount  of  the  reduction.  Fice- 
ner  v.  Bott,  20  Ky.  L.  Rep.  032. 


MISCELLi\.N£OUS  RECEIVERSHIPS. 


§  321 


A  mechanic's  lien  is  not  lost  by  the 
subsequent  appointment  of  a  receiv- 
er. Totten  d  H.I.&  S.  Foundry  Co. 
V.  Muncie  Nail  Co.  148  Ind.  372. 

If  the  appointment  of  a  receiver 
of  a  real  estate  company  devests  the 
creditors  of  the  company  of  all 
rights  to  acquire  a  mechanic's  lien  on 
its  property,  it  will  not  be  a  defense 
available  to  such  company  in  an  ac- 
tion to  enforce  such  a  lien  to  which 
it  is  a  party.  Vigo  Real  Estate  Co. 
V.  Reese,  21  Ind.  App.  20. 

But  in  the  absence  of  a  statute  it 
cannot  be  done. 


The  complainant  in  an  action  to 
foreclose  a  mechanic's  lien  is  not  en- 
titled, in  the  absence  of  any  statu- 
tory provision  therefor,  to  a  receiver 
of  the  rents  and  profits  of  the  prop- 
erty pendente  lite,  titone  v.  Tijlcr, 
173  111.  147,  Reversing  67  111.  App. 
17. 

The  fact  that  property  is  in  the 
hands  of  a  receiver  is  no  defense  to 
an  action  to  enforce  a  mechanic's 
lien  against  it.  Richardson  v.  Hick- 
man, 32  Ark.  406. 


In  attachment  suits. 


The  rule  generally  is  that  a  re- 
ceiver will  not  be  appointed  in  an 
attachment  proceeding  unless  the 
attachment  is  inadequate  and  inef- 
ficacious. Fearee  v.  Jennings,  94 
Ala.  524.  But  see  Sackhoff  v.  Vande- 
arift,  98  Ala.  192. 

It  has  been  held,  however,  that  a 
receiver  of  the  property  of  defendant 
in  attachment  is  properly  appointed 


where  the  attached  property  had 
been  mortgaged  to  secure  specified 
debts,  and  the  attachment  plaintiff 
alleges  that  the  most  of  such  debts 
were  fictitious  and  fraudulent  and 
that  the  mortgagor  and  mortgagee 
are  insolvent.  Gassaivay  v.  Heiden- 
heimer  (Tex.  Civ.  App.)  37  S.  W. 
343. 


Appointment  on  application  of  vendor  or  purchaser. 


A  purchaser  at  a  judicial  sale  may 
have  a  receiver  where  the  debtor  re- 
mains in  possession  during  the  re- 
demption period  and  is  insolvent,  in 
case  of  a  mine  where  it  may  be  worked 
out  and  its  value  destroyed.  It  is 
different  from  the  ordinary  real  es- 
tate sale.  Hill  v.  Taylor,  22  Cal. 
191;  Harris  v.  Reynolds,  13  Cal.  514, 
73  Am.  Dec.  600. 

A  receiver  should  not  be  appointed 
in  a  suit  by  vendees  to  recover  the 
purchase  money  where  there  is  no 
evidence  of  waste.  Collins  v.  Rich- 
art,  14  Bush,  621. 

A  receiver  will  be  appointed  at  the 
suit  of  a  vendor  seeking  to  rescind 
a  contract  for  the  sale  of  land 
against  a  purchaser  in  possession, 
where  the  subject-matter  of  the  con- 
tract is  imperiled  by  the  latter's  acts. 
Cook  v.  Andrcics  [1897]  1  Ch.  266,  66 
L.  J.  Ch.  X.  S.  137. 

A  receiver  may  be  appointed  on 
the  application  of  a  purchaser  at  a 


sheriff's  sale  pending  litigation.  Mc- 
Fadden  v.  'Nolan,  15  Phila.  187. 

A  purchaser  of  land  at  a  judicial 
sale  is  not  entitled  to  have  a  receiver 
of  the  rents  and  profits  appointed 
pending  an  appeal  by  the  residuary 
legatee  from  a  confirmation  of  the 
sale.  Pearson  v.  Gillenwaters,  99 
Tenn.  446,  Affirmed  on  Rehearing,  99 
Tenn.  462. 

The  purchaser  at  a  void  judicial 
sale,  who  acquired  and  retained  pos- 
session under  a  receiver  legally  ap- 
pointed, may  offset  against  the  rents 
whatever  credits  the  court  would 
have  allowed  the  receiver  if  he  had 
cultivated  the  land  under  the  court's 
directions,  such  as  taxes,  necessary 
improvements,  etc.  Jefferson  v.  Ed- 
rington,  53  Ark.  545. 

A  purchaser  of  railroad  property 
from  o\w.  who  purchased  at  a  sale  by 
a  icceiver  takes  it  free  from  claims 
against  the  receiver,  unless  it  is  or- 
dered otherwise  by  the  terms  of  sale. 

113 


§  321 


RECEIVERSHIPS— SUPPLEMENT. 


Houston,  E.  d  W.  T.  R.  Go.  v.  TSlor- 
rts  (Tex.  Civ.  App.)   41  S.  W.  708. 
Under  a  bill  to  set  aside  a  sale  for 


inadequacy  and  fraud  a  receiver  was 
appointed.  Stilwell  v.  Wilkins,  Jac. 
280. 


Other  parties  and  cases. 


Where  funds  are  in  dispute  it  is 
proper  to  appoint  a  receiver  who  may 
apply  for  an  order  to  turn  the  money 
into  court,  where  all  parties  can  be 
heard.  People  v.  King,  9  How.  Pr. 
97. 

The  court  may  appoint  a  receiver 
where  property  in  the  possession  of 
one  in  which  another  claims  an  in- 
terest is  allowed  to  depreciate.  Jones 
V.  Quayle   (Idaho)  32  Pac.  1134. 

A  receiver  may  be  appointed  to 
take  possession  of  and  collect  a  note 
and  mortgage  in  the  hands  of  an  at- 
torney claiming  a  lien  thereon,  upon 
petition  of  a  third  party  claiming 
the  same.  Gary  v.  Brown,  33  111. 
App.  435. 

A  deputy  county  clerk  is  entitled 
to  a  receiver  for  his  portion  of  fees 
earned.  Cheek  v.  Tilley,  31  Ind. 
121. 

Receiver  not  appointed  for  the  an- 
nual allowance  of  assistant  parlia- 
mentary counsel,  there  being  no  fixed 
salary.  Cooper  v.  Reilly,  1  Russ.  & 
M.  560. 

A  judgment  against  a  clergyman 
does  not  create  a  charge  upon  his 
benefice  and  entitle  a  judgment  cred- 
itor to  a  receiver.  Hawkins  v.  Gath- 
ereole,  6  De  G.,  M.  &  G.  1,  1  Jur. 
N.  S.  481. 

Where  a  canon  granted  the  profits 
of  his  canonry  as  security  for  money, 
it  appearing  that  no  public  duty  was 
involved,  a  receiver  was  appointed. 
Grenfell  v.  Windsor,  2  Beav.  544. 

A  savings  and  loan  association 
containing  a  lottery  feature,  by 
which  certain  shareholders  who  are 
first  paid  will  obtain  an  undue  ad- 
vantage over  the  other  members,  will 
be  restrained  from  proceeding  with 
the  business,  and  a  receiver  of  the 
funds  will  be  appointed  to  distribute 
them  equitably  among  all  the  share- 
holders. Shaiv  V.  Interstate  Bav.  L. 
&  T.  Corp.  5  Ohio  N.  P.  411. 

A  court  will  not  appoint  a  receiver 
to  collect  the  fees  of  an  officer 
114 


against  whom  quo  warranto  proceed- 
ings are  pending.  Stone  v.  Wet- 
more,  42  Ga.  (iOl. 

A  receiver  may  be  appointed  to 
reach  a  surplus  in  the  admiralty 
court.  Thompson  v.  Van  Vechten, 
5  Duer,  618. 

In  all  cases  where  a  creditor  en- 
joins the  debtor  from  disposing  of 
or  interfering  with  his  property  a 
receiver  should  be  appointed  whether 
there  is  such  property  or  not.  Webb 
V.  Overman,  6  Abb.  Pr.  92;  Osborn 
V.  Heyer,  2  Paige,  343. 

Officers  of  a  corporation  ordered 
to  continue  the  operation  of  an  in- 
solvent road  are  special  receivers. 
^Ex  parte  Brown,  15  S.  C.  518. 

Relative  duties  of  employees  and 
receiver  in  case  of  a  strike — dis- 
cussed. Frank  v.  Denver  &  R.  G.  R. 
Co.  23  Fed.  Rep.  757,  764. 

A  receiver  may  be  appointed  to 
take  and  state  an  account  of  timber 
cut  from  premises  in  dispute,  even 
where  the  parties  are  solvent.  John 
L.  Roper  Lumber  Co.  v.  Wallace,  93 
N.  C.  23. 

Or  to  preserve  property  where 
there  is  danger  of  an  eviction.  Feth- 
erstone  v.  Mitchell,  9  Ir.  Eq.  Rep. 
480. 

Or  to  prevent  the  lapsing  of  a  land 
grant.  Kennedy  v.  tit.  Paul  d-  P.  R. 
Co.  2  Dill.  448,  5  Dill.  519. 

Or  over  a  savings  institution. 
Savings  Inst.  v.  Makin,  23  Me.  360. 

Or  where  a  creditor  who  has  a 
right  to  redeem  has  tendered  the 
amount  required  to  a  mortgagee  in 
possession.  Shultz  v.  Jerrard  (N. 
J.  Eq.)   2  Cent.  Rep.  211. 

A  receiver  may  be  appointed  of 
the  master  forester  of  a  royal  forest. 
Bla7ichard  v.  Cawthorne,  4  Sim.  566. 

Or  of  deeds  that  are  ordered  to  be 
produced  before  a  master  where  there 
is  a  refusal.  Brigstocke  v.  Hansel, 
3  Madd.  47. 

Or  to  keep  a  cemetery  in  repair  on 
failure  by  a  corporation  as  required 


REMOVAL  AND   DISCHARGE   OF   RECEIVER. 


§  330 


by  its  charter,  on  application  of  a 
lotowner.  Houston  Cemetery  Co.  v. 
Drew,  13  Tex.  Civ.  App.  536. 

Under  the  provisions  of  Cal.  Code 
Civ.  Proc.  §  564,  authorizing  the 
court  to  appoint  a  receiver  to  carry 
a  judgment  into  effect,  the  court  may 
appoint  a  receiver  to  make  a  convey- 
ance when  the  defendants  are  nu- 
merous and  some  are  minors.  Scad- 
den  Flat  Gold  Mm.  Co.  v.  Scadden, 
121  Cal.  33. 

A  receiver  may  be  appointed  to 
rent  premises  until  confirmation  of 
the  title.  Garlington  v.  McKibben, 
99  Ga.  128. 

Or  to  run  a  newspaper  for  a  lim- 
ited term.  Gwynne  v.  Memphis  Ap- 
peal-Avalanche Co.  93  Tenn.  603. 

Or  where  a  judgment  has  been 
confessed  with  a  view  of  defrauding 
creditors.  Stern  v.  Austern,  120  N. 
C.   107. 

Or  for  a  suit  in  a  stock  exchange. 
Hahenicht  v.  Lissak,  78  Cal.  351,  5 
L.  R.  A.  713. 

Or  to  collect  money  due  on  mort- 
gage securities.  Sidivay  v.  Ameri- 
can Mortgage  Co.  67  111.  App.  24. 

Or  for  torpedoing  an  oil-well.  Gal- 
lagher V.  Earns,  27  Hun,  375. 

Or  to  collect  taxes  levied  by  judi- 
cial direction,  for  the  payment  of  a 
judgment.  Garrett  v.  Memphis,  5 
Fed.  Rep.  860. 

Or    where    a    stallion    is    owned 


jointly  and  one  joint  owner  is  in  pos- 
session and  is  insolvent.  Shehan  v. 
Maher,  17  Hun,  129;  Andrews  v. 
Betts,  8  Hun,  322. 

But  a  receiver  will  not  be  ap- 
pointed over  a  stand  in  a  market,  it 
being  only  a  license.  Barry  v.  Ken- 
nedy, 11  Abb.  Pr.  N.  S.  421. 

Or  to  preserve  a  jail  on  the  appli- 
cation of  a  taxpayer.  Manly  Mfg. 
Co.  V.  Broaddus,  94  Va.  547. 

Or  of  a  fellowship.  Berkeley  v. 
King's  College,  10  Beav.  602. 

A  receivership  for  a  municipality 
and  its  funds,  and  an  injunction  to 
restrain  its  officers  from  improperly 
paying  out  the  funds,  are  not  proper 
under  a  bill  in  equity  whose  princi- 
pal averment  is  that  the  officers  are 
neglecting  their  duties,  but  which 
does  not  allege  that  irreparable  in- 
jury will  result  therefrom,  or  seek 
by  way  of  mandamus  to  compel  per- 
formance thereof,  and  in  which  the 
complainants  do  not,  as  creditors,  al- 
lege insolvency,  or  that  it  is  necessary 
to  exercise  its  taxing  powers  to  raise 
money  to  pay  debts.  Eurlhut  v. 
Lookout  Mountain  (Tenn.  Ch.  App.) 
49  S.  W.  30i.   [Aff'd  by  Sup.  Ct.] 

Where  two  parties  claim  under  le- 
gal titles  the  validity  of  which  is 
pending  at  law,  a  receiver  will  not  be 
appoin'ted  for  the  rents  and  profits. 
Squire  v.  Eeivlett,  141  Mass.  597. 


Page  557,  sec.  330. — Removal  and  discharge  of  receiver. 


A  receiver  will  not  be  removed  be- 
cause a  creditor  of  the  insolvent  cor- 
poration is  a  stockholder  and  offi- 
cer of  the  receiver  corporation. 
Barker  V.  Lillibridge  (Mich.)  5  Det. 
L.  N.  250,  75  N.  W.  886. 

The  trusteeship  of  a  receiver  ceases 
on  his  discharge  and  payment  or  de- 
livery of  the  property  in  his  hands 
pursuant  to  the  order  of  court. 
Ilovey  V.  Elliott,  118  N.  Y.  124. 

Property  in  the  hands  of  a  receiver 
after  the  bill  is  dismissed  sliould  be 
restored  to  the  party  from  whom  it 
was  received.  Caswell  v.  Bunch,  80 
Ga.  124. 

Plaintiff  has  a  right  to  dismiss 
his  bill  b(?fore  the  receiver  has  passed 
his  accounts  and  paid  in  his  balances. 


White  V.  Westmeath,  Beatty,  174,  2 
Hogan,  33. 

A  receiver  cannot  be  removed  with- 
out notice  of  the  application  for  such 
removal.  Campbell  v.  Sprat t,  5  N. 
y.  Week.  Dig.  25. 

A  receiver  may  be  removed  at  any 
time,  at  the  pleasure  of  the  court, 
under  Conn.  Gen.  Stat.  §  1319;  and 
any  judge  of  the  superior  court  may, 
when  the  court  is  not  actually  in  ses- 
sion, remove  the  receiver  after  due 
notice  given  under  Conn.  Pub.  Acts 
1895,  chap.  499,  §  108.  Re  Premier 
Cycle  Mfg.  Co.  70  Conn.  473. 

It  is  within  the  discretion  of  the 
circuit  court  to  fix  the  time  for  hear- 
ing a  petition  for  the  removal  of  a 
receiver.     Barker       v.       Lillibridge 

115 


S  330 


EECEIVERSHIPS— SUPPLEMENT. 


(Mich.)   5  Det.  L.  N.  250,  75  N.  W. 
880. 

A  motion  to  discharge  must  be  on 
notice.  Johnson  v.  Henderson,  8  Ir. 
Eq.  Rep.  521. 

A  receiver  may  be  discharged  on 
motion  when  his  functions  under  the 
bill  liave  ceased.  Baughman  v.  Cal- 
averas County  Super.  Ct.  72  Cal.  572. 

Receivers  having  executed  the 
duty  for  which  they  were  appointed, 
it  is  the  right  and  duty  of  the  party 
on  whose  application  they  are  ap- 
pointed to  see  to  it  that  they  are  dis- 
charged, in  order  to  avoid  the  con- 
sequences of  their  continuing  to  act. 
Lanqdon  v.  Vermont  d  C.  R.  Go.  53 
Vt.  228. 

A  provision  of  an  order  discharg- 
ing the  receiver  of  a  corporation, 
making  the  restoration  of  the  prop- 
erty to  the  corporation  subject  to 
the  debts  incurred  by  him,  applies 
only  to  such  of  the  debts  as  could  be 
legally  enforced  against  the  trust 
property.  Brunner  v.  Central  Glass 
Co.  18  Ind.  App.  174. 

A  receiver  may  be  removed  for  dis- 
obeying orders  of  the  court.  Guard- 
ian Sav.  Inst.  V.  Bowling  Green  Sav. 
Bank,  65  Barb.  275. 

The  payment  of  the  judgment  on 
which  supplementary  proceedings 
are  based  renders  the  further  acts 
of  the  receiver  as  such  null  and  void. 
Righton  v.  Pruden,  73  N.  C.  61. 

If  the  balance  is  to  be  paid  into 
court,  the  same  order  may  discharge 
the  recognizance;  but  if  to  be  paid 
to  a  person,  it  should  not.  Lawson 
V.  Ricketts,  11  Beav.  627. 

When  a  corporation  satisfies  a 
chancellor  that  it  is  able  and  willing 
to  resume  operation  of  its  road,  the 
receiver  will  be  ordered  to  deliver  it 
up.  Re  Long  Branch  d  Sea  Shore  R. 
Co.  24  N.  J.  Eq.  398. 

Power  to  remove  is  in  the  discre- 
tion of  the  court.  First  Nat.  Bank 
V.  E.  T.  Barnum  Wire  &  Iron  Works, 
60  Mich.  487. 

An  equitable  action  for  injunction 
and  the  appointment  of  a  receiver  is 
completely  ended  by  a  consent  order 
by  which  the  receiver  is  discharged 
and  the  property  in  his  hands  re- 
stored to  the  defendants.  Conquest 
V.  yational  Bank,  97  Ga.  500. 

An    order    appointing    a    receiver 

116 


and  putting  the  land  in  suit  in  his 
hands  pending  the  action  should,  in 
the  absence  of  special  circumstances, 
be  rescinded  upon  dismissal  of  the 
action.  Campbell  v.  Eversole,  18  Ky. 
L.  Rep.  723. 

A  receiver  appointed  in  a  mort- 
gage foreclosure  action  is  properly 
discharged  and  the  possession  of  the 
lot  restored  to  the  owner  of  the 
equity  of  redemption,  who  is  also  en- 
titled to  the  balance  of  the  rents  left 
in  the  receiver's  hands  after  paying 
the  taxes,  where  the  mortgagee  has 
purchased  the  property  for  the 
amount  of  the  decree,  interest,  and 
costs,  notwithstanding  that  the  ap- 
plication to  discharge  is  contested 
by  a  third  person  who  was  liable  for 
the  mortgage  debt,  and  who  induced 
the  mortgagee  to  purchase  the  prop- 
erty by  agreeing  to  reimburse  him 
and  take  over  the  property.  Bogard- 
us  V.  Moses,  78  111.  App.  223. 

The  trial  judge  is  not  confined,  on 
an  application  for  the  removal  of  a 
receiver,  to  the  receiver's  disobedi- 
ence of  an  order  set  up  in  the  peti- 
tion as  the  ground  for  removal, 
where  the  receiver  in  his  answer  sets 
forth  the  whole  history  of  his  man- 
agement from  the  beginning,  and  af- 
firms that  he  has  never  intentional- 
ly done  or  omitted  any  act  prejudi- 
cial to  the  interests  committed  to  hia 
charge,  and  has  never  disregarded 
any  order  of  the  court,  and  the  reply 
to  such  answer  is  a  general  denial. 
Re  Premier  Cycle  Mfg.  Co.  70  Conn. 
473. 

Though  after  decree,  if  the  receiv- 
er is  not  discliarged  thereby,  he  is 
still  receiver.  Visage  v.  Sehofield, 
60  Ga.  680. 

A  decree  of  the  Federal  court,  dis- 
charging receivers  appointed  by  it, 
is  a  bar  to  any  suit  against  such  re- 
ceivers for  liability  incurred  solely 
by  virtue  of  their  office,  and  consti- 
tutes a  complete  defense.  Fordyce 
v.  Beecher,  2  Tex.  Civ.  App.  29. 

The  granting  of  an  order  to  put  a 
purchaser  in  possession  is  ipso  facto 
a  discharge  of  the  receiver  as  to  the 
land  covered  by  the  order.  Ponson- 
by  V.  Ponsonhy,  1  Hogan,  321. 

Discontinuance  of  the  suit  does 
not  discharge  the  receiver.  White- 
side V,  Prendergast,  2  Barb.  Ch.  471. 


CLAIMS  AGAINST   RECEIVERSHIP  FUNDS. 


340 


A  receiver  of  a  corporation  should 
not  be  discharged  and  ordered  to 
turn  over  the  property  to  an  assignee 
subsequently  apjjointed  by  the  court 
of  another  county,  in  advance  of  a 
hearing  upon  the  merits.  France  v. 
Peerless  Refining  Co.  15  Ohio  C.  C. 
232. 

A  receiver  who  presents  his  resig- 
nation will  be  relieved  from  further 
administration  of  the  trust,  but  will 
not  be  discharged  until  his  accounts 
have  been  duly  passed  and  any  sums 
with  which  he  is  surcharged  have 
been  paid.  Morehead  v.  Striker,  82 
Fed.  Rep.  1003. 

A  bill  to  set  aside  a  conveyance  as 
fraudulent  should  not  be  dismissed 
without  requiring  a  receiver  ap- 
pointed in  the  action  to  report  and 
settle  his  account.  Simmons  v. 
Shelton,  112  Ala.  284. 

A  stockholder  and  bondholder  of  a 
mining  company,  petitioning  for  the 
removal  of  a  receiver  on  the  ground 
of  mismanagement  and  waste,  will 
be  permitted  to  examine  the  mines 
by  an  agent  in  whom  he  confides,  for 
the  purpose  of  seeing  if  the  grounds 
upon  which  he  bases  his  petition  are 
well  founded.  Henszey  v.  Langdon- 
Henszy  Coal  Min.  Co.  80  Fed.  Rep. 
178. 

Dismissal  of  a  bill  does  not  dis- 
charge the  receiver.  State,  Peterson, 
V.  Gibson,  21  Ark.  140. 

The  dismissal  of  the  bill  does  not 
discharge  the  receiver  from  his  ac- 
countability to  the  court.  State, 
Peterson,  v.  Gibson,  21  Ark.  140. 

A  motion  to  dismiss  and  discharge 
the  receiver  held  over  until  right  to 


taxes  determined.  Hazard  v.  Credit 
Mobilier  of  America,  38  Fed.  Rep. 
195. 

A  receiver  wrongful]}^  appointed 
over  property  will  be  discharged  not- 
withstanding the  abatement  of  the 
suit.  Lavender  v.  Lavender.  Ir.  Rep. 
9  Eq.  593. 

Alter  a  receiver  has  been  ap- 
pointed and  has  given  bond  he  must 
show  some  reasonable  cause  to  en- 
title himself  to  be  discharged. 
Smith  V.  Vaughan,  Ridgeway 
t.  Hardw.  251. 

A  receiver  of  a  corporation  ap- 
pointed for  mismanagement  of  direct- 
ors should  be  discontinued  on  the  re- 
moval of  such  mismanaging  direct- 
ors, when  the  dissolution  of  the  cor- 
poration is  not  sought.  Duncan  v. 
George  C.  Treadwell  Co.  82  Hun, 
376. 

The  bondsman  of  a  receiver  will 
not  upon  his  resignation  be  made  a 
party  to  the  action  in  which  he  was 
appointed,  but  will  be  given  notice 
that  his  accounts  are  being  investi- 
gated, and  allowed  to  take  part  in  the 
investigation.  Morehead  v.  Striker, 
82   Fed.  Rep.   1003. 

A  bank  is  estopped  from  endeavor- 
ing to  secure  the  discharge  of  a  re- 
ceiver, where  it  has  accepted  divi- 
dends, and  suffered  entries  to  be 
made  authorizing  the  continuance  of 
the  business  and  a  sale  of  the  prop- 
erty by  the  receiver,  without  objec- 
tion, and  where  it  prays  payment  of 
its  claim  out  of  the  proceeds.  Equi- 
table yat.  Bank  v.  Guckenbcrger,  5 
Ohio  N.  P.  319. 


Page  568,  sec.  340. — Claims  against  receivership  funds. 


The  funds  in  the  hands  of  the  re- 
ceiver should  be  paid  out  only  on  or- 
der of  court.  Duffy  v.  Casey,  7  Robt. 
79. 

Where  an  order  requiring  a  re- 
ceiver to  pay  out  more  money  than 
he  is  likely  to  have  has  been  entered 
by  mistake,  it  may  be  amended  by 
summary  action  or  by  the  court  on 
its  own  motion.  Ryan  v.  Thomas, 
104  Ind.  59. 

It  is  error,  after  the  expiration  of 


the  term  of  court  at  which  the  decree 
was  rendered,  to  modify  a  decree 
wliich  in  effect  adjudged  certain  par- 
ties to  be  the  owner  of  funds  in  pos- 
session of  or  to  be  collected  by  a  re- 
ceiver, directing  that  the  same  be 
paid  to  tliom.  to  rcdocicct  the  cause, 
and  enter  an  order  whicli  in  effect  di- 
rects the  funds  to  be  ])aid  to  one  ol 
such  parties,  ignoring  the  riglits  of 
the  other.  Fanning  v.  Fanning,  173 
111.  83. 

117 


340 


RECEIVERSHIPS— SUPPLEMENT. 


Authority  given  to  receivers  to  ad- 
just, compromise,  and  settle  in  their 
best  discretion  claims  against  a  rail- 
road company,  vests  no  right  in  cred- 
itors to  have  their  claims  paid  in 
full.  Mercantile  Trust  Co.  v.  Bal- 
timore &  0.  R.  Co.  79  Fed.  Rep.  JS9. 

A  loss  after  the  appointment  of  a 
receiver  does  not  entitle  the  claim- 
ants to  share  in  the  distribution  of 
assets.  Doane  v.  Millville  Mut.  M. 
&  F.  Ins.  Co.  43  N.  J.  Eq.  522. 

An  order  directing  that  no  pay- 
ment of  claims  shall  be  made  by  a  re- 
ceiver without  order  of  the  court 
does  not  cut  ofT  claims  of  the  class 
covered  thereby,  where  the  claimants 
are  not  parties  to  the  proceeding. 
yew  England  R.  Co.  v.  Carnegie 
Hteel  Co.  33  U.  S.  App.  491,  75  Fed. 
Rep.  54,  21  C.  C.  A.  219. 

Heirs  who  have  inherited  stock  in 
a  corporation  are  not  entitled  to  an 
allowance  by  a  receiver  for  services 
rendered  in  preserving  the  property 
before  his  appointment,  since  their 
services  were  in  the  interest  of  their 
own  inheritance.  Re  Osceola  Mill- 
ing Co.  76  Mo.  App.  23. 

When  a  suit  is  brought  to  a  con- 
clusion by  settlement,  the  money  iii 
the  receiver's  hands  belongs  to  the 
person  in  possession  of  the  estate 
when  the  receiver  was  granted. 
Paynter  v.  Carew,  Kay,  Appx. 
xxxvi. 

Neither  a  railroad  company  nor 
one  in  privity  with  it  can  demand 
the  income  in  the  hands  of  a  receiver 
to  pay  liens,  until  they  have  been 
satisfied.  Schutte  v.  Florida  C.  R. 
Co.  3  Woods,  692,  712. 

Pledgees  of  bonds  entitled  to  share 
in  the  funds  in  the  hands  of  a  re- 
ceiver of  a  corporation,  who  have 
bought  in  such  bonds  upon  a  sale, 
are  entitled  to  the  full  face  value,  and 
not  merely  to  the  amount  for  which 
they  were  pledged.  Atlantic  Trust 
Co.  V.  Woodbridge  Canal  d  Irrig.  Co. 
86  Fed.  Rep.  975. 

Levy  of  writ  of  attachment 
against  insolvent  railroad  company 
gives  the  attaching  creditor  no  pref- 
erence or  lien  which  will  deprive  the 
court  of  the  power  to  equitably  ap- 
portion the  income  of  the  property 
under  a  receiver  appointed  in  pro- 
ceedings to  foreclose  a  mortgage,  to 
118 


the  operating  expenses  of  the  road. 
Fanners'  d  M.  iSiat.  Bank  v.  Waco 
Electric  R.  &  L.  Co.  (Tex.  Civ.  App.) 
30  S.  W.  131. 

The  court  may  apply  a  balance  of 
rents  in  the  receiver's  hands  to  the 
satisfaction  of  a  second  mortgage 
after  the  payment  of  the  first. 
Keogh  v.  McManus,  34  Hun,  521. 

A  corporation  whose  checks  dur- 
ing the  illness  of  its  treasurer  are, 
without  further  authority  from  such 
treasurer  than  a  direction  to  the 
clerk  of  another  company  in  which 
he  was  a  stockholder  to  turn  one 
such  check  into  the  funds  of  the  lat- 
ter company,  taken  possession  of  by 
the  latter  company,  and  the  proceeds 
used  in  buying  goods  in  the  regular 
course  of  business,  may,  where  the 
latter  company  becomes  insolvent  and 
goes  into  the  hands  of  a  receiver,  re- 
cover from  such  receiver  the  amount 
of  the  checks  so  used.  York  v.  York 
Market  Co.   (N.  H.)   37  Atl.  1038. 

Where  plaintiff  was  appointed  re- 
ceiver, with  power  to  repair  and  pay 
taxes,  and  subsequently  a  mortga- 
gee foreclosed  and  bought  the  prop- 
erty for  less  than  his  mortgage  and 
a  balance  remained  in  plaintiff's 
hands, — held  that  he  was  not  re- 
quired to  pay  it  over  to  the  mortga- 
gee.    Ranney  v.  Peyser,  83  N.  Y.  1. 

For  a  question  as  to  what  parties 
were  entitled  to  a  fund  in  the  hands 
of  receivers — see  Lanauze  v.  Belfast, 
E.  &  B.  R.  Co.  Ir.  Rep.  3  Eq.  454. 

A  claim  against  a  construction 
company  is  not  payable  from  the 
funds  in  the  hands  of  a  receiver  of 
a  railroad  company  whose  stock  is 
all  owned  by  the  construction  com- 
pany. Exchange  Bank  v.  Macon 
Construction  Co.  97  Ga.  1,  smT)  nom. 
McTighe  v.  Macon  Construction  Co. 
33  L.  R.  A.  800. 

After  insolvency  and  the  appoint- 
ment of  a  receiver  for  a  railroad,  the 
court  in  a  foreclosure  proceeding 
may  direct  payment  of  a  reasonable 
amount  for  land  taken  for  a  right  of 
way  and  included  in  the  mortgage. 
Coe  V.  yew  Jersey  Midland  R.  Co. 
30  N.  J.  Eq.  21. 

The  conduct  of  a  real-estate  broker 
in  concealing  from  a  receiver  who 
had  employed  him  to  procure  a  pur- 
chaser for  land,  his  own  interest  in 


CLAIMS  AGAINST  RECEIVERSHIP  FUNDS. 


340 


the  prospective  purchase,  precludes 
him  from  obtaining  compensation 
from  the  latter.  Ryan  v.  Kahler 
(Tex.  Civ.  App.)  40  S.  W.  71. 

Policy  holders  in  an  employers' 
liability  insurance  company,  in  a 
state  whose  statutes  require  the  de- 
posit as  security  of  a  certain 
amount  for  the  benefit  of  all  the  pol- 
icy holders  residing  therein  before 
such  company  can  do  business  there- 
in, are  entitled  to  share  in  the  dis- 
tribution of  dividends  by  the  receiver 
of  the  company  only  after  the  policy 
holders  in  other  states  have  received 
sums  equal  to  the  amounts  secured 
to  such  first-mentioned  policy  hold- 
ers by  such  deix)sit.  Ross  v.  Ameri- 
can Employers'  Liability  Ins.  Co.  56 
N.  J.  Eq.  41. 

In  distributing  the  proceeds  of  a 
crop  in  the  hands  of  a  reciver  in  a 
partition  suit,  a  cropper  under  a  co- 
tenant  who  was  in  sole  possession 
should  be  allowed  the  proportion 
called  for  by  his  contract,  subject  to 
a  porportional  deduction  for  the  ex- 
penses of  the  receiver  in  harvesting 
and  marketing  the  crop,  and  the  bal- 
ance, after  deducting  a  reasonable 
compensation  to  such  cotenant  for 
the  use  of  his  teams  and  seed  and 
machinery  furnished  by  him,  should 
be  divided  between  the  several  co- 
tenants,  each  share  bearing  its  due 
proportion  of  the  receivership. 
Moreland  v.  i:>tronr/,  115  Mich.  211. 

Assets  of  a  national  bank  in  the 
hands  of  a  receiver  are  under  the 
comptroller  of  the  currency,  and  the 
receiver  has  no  power  to  pay  divi- 
dends. Merrill  v.  National  Bank, 
41  U.  S.  App.  529,  sub  nom.  Merrill 
V.  First  Nat.  Bank,  75  Fed.  Rep.  148, 
21  C.  C.  A.  282. 

A  suit  to  compel  the  receiver  of  a 
national  bank  to  pay  certain  assets 
is  one  arising  under  the  laws  of 
the  Cnited  States  within  the  mean- 
ing of  the  acts  of  March  3,  1887,  and 
August  13,  1888,  regarding  the  juris- 
diction of  Federal  courts.  Swope  v. 
Villard,  61  Fed.  Rep.  417. 

An  agreement  between  two  cor- 
porations, that  if  one  of  them  would 
extend  the  time  of  payment  of  its 
claim  from  a  third  corporation  such 
claim  should  be  paid  in  full  before 
any  payment  should  be  niado  or  de- 


manded on  a  claim  by  the  second 
corporation,  made  at  the  solicitation 
of  the  third  corporation  and  for  its 
benefit,  entitles  the  first  corporation, 
on  the  appointment  of  a  receiver  of 
the  property  of  the  third  corpora- 
tion and  the  proof  by  the  first  and 
second  corporations  of  their  respec- 
tive claims,  to  the  dividends  on  the 
claim  of  the  second  corporation  until 
the  claim  of  the  first  corporation  is 
paid  in  full,  but  does  not  entitle  it 
to.  have  paid  to  it  the  proceeds  of 
certain  collateral  transferred  to  the 
second  corporation  before  such  agree- 
ment was  made.  Plymouth  Cord- 
age Co.  V.  Seymour,  07  Minn.  311. 

The  assignee  of  half  of  a  claim  is 
entitled  to  his  share  of  dividend. 
Todd  V.  Meding,  50  N.  J.  Eq.  83. 

Rents  not  charged  with  the  pay- 
ment of  petitioner's  claim  will  not  be 
ordered  turned  over  to  him.  Balti- 
more V.  Chase,  2  Gill   &  J.  370. 

The  amount  collected  on  claims 
due  a  corporation,  by  its  bookkeeper 
under  an  agreement  between  the  cor- 
poration and  a  bank  that  the  claims 
shall  be  set  aside  and  used  to  reim- 
burse the  bank  for  advancements,  and 
as  a  matter  of  convenience  shall  be 
collected  by  the  bookkeeper  and  be 
under  his  control,  is  impressed  with 
an  equitable  trust  in  favor  of  the  bank 
as  against  a  receiver  of  the  corpora- 
tion. Atlantic  Trust  Co.  v.  Carbon- 
dale  Coal  Co.  99  Iowa,  234. 

Wages  of  an  injured  employee 
may  be  paid  by  receiver  if  the  em- 
ployee is  deserving.  Thomas  v.  East 
Tennessee,  V.  d  G.  R.  Co.  00  Fed. 
Rep.  7. 

The  state  is  not  entitled  to  a  pref- 
erence, either  under  the  Minnesota 
statutes  or  the  rules  of  equity,  to  the 
funds  in  the  hands  of  a  receiver  of  an 
insolvent  trust  company  which  had 
wrongfully  converted  and  mingled 
with  its  own  funds  and  those  of 
other  creditors  funds  which  it  had 
collected  as  an  assignee  of  an  insol- 
vent bank  and  which  it  should  under 
an  order  of  the  court  have  applied 
to  a  preferred  claim  of  the  state, 
where  none  of  the  funds  so  collected 
by  the  trust  company  ever  came  into 
tiie  hands  of  its  receiver;  but  the 
state  is  entitled  to  file  a  claim 
against    the    receiver    as    a    geiu'ral 

11» 


§340 


RECEIVERSHIPS— SUPPLEMENT. 


creditor.  Ke  Receivership  of  North- 
ern Trust  Co.  70  Minn.  334. 

Funds  of  a  mutual  benefit  associa- 
tion are  properly  distributed  by  the 
receiver.  Funiitrs'  Loan  cG  T.  Co.  v. 
Aberle,  19  App.  Div.  79,  Modifying 
18  Misc.  257. 

State  laws  cannot  control  the 
rights  of  creditors  to  participate  in 
the  distribution  by  a  receiver  ap- 
pointed in  a  Federal  court.  London 
d  8.  F.  Bank  v.  Willamette  Steam- 
Mill,  Lumbering,  &  Mfg.  Go.  80  Fed. 
Rep.  220. 

The  assets  in  New  York  of  a  Con- 
necticut corporation,  collected  by  re- 
ceivers appointed  in  New  York  by  a 
Federal  court,  will  be  first  applied 
to  the  protection  of  the  New  I'ork 
creditors  before  distribution  ratably 
among  the  general  creditors.  Sands 
V.  E.  S.  Greeley  d  Co.  80  Fed.  Rep. 
195. 

One  who  has  sold  personal  prop- 
erty to  a  corporation  cannot,  after 
the  corporate  property  has  been 
placed  in  the  hands  of  a  receiver  by 
a  valid  order  of  the  court,  obtain  a 
lien  or  benefit  under  Sand.  &  H. 
(Ark.)  Dig.  §§  4727,  4728,  provid- 
ing a  method  for  impounding  the 
property  to  prevent  the  purchaser 
from  disposing  of  it.  Halpern  v. 
Clarendon  Hardwood  Lumber  Co.  64 
Ark.  132. 

The  surplus  proceeds  of  a  vessel 
seized  by  a  Federal  court  for  satis- 
faction of  maritime  liens  should  be 
paid  to  a  receiver  appointed  in  an- 
other state  and  operating  the  vessel, 
and  not  to  creditors  having  no  liens. 
The  Willamette  Valley,  76  Fed.  Rep. 
838. 

Trust  funds  in  the  hands  of  a  re- 
ceiver may  be  recovered  after  a  par- 
tial dividend  where  there  still  remains 
sufficient  to  pay  the  claim,  though 
the  specific  money  is  no  longer  in 
the  hands  of  the  receiver.  Standard 
Oil  Co.  V.  Hawkins,  46  U.  S.  App. 
115,  74  Fed.  Rep.  395,  20  C.  C.  A. 
408,  33  L.  R.  A.  739. 

As  between  creditors,  funds  in  the 
hands  of  receivers  are  to  be  dis- 
tributed on  a  basis  of  equality.  Re 
Waddell-Entz  Co.  67   Conn.  324. 

The  receiver  cannot  divert  the 
property  from  creditors  and  stock- 
holders of  one  corporation  to  the 
120 


creditors  and  stockholders  of  an- 
other company.  Ames  v.  Union  P. 
R.  Co.  74  Fed.  Rep.  335. 

The  payments  made  out  of  a  fund 
by  the  attorney  of  a  judgment  credit- 
or as  receiver,  under  orders  of  the 
court  and  without  notice  to  the  exe- 
cution creditor,  cannot  be  considered 
as  consented  to  by  such  creditor. 
Boice  V.  Conover,  54  N.  J.  Eq.  531. 

Assets  may  be  sold  for  the  benefit 
of  the  parties  interested.  Orifjith 
V.  Toicer  Publishing  Co.  75  L.  T.  N. 
S.  330. 

A  mortgagee  having  a  deficiency 
decree  against  a  corporation  in  the 
hands  of  a  receiver  is  entitled  to  a 
dividend.  Re  Simpson,  36  App.  Div. 
562. 

A  lessor  of  a  bank  may,  in  the  in- 
voluntary insolvency  proceedings  in- 
stituted against  it  under  JNlinn.  Gen. 
Stat.  1894,  chap.  76,  have  allowed  as 
a  claim  the  damages  he  has  sustained 
by  reason  of  the  repudiation  by  its 
receiver  of  its  executory  contract  of 
leasing,  and  its  abandonment  of  the 
premises.  Minneapolis  Base  Ball 
Co.  V.  City  Bank,  76  N.  W.  1024. 

No  trust  arises  as  to  amounts  in 
the  hands  of  a  receiver  realized  upon 
collaterals  pledged  to  secure  a  note, 
which  were  redelivered  to  tlie  bor- 
rower for  collection  as  they  matured, 
and  paid  over  to  the  lender  as  pay- 
ments on  the  note,  and  mingled  with 
tlie  latter's  funds,  although  the  lat- 
ter fraudulently  sold  and  indorsed 
the  note  to  a  third  person  as  wholly 
unpaid,  and  such  person  received  the 
same  without  knowledge  that  it  was 
secured  by  collateral  or  of  the  pay- 
ment of  such  collateral.  Merchants' 
'Nat.  Bank  v.  Allemania  Bank,  71 
Minn.  477. 

Where  a  mortgage  of  cliattels  by 
reason  of  "defectiveness  creates  no 
lien,  unsecurded  creditors  share 
equally  with  the  mortgagees.  Sligh 
V.  Shelton  S.  W.  R.  Co.  20  Wash.  16. 

The  allowance  of  claims  by  a  re- 
ceiver is  not  conclusive.  United 
States  Trust  Co.  v.  United  States  F. 
Ins.  Co.  18  N.  Y.  199. 

There  should  be  no  distribution  by 
a.  receiver  until  the  rights  of  parties 
are  determined.  Doane  v.  Corbin, 
44  111.  App.  463. 

In  the  management  by  a  receiver 


CLAIMS  AGAINST  RECEIVERSHIP  FUNDS. 


340 


of  several  consolidated  railroads,  the 
accounts  of  the  subdivisions  should 
be  kept  separate  and  the  earnings  of 
each  made  to  pay  its  own  expenses,  if 
possible.  Central  Trust  Co.  v.  Wa- 
hash,  ISt.  L.  &  F.  R.  Co.  23  Fed.  Rep. 
8G3. 

The  Georgia  Code,  regulating  the 
collection  and  distribution  of  assets 
by  a  receiver  of  a  bank,  in  an  action 
for  its  dissolution,  does  not  apply  to 
a  case  of  voluntary  assignment  under 
the  statute.  Fouche  v.  Brower,  74 
Ga.  251. 

The  owner  of  bonds  having  a  lien 
on  a  railroad  may  attack  the  validity 
of  other  claims  sought  to  be  made 
equal  to  or  superior  to  his  own  claim. 
Farmers'  &  M.  Nat.  Bank  v.  Waco 
Electric  R.  &  Light  Co.  (Tex.  Civ. 
App.)   36  S.  W.  131. 

Money  expended  for  various  pur- 
poses for  the  benefit  of  the  mort- 
gagees are  not  charges  on  the  earn- 
ings as  between  mortgagees  and  gen- 
eral creditors  entitled  to  be  paid  out 
of  the  earnings  of  the  corporation 
while  in  the  hands  of  a  receiver. 
Randolph  v.  Farmers'  Loan  &  T. 
Co.  91  Tex.  605,  Reversing  41  S.  W. 
113. 

A  claim  for  a  rebate  under  a  con- 
tract made  by  a  superintendent  of  a 
road  in  the  hands  of  a  receiver 
should  be  paid  out  of  the  receiver's 
fund.  Ex  -parte  Benson,  18  S.  C.  38, 
44  Am.  Rep.  564. 

Borrowed  money  for  an  insolvent 
railroad  should  be  paid  out  of  fund 
in  court.  Ex  parte  Carolina  Nat. 
Bank,  18  S.  C.  289. 

The  day  on  which  the  insolvency 
of  a  corporation  whose  business  was 
the  indemnifying  of  creditors  for 
losses  incurred  on  credit  sales  oc- 
curred, as  adjudged  by  the  order  ap- 
pointing a  receiver,  fixes  the  time 
to  which  the  several  claims  of  credit- 
ors must  be  referred  for  adjustment. 
Gray  v.  Reynolds,  55  N.  J.  Fq.  501. 

One  who  moves  for  leave  to  fik;  a 
claim  with  a  receiver  appointed  in 
proceedings  instituted  under  Minn. 
Gen.  Stat.  1894,  chap.  76,  alleging  in 
his  moving  papers  that  the  time  fixed 
by  the  decree  for  filing  has  expired, 
but  asking  relief  on  the  ground  of 
excusable  neglect,  cannot  shift  his 
position  on  appeal  and  contend  that 


the  time  within  which  claims  are  re- 
quired to  be  exhibited  had  not  ex- 
pired because  the  provisions  of  § 
5911  were  not  observed  by  the  court 
in  making  the  order  fixixig  the  time. 
Hove  V.  Bankers'  Exch.  Bank 
(Minn.)  77  N.  W.  967. 

The  respective  rights  of  creditors 
of  a  corporation  for  which  a  receiver 
has  been  appointed  under  tlie  general 
equity  powers  of  the  court  will  be 
adjusted  as  of  the  date  of  the  ap- 
pointment of  the  receiver,  and  not  of 
the  filing  of  the  bill,  where  no  in- 
junction issued  upon  the  filing  of 
the  bill,  and  the  corporation  con- 
tinued its  business  as  usual,  and 
those  who  dealt  with  it  in  the  in- 
terim did  so  without  being  influenced 
by  the  fact  that  the  suit  was  pend- 
ing, and  no  attachments  or  other 
liens  were  placed  upon  the  jjroperty 
in  the  interim.  Jones  v.  Arena  Fub- 
lishing  Co.  171  Mass.  22. 

A  bona  fide  purchaser  of  a  valid 
claim  against  a  corporation  is  en- 
titled to  a  dividend  from  its  receiver 
upon  the  entire  face  value  of  the 
claim,  although  purchased  for  a  less 
amount.  Dimmick  v.  W.  Fred 
QuimJjy  Co.   (N.  J.  Eq.)   41  Atl.  101. 

A  receiver  may  hear  and  allow 
claims  before  the  expiration  of  the 
time  provided  for  by  statute.  Bis- 
sell  V.  Heath,  98  Mich.  472. 

Where  receivers  of  a  railroad 
have  all  its  property  in  their  hands, 
and  all  proceedings  are  required  to 
be  and  are  had  in  the  one  cause  for 
the  purpose  of  establishing  the  rights 
of  all  the  claimants,  whether  the  re- 
ceivers are  technically  made  parties 
to  every  proceeding  for  establishing 
rights  to  the  property,  or  not,  is  im- 
material. Grand  Trunk  R.  Co.  v. 
Central  Vermo)it  R.  Co.  88  Fed.  Rep. 
622. 

The  receiver  of  a  credit  system  in- 
surance company  stands  in  the  place 
of  tlie  company  as  to  the  allowance 
or  disallowance  of  claims  accruing 
before  the  insolvency  of  the  company 
and  his  appointment  as  receiver,  and 
may  by  liis  conduct  waive  the  re- 
quirement of  a  policy  as  to  tlie  time 
of  furnishing  proofs  of  loss,  in  the 
same  manner  as  the  company  might 
have  done.  Gray  v.  Blum,  55  N.  J. 
Eq.  553. 

121 


§  340 


RECEIVERSHIPS— SUPPLEMENT. 


A  judgment  recovered  against  a 
railroad  company  for  injuries  to 
land  from  the  construction  of  a  track 
in  a  street,  after  the  appointment  of 
a  receiver  for  the  company  but  in  an 
action  connnenced  before  his  ap- 
pointment, will  be  classified  as  a 
claim  of  the  sixth  class,  under  Tex. 
Rev.  Stat.  1S95,  art.  1472,  where  the 
application  to  have  it  classified  was 
made  before  the  sale  of  the  property 
of  the  railway  company  by  the  re- 
ceiver, and  no  amendment  of  the  ap- 
plication was  made  setting  up  the 
sale,  or  showing  that  the  proceeds 
thereof  were  in  the  receiver's  hands. 
Vollmer  v.  San  Antonio  &  G.  8.  R. 
Co.  (Tex.  Civ.  App.)  47  S.  W.  378. 

An  officer  of  a  corporation  who 
files  a  petition  to  establish  its  in- 
solvency may  prove  his  claim  before 
receivers.  Grinnell  v.  Merchants 
Ins.  Co.  16  X.  J.  Eq.  283. 

Claims  arising  by  virtue  of  the 
death  of  the  insured  before  the  filing 
of  a  bill  for  the  appointment  of  a  re- 
ceiver, but  not  proved  and  allowed 
before  that  time,  are  comprehended 
by  the  word  "accrued"  in  Mass.  Stat. 
1890,  chap.  421,  §  14,  providing  that 
when  an  assessment  insurance  com- 
pany shall  discontinue  business  a  re- 
ceiver may  be  appointed  to  adminis- 
ter any  portion  of  the  emergency 
funds,  which  shall  be  used  first  in 
the  payment  of  accrued  claims  on 
certificates  or  policies.  Atty.  Gen. 
V.  Massachusetts  Ben.  Life  Asso.  171 
Mass.  193. 

A  claim  filed  with  a  receiver  of  a 
corporation  by  a  nonresident  credit- 
or, with  an  express  reservation  or 
condition  that  by  filing  it  he  does  not 
intend  to  abandon  any  rights  gained 
by  reason  of  an  attachment  suit 
previously  brought  in  another  state, 
does  not  estop  the  creditor  from  pur- 
suing the  attachment.  Linville  v. 
Hadden,  88  Md.  594,  43  L.  R.  A.  222. 

The  statute  of  limitations  does 
not  run  in  favor  of 'a  receiver  of  a 
dissolved  corporation  against  a  claim 
not  barred  at  the  time  of  his  ap- 
pointment, so  long  as  the  receiver- 
ship is  open  and  continuing.  Lud- 
ington  v.  Thompson,  153  N.  Y.  499, 
Affirming  4  App.  Div.   117. 

Citing  Ex  parte  Ross,  2  Glyn  &  J. 
46,  330;  Mi^iot  v.  Thacher,  7  Met. 
122 


348,  41  Am.  Dec.  444;  Parker  v.  San- 
horn,  7  Gray,  191;  Kirkpatrick  v. 
McElroy,  41  N.  J.  Eq.  555. 

Labor  claims  not  reduced  to  judg- 
ment are  not  the  basis  for  a  bill  in 
chancery.  Fntman  v.  Jacksonville, 
L.  &  St.  L.  R.  Co.  61  Fed.  Rep.  440. 

Where  a  receiver  is  discharged  and 
the  property  turned  back,  a  judg- 
ment against  the  receiver  is  con- 
clusive as  to  the  amount  and  exist- 
ence of  a  claim.  Garrison  v.  Texas 
d  1\  R.  Co.  10  Tex.  Civ.  App.  130. 

Earnings  of  a  railroad  and  light 
company  before  the  appointment  of  a 
receiver  in  proceedings  to  foreclose 
a  mortgage,  which  were  applied  to 
the  partial  extinguishment  of  the 
mortgage  debt,  or  invested  in  better- 
ments or  improvement  of  the  mort- 
gage security,  or  were  on  hand  when 
the  receiver  was  appointed,  may  in 
the  discretion  of  the  court  be  applied 
to  claims  that  arose  for  operating  ex- 
penses or  were  necessary  or  proper 
to  preserve  the  property  before  the 
appointment  of  the  receiver.  Farm- 
ers' &  M.  Nat.  Bank  v.  Waco  Electric 
R.  d  Light  Co.  (Tex.  Civ.  App.)  36 
S.  W.  131. 

The  receiver  of  an  insolvent  bank 
has  no  authority  to  allow  or  disal- 
low the  claims  of  creditors ;  and 
where  he  allows  some,  and  pays  a 
dividend  thereon,  disallowing  others, 
the  court  may  allow  the  latter,  and 
order  the  same  dividend  to  be  first 
paid  out  of  the  stockholders'  double 
liability,  under  the  Minnesota  stat- 
ute, and  order  the  distribution  of  the 
balance  to  all  the  creditors  pro  rata. 
Palmer  v.  Bank  of  Ztimbrota,  05 
Minn.  90. 

Mortgagees  of  railroad  property 
cannot  insist  that  funds  properly  ap- 
plicable to  unpaid  claims  should  be 
withheld  from  them  and  applied 
upon  the  mortgage,  because  the  re- 
ceivers have  paid  claims  which  were 
not  proper  charges  upon  the  funds 
in  their  hands,  and  which  might 
have  been  applied  in  reduction  of  the 
claims  remaining  unpaid.  Grand 
Trunk  R.  Co.  v.  Central  Vermont  R. 
Co.  88  Fed.  Rep.  620. 

In  the  allowance  of  claims  the  re- 
ceiver has  no  power  to  waive  rules 
of  law  applicable  to  policies   and  by- 


CLAIMS  AGAINST  RECEIVERSHIP  FUNDS. 


340 


laws.  Evans  v.  Trimountain  Mut. 
F.  Ins.  Co.  9  Allen,  329. 

The  decision  of  a  receiver  as  to 
the  admission  of  a  claim  is  not  final. 
Bank  of  Bethel  v.  Pahquioque  Bank, 
14  Wall.  383,  sub  nom.  First  ISlat. 
Bank  v.  National  Pahquioque  Bank, 
20  L.  ed.  840. 

One  who  purchases  from  a  bank 
shares  of  its  stock  cannot  recover  the 
price  paid  therefor  from  the  receiver 
of  the  bank,  on  the  ground  that  his 
purchase  was  induced  by  fraud,  until 
he  has  established  his  claim  in  an 
action  at  law  against  the  bank.  Wal- 
lace v.  Hood,  89  Fed.  Rep.  11. 

The  breach  of  a  contract  of  employ- 
ment by  an  insolvent  corporation 
entitles  the  claimant  to  no  more  than 
any  other  general  creditor.  The 
claim  is  not  wages.  Spader  v.  Mural 
Decoration  Mfg.  Co.  47  N.  J.  Eq.  18. 

The  receiver  of  a  mutual  insur- 
ance companj'  cannot  allow  losses  oc- 
curring after  the  entry  of  the  decree 
of  forfeiture  of  charter.  Insurance 
Commissioner  v.  Commercial  Mut. 
Ins.  Co.  20  R.  I.  7. 

General  creditors  of  a  railroad 
who  bring  suit  to  have  the  corpora- 
tion wound  up  as  insolvent  and  to 
have  a  receiver  appointed  cannot 
claim  that  expenditures  made  by  the 
receiver  out  of  the  income  in  satisfac- 
tion of  preferential  claims  should  be 
charged  to  the  mortgagees  where 
they  were  made  parties  to  the  suit 
and  the  foreclosure  of  the  mortgage 
sought,  and  even  if  they  were  not 
properly  made  parties  the  expendi- 
tures were  essential  to  the  preserva- 
tion of  the  railroad  system,  without 
which  substantial  earnings  for  the 
benefit  of  the  creditors  would  not 
have  been  possible.  Kuhlender  v. 
Chesapeake,  O.  &  8.  W.  B.  Co.  91 
Fed.  Rep.  5,  33  C.  C.  A.  299. 

A  judgment  by  default  for  want  of 
an  answer,  entered  against  a  cor- 
poration in  an  action  to  recover  on  a 
contract  for  the  payment  of  money 
only,  instituted  after  the  assets  had 
been  sequestrated  and  a  receiver  ap- 
pointed under  Minn.  Gen.  Stat.  1894, 
chap.  70,  for  the  benefit  of  all  its 
creditors,  is  not  entitled  to  be  ex- 
hibited and  allowed  as  a  claim 
against  the  estate,  without  further 
proof  of  the  existence  and  bona  fide 


character  of  the  claim  on  which  it  is 
based.  Danforth  v.  National  Chemi- 
cal Co.  08  Minn.  308. 

Judgment  entered  after  the  ap- 
pointment of  receivers  and  the  issu- 
ing of  an  injunction  restraining  in- 
terference with  the  property  of  the 
corporation  do  not  become  liens 
upon  the  real  estate  of  the  corpora- 
tion not  embraced  in  the  mortgage, 
to  foreclose  which  the  suit  is  brought 
and  in  which  the  receivers  were  ap- 
pointed, where  such  suit  is  also  a 
general  creditors'  bill  for  liquida- 
tion, although  such  judgments  are 
entered  before  the  receivers'  bonds 
are  perfected  by  approval.  Temple 
V.  Glasgow,  42  U.  S.  App.  417,  80 
Fed.  Rep.  441,  25  C.  C.  A.  540,  Citing 
Maynard  v.  Bond,  67  Mo.  315;  Dis- 
tinguishing Frayser  v.  Richmond  & 
A.  R.  Co.  81  Va.  388;  Edwards  v. 
Edicards,  L.  R.  2  Ch.  Div.  291; 
Moran  v.  Sturges,  154  U.  S.  250, 
38  L.  ed.  981. 

A  receiver  of  a  mutual  insurance 
company  may  recognize  claims  filed 
with  the  company  in  the  same  man- 
ner as  is  required  by  the  decree, 
though  they  have  never  been  pre- 
sented to  him  according  to  the  de- 
cree, if  he  is  satisfied  that  they  are 
just.  Insurance  Commissioner  v. 
Commercial  Mut.  Ins.  Co.  20  R.  I.  7. 

A  receiver  authorized  to  pay  divi- 
dends on  claims  proved  to  his  satis- 
faction is  justified  in  making  pay- 
ment to  a  creditor  who  filed  a  claim 
establishing  an  indebtedness  evi- 
denced by  a  chattel  mortgage  and 
four  promissory  notes  of  the  corpo- 
ration, and  stating  that  the  claim 
was  presented  on  her  own  behalf,  as 
well  as  on  the  behalf  of  one  to  whom 
a  half  interest  in  the  indebtedness 
had  been  assigned  as  collateral  se- 
curity, which  assignee  filed  a  claim 
upon  another  promissory  note,  and 
made  no  mention  of  his  interest  as 
assignee.  Meding  v.  Todd,  50  N.  J. 
Fq.  820. 

The  validity  of  a  director's  claim 
against  a  corporation  cannot  be 
questioned  by  its  receiver  in  a  pro- 
ceeding to  secure  the  possession  of 
money  paid  into  court  under  a  judg- 
ment in  tlic  director's  favor,  where, 
upon  opening  the  judgment  and  per- 
mitting the  receiver  to  defend,  judg- 


§  340 


RECEIVERSHIPS— SUPPLEMENT. 


ment  is  recovered  against  him.  Ten- 
nant  v.  Appleby  (N.  J.  Eq.)  41  Atl. 
110. 

One  to  whom  a  claim  against  an 
insolvent  corporation  has  been  as- 
signed in  part  as  collateral  security, 
but  who  filed  no  claim  in  respect 
thereto,  cannot  hold  the  receiver  li- 
able for  a  dividend  paid  thereon  up- 
on satisfaetorj'  proof,  to  the  assign- 
or, on  the  ground  that  he  is  charge- 
able with  notice  of  the  interest  of  the 
assignee  from  circumstances  extrin- 
sic to  the  proofs  on  hie.  Meding  v. 
Todd.  50  N.  J.  Eq.  820. 

Judgments  which  were  liens  at  the 
time  of  the  appointment  are  to  be 
paid  in  full.  Couan  v.  Pennsyl- 
vania Plate  Glass  Co.  184  Pa.  1. 

Under  statutes  giving  a  certain 
class  of  judgments  against  a  lessee 
of  a  railroad  a  prior  lien  upon  roll- 
ing stock,  but  not  upon  the  lease- 
hold, earnings  of  a  receiver  ap- 
pointed under  a  general  creditors' 
bill  will  be  distributed  to  such  judg- 
ments in  the  proportion  which  the 
rolling  stock  bears  to  the  property 
of  the  lessee,  including  rolling  stock 
and  leasehold.  Thomas  v.  Cincin- 
nati, N.  0.  d  T.  P.  R.  Co.  91  Fed. 
Rep.  202. 

Liens  upon  the  entire  property  of 
an  insolvent  debtor  in  the  hands  of  a 
receiver  appointed  under  the  Georgia 
traders'  act,  which  are  superior  to 
a  mortgage  on  a  portion  of  the  prop- 
erty, antedating  the  filing  of  the  pe- 
tition, must  be  paid  out  of  the  fund 
arising  from  the  sale  of  the  property 
other  than  that  covered  by  the  mort- 
gage before  resorting  to  the  proceeds 
of  the  mortgaged  property  to  the 
prejudice  of  the  mortgagee,  and,  if 
the  surplus  arising  from  the  sale  be- 
yond the  amount  necessary  to  pay 
oflF  the  mortgage  is  not  sufficient  to 
meet  them,  the  fund  necessary  to  pay 
the  mortgage  can  only  be  diminished 
to  the  extent  that  the  general  fund 
is  deficient.  Bradford  v.  Cooledge, 
103  Ga.  753. 

The  action  of  a  receiver  in  allow- 
ing claims  is  prima  facie  binding  on 
the  members.  Sands  v.  Hill,  42 
Barb.  651. 

An  agreement  by  the  receiver  of  a 
corporation,  although  made  without 
permission  of  the  court,  to  pay  an 
124 


execution  creditor  of  the  corporation 
for  the  amount  of  his  judgment  from 
the  jjroceeds  of  propertj'  levied  up- 
on and  afterwards  turned  over  to 
such  receiver  in  consideration  of  hav- 
ing such  property  transferred  to  him, 
will  be  enforced.  People  v.  Nation- 
al Mat.  Ins.  Co.  19  App.  Div.  247. 

Receivers  representing  both  the 
creditors  of  a  corporation  and  the 
corporation  itself  may  assert  any  de- 
fense to  a  claim  against  the  corpo- 
ration to  which  creditors  are  en- 
titled, although  the  corporation  is 
itself  estopped.  Hamor  v.  Taylor- 
Rice  Engineering  Co.  84  Fed.  Rep. 
392. 

A  receiver  of  a  corporation  as  the 
representative  of  its  creditors  is  not 
estopped  to  claim  that  a  contract  of 
conditional  sale,  or  chattel  mortgage, 
was  not  properly  recorded,  by  a  re- 
cital in  such  instrument.  Re  Wil- 
cox &  H.  Co.  70  Conn.  220. 

Moneys  realized  on  executions 
must  first  be  allowed  before  distri- 
bution. Third  Nat.  Bank  v.  Weaver, 
73  111.  App.  463. 

The  fair  value  of  goods  at  the  time 
of  attachment,  although  they 
brought  less  than  their  value  at 
sheriff's  sale,  must  be  accounted  for 
before  the  creditor  can  share  in  the 
benefit  of  a  receivership  in  another 
state  in  which  the  attachment  is  not 
recognized  as  valid.  Ward  v.  Co7t- 
necticut  Pipe  Mfg.  Co.  71  Conn.  345, 
42  L.  R.  A.  700. 

A  creditor  with  notice  of  the  pend- 
ency of  a  winding-ujj  suit  is  not  en- 
titled to  share  in  the  distribution 
without  a  surrender  of  whatever  ad- 
vantage he  may  have  obtained  by  at- 
tachment in  another  state.  '  Ward  v. 
Connecticut  Pipe  Mfg.  Co.  71  Conn. 
345,  42  L.  R.  A.  700. 

A  bank  in  another  state  is  not  pre- 
cluded from  participating  in  the  dis- 
tribution by  a  receiver  appointed  in 
Minnesota  of  the  assets  of  an  insolv- 
ent indorser  of  a  note  held  by  it  be- 
cause after  the  receiver's  appoint- 
ment it  attached  a  deposit  held  by 
it  to  the  credit  of  the  indorser,  since 
no  attachment  proceedings  were  nec- 
essary to  protect  it  as  to  the  deposit, 
as  it  had  the  right  upon  the  insolv- 
ency of  the  indorser  to  retain  the 
deposit  and  offset  the  note  against 


CLAIMS  AGAINST  RECEIVERSHIP  FUNDS. 


§  340 


the  same.  Mercantile  Nat.  Bank  v. 
Macfarlane,  71  Minn.  497. 

A  creditor  whose  claim  has  been 
presented  late  is  entitled  to  receive, 
before  further  dividends  are  declared 
to  other  creditors,  the  same  propor- 
tion of  its  claim  as  other  creditors 
have  received  on  their  claims.  Lon- 
don <&  S.  F.  Bank  v.  Willamette 
Steam-Mill  Lumbering  d  Mfg.  Co.  80 
Fed.  Rep.  220. 

The  right  to  present  an  account 
for  allowance  in  receivership  is  not 
prejudiced  by  having  put  it  into 
judgment  in  another  state.  Ward 
V.  Connecticut  Pipe  Mfg.  Co.  71 
Conn.  345,  42  L.  R.  A.  700. 

Order  to  present  claims. 

An  order  requiring  all  claims  to 
be  presented  to  the  court  within  a 
certain  time  does  not  bar  recovery 
of  a  claim  against  the  company, 
though  not  presented  within  the 
time.  Texas  P.  R.  Co.  v.  Bloom,  23 
U.  S.  App.  143,  GO  Fed.  Rep.  979,  9 
C.  C.  A.  300. 

It  is  the  duty  of  the  court  of  its 
own  motion  to  direct  all  creditors  to 
come  and  prove  their  claims  against 
the  corporation;  and  any  sufficient 
statement  of  the  nature  and  amount 
of  the  debt  due  such  a  creditor  is 
good  though  it  does  not  conform  to 
the  technical  requirements  of  a 
pleading.  Biddle  Purchasing  Co.  v. 
Port  Toivnsend  Steel  Wire  d  Nail  Co. 
16  Wash.  681. 

Creditors  of  an  assignor  for  cred- 
itors whose  assignee  was,  on  his  ap- 
plication, appointed  receiver  by  the 
chancery  court  upon  the  commence- 
ment of  attachment  actions  against 
the  assignor  and  the  levy  of  the  at- 
tachment upon  the  assigned  prop- 
erty, are  not  guilty  of  laches  in  fail- 
ing to  present  their  claims  to  the  re- 
ceiver until  after  the  latter  has 
made  his  report,  where  the  attach- 
ment suits  have  not  been  abandoned, 
or,  if  abandoned,  no  notice  has  been 
given  to  creditors  to  present  their 
claims  and  prove  the  same.  Taylor 
V.  Moore,  64  Ark.  23. 

The  rule  that  creditors  of  an  in- 
solvent corporation  may  come  in  at 
any  time  before  final  distribution  by 
the  receiver  and  have  a  new  account 
at   their  own  expense  does  not  ap- 


ply where  the  court  has  ordered  that 
all  claims  shall  be  presented  within 
a  time  specified,  and  that  the  fund 
in  the  receiver's  hands  shall  be  ap- 
plicable solely  to  the  payment  of 
such  claims  as  shall  be  presented 
within  that  time.  Abraham  v.  Mer- 
cantile Trust  d  Dep.  Co.  80  Md.  254. 

An  order  limiting  the  time  for  pre- 
sentation of  claims  against  the  as- 
sets of  a  corporation  will  not  bar  a 
claim  to  a  trust  fund  which  does  not 
constitute  part  of  the  assets.  New 
York  Security  d  T.  Co.  v.  Lombard 
Investment  Co.  75  Fed.  Rep.  172. 

A  notice  requiring  all  persons  hav- 
ing claims  or  demands  against  the 
receiver  of  a  railroad  appointed  by  a 
Federal  court,  to  present  them  to  a 
special  master  within  a  given  time, 
does  not  preclude  the  prosecution  to 
final  judgment  of  a  pending  action 
against  the  receiver  in  a  state  court. 
Erb  V.  Popritz,  59  Kan.  204. 

Nonresident  claimants  to  funds  in 
the  hands  of  a  receiver  of  an  insol- 
vent corporation  have  no  greater 
rights  or  privileges  in  respect  to  fil- 
ing their  claims  after  the  time  al- 
lowed for  that  purpose  by  the  court 
than  residents  have,  and  they  are 
equally  bound  with  the  latter  by  the 
publication  of  a  notice  for  presen- 
tation of  claims  within  the  time  lim- 
ited. Abraham  v.  Mercantile  Trust 
d  Deposit  Co.  86  Md.  254. 

The  limitation  of  the  time  for  fil- 
ing a  lien  for  supplies  against  a  cor- 
poration under  the  Virgina  Code 
ceases  to  run  at  the  filing  of  a  gener- 
al creditors'  bill  under  which  a  re- 
ceiver is  appointed;  and  a  lien  filed 
after  the  expiration  of  the  ninety 
days  allowed  is  in  time  where  such 
creditors'  bill  was  filed  in  time. 
Ihid. 

The  court  cannot  allow  a  claim 
against  an  insolvent  corporation, 
which  has  not  been  presented  to  the 
receiver  in  writing  under  oath,  as 
required  by  the  New  Jersey  corjjora- 
tion  act  1890,  §  76.  Blake  v.  Domes- 
tic Mfg.  Co.  (N.  J.  Eq.)  41  Atl.  376. 

An  application  for  leave  to  pre- 
sent a  claim  to  the  receiver  of  an  in- 
solvent corporation,  made  more  than 
four  years  after  the  exiuration  of 
the  time  ll.ved  by  an  order  of  the 
court  for  presentation  of  claims,  is 

135 


§  341 


RECEIVERSHIPS— SUPPLEMENT. 


properly  refused,  where  the  question 
as  to  the  existence  of  the  corpora- 
tion, as  distinct  from  another  corpo- 
ration, ui)on  wliich  the  applicant 
bases  his  right  to  relief,  has  been  in- 
volved in  liti{,'ation  for  about  three 
years,  of  which  fact  the  petitioner 
might  have  known  if  he  had  made 
any  inquiries  about  his  claim.  Ibid. 
Where  a  Federal  court  appointed 
a  receiver  of  a  railroad,  and  ordered 
that  all  claims  should  be  by  inter- 
vention in  the  receivership  proceed- 
ing before  a  certain  date,  a  claim 
which  accrued  during  the  receiver- 
ship and  was  not  presented  before 
the  Federal  court  within  the  time 
allowed  was  barred.  DllUngham  v. 
Kelly,  8  Tex.  Civ.  App.  113. 

Funds  distributed  pro  rata. 

A  reserve  fund  of  a  mutual  benefit 
association  on  insolvency  and  ap- 
pointment of  a  receiver  is  distributed 


proportionately  among  all  creditors, 
irrespective  of  residence.  Garham 
v.  Mutual  Aid  ^oc.  101  Mass.  357. 

The  net  profits  realized  by  receiv- 
ers in  the  operation  of  the  business 
of  a  corporation  may  be  by  order  of 
court  apportioned  to  mortgagees  and 
general  creditors.  Lehman  Bros.  v. 
Tallassee  Mfg.  Co.  64  Ala.  507. 

A  decree  in  favor  of  judgment 
creditors,  setting  aside  fraudulent 
confessions  of  judgments  and  trans- 
fers of  property  by  a  firm,  will  not 
appoint  a  receiver  and  direct  the  ap- 
plication of  the  property  and  its  pro- 
ceeds to  the  payment  of  the  com- 
plainant's judgments,  where  a  re- 
ceiver has  been  appointed  in  an  ac- 
tion for  the  dissolution  of  the  firm; 
but  the  property  realized  from  such 
judgments  and  transfers  will  go  to 
such  receiver,  and  be  distributed 
among  the  creditors  pro  rata.  Met- 
calf  V.  Moses,  22  Misc.  664. 


Page  572,  sec.  341. — Character  of  claims  allowed. 


Attorney  and  counsel  fees. 

A  reasonable  charge  of  an  attor- 
ney for  services  which  benefit  all  the 
creditors  will  be  paid  out  of  the 
funds  in  the  hands  of  a  receiver  for 
distribution.  Weigand  v.  Alliance 
Supply  Co.  44  W.  Va.   133. 

A  2>artner  of  a  receiver  of  an  in- 
solvent corporation  may  be  allowed 
a  sum  as  compensation  for  legal  serv- 
ices rendered  as  counsel  to  the  re- 
ceiver, where  the  latter  is  not  to 
share  in  such  comi^ensation.  Re 
Simpson,  36  App.  Div.  502. 

Intervening  creditors  who  file  an 
independent  petition  asking  the 
court  to  direct  the  sale  of  certain 
property  of  an  insolvent  corporation, 
which  still  remains  undisposed  of  in 
the  hands  of  a  receiver  of  such  cor- 
poration who  has  been  duly  ap- 
pointed, are  not  entitled  to  an  al- 
lowance of  coimsel  fees  out  of  the 
general  fund  or  out  of  the  fund  real- 
ized from  the  sale  of  such  property, 
as  it  was  already  in  the  hands  of  the 
receiver  under  the  original  proceed- 
ings. G.  Ober  d  Sons  Co.  v.  Macon 
Constr.  Co.  100  Ga.  035 
126 


Taxes. 

After  a  bank  has  become  insolvent 
and  passed  into  the  hands  of  a  re- 
ceiver, the  receiver  cannot  be  com- 
pelled to  pay  taxes  assessed  upon  the 
shares  of  stock.  Stapylton  v.  Thag- 
gard,  91  Fed.  Rep.  93,  33  C.  C.  A. 
353. 

A  receiver  may  be  directed  to  pay 
an  assessment  levied  upon  the  prop- 
erty in  his  possession,  although  it  is. 
not  shown  that  there  are  sufficient 
funds  in  his  hands  to  pay  the  tax  in 
question.  Wisicall  v.  Kunz,  173  111. 
110. 

Where  the  county  has  acquired  no 
lien  for  taxes  on  personal  property 
which  has  passed  into  the  hands  of  a 
receiver  pending  litigations  of  liens 
more  than  sufficient  to  absorb  the 
property,  the  county  has  no  claim. 
Hoicard  County  v.  Strother,  71  Iowa,. 
683. 

When  property  in  the  hands  of  a 
receiver  is  not  taxable.  Brooks  v. 
Hartford,  61  Conn.  112. 

When  receiver  should  pay  fran- 
chise tax.  Re  George  Mather's  Son's-- 
Co.  52  N.  J.  Eq.  607. 


CLAIMS   AGAINST   RECEIVERSHIP  FUNDS. 


§  341 


When  receiver  is  not  liable  for 
franchise  tax.     Ibid. 

The  lien  of  the  state  for  taxes  has 
IH-iority  over  the  equitable  claim  of 
a  creditor.  Re  Columbia  his.  Co. 
3  Abb.  App.  Dec.  239. 

The  property  in  the  hands  of  a  re- 
ceiver is  bound  for  taxes.  He  can 
appeal  to  the  court  if  the  tax  is  in- 
valid. Ex  parte  Chamberlain,  55 
Fed.  Rep.  704. 

A  petition  in  the  same  suit  for  an. 
injunction  is  the  proper  remedy  to 
prevent  a  sale  for  taxes  of  property 
in  the  hands  of  a  receiver.  Virginia, 
T.  d  C.  Steel  d  I.  Co.  v,  Bristol  Land 
Co.  88  Fed.  Rep.  134. 

Taxes  are  not  superior  to  an  at- 
tachment lien  subject  to  which  prop- 
erty was  placed  in  the  hands  of  a 
receiver.  Re  Atlas  Iron  Constr.  Co. 
19  App.  Div.  415. 

The  court  of  primary  jurisdiction 
of  a  receivership  will  follow  the  de- 
cision of  the  local  Federal  court  in 
ordering  the  receiver  to  pay  local 
taxes,  that  such  taxes  are  not  irregu- 
lar and  constitute  a  lien  upon  the 
property.  Fletcher  v.  Harney  Peak 
Tin-Min.  Co.  84  Fed.  Rep.  555. 

Funds  in  the  hands  of  a  receiver 
are  liable  to  taxation  though  col- 
lected in  other  states.  Schmidt  v. 
Failey,  148  Ind.  150,  37  L.  R.  A.  442. 
Moneys  in  the  hands  of  a  receiver 
will  not  be  directed  applied  to  the 
payment  of  taxes  for  the  year  in 
which  the  property  was  sold,  at  the 
instance  of  a  purchaser,  where  there 
was  nothing  in  any  of  the  decrees  to 
show  that  the  failure  to  provide  for 
the  paj^ment  of  taxes  for  that  year 
was  a  clerical  error  or  mistake,  and 
the  taxes  were  not  due  at  the  time 
of  the  sale,  and  the  purchasers  by  ex- 
amining the  master's  report  and  de- 
crees could  readily  have  ascertained 
that  no  provision  had  been  made  for 
the  payment  of  such  taxes.  Fidelity 
Ins.  T.  d  S.  D.  Co.  V.  Roanoke  Iron 
Co.  84  Fed.  Rep.  752. 

Interest. 

Interest  should  not  be  allowed 
upon  a  claim  given  priority  over  a 
mortgage  in  funds  in  a  receiver's 
hands,  where  it  is  not  shown  that 
there  is  a  fund  specially  applicable 
to  its  payment  that  will  not  be  ex- 


hausted by  the  allowance  of  interest, 
but  interest  should  be  allowed  from 
the  time  of  the  decree  in  favor  of  the 
claimant.  Ifew  England  R.  Co.  v. 
Carnegie  Steel  Co.  75  Fed.  Rep.  54, 
21  C.  C.  A.  219,  33  U.  S.  App.  491. 

A  receiver  is  not  liable  for  inter- 
est on  money  withheld  by  him  until 
he  could  be  advised  as  to  his  duty  in 
the  premises.  Guignon  v.  First  Nat. 
Batik  (Mont.)  55  Pac.  1051. 

Interest  will  not  be  allowed  in 
South  Carolina  on  open  accounts 
against  the  receiver  of  a  railroad,  in 
the  absence  of  a  contract  or  course  of 
dealing.  South  Carolina  v.  Port 
Royal  d  A.  R.  Co.  89  Fed.  Rep.  565. 

As  to  the  payment  of  interest  on 
encumbrances,  see  Leicis  v.  Zouche, 
2  Sim.  388,  393. 

The  court  will  not  take  the  net 
earnings  in  the  hands  of  its  receiver, 
when  large  expenses  have  accrued 
in  the  management,  and  apply  the 
same  to  the  payment  of  interest. 
Cleveland,  C.  d  S.  R.  Co.  v.  Knicker- 
bocker Trust  Co.  64  Fed.  Rep.  623. 

Rule  where  creditors  hold  collaterals. 

The  courts  in  the  exercise  of  the 
power  conferred  by  Conn.  Gen.  Stat. 
§  1942,  to  make  such  orders  as  to  the 
payment  of  debts  and  distribution 
of  the  effects  of  an  insolvent  corpora- 
tion by  the  receiver  as  may  be  just 
and  conformable  to  law,  will  adopt 
the  principle  of  the  provision  of 
Conn.  Gen.  Stat.  §  590,  requiring  a 
secured  creditor  who  presents  his 
claim  against  an  insolvent  estate  to- 
elect  between  the  surrender  of  his 
security  and  a  dividend  only  upon 
the  excess  of  such  claim  above  the 
value  of  his  security.  Re  Waddell- 
Eniz  Co.  67  Conn.  324. 

That  claims  of  creditors  are  se- 
cured by  mortgage  on  property  other 
than  that  of  the  insolvent  does  not 
debar  tlie  holders  from  sharing  in 
the  distribution  of  funds  by  the  re- 
ceiver of  the  insolvent.  Taylor  v. 
Moore,  64  Ark.  23. 

The  holder  of  the  bonds  of  an  in- 
solvent corporation  as  collateral  se- 
curity for  an  indebtedness  is  not  en- 
titled to  a  dividend  out  of  the  assets 
of  the  corjjoration  derived  from  the 
property  covered  by  the  mortgage 
securing  tlie  bonds,  on  the  basis  of 

127 


§341 


RECEIVERSHIPS— SUPPLEMENT. 


the  afrgrcgate  of  the  property  debt 
and  the  iiniount  remaining  unpaid 
on  the  bonds  after  the  mortgage  se- 
curity has  been  exhausted.  Patt- 
berg  v.  Lcicis  Pa  if  here/  iG  Bros.  55  N. 
J.  Eq.  004.  Distinguishing  Dun- 
eomh  V.  Xcw  York,  II.  i6  A".  li.  Co.  84 
N.  Y.  190. 

Expenses. 

The  following  expenses  are  prop- 
erly allowed  a  receiver:  — 

Attorney's  fees  for  defense  of  the 
estate.  Piatt  v.  Archer,  13  Blatchf. 
351 ;  Kadish  v.  Chicago  Co-Opcra- 
tive  Breiring  Asso.  35  111.  App.  411. 

All  reasonable  expenses  in  a  suit 
ordered  by  the  court.  Fitzgerald  v. 
Fitzgerald,  5  Ir.  Eq.  Rep.  525;  Rob- 
inson V.  Bank  of  Darien,  18  Ga.  65. 

The  ordinary  outlays  made  in  good 
faith  by  a  receiver  of  a  railroad,  in 
the  ordinary  course  of  business,  for 
the  purpose  of  promoting  the  busi- 
ness of  the  road  and  to  make  it 
profitable,  are  within  the  discretion 
allowed  him.  Coicdrey  v.  Galves- 
ton, U.  c6  H.  R.  Co.  1  Woods,  331. 

Expenses  and  counsel  fees  in  re- 
sisting a  motion  for  removal  of  a  re- 
ceiver, when  he  has  acted  in  good 
faith  and  integrity,  may  be  allowed. 
Ibid. 

If  the  outlay  is  large  the  receiver 
should  ap])ly  to  the  court  for  di- 
rection.    Ibid. 

Expenses  of  a  receiver  in  complet- 
ing a  contract  which  he  was  not 
bound  to  complete  are  payable  from 
the  sale  of  collateral,  where  the 
work  was  done  by  the  consent  of  all 
parties.  Re  A.  E.  Chasmar  &  Co.  22 
Misc.  G80. 

A  receiver  appointed  without  re- 
muneration is  entitled  to  premiums 
paid  to  his  surety,  and  for  manual 
labor  beneficial  to  the  estate,  though 
not  part  of  his  duty  as  receiver. 
Earris  v.  Bleep  [1897]  2  Ch.  80,  66 
L.  J.  Ch.  N.  S.  596,  76  L.  T.  N.  S. 
670,  Reversing  6G  L.  J.  Ch.  N.  S.  511, 
76  L.  T.  N.  S.  458. 

Net  earnings  are  applied  primari- 
ly to  the  payment  of  wages,  supplies, 
and  materials  furnished.  Calhoun  v. 
8t.  Louis  &  S.  E.  R.  Co.  9  Biss.  330. 

Holders  of  bonds  secured  by  mort- 
gage on  a  railroad,  who  are  parties 
to  a  proceeding  to  foreclose  liens  on 
128 


the  property,  and  become  purchasers 
at  a  sale  under  a  decree  requiring 
them  to  pay  expenses  of  a  receiver- 
ship, cannot  claim  to  be  subrogated 
to  the  rights  of  the  holders  of  claims 
so  jjaid,  so  as  to  be  entitled  to  en- 
force them  against  property  of  the 
railroad  not  covered  by  their  mort- 
gage, to  the  exclusion  of  holders  of 
other  liens  on  the  road,  where  the 
decree  plainly  intended  that  the 
claims  should  be  extinguished  when 
paid.  Morgan's  L.  d  T.  R.  t£-  S.  8. 
Co.  V.  Moran,  91  Fed.  Rep.  22,  33  C. 
C.  A.  313. 

Expenses  of  a  receiver  of  a  railroad 
in  traveling  to  and  from  his  resi- 
dence to  the  railroad  property  and 
elsewhere  about  the  country,  in  the 
interest  of  the  property  in  his  cus- 
tody, may  be  reimbursed  to  him  out 
of  the  proceeds  of  the  sale.  North- 
ern Alabama  R.  Co.  v.  Hopkins,  59 
U.  S.  App.  74,  87  Fed.  Rep.  505,  31 
C.  C.  A.  94. 

Current  expenses  are  chargeable 
to  the  corpus  where  the  income  has 
been  diverted.  Virginia  d  A.  Coal 
Co.  V.  Central  R.  <&  Bkg.  Co.  30  U. 
S.  App.  203 :  Clark  v.  Central  R.  d 
Bkg.  Co.  66  Fed.  Rep.  803,  14  C.  C. 
A.  112:  Central  Trust  Co.  v.  Thur- 
man,  94  Ga.  735. 

And  this  irrespective  of  who  may 
be  the  ultimate  owner.  Illinois 
Trust  tG  Hav.  Bank  v.  Pacific  R.  Co. 
115  Cal.  285. 

Where  receivership  benefits  all, 
the  expenses  should  be  borne  by  all. 
Johnson  v.  Garrett,  23  Minn.  565. 

Receivership  funds  and  property 
are  liable  for  supplies  and  equip- 
ments when  not  unreasonable,  as 
against  a  purchaser.  South  Carolina 
V.  Port  Royal  d  A.  R.  Co.  89  Fed. 
Rep.  565. 

And  for  terminal  facilities  af- 
forded the  receiver.     Ibid. 

And  for  operating  expenses  for  a 
reasonable  time  prior  to  the  appoint- 
ment of  the  receiver.  Central  Trust 
Co.  V.  Utah  C.  R.  Co.  16  Utah,  12, 
Citing  Farmers'  Loan  d  T.  Co.  v. 
Kansas  City,  W.  d  N.  W.  R.  Co.  53 
Fed.  Rep.  182;  Burnham  v.  Bowen, 
111  U.  S.  776,  28  L.  ed.  596;  Wood 
V.  New  York  d  N.  E.  R.  Co.  70  Fed. 
Rep.  741 ;  Thomas  v.  Peoria  d  It.  I. 
R.  Co.  36  Fed.  Rep.  808. 


CLAIMS   AGAINST   RECEIVERSHIP  FUNDS. 


§  341 


A  receiver  of  a  corporation  is  en- 
titled to  a  lien  prior  to  that  of  credit- 
ors under  levies  prior  to  his  appoint- 
ment, for  interest  and  taxes  paid  by 
him  on  the  loan  levied  upon  to  pro- 
tect it  from  sale  under  a  mortgage 
prior  to  the  levies.  Dummer  v. 
^medley,  110  Mich.  466,  38  L.  R.  A. 
490. 

Claims  for  cars  of  other  railroads, 
destroyed  by  a  railroad  company  in 
the  operation  of  its  road  within  the 
time  specifiedj  are  within  an  order 
directing  a  receiver  to  pay  all  such 
loss  and  damage  claims  arising 
from  the  operation  of  the  property 
as  in  his  judgment  are  proper  to  be 
paid  as  exjienses  of  operation. 
Grand  Trunk  R.  Co.  v.  Central  Ver- 
mont R.  Co.  88  Fed.  Rep.  636. 

Mortgagees  cannot  object  to  the 
payment  by  the  receivers  of  a  rail- 
road of  claims  for  supplies  furnished 
to  the  road  before  they  took  posses- 
sion, if  excess  of  net  earnings  re- 
ceived by  them  from  the  time  they 
took  possession  to  the  time  of  the 
breach  of  the  conditions,  over  operat- 
ing exjDenses  and  fixed  charges,  was 
more  than  enough  to  pay  these 
claims.  Grand  Trunk  R.  Co.  v.  Cen- 
tral Vermont  R.  Co.  88  Fed.  Rep. 
620. 

Claims  against  an  insolvent  rail- 
road company  for  its  right  of  way 
taken  without  paying  therefor  have 
priority  over  certificates  of  a  re- 
ceiver of  such  company  for  expenses 
of  its  operation  under  Tenn.  Const, 
art.  1,  §  21,  providing  that  no  prop- 
erty shall  be  taken  or  applied  to  pub- 
lic use  without  the  consent  of  the 
owner  or  without  just  compensation 
being  made  therefor.  Crosby  v. 
Morristown  d  C.  G.  R.  Co.  (Tenn. 
Ch.  App.)  42  S.  W.  507.  [AflT'd  by 
Sup.  Ct.] 

Where  the  receiver  is  authorized 
to  incur  the  expenses  of  operation, 
the  payment  of  detectives  to  prevent 
loss  is  proper.  Grand  Trunk  R.  Co. 
V.  Central  Vermont  R.  Co.  88  Fed. 
Rep.  636. 

And  so  are  expenses  of  a  trip  to 
Europe  at  the  instance  of  bondhold- 
ers to  effect  a  reorganization.  North- 
ern Alabama  R.  Co.  v.  Hopkins,  59 
U.  S.  App.  74,  87  Fed.  Rep.  505,  31 
C.  C.  A.  94. 


9 


And  clerical  services  in  making 
out  books  for  the  receiver,  where  it 
is  necessaiy  to  an  adjustment  of  the 
accounts.  Mattlieios  v.  Adams,  84 
Md.   143. 

And  fees  of  a  referee  for  taking 
testimony  and  examining  the  receiv- 
er's accounts.  Re  Merry,  11  App. 
Div.  597. 

N.  Y.  Code  Civ.  Proc.  §§  3236, 
3251,  subd.  4,  provides  for  the  al- 
lowance on  such  a  reference  of  a 
sum  for  reference  fees  and  printing 
disbursements,  in  the  discretion  of 
the  court.  Anderson  v.  Brackeleer 
25  Misc.  343,  Confirming  Referee's 
Report  in  28  N.  Y.  Civ.  Proc.  Rep. 
306. 

Referees'  fees,  counsel  fees  and  ex- 
penses, including  attorneys'  fees  of 
the  receiver  of  an  insolvent  corpora- 
tion, are  properly  allowed  out  of 
the  proceeds  of  a  sale  of  the  property 
of  the  corporation.  Re  F.  X.  Muller 
&  Co.  47  N.  Y.  Supp.  277. 

While  there  is  no  liability  it  may 
be  policy  to  pay  an  employee  a  salary 
during  his  recovery  from  a  personal 
injury.  Missouri  P.  R.  Co.  v.  Texas 
d  >.  R.  Co.  33  Fed.  Rep.  701. 

The  following  expenses  of  the  re- 
ceiver have  been  held  not  allowable: 

Attorneys'  fees  for  hunting  up  and 
taking  possession  of  receivership 
property.  Saulsbury  v.  Lady  Ens- 
ley  Coal,  I.  d  R.  Co.  110  Ala.  585. 

Attorneys'  fees  in  defending  an  ap- 
peal from  an  order  appointing  a  re- 
ceiver; for  preparing  receiver's 
bond ;  costs  growing  out  of  his  resig- 
nation.    Ibid. 

A  receiver  proceeding  in  the  wrong 
form  of  action  cannot  recover  costs 
in  case  of  a  lunatic's  estate.  Re 
Montgomery,  1  Molloy,  419. 

Expenses  for  prosecution  of  suit 
in  a  foreign  country  not  allowed  ex- 
cept on  the  sanction  of  court.  Mal- 
colm V.  O'Callaghan,  3  Myl.  &  C.  52. 

The  receiver,  being  an  officer  of 
court, is  not  entitled  to  costs  (though 
served  with  a  petition)  for  his  ap- 
pearance. Herman  v.  Dunbar,  23 
Reav.  312. 

A  person  illegally  procuring  him- 
self to  be  appointed  is  chaigcalilo 
with  costs.  Robinson  v.  Wood,  39 
N.  Y.  S.  R.  466. 

The  court  will  not  decree  the  pay- 

129 


§341 


RECEIVERSHIPS— SUPPLEMENT. 


ment  of  receivers'  expenses  against 
the  party  securing  the  appointment, 
thoui!:h  he  fail  in  his  suit,  where  the 
appointnu'iit  was  proper  and  the  se- 
cured creditors  consented.  It  may 
be  done  if  the  appointment  was 
wrongful.  French  v.  Gifford,  31 
Iowa,  42S;  J  affray  v.  Raah,  72  Iowa, 
335. 

The  salary  paid  the  president  of  a 
corporation  while  its  property  is  in 
the  hands  of  a  receiver  is  no  part  of 
the  expenses  of  the  receivership. 
'New  Birmingham  Iron  &  Land  Co. 
V.  Blcvins  (Tex.  Civ.  App.)  40  S.  W. 
829. 

A  claim  for  a  retainer  of  counsel 
in  a  matter  not  connected  with  the 
operation  of  the  road,  and  for  assess- 
ment of  a  railroad  association,  are 
'  not  within  an  order  directing  re- 
ceivers of  a  railroad  to  pay  expenses 
of  the  operation.  Grand  Trunk  R. 
Co.  V.  Central  Vermont  R.  Co.  88 
Fed.  Rep.  03(5. 

An  employee  of  a  receiver  has  no 
right  to  file  a  petition  for  an  order 
to  compel  the  receiver  to  pay  him. 
Qatzmer  v.  Philadelphia  &  A.  C.  R. 
Co.  39  N.  J.  Eq.  303. 

A  receiver  of  a  state  court  is  not 
chargeable  with  the  expenses  of  a  re- 
ceiver of  the  Federal  court  while  the 
property  was  in  his  hands.  Central 
Trust  Co.  V.  Thurman,  94  Ga.  735. 

An  attorney  employed  by  a  receiv- 
er at  a  stipulated  salary,  who  seeks 
in  another  court  to  enforce  a  claim 
against  the  receivership  property, 
must  show  that  his  claim  for  services 
was  authorized  by  the  court  or  ap- 
proved by  it.  International  <&  G.  N. 
R.  Co.  V.  Rerndon,  11  Tex.  Civ.  App. 
465. 

A  receiver  cannot  pay  out  of  as- 
sets in  his  hands  the  taxes  upon  a 
tug  which  was  not  the  property  of 
his  principal,  the  tax  lien  upon 
\  which  has  been  enforced  in  the  ad- 
miralty. McRae  v.  Bowers  Dredg- 
ing Co.  90  Fed.  Rep.  300. 

As  to  what  were  costs  and  ex- 
penses of  receivership,  see  Seligman 
V.  t^aussy,  00  Ga.  20.  25. 

Parties  are  not  relieved  from  lia- 
bility for  receivership  expenses  by  a 
purchase  of  the  receivership  prop- 
erty under  a  foreclosure,  where  the 
receivership  funds  have  been  di- 
130 


verted.  Knickerbocker  v.  McKind- 
ley  Coal  &  Min.  Co.  172  111.  535^ 
Aflirming  07  111.  App.  291.  In  thia- 
case  there  was  a  stipulated  decree. 

So  much  of  the  funds  in  the  hands 
of  a  permanent  receiver  appointed 
in  a  proceeding  under  the  Georgia 
traders'  act  against  an  insolvent 
debtor,  from  the  sale  of  property 
covered  by  a  mortgage  executed  and 
recorded  prior  to  the  filing  of  the  pe- 
tition, as  is  necessary  to  paj'  off  the 
amount  due  on  the  mortgage,  is  not 
subject  to  be  diminished  by  costs  and 
expenses  of  the  receivership;  but  so 
much  of  such  costs  and  expenses 
which  cannot  be  met  by  the  general 
fund  arising  from  the  sale  of  the 
debtor's  property  in  excess  of  the 
amount  of  the  mortgage,  or  not 
covered  by  the  mortgage  lien,  shall 
be  taxed  against  the  petitioners^ 
Bradford  v.  Cooledge,  103  Ga.  753. 

The  i^arties  to  the  suit  may  be  re- 
quired to  pay  the  receivership- 
costs  and  expenses.  St.  Louis  v.  St. 
Louis  Gaslight  Co.  11  Mo.  App.  237. 

As,  where  the  jjlaintiflf,  on  whose 
motion  the  receiver  was  appointed, 
had  no  interest  in  the  receivership 
property.  Cutter  v.  Pollock,  7  N. 
D.  031. 

Or  where  the  appointment  is  pro- 
cured under  the  assertion  of  an  un- 
just and  wrongful  claim.  Righley 
V.  Dcane,  108  111.  200. 

Or  where  a  large  sum  was  pro- 
cured, by  reason  of  the  appointment, 
for  the  plaintiff's  benefit.  Farm- 
ers' Nat.  Bank  v.  Backus  (Minn.) 
77  N.  W.  142. 

Or  where  the  bill  is  filed  to  fore- 
close a  fraudulent  mortgage.  High' 
ley  V.  Deane,  04  111.  App.  389. 

A  stipulation  that  half  the  receiv- 
ership expenses  shall  be  paid  by  one 
party  and  half  by  the  other  is  a 
recognition  of  the  regularity  of  the 
receiver's  appointment  and  of  his 
right  to  compensation.  Kimmerle  v. 
Dowagiac  Mfg.  Co.  105  Mich.  640. 

A  creditor  prosecuting  a  case 
through  the  receiver  against  third 
parties  is  liable  for  costs  if  he  fails, 
if  the  suit  is  for  his  sole  benefit. 
Ward  V.  Roy,  69  N.  Y.  90. 

When  a  receiver  is  appointed 
without  probable  cause,  the  party 
procuring   the   appointment     should 


CLAIMS  AGAINST   RECEIVERSHIP  FUNDS. 


342 


pay   the  expenses.     Myres  v.  Frank- 
enthal,  55  111.  App.  390. 

The  unsuccessful  result  of  the 
suit  does  not  justify  taxing  the  re- 
ceivership expenses  to  plaintiff. 
Elk  Fork  Oil  <&  Gas  Co.  v.  Jennings, 


90  Fed.  Rep.    767;  Walton  v.    Will- 
iams, 5  Okla.  642. 

When  receiver's  agreement  con- 
cerning expenses  is  void.  Shade- 
wald  V.  White  (Minn.)  77  X.  W.  42. 


Page  574,  sec.  342. — Preferred  claims. 


Priority  may  he  determined  in 
the  suit  in  which  the  receiver  is  ap- 
pointed. Myrick  v.  Selden,  36  Barb. 
15. 

The  right  of  a  corporation,  al- 
though insolvent,  to  prefer  creditors, 
cannot  be  exercised  by  its  receiver, 
since  such  power  terminates  when 
the  corporate  property  is  placed  in 
eustodia  legis.  Re  Osceola  Milling 
Co.  76  Mo.  App.  23. 

That  the  personnel  of  a  receiver- 
ship has  been  changed  will  not  affect 
the  priority  of  a  claim  against  the 
receivership.  State  v.  Port  Royal  & 
A.  R.  Co.  84  Fed.  Rep.  67. 

A  general  creditor  has  the  right  to 
intervene  in  case  of  a  receivership 
and  contest  the  validity,  as  well  as 
the  priority,  of  other  claims  or  as- 
serted liens.  Franklin  Nat.  Bank  v. 
Whitehead,  149  Ind.  560,  39  L.  R.  A. 
725. 

An  order  of  court  directing  a  re- 
ceiver of  a  corporation  to  pay  a 
specified  dividend  on  all  claims 
against  the  corporation  does  not 
make  the  dividend  to  which  a  credit- 
or is  entitled  thereunder  a  preferred 
lien  upon  the  entire  assets  of  the  cor- 
poration; and  the  remedy  of  a  credit- 
or whose  dividend  has  not  been  paid 
to  him  is  an  application  to  the  court. 
Rockwell  v.  Portland  Sav.  Bank,  31 
Or.  431. 

The  date  when  claims  must  have 
accrued  in  order  to  be  entitled  to 
priority  of  payment  under  Mass. 
Stat.  l"890,  chap.  421,  §  14,  provid- 
ing that  when  an  assessment  insur- 
ance company  shall  discontinue  busi- 
ness a  receiver  may  be  appointed  to 
administer  any  unexhausted  portion 
of  the  emergencj'  fund,  which  shall 
be  used  first  in  the  payment  of  ac- 
crued claims  upon  certificates  or 
policies,  is  the  date  of  the  filing  of 
the  bill.  Atty.  Gen.  v.  Massachu- 
setts Ben.  L.  Asso.  171  Mass.  193. 


Notes  given  in  the  prosecution  of 
the  business  of  a  corporation  during 
the  pendency  of  a  bill  for  the  ap- 
pointment of  a  receiver,  and  before 
the  appointment,  should  be  allowed 
whenever  they  mature,  with  an  ad- 
dition or  rebate  of  interest,  as  in  in- 
solvency proceedings,  where  the  cir- 
cumstances are  such  as  to  render  it 
equitable  that  the  rights  of  the  re- 
spective parties  should  be  adjusted 
as  of  the  date  of  the  appointment, 
and  not  of  the  filing  of  the  bill. 
Jones  V.  Arena  Publishing  Co.  171 
Mass.  22. 

There  is  no  fixed  arbitrary  rule 
barring  preferential  claims  that  have 
been  contracted  more  than  six 
months  before  the  appointment  of  a 
receiver.  New  York  Guaranty  & 
Indemnity  Co.  v.  Broderick  dc  B. 
Rope  Co.  48  U.  S.  App.  668,  suh  nom. 
New  York  Guaranty  c6  Indemnity 
Co.  v.  Tacoma  R.  &  Motor  Co.  83 
Fed.  Rep.  365,  27  C.  C.  A.  550. 

Priority  as  between  receivers  of  a 
bank  appointed  by  diflerent  judges 
in  proceedings  instituted  by  a  credit- 
or of  the  bank  and  the  state  treas- 
urer respectively  is  to  be  determined 
by  reference  to  the  date  of  the  ap- 
pointment, and  not  by  the  dates  of 
the  commencement  of  the  respective 
proceedings.  Worth  v.  Piedmont 
Bank,  121  N.  C.  343. 

In  supplementary  proceedings  in 
North  Carolina,  priority  as  between 
creditors  is  determined  from  the  date 
of  the  application  for  appointment. 
Parks  v.  Sprinkle,  64  N.  C.  637. 

Delay  of  a  creditor  entitled  to 
priority  in  the  funds  in  the  hands  of 
receivers  of  a  railroad  over  the  mort- 
gages, until  after  payment  of  many 
other  claims  of  the  same  class,  will 
not  bar  recovery  if  there  are  assets 
from  which  tiie  claim  can  still  bo 
paid.     New  England  R.  Co.    v.    Car- 

131 


S  342 


RECEIVERSHIPS— SUPPLEMENT. 


negie  Sicel  Co.  33  U.  S.  App.  491,  21 
C.  C.  A.  219,  75  Fed.  Rep.  54. 

A  creditor  of  an  insolvent  cor- 
poration in  a  proper  case  may  be  per- 
mitted to  file  his  claim  after  the  ex- 
piration of  the  period  limited  for 
that  purpose  by  a  rule  of  the  court, 
and  may  be  allowed  a  preferential 
dividend  out  of  the  estates  coming 
into  the  hands  of  the  receiver  to  such 
an  extent  as  will  put  him  on  an 
equality  with  other  creditors  who 
have  received  partial  dividends. 
Pattberg  v.  Lciins  Pattberg  d  Bros. 
55  N.  J.  Eq.  G04. 

A  creditor  securing  the  appoint- 
ment in  supplementary  proceedings, 
and  who  through  the  receiver  ob- 
tains a  decree  setting  aside  a  trans- 
fer of  the  debtors  under  1  N.  Y.  Rev. 
Stat.  p.  766,  §  20,  is  entitled  to 
prioritv.  Stiefel  v.  Berlin,  28  App. 
Div.  103. 

Billholders  of  a  bank  are  not  en- 
titled to  priority  over  other  credit- 
ors. Cochituate  Bank  v.  Colt,  1 
Gray,  382. 

Creditors  of  a  receiver  of  a  part- 
nership on  account  of  goods  pur- 
chased from  them  under  order  of  the 
court  and  sanction  of  the  creditors 
of  the  partnership,  to  enable  him  to 
dispose  of  the  partnersip  assets,  are 
entitled  to  a  preference  in  the  fund 
in  the  hands  of  the  receiver  over 
other  creditors  of  the  receiver  on  ac- 
count of  similar  sales,  who  are  also 
creditors  of  the  firm  and  who  have 
received  and  retained  dividends  upon 
their  claims  against  the  firm  out  of 
money  which  should  have  been  ap- 
plied to  the  payment  of  the  receiver's 
creditors.  Diamond  Match  Co.  v. 
Taylor,  83  Md.  394. 

A  receiver  of  a  corporation  is  en- 
titled to  a  lien  prior  to  that  of 
creditors  under  levies  prior  to  his  ap- 
pointment, for  interest  and  taxes 
paid  by  him  on  the  land  levied  upon 
to  protect  it  from  sale  under  a  mort- 
gage prior  to  the  levies.  Dummer 
V.  Smedley,  110  Mich.  466,  38  L.  R. 
A.  490. 

A  nonresident  cannot  by  filing  an 
attachment  in  Pennsylvania  obtain 
preference  over  a  receiver  previous- 
ly appointed  of  the  property  of  a 
citizen  of  a  third  state.  Paladini 
132 


V.  Maryland  Silk  Co.  IS  Pa.  Co.  C.t. 
175. 

The  proceeds  of  property  realized 
by  a  receiver  in  whose  hands  it  was 
placed  subject  to  attachment  liens 
are  properly  paid  to  the  attachment 
creditors  without  regard  to  other 
creditors,  where  they  are  less  than 
the  amount  of  the  attachment  liens. 
Re  Atlas  Iron  Constr.  Co.  19  App. 
Div.  415. 

The  lien  of  an  execution  or  attach- 
ment secured  prior  to  the  appoint- 
ment will  be  entitled  to  a  priority. 
Pease  v.  Smith,  63  III.  App.  411. 

An  attachment  creditor  of  a  cor- 
poration is  entitled  to  payment  of 
the  amount  of  his  lien  out  of  funds 
in  the  hands  of  a  receiver  of  the  cor- 
poration to  whom  the  attached 
property  was  delivered  by  the  sheriff 
under  an  order  of  court  reserving 
the  attachment  lien,  in  preference  to 
a  claim  for  personal  taxes  assessed 
against  the  corporation  before  the 
attachment,  but  not  made  a  lien  on 
the  property  in  question  by  the  issu- 
ance of  a  warrant  for  their  collection 
at  that  time.  Wise  v.  L.  &  C.  Wise 
Co.  12  App.  Div.  319. 

A  seizure  designed  to  give  priority 
in  favor  of  one  over  other  creditors, 
based  on  imminence  of  insolvency, 
does  not  secure  such  priority.  Grand 
Trunk  R.  Co.  v.  Central  V.  R.  Co.  88 
Fed.  Rep.  622. 

Receivers  of  a  railroad  company 
which  has  leased  another  road,  sub- 
ject to  a  provision  that  all  the  gross 
earnings  of  the  latter  shall  be  ap- 
plied first  to  the  expense  of  mainte- 
nance and  improvement  and  then  to 
the  payment  of  the  interest  on  the 
bonds  issued  by  the  lessor  road,  will 
be  directed  to  make  payment  of  the 
net  earnings  to  the  bondholders  in 
preference  to  claims  for  damages 
arising  from  the  operation  of  the 
leased  road,  where  the  lease  provides 
that  the  lessee  shall  assume  all  obli- 
gations of  the  lessor  thereafter  in- 
curred as  common  carrier,  ware- 
houseman, or  otherwise,  and  save 
the  lessor  harmless  from  all  loss  by 
reason  of  any  claim  for  any  neglect, 
accident,  or  default  happening  upon 
or  in  connection  with  the  road,  and 
from  any  claims  arising  from  the 
maintenance   and   operation   of   the 


CLAIMS   AGAINST  RECEIVERSHIP  FUNDS. 


342 


road.  Grand  Trunk  R.  Co.  v.  Cen- 
tral Vermont  R.  Co.  81  Fed.  Rep. 
60. 

Creditors  whose  claims  are  pro- 
vided by  a  lease  of  a  railroad  to  be 
paid  before  the  payment  of  net  earn- 
ings to  bondholders  are  not  entitled 
to  priority  of  lien  upon  the  assets 
in  the  hands  of  a  receiver  of  a  lessee 
road  which  has  assumed  payment  of 
such  claims,  where  they  have  let  pay- 
ment to  the  bondholders  be  made 
first,  and  themselves  remain  cred- 
itors of  the  lessee  company.  Grand 
Trunk  R.  Co.  v.  Central  Vermont  R. 
Co.  78  Fed.  Rep.  090. 

A  consignor  to  a  commission  com- 
pany of  cattle  whose  proceeds  were 
to  be  applied  to  payment  of  a  note 
given  by  him  to  the  company  is  not 
entitled  to  a  preference  in  the  assets 
in  the  hands  of  a  receiver  of  the  com- 
pany because  the  company  applied 
the  proceeds  of  such  cattle  to  the  dis- 
charge of  its  other  indebtedness, 
further  than  such  proceeds  came  into 
the  hands  of  the  receiver  or  went 
into  property  which  has  come  into 
his  hands.  Metropolitan  Nat.  Bank 
V.  Camphell  Commission  Co.  77  Fed. 
Rep.  705. 

Rent  for  a  limited  period,  in  South 
Carolina,  has  priority.  Malcomson 
V.  WapjMo  Mills,  85  Fed.  Rep.  907. 

A  creditor  of  a  railroad  corpora- 
tion whose  claim  originated  in  the 
negligent  act  of  its  servant  is  not  en- 
titled to  be  paid  in  preference  to  the 
holders  of  existing  liens  upon  the 
corporate  property.  Farmers'  Loan 
d  T.  Co.  V.  Irvine,  48  U.  S.  App.  324, 
suh  nom.  Farmers'  Lean  £  T.  Co.  v. 
Xorthern  P.  R.  Co.  79  Fed.  Rep.  227, 
24  C.  C.  A.  511. 

A  claim  for  services  rendered  by 
attorneys  under  an  order  of  court,  in 
attempting  to  enforce  the  collection 
of  a  judgment  in  favor  of  the  master 
commissioner,  which  when  collected 
was  intended  for  the  benefit  of  all 
the  creditors  of  an  insolvent  corpo- 
ration in  the  hands  of  a  receiver,  is 
entitled  to  priority  over  the  demands 
of  general  creditors  in  the  funds  of 
the  corporation  in  the  hands  of  the 
special  master  for  distribution, 
Armstrong  v.  Wagner,  20  Ky,  L. 
Rep.  142. 


Trust  funds. 

The  fund  in  the  hands  of  the  re- 
ceiver of  a  national  bank  will  not  be 
held  to  have  been  augmented  by  a 
trustee's  deposit,  so  as  to  entitle  the 
trustee  to  a  return  of  the  fund  in 
preference  to  other  creditors  of  the 
bank,  if  the  deposit  was  a  check  on  the 
bank  itself  by  one  of  its  officers,  and 
the  credit  was  merely  transferred 
from  one  account  to  the  other,  with- 
out any  actual  deposit  of  money. 
Beard  v.  Independent  Dist.  GO  U.  S. 
App.  372,  88  Fed.  Rep.  375.  31  C. 
C.  A.  502. 

A  cestui  que  trust  who  joins  in  a 
release  to  the  trustee  in  order  to  pro- 
cure a  loan  of  the  trust  fund  to  a 
corporation  in  furtherance  of  his 
own  individual  interest  cannot  claim 
a  preference  over  other  creditors  out 
of  the  assets  of  the  corporation  in 
the  hands  of  a  receiver,  as  the  fund 
lost  its  quality  as  a  trust  fund 
through  his  acts.  Todd  v.  Meding, 
56  N.  J.  Eq.  83. 

It  is  not  essential  to  the  creation 
of  a  preference  in  the  funds  in  the 
hands  of  a  receiver  of  a  bank  for 
trust  funds  held  by  the  bank  that  the 
trust  fund  shall  be  actually  traced 
into  specific  property  coming  into 
the  hands  of  the  receiver,  but  it  is 
sufficient  if  it  can  be  traced  into  the 
general  assets  of  the  bank.  Leonard 
V.  Latimer,  67  Mo.  App.  138. 

Receivers'  certificates. 

Receivers'  certificates  are  not  en- 
titled to  priority  as  against  other 
lien  holders  not  consenting.  Doe  v. 
Northwestern  Coal  c6  Tra)isp.  Co.  78 
Fed.  Rep.  02. 

Persons  taking  receivers'  certifi- 
cates issued  under  order  of  court  not 
making  them  a  prior  lien  to  all  other 
claims,  in  place  of  prior  certificates 
which  are  ordered  to  be  made  such 
prior  lien,  are  not  entitled  to  the 
preference  given  under  the  first  or- 
der. Lewis  v.  Linden  Steel  Co.  27 
Pittsb.  L.  J.  N.  S.  395. 

Of  mortgagees. 

Claims  not  in  existence  wiien  a 
mortgage  was  executed,  and  which 
are  not  given  priority  by  contract 
or  by  law,  have  no  uriority  over  the 

138 


§  342 


RECEIVERSHIPS— SUPPLEMENT. 


mortgage.  Farmers'  &  M.  Nat.  Bank 
V.  Waco  Electric  R.  &  Light  Co. 
(Tex.  Civ.  App.)   36  S.  W.  131. 

The  liiw  in  reference  to  preferences 
over  tlie  mortgage  debts  in  property 
of  railroads  in  the  hands  of  receivers 
ip  applicable  to  a  water  company  or- 
ganized for  irrigation  purposes,  as 
such  purjioses  are  a  public  use  and 
it  is  essential  to  the  interests  of  the 
public  that  the  company  be  kept  a 
going  concern.  Atlantic  Trust  Co. 
V.  Woodbridge  Canal  &  Irrig.  Co.  79 
Eed.  Rep.  39. 

A  receiver  of  an  irrigation  com- 
pany cannot  be  directed  to  convey 
water  rights  to  the  holder  of  scrip 
expressly  stipulating  that  it  is  ac- 
cepted only  as  a  payment  for  the 
purchase  of  a  permanent  water  right, 
and  not  as  a  claim  against  the  com- 
pany for  any  other  purpose  whatever, 
and  the  water  rights  sought  to  be 
recognized  as  against  the  mortgage 
lien  are  not  appurtenant  or  attached 
to  any  specific  land.  Atlantic  Trust 
Co.  V.  Woodbridge  Canal  &  Irrig.  Co. 
79  Fed.  Rep.  501. 

Holders  of  scrip  issued  by  a  water 
company  and  receivable  in  pajinent 
of  any  water  rights  are  not  entitled 
to  priority  over  a  mortgage  in  the 
proceeds  of  the  property  of  the  com- 
pany in  the  hands  of  a  receiver,  what- 
ever might  have  been  the  rights  of 
the  person  who  furnished  the  ma- 
terial and  supplies  for  which  such 
scrip  was  issued.     Ibid. 

All  earnings  and  rents  collected  by 
a  receiver  ajipointed  in  an  action  in 
the  nature  of  a  creditors'  bill  are  sub- 
ject to  the  lien  of  a  valid  mortgage 
executed  before  the  rendition  of  the 
judgment  in  favor  of  plaintiff,  and 
must  be  paid  over  to  the  mortgagee 
alter  deducting  the  expenses  of  the 
receivership,  where  such  mortgagee 
intervenes  in  the  action,  provided 
such  payment  is  necessary  to  satisfy 
a  deficiency  after  the  sale  of  the 
mortgaged  property.  McKenzie  v. 
Bismarck  Water  Co.  6  N.  D.  361. 

A  mortgagee  has  an  equitable 
claim  on  the  rents  due  and  to  accrue 
superior  to  any  arising  subsequent 
to  the  mortgage,  by  reason  of  a  re- 
ceivership; and  the  tenants  will  be 
compelled  to  attorn.  Woodyatt  v. 
Conncll,  38  111.  App.  475. 
134 


The  provision  of  the  acts  relating 
to  the  Chesapeake  &  Ohio  Canal 
Company  and  the  Baltimore  &  Ohio 
Railroad  Company,  by  which  the 
state  of  Marjiand  subscribed  to  the 
stock,  that  the  company  shall  be 
bound  to  pay  out  of  the  profits  a 
dividend  of  6  per  cent  per  annum, 
and  that  the  state  shall  be  entitled  to 
have  and  receive  such  perpetual  divi- 
dend out  of  the  profits  of  the  work 
as  declared  from  time  to  time,  does 
not  make  any  pledge  or  specific  ap- 
propriation of  the  profits  which  will 
entitle  the  holders  of  such  preferred 
stock  to  priority  in  the  net  profits 
over  the  liens  of  subsequent  mort- 
gage bondholders,  or  the  rights  of 
lessors  of  properties  held  under 
leases,  or  of  holders  of  equipment 
contracts  giving  a  right  of  possession 
upon  default.  Mercantile  Trust  Co. 
V.  Baltimore  &  0.  It.  Co.  82  Fed.  Rep. 
360. 

Complainants  in  a  suit  to  fore- 
close a  mortgage  made  by  a  corpo- 
ration, of  all  whose  property  a  re- 
ceiver is  appointed  in  the  suit,  are 
upon  a  par  with  other  general  cred- 
itors who  may  become  parties  to  the 
proceeding,  as  to  any  unsatisfied  bal- 
ance that  may  remain  due  them,  aft- 
er appropriation  to  their  demand  of 
the  i^roeeeds  of  the  property  upon 
which  the  mortgage  is  foreclosed,  in 
the  assets  not  subject  to  the  mort- 
gage or  the  judgment  liens.  Mer- 
cantile Trust  Co.  V.  Southern  States 
Land  d  T.  Co.  52  U.  S.  App.  075,  86 
Eed.  Rep.  711.  30  C.  C.  A.  349. 

A  preferential  claim  cannot  be  al- 
lowed against  the  property  of  a  les- 
sor railroad  company  for  the  value 
of  rails  sold  to  and  on  the  credit  of 
a  stockholder  for  the  benefit  of  the 
lessee,  over  mortgage  bondholders  of 
the  lessor.  Ruhlender  v.  Chesa- 
peake, 0.  &  S.  W.  R.  Co.  91  Fed.  Rep. 
5,  33  C.  C.  A.  299. 

Where  a  junior  mortgagee  obtains 
the  appointment  of  a  receiver,  and 
is  authorized  to  take  possession  and 
operate  a  railroad  and  receive  its 
earnings,  a  senior  mortgagee  may 
apply  for  and  obtain  such  earnings. 
Seibcrt  v.  Minneapolis  d  St.  L.  R. 
Co.  52  Minn.  246. 

Arrears  of  salary  of  the  president 
of  a   railroad  company  will   not  be 


CLAIMS  AGA  NST  RECEIVERSHIP  FUNDS. 


343 


paid,  in  preference  to  the  lien  of  a 
mortgage,  from  income.  ISlational 
Bank  v.  Carolina,  K.  &  W.  R.  Co. 
63  Fed.  Hep.  25. 

The  lien  of  a  valid  mortgage  on 
railroad  property  existing  at  the 
time  of  filing  a  bill,  under  Ga.  Civ. 
Code,  §§  2719  et  seq.,  for  the  ap- 
pointment of  a  receiver  of  the  rail- 
road property,  cannot  be  displaced 
so  as  to  give  a  preference  to  a  cred- 
itor who  relies  solely  on  a  preferen- 
tial equity.  Alexander  v.  Mercantile 
Trust  cG  D.  Co.   100  Ga.  537. 

A  mortgage  upon  city  lots  after- 
wards becoming  part  of  street-rail- 
way property  cannot  be  subordinated 
to  the  expenses  of  a  receiver  of  the 
property  of  the  company.  Third 
street  <C-  S.  R.  Co.  v.  Lewis,  48  U.  S. 
App.  273.  79  Fed.  Rep.  190,  24  C.  C. 
A.  482. 

Preference  to  railroad  mortgagees 
is  not  gained  by  payment  of  a  judg- 
ment against  the  railroad  company 
for  damages,  when  it  is  paid  after 
its  afhrmance  on  appeal  by  the 
surety  on  a  supersedeas  bond  who 
signed  it  when  the  mortgage  was  in 
•existence  and  no  default  had  been 
made  upon  it  and  when  the  railroad 
•company  was  apparently  solvent,  al- 
though the  bond  may  have  benefited 
the  mortgagees  by  preventing  a  levy 
on  the  railroad  which  might  have 
worked  detriment  to  them  directly 
and  indirectly  as  substantial  owners 
of  the  property.  Whiteley  v.  Cen- 
tral Trust  Co.  43  U.  S.  App.  G43,  76 
Fed.  Rep.  74,  22  C.  C.  A.  67,  34  L. 
R.  A.  303. 

As  to  when  a  mortgagee  is  entitled 
to  priority  in  rents  over  an  assignee 
of  the  lease  from  the  mortgagor,  see 
Citizens'  Sav.  d  L.  Co.  v.  French,  4 
Ohio  N.  P.  61. 

Of  judgment  creditors. 

Judgments  obtained  against  an  in- 
solvent corporation  after  the  ap- 
pointment of  a  receiver  of  its  assets 
are  not  liens  upon  the  real  estate. 
Fidelity  Ins.  T.  &  H.  D.  Co.  v.  Ro- 
anoke Iron  Co.  81  Fed.  Rep.  439. 

Judgment  creditors  an;  entitled  to 
be  paid  out  of  surplus  income  real- 
ized by  a  receiver  appointed  in  a 
stockholder's  suit  prior  to  tlic  filing 
of  a  bill  of  foreclosure  in  wliidi  lie 


was  subsequently  appointed  in  pref- 
erence to  the  mortg-age  debt.  Veatch 
v.  American  Loan  &  T.  Co.  49  U.  S. 
App.  191,  79  Fed.  Rep.  471,  25  C.  C. 
A.  39. 

Judgments  recovered  against  an 
insolvent  corporation  after  the  ap- 
pointment of  a  receiver,  whether  en- 
tered by  leave  of  court  or  not,  are  not 
such  liens  on  the  corporate  real  es- 
tate as  to  be  entitled  to  preference 
in  the  distribution  of  the  receiver- 
ship funds.  Coican  v.  Pennsylvania 
Flute  Glass  Co.  184  Pa.   1. 

Judgment  cretlitors'  liens  lost  by 
laches  are  not  entitled  to  priority. 
Savings  d  T.  Co.  v.  Bear  Valley 
Irrig.  Co.  89  Fed.  Rep.  32. 

An  order  appointing  a  receiver  of 
moneys  receivable  by  a  corporation 
from  its  interest  in  a  ship  and  her 
freight  does  not  confer  on  a  judg- 
ment creditor  any  charge  on  the  cor- 
poration's property,  so  as  to  make 
him  a  secured  creditor,  and  is  not 
equivalent  to  a  seizure  of  the  prop- 
erty in  execution.  Croshaw  v.  Lynd- 
hurst  Ship  Co.  [1897]  2  Ch.  154,  66 
L.  J.  Ch.  N.  S.  576,  76  L.  T.  N.  S. 
553. 

Judgment  creditors  are  entitled  to 
priority  though  the  judgment  is  aft- 
er the  appointment  but  before  the 
decree  in  an  action  to  administer 
the  property  of  a  corporation. 
Moore  v.  Southern  States  Land  & 
Timber  Co.  83  Fed.  Rep.  399. 

A  judgment  entered  nunc  pro  tunc 
antedating  the  appointment  is  not 
entitled  to  priority  over  other  cred- 
itors. Coivan  V.  Pennsylvania  Plate 
Glass  Co.  184  Pa.  1. 

Nor  is  one  entered  after  the  ap- 
pointment, though  suit  was  com- 
menced prior.  Lang  v.  Macon  Constr^ 
Co.  101  Ga.  343. 

A  covenant  in  a  lease  of  a  rail- 
road, that  the  gross  earnings  sliall 
be  applied  first  to  satisfy  obligations 
assumed  by  the  lessee  of  the  lessor 
"as  common  carrier,  warehouseman, 
or  otherwise,"  and  thereafter  to  ])ay- 
ment  of  the  interest  on  mortgage 
bonds  of  the  h'ssor,  does  not  giv((  pri- 
ority in  earnings  of  tlie  road  in  the 
hands  of  receivers  of  the  lessee,  to  a 
judgment  upon  a  note  made  by  tlie 
lessor  company.  Wcldrn  Xat.  Itnnk 
v.  I'ar.ions,  57  U.    S.    Apj).    136,  sub 

135 


§  343 


KECEIVERSHIPS— SUPPLEMENT. 


nom.  Wcldcn  Wat.  Bank  v.  Ismith, 
86  Fed.  Kcp.  398,  30  C.  C.  A.  133. 

The  holders  of  judgments  against 
a  railroad,  who  are  given  a  lien  pri- 
or to  the  mortgage,  are  entitled  to 
priority  over  of  the  earnings  of  the 
receiver  appointed  under  a  general 
creditors'  bill.  Thomas  v.  Cincin- 
nati, N.  0.  tC-  T.  P.  It.  Co.  91  Fed. 
Rep.  202. 

A  plaintiff  in  a  general  creditors' 
bill  against  an  insolvent  corporation, 
who  bases  his  claim  on  a  judgment 
against  the  company  for  a  specified 
amount  for  breach  of  a  contract  by 
the  company  to  construct  a  depot 
and  perform  other  agreements  made 
as  a  consideration  for  the  con- 
veyance to  it  by  plaintiff  of  land  for 
a  right  of  way,  does  not  occupy  the 
position  of  a  right-of-way  claimant 
in  the  creditors'  bill  as  to  preference 
in  the  funds  in  the  hands  of  a  re- 
ceiver. Crosby  v.  Morristoion  <&  G. 
a.  It.  Co.  (Tenn.  Ch.  App.)  42  S.  W. 
507. 

For  personal  injuries  and  death. 

A  claim  for  damages  for  personal 
injuries  resulting  fiom  a  negligent 
act  of  a  mortgagor  railroad  company, 
committed  before  the  appointment  of 
a  receiver  in  a  suit  to  foreclose  the 
mortgage,  is  not  a  preferential  claim 
entitled  to  be  paid  out  of  the  income 
or  corpus  of  the  mortgaged  property, 
to  the  exclusion  of  the  mortgage 
debt.  Veatch  v.  American  Loan  c€ 
T.  Co.  49  U.  S.  App.  191,  79  Fed. 
Rep.  471,  25  C.  C.  A.  39. 

Claims  for  injuries  by  the  negli- 
gence of  a  railroad  company  prior  to 
the  appointment  of  a  receiver,  but 
after  the  execution  of  and  recording 
of  mortgages  upon  the  road,  cannot 
be  given  precedence  over  the  mort- 
gage liens  in  the  funds  in  the  hands 
of  the  receiver.  Farmers'  Loan  d 
T.  Co.  v.  Northern  P.  R.  Go.  74  Fed. 
Rep.  431. 

Expenditure  by  a  receiver  of  in- 
come for  improvements  and  altera- 
tion of  a  railroad  will  not  entitle 
claims  for  personal  injuries  to  pref- 
erence on  the  ground  that  such  ex- 
penditure was  a  diversion,  where  the 
mortgage  clearly  authorizes  an  ex- 
penditure of  the  income  of  the  mort- 
gaged property  for  such  purposes  by 
136 


the  trustee.  Veatch  v.  American 
Loan  d  T.  Co.  49  U.  S.  App.  191,  79 
Fed.  Rep.,  471,  25  C.  C.  A.  39. 

Claims  for  damages  caused  by 
negligence  in  the  operation  of  a 
mortgaged  railroad  cannot  be  paid 
as  jDreferential  claims  out  of  the  as- 
sets in  the  hands  of  the  receiver. 
Front  Street  Cable  R.  Co.  v.  Drake, 
84  Fed.  Rep.  257. 

The  holder  of  a  judgment  for  per- 
sonal injuries  against  a  railroad 
company  cannot  claim  preference  to 
a  mortgage  debt  out  of  the  assets  iu 
the  hands  of  a  receiver  because  an- 
other railroad  company  while  operat- 
ing the  road  of  the  mortgagor  and 
judgment  debtor  has  expended  in- 
come in  making  permanent  improve- 
ments instead  of  appropriating  it  as 
required  by  the  contract  to  the  pay- 
ment of  operating  expenses,  as  the 
breach  of  such  provision  can  be  com- 
plained of  only  by  the  company  own- 
ing the  road,  since  such  company 
could  itself  have  made  such  expendi- 
ture. Veatch  v.  America )i  Loan  & 
T.  Co.  49  U.  S.  App.  191,79  Fed.  Rep. 
471,  25  C.  C.  A.  39. 

The  holder  of  a  judgment  against 
a  railroad  company  for  negligent 
death  is  not  entitled  to  preference 
over  mortgage  indebtedness  in  the 
assets  in  the  hands  of  a  receiver,  be- 
cause execution  and  levy  upon  the 
judgment  were  prevented  by  a  writ 
of  error  and  supersedeas,  on  the 
ground  that  the  surety,  having  saved 
the  property  from  seizure  and  sale, 
is  entitled  to  protection,  and  such 
creditor  can  avail  himself  of  such 
equity,  as  the  surety,  having  re- 
quired no  indemnity,  must  be  held 
to  have  signed  the  bond  on  the  per- 
sonal credit  and  resijonsibility  of  the 
principal.  'Neio  York  Security  &  x'. 
Co.  V.  Louisville,  E.  &  8t.  L.  C.  R.  Co. 
79  Fed.  Rep.  386. 

For  taxes. 

City  taxes  assessed  against  a  mu- 
tual insurance  company  after  it  had 
ceased  to  do  business  and  before  the 
filing  of  a  petition  for  the  forfeiture 
of  its  charter  are  entitled  to  a  pref- 
erence in  the  funds  in  the  hands  of  a 
receiver,  under  R.  1.  Gen.  Laws,  chap. 
50,  §  3,  providing  that  when  any  per- 
son  (which  includes  a  corporation) 


CLAIMS  AGAINST  RECEIVERSHIP  FUNDS. 


S  343 


shall  become  insolvent  town  taxes 
shall  have  preference  over  general 
debts.  Insurance  Commissioner  v. 
Commercial  Mut.  Ins.  Co.  20  R.  I.  7. 
The  absence  of  any  effectual  stat- 
utory method  for  the  enforcement  of 
tax  liens  which  have  accrued  at  the 
time  of  the  appointment  of  a  receiver 
of  an  insolvent  corporation  under  the 
New  Jersey  corporation  act  1896 
does  not  prevent  the  allowance  of 
such  liens  as  a  preferred  claim,  as 
the  possession  of  the  assets  of  the 
corporation  by  the  court  through  the 
receiver  for  distribution  is  in  itself 
a  clear  source  of  jurisdiction  for  the 
enforcement  of  the  lien.  Duryee  v. 
United  States  Credit  System  Co.  55 
N.  J.  Eq.  311. 

For  labor,  supplies,  and  other  operat- 
ing expenses. 

For  labor  claims  allowed,  see 
Putman  v.  Jacksonville,  L.  &  St.  L. 
R.  Co.  61  Fed.  Rep.  440. 

A  percentage  on  sales  allowed  an 
employee  of  a  corporation  in  addi- 
tion to  his  regular  stated  salary 
constitutes  a  part  of  his  salary,  un- 
der N.  Y.  Laws  1885,  chap.  376,  giv- 
ing employees  of  corporations  of 
which  a  receiver  has  been  appointed 
the  right  to  payment  of  wages  out 
of  the  money  which  first  comes  into 
the  receiver's  hands.  Re  Luxton  d 
B.  Co.  35  App.  Div.  243. 

A  traveling  salesman  of  a  corpo- 
ration under  a  contract  of  employ- 
ment by  the  year  is  within  N.  Y. 
Laws  1885,  chap.  376,  providing  that 
where  a  receiver  of  a  domestic  corpo- 
ration shall  be  appointed  the  wages 
of  the  "employees"  shall  be  preferred 
to  all  other  claims.  Re  Fitzgerald, 
21  Misc.  226,  Disapproving  Re 
Stryker,  73  Hun,  327. 

An  employee  of  a  corporation  un- 
der a  contract  of  employment  by  the 
year  is  not  negligent,  so  as  to  de- 
prive him  of  a  preference  for  his 
wages  on  the  appointment  of  a  re- 
ceiver a  month  after  the  expiration 
of  the  year,  where  his  wages  were 
not  due  until  the  end  of  the  year,  un- 
der N.  Y.  Laws  1885,  chap.  376,  giv- 
ing a  preference  to  the  wages  of  em- 
ployees on  the  appointment  of  a  re- 
ceiver for  a  corporation.  Ihid,  Dis- 
tinguishing Re  Scott,  148  N.  Y.  588. 


One  employed  by  a  manufacturing 
corporation  to  set  up,  take  down, 
and  repair  reapers  and  mowers,  and 
to  unpack  and  repack  them,  is  with- 
in N.  Y.  Laws  1885,  chap.  376,  pro- 
viding that  where  a  receiver  of  a  cor- 
poration organized  and  doing  busi- 
ness in  the  state,  other  than  insur- 
ance and  moneyed  corporations,  shall 
be  appointed,  the  wages  of  the  em- 
ployees, operatives,  and  laborers 
thereof  shall  be  preferred,  although 
he  was  also  employed  to  sell  ma- 
chines. Palmer  v.  Van  Santvoord^ 
17  App.  Div.  194. 

A  manager  of  a  manufacturing 
corporation,  who  does  not  engage  in 
the  performance  of  manual  labor,  or 
render  any  other  service  than  the 
general  supervision  of  the  affairs  of 
the  company,  is  not  an  employee 
within  X.  Y.  Laws  1885,  chap.  376, 
giving  a  preference  to  employees  for 
wages  in  the  funds  in  the  hands  of  a 
receiver  of  the  corporation.  Re 
American  Lace  cC-  F.  P.  Works  Direct- 
ors, 30  App.  Div.  321. 

A  traveling  salesman  for  a  firm  is 
an  employee  within  the  New  York 
statute,  and  entitled  to  a  preference 
for  his  wages,  on  a  dissolution  of  the 
firm  and  the  appointment  of  a  re- 
ceiver. Mayer  v.  Stern,  47  N.  Y. 
Supp.  965. 

Debts  due  the  employees  of  a  rail- 
road company  at  the  time  a  receiver 
of  all  its  property  is  appointed,  up- 
on the  application  of  the  mortgagee 
in  an  action  to  foreclose  his  mort- 
gage, have  a  preference  in  equity 
over  any  claim  of  the  mortgagee  in 
the  earnings  which  may  come  to  the 
receiver  while  he  is  so  operating  the 
road.  Franklin  Trust  Co.  v.  North- 
ern Adirondack  R.  Co.  11  App.  Div. 
249. 

A  receiver  appointed  to  take  pos- 
session of  and  operate  a  railroad 
pending  foreclosure  of  a  mortgage 
thereon,  and  to  make  all  rei)airs,  and 
keep  up  a  proper  standing  of  cfli- 
ciency,  and  pay  all  such  ex])pnse3 
out  of  the  assets,  ineoiiic,  and  piofits, 
is  entitled  to  a  credit  for  expendi- 
tures for  necessary  repairs  and 
taxes,  as  against  employees  of  the 
road  having  chiims  for  wages  due  at 
the  time  of  his  appointment,  there 
being   no   direction    in    tlic   order   of 

137 


§  343 


KECEIVERSHIPS— SUPPLEMENT. 


his  appointment  for  paying  such 
claims.     Ihid. 

A  receiver  appointed  in  an  action 
for  tlie  foicclosiue  of  a  mortgage  ui)- 
on  a  railroad,  to  take  possession  of 
the  road  and  operate  the  same  pend- 
ing the  action,  is  not  such  a  receiver 
as  is  contemplated  by  N.  Y.  Laws 
1885,  chap.  370,  providing  that  where 
a  receiver  of  a  corporation  shall  be 
appointed  the  wages  of  employees 
shall  be  ])referred  to  any  other  debt 
or  claim  against  the  corporation, 
and  shall  be  paid  by  the  receiver 
from  the  moneys  of  such  corporation 
which  shall  first  come  to  his  hands. 
Ibid. 

The  provision  in  IJurns's  (Ind.) 
Kev.  Stat.  1894,  §  7058,  which  makes 
all  debts  due  any  person  for  manual 
or  mechanical  labor  a  preferred 
claim  against  a  corporation  whose 
property  is  in  the  hands  of  a  receiv- 
er, does  not  include  contractors  en- 
gaged to  complete  certain  work  for 
an  agreed  sum.  Anderson  Driving 
Park  Asso.  v.  Thompson,  18  Ind. 
App.  458. 

The  usual  rule  is  to  give  claims 
for  materials  and  labor  for  six 
months  preceding  the  appointment 
of  a  receiver  of  a  railroad  corpora- 
tion preference  over  prior  bonds. 
Rutherford  v.  Pennsylvania  Midland 
R.  Co.  178  Pa.  38. 

A  creditor  of  a  corporation  on  ac- 
count of  material  and  labor  fur- 
nished more  than  six  months  prior  to 
the  appointment  of  a  receiver  can- 
not complain  of  the  action  of  the 
court  in  permitting  the  issuance  of 
receiver's  certificates  to  be  liens  on 
the  property  prior  to  the  mortgage 
bonds,  on  account  of  similar  claims 
accruing  within  the  six  months. 
lUd. 

A  chemist  performing  services  in 
his  profession  in  the  analysis  of  met- 
als for  an  iron  company  is  not  en- 
titled to  preference  as  a  laborer  to 
funds  in  the  hands  of  a  receiver  of 
such  company  under  the  Pennsyl- 
vania wages  act,  although  the  same 
work  might  have  been  done  by  any 
ordinarily  intelligent  man.  Cullum 
V.  Lickdale  Iron  Co.  5  Pa.  Dist.  R. 
622. 

Claims  for  labor  performed  for  a 
corporation  ai'e  not  entitled  to  pri- 
138 


ority  in  a  fund  in  the  hands  of  the 
receiver  of  a  copartnership,  arising 
out  of  the  sale  by  him  of  its  property 
to  the  corporation,  discharged  of  all 
liens  against  the  jaartnership,  under 
Iowa  Laws  23d  Gen.  Assem.  chap.  48, 
Iowa  Code,  §  3079.  Haw  v.  Burch 
(Iowa)  77  N.  W.  401. 

The  receiver  of  a  manufactviring 
company  can  derive  no  authority  of 
the  court,  except  in  railway  cases, 
to  pay  labor  claims  in  preference  to 
the  liens  of  mortgages.  Merchants^ 
Bank  v.  Moore,  100  Ala.  040. 

The  purchase  price  of  products 
sold,  in  the  hands  of  a  receiver,  is  a 
fund  to  which  employees  whose 
wages  accrued  within  six  months 
have  priority.  Drennen  v.  Mercan- 
tile Trust  d  Deposit  Co.  115  Ala.  592, 
39  L.  R.  A.  023. 

Employees  of  a  corporation  in  the 
hands  of  a  receiver  on  foreclosure  of 
a  mortgage  have  a  perfect  equity  m 
priority  of  payment  of  wages  earned 
within  six  months  before  the  receiv- 
er's appointment,  v/hen  the  funds 
from  which  they  ought  to  have  been 
paid  have  been  used  for  the  benefit 
of  the  bondholders,  even  if  the  terms 
of  the  mortgage  embrace  income. 
Ibid. 

Labor  necessary  to  the  continua- 
tion of  the  business  of  a  corporation 
does  not  entitle  the  workmen  to  pri- 
ority of  payment  out  of  the  assets 
of  a  receiver  on  foreclosure  of  a 
mortgage,  if  the  labor  is  not  shown 
to  have  been  to  the  advantage  of  the 
bondholders,  or  necessary  in  conser- 
vation of  their  interests,  or  if  the 
receiver  has  not  realized  any  income 
out  of  which  the  wages  should  be 
paid.     Ibid. 

Mere  casual  and  incidental  re- 
pairs to  remedy  defects  caused  by 
current  use  are  not  improvements  or 
betterments  within  the  rule  which 
gives  priority  to  wages  out  of  the  as- 
sets of  a  receiver  of  a  corporation 
when  funds  that  should  have  been 
used  to  pay  wages  have  gone  into 
improvements.     Ibid. 

Assignees  of  employees  may  have 
their  priority  of  payment  out  of  the 
assets  of  a  receiver.     Ibid. 

A  receiver  of  an  insolvent  corpo- 
ration appointed  under  the  general 
equity  powers  of  the  court  will  rec- 


CLAIMS  AGAINST    RECEIVERSHIP  FUNDS. 


343 


ognize  and  enforce  preferences  which 
would  be  accorded  to  taxes  and  debts 
due  to  workmen  for  labor  in  a  legal 
proceeding.  Jones  v.  Arena  Publish- 
ing Co.  171  Mass.  22. 

A  purchaser  of  partnership  prop- 
erty at  a  sale  under  foreclosure  of  u 
deed  of  trust,  while  the  property  was 
in  the  hands  of  a  receiver  appointed 
in  an  action  to  dissolve  the  firm,  is 
estopped  to  assert  his  title  to  defeat 
a  charge  upon  the  property  in  favor 
of  persons  who  furnished  the  sup- 
plies to  the  receiver  necessary  to  the 
operation  of  the  business  of  the  firm, 
while  the  property  remained  in  his 
possession  with  the  consent  of  the 
purchaser  pending  an  appeal  from  an 
order  directing  him  to  turn  the  same 
over  to  the  purchaser.  Knicker- 
bocker  v.  McKindley  Coal  &  M.  Co. 
172  111.  535,  Affirming  67  111.  App. 
291. 

The  lien  of  employees  of  a  firm, 
for  labor  performed  by  them,  is  su- 
perior to  the  lien  of  a  mortgage  on 
personal  property  belonging  to  the 
firm,  where  the  partnership  goes  in- 
to the  hands  of  a  receiver,  under  2 
Starr.  &  C.  (111.)  Stat.  p.  2580,  pro- 
viding that  when  the  business  of  any 
firm  is  put  into  the  hands  of  a  re- 
ceiver the  debts  owing  to  laborers  for 
labor  shall  be  treated  as  prefer  re. 1 
claims  and  be  first  paid  in  full. 
Dolese  v.  Shepard  (111.)  2  Chic.  L. 
J.  Wkly.  478,  Citing  Reynolds  v. 
Black,  91  Iowa,  1;  Piatt  v.  Union  P. 
R.  Co.  99  U.  S.  48,  25  L.  ed.  424 ; 
Walker  v.  Whitehead,  10  Wall.  314, 
21  L.  ed.  357. 

The  amount  due  for  material  used 
in  the  construction  of  rolling  stock 
is  entitled  to  priority  over  the  mort- 
gage. Ht.  Louis,  A.  &  a.  R.  Co.  v. 
Crews,  75  111.  App.  490. 

And  so  as  to  labor  and  material 
necessary  to  keep  a  railroad  a  going 
concern.  Cleveland,  C.  &  S.  R.  Co. 
V.  Knickerbocker  Trust  Co.  80  Fed. 
Eep.  73 ;  Southern  R.  Co.  v.  Carnegie 
Steel  Co.  7G  Fed.  Rep.  492,  42  U.  S. 
App.  145,  22  C.  C.  A.  289. 

And  as  to  the  cost  of  replacing  an 
old  bridge  where  it  has  become  un- 
safe. Cleveland,  C.  &  S.  R.  Co.  v. 
Knickerbocker  Trust  Co.  80  Fed. 
Rep.  73 ;  Southern  R.  Co.  v.  Ameri- 
can Brake  Co.  70  Fed.  Rep.  502,  42 


U.  S.  App.  162,  22  C.  C.  A.  298; 
Southern  R.  Co.  v.  Adams,  42  U.  S. 
App.  167,  76  Fed.  Rep.  504,  22  C.  C. 
A.  300. 

A  corporation  which  assumes  the 
operation  of  the  railroad  of  another 
corporation  by  its  lessee,  all  the 
earnings  of  both  roads  being  depos- 
ited in  a  common  fund  out  of  which 
wages  and  supplies  are  purchased 
generally  by  the  lessee  for  the  bene- 
fit of  both  roads,  is  not  entitled  to  a 
lien  for  supplies  and  labor  furnished 
for  the  amount  shown  to  be  due  from 
the  company  for  which  such  road  is 
operated,  upon  its  assets  in  the 
hands  of  a  receiver,  but  such  amount 
is  for  money  advanced.  United 
States  Trust  Co.  v.  Western  Con- 
tract Co.  54  U.  S.  App.  67,  81  Fed. 
Rep.  454,  20  C.  C.  A.  472. 

The  compensation  of  the  manager 
and  of  the  secretary  and  treasurer 
of  a  corporation  is  not  within  Va. 
Code,  §  2485,  giving  a  lien  upon  the 
personal  property  of  a  mining  or 
manufacturing  corporation  for 
wages,  so  as  to  entitle  him  to  a  lien 
upon  its  assets  in  the  hands  of  a  re- 
ceiver. Fidelity  Ins.  Trust  d  S.  D. 
Co.  v.  Roanoke  Iron  Co.  81  Fed.  Rep. 
439. 

A  transfer  by  an  iron  company,  of 
which  a  receiver  is  afterwards  ap- 
pointed, of  iron,  accompanied  bj'  a 
bill  of  lading,  to  factors  who  make 
advances  thereon  and  are  to  sell  the 
same  and  account  therefor  to  the 
company,  deprives  the  company  of 
any  property  in  the  iron,  to  which 
the  lien  given  by  Va.  Code,  §  2485, 
upon  the  personal  property  of  a  man- 
ufacturing company  for  supplies  can 
attach.     Ibid. 

Labor  claims  against  a  railroad, 
which  accrued  more  than  six  moniiis 
before  the  appointment  of  a  receiver, 
cannot  be  given  priority  of  payment 
out  of  the  funds  in  his  hands. 
Thomas  v.  Cincinnati,  V.  ().  iG  T.  P. 
R.  Co.  91  Fed.  Rep.  195. 

Services  of  a  laborer  in  repairs 
and  iini)rovem(>iits  ujion  a  water- 
wf)rks  cannot  be  given  j)reference 
to  a  mortgage  lien  in  the  assets 
ill  the  hands  of  a  receiver,  where 
there  is  no  diversion  of  income.  At- 
lantic Trust  Co.  v.  Woodhriilgc  Canal 
it-  Irrig.  Co.  79  Fed.  Rep.  39. 

139 


342 


RECEIVERSHIPS— SUPPLEMENT. 


Expenses  of  proceedings  to  record 
a  mechanic's  lien  cannot  be  <i;iven 
preference  in  funds  in  the  hands  of 
a  receiver,  where  all  claim  to  prefer- 
ence is  based  upon  the  ground  that 
the  nature  of  the  services  rendered 
gives  them  an  equity  superior  to  that 
possessed  by  the  bondholders,  and 
not  upon  the  fact  of  the  lien  ac- 
quired. Atlantic  Trust  Co.  v.  Wood- 
hridge  Canal  c£  Irrig.  Co.  86  Fed. 
Rep.  975. 

Services  of  a  laborer  in  construc- 
tion of  waterworks  cannot  be  given 
a  preference  in  the  assets  in  the 
hands  of  a  receiver  to  a  mortgage 
lien.  Atlantic  Trust  Co.  v.  Wood- 
bridge  Canal  dc  Irrig.  Co.  79  Fed. 
Rep.  39. 

Preference  for  the  construction  of 
an  extension  canal  system  cannot 
be  given  in  funds  in  the  hands  of  a 
receiver  of  the  canal  company,  on 
the  ground  that  they  were  incurred 
to  keep  the  system  a  going  concern, 
because  prior  to  such  extension  the 
company  was  not  a  paying  concern, 
where  it  does  not  appear  that  the 
property  was  thereby  placed  upon  a 
paying  basis.  Atlanta  Trust  Co.  v. 
Woodbridge  Canal  d  Irrig.  Co.  86 
Fed.  Rep.  975. 

A  claim  for  services  rendered 
purely  in  constructing  an  addition 
to  a  system  of  canals  which  was 
never  completed  or  in  operation  can- 
not be  given  preference  in  funds  in 
the  hands  of  a  receiver  over  claims 
of  bondholders.     Ibid. 

Services  or  materials  rendered  in 
extending  a  system  of  canals  owned 
by  a  corporation  are  not  necessary 
to  the  preservation  of  the  existing 
canals  and  ditches^  so  as  to  give  a 
claim  therefor  priority  in  the  funds 
in  the  hands  of  a  receiver  appointed 
in  a  mortgage  foreclosure.     Ibid. 

Services  of  a  laborer  in  the  opera- 
tion of  a  waterworks,  keeping  it  a 
going  concern,  may  be  entitled  to 
preference  even  out  of  the  corpus  of 
the  assets  in  the  hands  of  a  receiver 
over  a  mortgage  lien.  Atlantic 
Trust  Co.  V.  Woodbridge  Canal  & 
Irrig.  Co.  79  Fed.  Rep.  39. 

A  lien  for  laborer's  wages  taking 
precedence  of  mortgages  in  assets  in 
a  receiver's  hands  under  the  Vir- 
ginia statute  is  invalid  when  based 
140 


upon  notes  given  by  a  corporation 
for  labor,  and  there  is  nothing  to 
show  when  the  labor  was  performed 
or  when  the  claims  therefor  were 
due,  as  the  statute  does  not  contem- 
plate that  the  company  may  give  its 
note,  and  that  when  such  note  is  due 
ninety  days  shall  be  allowed  there- 
after to  file  a  memorandum  of  the 
lien.  Liberty  Perpetual  Bldg.  &  L. 
Co.  V.  M.  A.  Furbush  <f-  ^on  Mach. 
Co.  42  U.  S.  App.  031,  80  Fed.  Rep. 
031,  26  C.  C.  A.  38,  Citing  Boston  v. 
Chesapeake  &  O.  It.  Co.  76  Va.  182; 
ShacJdeford  v.  Beck,  80  Va.  573; 
Mayes  v.  Ruffners,  8  W.  Va.  384; 
Phillips  V.  Roberts,  26  W.  Va.  783; 
Davis  V.  Livingston,  29  Cal.  283 ; 
Hooper  v.  Flood,  54  Cal.  218;  Noll 
V.  Swineford,  0  Pa.  187;  Wiiman  v. 
Walker,  9  Watts  &  S.  186 ;  Thomas  v. 
Barber,  10  Md.  380;  Delaicare  R. 
Constr.  Co.  v.  Davenport  c6  tit.  P.  R. 
Co.  46  Iowa,  406;  Valentine  v.  Raw- 
son,  57  Iowa,  179;  Lyon  v.  Xew  York 
&  N.  E.  R.  Co.  127  Mass.  101 ;  Mul- 
loy  V.  Lawrence,  31  Mo.  583 ;  Cook  v. 
Vreeland,  21  111.  431;  Vane  v.  New- 
combe,  132  U.  S.  220,  33  L.  ed.  310; 
Van  Stone  v.  Stillwell  d  B.  Mfg.  Co. 
142  U.  S.  128,  35  L.  ed.  901. 

Services  in  the  construction  of 
lateral  ditches  from  the  main  canals 
of  an  irrigating  system  are  not  en- 
titled to  preference  over  a  mortgage 
debt  in  the  assets  in  the  hands  of  a 
receiver,  on  the  ground  that  such 
laterals  are  extended  from  time  to 
time  as  required  in  the  actual  opera- 
tion of  such  system.  California 
Safe  Dep.  &  T.  Co.  v.  Yakima  Invest. 
Co.  82  Fed.  Rep.  542. 

Services  of  a  civil  engineer,  per- 
formed in  the  original  construction 
of  the  works  of  an  irrigating  com- 
pany, do  not  constitute  a  claim  en- 
titled to  preference  over  a  mortgage 
debt  in  the  funds  in  the  hands  of  a 
receiver.     Ibid. 

Employees  are  not  creditors  at 
large,  but,  as  against  mortgagees, 
will  be  preferred  out  of  earnings  and 
corpus.  Duncan  v.  Chesapeake  <& 
0.  R.  Co.  (Va.)  9  Am.  Ry.  Rep.  386. 

The  court  refuses  to  give  claims 
for  labor  preference  to  all  others. 
Case  v.  Fredrickson,  63  Wis.  501. 

The  lien  given  by  Va.  Code,  § 
2485,  to  supply  creditors  in  prefer- 


CLAIMS  AGAINST    RECEIVERSHIP  FUNDS. 


S  343 


ence  to  any  lien  by  deed  of  trust, 
mortgage,  hypothecation,  sale,  or 
conveyance  previously  made,  in  the 
assets  of  a  receivership,  takes  prece- 
dence of  a  pledge  to  a  warehouse 
company  to  secure  advances  made 
after  the  passage  of  such  statute. 
Fidelity  Ins.  Trust  d  S.  D.  Co.  v. 
Roanoke  Iron  Co.  81  Fed.  Rep.  439. 

Goods  furnished  a  commissary 
store  conducted  by  an  iron  company, 
upon  which  it  frequently  gave  its 
employees,  in  payment  of  their 
wages,  orders  for  goods  and  supplies, 
are  not  within  Va.  Code,  §  2485,  giv- 
ing a  lien  upon  the  property  of  a 
mining  and  manufacturing  com- 
pany for  supplies  necessary  to  its 
operation,  so  as  to  give  a  lien  upon 
its  assets  in  a  receivers'  hands, 
where  the  company  is  located  in  a 
city  where  supplies  of  every  kind  are 
readily  accessible  to  its  employees, 
and  not  in  so  remote  a  locality  that 
furnishing  by  it  of  supplies  to  its 
employees  is  necessary.     Ihid. 

Freight  charges  on  supplies  by  a 
railroad  company  against  a  manu- 
facturing company,  of  which  a  re- 
ceiver is  afterwards  appointed,  are 
not  within  Va.  Code,  §  2485,  giving 
to  a  person  furnishing  supplies  to  a 
mining  or  manufacturing  company  a 
prior  lien  upon  its  personal  property 
to  the  liens  of  mortgages  or  other 
transfers.     IMd. 

The  right  of  a  preference  over 
mortgage  bondholders  of  one  furnish- 
ing supplies  to  a  cable  street-railway 
company  in  Colorado  is  not  waived 
by  suing  such  company  in  the  courts 
of  New  York  before  receivers  are  ap- 
pointed, although  the  suit  is  prose- 
cuted to  judgment  after  his  appoint- 
ment. Central  Trust  Co.  v.  Clark,  49 
U.  S.  App.  453,  81  Fed.  Rep.  209,  26 
C.  C.  A.  397. 

Priority  may  be  given  in  funds  in 
the  hands  of  a  receiver  to  supply 
bills  furnished  shortly  before  or  aft- 
er his  appointment,  although  he 
was  originally  appointed  upon  the 
application  of  a  stock  and  Ijondhold- 
er  merely  to  hold  the  system  intact 
and  protect  the  company  from  its 
creditors,  where  the  mortgagees  have 
come  in,  asked  for  a  receiver,  and 
had  the  existing  receivership  modi- 
fied so  as  to  give  it  retroactive  eilect 


as  of  the  time  of  its  original  creation. 
ISiew  England  R.  Co.  v.  Carnegie 
Steel  Co.  33  U.  S.  App.  491,  75  Fed. 
Rep.  54,  21  C.  C.  A.  219. 

A  provision  for  the  sequestration 
by  foreclosure  of  the  income  of  a 
railroad  for  the  benefit  of  the  bond- 
holders will  not  prevent  the  income 
from  being  charged  with  the  prior 
equity  of  unpaid  supply  claimants 
until  a  strict  foreclosure  or  a  sale  of 
the  road.  Virginia  &  A.  Coal  Co.  v. 
Central  R.  &  Bkg.  Co.  170  U.  S.  355, 
42  L.  ed.  1008. 

Supplies  furnished  a  lessee  of  a 
road  are  entitled  to  a  preference  over 
payments  made  by  such  lessee  on  the 
interest  of  outstanding  bonds  of  the 
lessor.  Southern  R.  Co.  v.  Tillett, 
42  U.  S.  App.  173,  76  Fed.  Rep.  507, 
22  C.  C.  A.  303. 

Persons  selling  personal  property 
to  a  receiver  carrying  on  the  busi- 
ness of  a  corporation,  with  knowl- 
edge of  the  order  of  court  under 
which  he  is  acting,  cannot  claim  a 
return  of  a  portion  of  the  property 
not  used,  but  stand  on  the  same  foot- 
ing as  other  creditors  who  furnished 
supplies.  Lewis  v.  Linden  Steel  Co. 
27  Pitts.  L.  J.  N.  S.  395. 

Labor  and  materials  used  in  re- 
building the  pier  and  abutments  of  a 
railroad  bridge  are  within  an  order 
directing  receivers  to  pay  out  of  net 
income  claims  for  materials  and  sup- 
plies accruing  within  six  months. 
Cleveland  C.  £  S.  R.  Go.  v.  Knicker- 
bocker Trust  Co.  86  Fed.  Rep.  73. 

Supplies  for  the  purpose  of  recon- 
structing a  railroad  cannot  be  given 
preference  in  the  assets  in  a  receiv- 
er's hands  to  a  mortgage,  even  on  the 
ground  that  they  must  have  en- 
hanced the  value  of  the  bondholders' 
security.  Lackaicanna  Iron  &  C.  Co. 
V.  Farmers'  Loan  d  T.  Co.  52  U.  S. 
App.  91,  79  Fed.  Rep.  202,  24  C.  C. 
A.  487 ;  Morgan's  L.  <6  T.  R.  d  S.  S. 
Co.  V.  Farmers'  Loan  d  T.  Co. 
52  U.  S.  App.  107,  79  Fed.  Rep.  210, 
24  C.  C.  A.  495;  Southern  Develop- 
ment Co.  V.  Farmers'  Loan  d  T.  Co. 
52  U.  S.  App.  HI,  79  Fed.  Rep.  212, 
24  C.  C.  A.  497. 

The  court  may  reject  the  claim  of 
a  mining  corporation,  which  has  no 
basis  exee[)t  in  ctjuity,  to  the  pay- 
ment out  of  tiie  assets  in  llie  lianda 

141 


§  342 


llECEIVEESHIPS— SUPPLEMENT. 


of  the  receiver  of  a  railroad  corpora- 
tion of  a  bill  for  coal  furnished  to 
the  company'  within  three  months  be- 
fore the  appointment  of  the  receiver, 
where  the  mining  company  is  prac- 
tically identical  with  another  rail- 
road company  which  has  assumed 
the  payment  of  the  current  expenses 
of  the  first  railroad  company,  al- 
though the  two  are  legally  distinct. 
Guarantee  Trust  tC-  S.  D.  Co.  v.  I'hila- 
ih'lphia  It.  tt-  .Y.  E.  li.  Co.  31  App. 
Div.  511. 

Receivers  of  a  railroad  company, 
■under  an  order  directing  payment  of 
claims  for  supplies  furnished  on  or 
after  a  certain  date,  practically  six 
months  before  the  receivership,  can- 
not pay  claims  incurred  for  supplies 
delivered  to  a  carrier,  consigned  to 
the  railroad  company,  before  such 
date,  but  falling  due  thereafter. 
Belknap  v.  Central  Trust  Co.  47  U. 
S.  App.  GG3,  sub  nom.  Central  Trust 
Co.  V.  East  Tennessee,  V.  d  G.  B.  Co. 
80  Fed.  Rep.  624,  26  C.  C.  A.  30, 

Claims  for  advertising  cannot  be 
given  precedence  of  a  mortgage  debt 
as  for  supplies.     Ibid. 

Money  in  the  hands  of  a  receiver 
of  an  insolvent  corporation  derived 
solely  from  collection  of  book  ac- 
counts after  his  appointment,  can- 
not be  subjected  to  a  trust  in  favor 
of  one  who  furnished  the  corpora- 
tion's employees  with  supplies,  un- 
der an  agreement  for  the  retention 
by  the  company  of  enough  of  their 
wages  to  pay  for  the  supplies. 
Arnold  v.  Porter,  122  N.  C.  242. 

Receivers'  debts  which  can  displace 
contract  liens  upon  the  property  of 
a  railroad  must  be  the  necessary 
operating  expenses.  Belknap  v. 
Central  Trust  Co.  47  U.  S.  App.  663, 
sub  nom.  Central  Trust  Co.  v.  East 
Tennessee,  V.  &  G.  R.  Co.  80  Fed. 
Rep.  624,  26  C.  C.  A.  30. 

The  doctrine  preferring  claims 
against  a  railroad  company  to  mort- 
gage indebtedness  out  of  the  assets 
in  the  hands  of  a  receiver  cannot  be 
extended  to  any  other  claims  than 
those  growing  out  of  debts  neces- 
sarily incurred  in  keeping  the  road 
in  operation.  New  York  Seeurity  & 
T.  Co.  v.  Louisville,  E.  d  St.  L.  C.  B. 
Co.  79  Fed.  Rep.  386. 

Where  the  expenses  are  limited 
142 


to  the  income  the  court  will  not  make 
them  a  lien  superior  to  the  mort- 
gage. United  States  Trust  Co.  v. 
New  York,  W.  S.  d  B.  B.  Co.  25  Fed. 
Rep.  800. 

Plaintiff  in  an  action  to  foreclose 
a  mortgage  given  by  a  railroad  com- 
pany to  secure  its  bonds,  who  ob- 
tains an  order  appointing  a  receiver 
and  providing  that  he  may  pay  in- 
debtedness theretofore  incurred  for 
current  expenses  of  operation  dur- 
ing the  three  months  next  preceding 
the  date  of  the  order,  assents  to  the 
payment  of  such  debts  out  of  the 
property  in  court  as  in  equity  should 
be  so  paid.  Guarantee  Trust  d  S. 
D.  Co.  V.  Philadelphia,  B.  d  N.  E.  B. 
Co.  31  App.  Div.  511. 

Expenses  incurred  after  the  sale 
cannot  be  made  a  lien  antedating 
the  decree.  Bassick  Min.  Co.  v. 
Schoolfield,  15  Colo.  370. 

Expenses  of  operation  are  entitled 
to  priority  over  a  mortgage.  Farm- 
ers' d  M.  Nat.  Bank  v.  Waco  Electric 
B.  d  Light  Co.  (Tex.  Civ.  App.)  36 
S.  W.  131 :  Be  Atlas  Iron  Constr.  Co, 
19  App.  Div.  415. 

And  so  as  to  the  lien  of  a  land- 
lord. Read  v.  Corcoran,  1  Ir.  Ch. 
Rep.  235. 

The  current  operating  expenses  of 
mortgaged  railroads  for  a  limited 
time  before  the  appointment  of  a  re- 
ceiver under  a  bill  to  foreclose  the 
mortgage  may  be  charged  upon  the 
income  earned  during  the  receiver- 
ship, or  upon  the  corpus  of  the  prop- 
erty, as  liens  superior  to  that  of  the 
mortgage.  Ames  v.  Union  P.  B.  Co. 
74  Fed.  Rep.  335. 

And  this  includes  expenses  for  a 
limited  time  before  the  bill  was  tiled. 
Davis  V.  Denby,  3  Madd.  170;  Ames 
v.  Union  P.  R.  Co.  74  Fed.  Rep.  335. 

Operating  expenses  incurred  by  a 
railroad  company  within  a  reason- 
able time  before  the  appointment  of 
a  receiver  in  a  foreclosure  suit, 
whether  before  or  after  the  execution 
of  the  trust  deed,  are  entitled  to  a 
preference  over  the  trust  deed,  where 
the  earnings  subsequently  diverted 
to  pay  for  permanent  improvements, 
together  with  those  in  the  master's 
hands,  exceed  the  amount  thereof. 
Central  Trust  Co.  v.  Utah  C.  B.  Co. 
16     Utah,     12,     Citing    Fosdick    v. 


CLAIMS  AGAINST    RECEIVERSHIP  FUNDS. 


§  343 


Schall,  99  U.  S.  235,  25  L.  ed.  339; 
Burnham  v.  Bowen,  111  U.  S.  776, 
28  L.  ed.  590;  Union  Trust  Co.  v. 
Souther,  107  U.  S.  591,  27  L.  ed.  488; 
Litzenbcrger  v.  Jarvis-Conklin  Trust 
Co.  8  Utah,  10;  Farmers'  Loan  &  T. 
Co.  V.  Kansas  City,  W.  c6  xY.  W.  R. 
Co.  53  Fed.  Hep.  182. 

Debts  for  coal  delivered  to  a  rail- 
road company  for  the  purpose  of  the 
operation  of  the  road  are  current 
debts  for  operating  expenses,  and  are 
a  preferred  charge  upon  the  income 
of  the  receivership.  Virginia  &  A. 
Coal  Co.  V.  Central  It.  <&  Bkg.  Co.  30 
U.  S.  App.  203,  sub  nom.  Clark  v. 
Central  li.  d  Bkg.  Co.  60  Fed.  Rep. 
803,  14  C.  C.  A.  112. 

That  coal  delivered  on  the  lines  of 
a  railroad  and  used  in  the  operation 
of  the  road  was  purchased  by  the 
lessee  of  the  road,  which  was  bound 
by  the  terms  of  the  lease  to  pay  cur- 
rent expenses,  does  not  affect  the 
right  of  the  seller  of  the  coal  to  a 
preference  in  payment  therefor  out 
of  the  income  derived  by  a  receiver 
subsequently  appointed  for  the  les- 
sor.    Ibid. 

Claims  for  coal  purchased  and 
used  by  the  railroad  company  in  the 
operation  of  leased  lines  under  its 
control,  before  the  appointment  of 
a  receiver,  are  entitled  to  the  same 
preference  in  the  income  of  the  re- 
ceivership as  claims  for  coal  actual- 
ly used  on  the  company's  own  line. 
Ibid. 

A  claim  for  coal  purchased  for  and 
used  in  operating  a  railroad,  when 
the  parties  expected  payment  there- 
of out  of  the  current  earnings,  is  not 
excluded  from  preference  over  a 
mortgage  on  the  road  in  case  of  a 
subsequent  receivership,  because  of 
the  fact  that  the  purchase  was  not 
made  by  the  owner  of  the  road,  but 
by  another  party  who  was  in  control 
and  operation  thereof  under  a  lease, 
without  protest  or  interference  by 
the  bondholders.  Virginia  cG  .4.  Coal 
Co.  V.  Central  It.  <t  Bkg.  Co.  170  U. 
S.  355,  42  L.  ed.  1008. 

Preference  over  a  mortgage  debt 
will  not  be  denied  a  claim  for  a  cable 
furnished  a  cable  street  railway,  be- 
cause it  was  purchased  twenty-six 
months  before  the  appointment  of  a 
receiver,  where  the  seller  commenced 


suit  about  twelve  months  thereafter, 
and  recovered  judgment  after  the  ap- 
pointment of  the  receiver,  as  the 
period  of  time  between  the  com- 
mencement of  such  action  and  the 
appointment  of  the  receiver  cannot 
properly  be  included  in  computing 
the  time  of  delay  in  making  the 
claim.  2sew  York  Guaranty  cC  In- 
demnity Co.  V.  Broderick  <&  B.  Rope 
Co.  48  U.  S.  App.  008,  sub  nom.  New 
York  Guaranty  d  Indemnity  Co.  v. 
Tacoma  R.  d  Motor  Co.  83  Fed.  Rep. 
305,  27  C.  C.  A.  550. 

A  claim  for  a  new  gear  wheel  and 
pinion  necessary  to  the  operation  of 
a  cable  railway  and  to  keep  it  a  go- 
ing concern  falls  within  the  cate- 
gory of  claims  generally  recognized 
as  of  a  preferential  character  and 
equitably  entitled  to  be  paid  in  ad- 
vance of  the  claims  of  mortgage 
bondholders, — especially  where  such 
wheel  and  pinion  have  been  mort- 
gaged in  thirty  days  after  their  de- 
livery to  meet  the  interest  obliga- 
tions of  such  mortgage  bondholders. 
Central  Trust  Co.  v.  Clark,  49  U.  S. 
App.  453,  81  Fed.  Rep.  269,  20  C.  C. 
A. 397. 

One  intervening  in  a  receivership 
of  a  street-railway  company  to  in- 
terpose a  claim  for  preference  over 
the  mortgage  indebtedness,  because 
of  the  circumstances  imder  which 
machinery  was  supplied  to  such  com- 
pany, must  do  equity  by  allowing  the 
mortgage  bondholders  to  show  that 
they  were  not  benefited  to  the  extent 
of  the  full  value  of  the  machinery 
supplied,  by  reason  of  failure  to  de- 
liver the  same  within  the  contract 
period,  notwithstanding  a  judgment 
obtained  in  a  state  court  against  the 
company  for  the  full  contract  price, 
as,  in  order  to  obtain  a  preference, 
the  intervener  must  himself  go  be- 
hind such  judgment  and  show  the 
origin  and  nature  of  the  demand  on 
which  it  rests.     Ibid. 

W'licn  track  rentals  are  not  al- 
lowed out  of  proceeds  of  foreclosure 
as  against  mortgagees.  Louisville 
d  N.  It.  Co.  V.  Central  Trust  Co.  59 
U.  S.  App.  694,  87  Fed.  Rep.  500,  31 
C.  C.  A.  89;  Mather  llumauc  Stock 
Transp.  Co.  v.  Anderson,  40  U.  S. 
App.  138,  70  Fed.  Rep.  164,  22  C.  C. 
A.  109. 

148 


§  350 


RECEIVERSHIPS— SUPPLEMENT. 


The  claim  of  a  sleeping-car  com- 
pany under  a  contract  providing  that 
it  shall  furnish  cars  for  the  use  of 
a  railroad  company,  remaining  the 
owner,  and  having  the  right  to  col- 
lect fares  for  seats  and  berths,  the 
railroad  company  to  pay  a  certain 
sum  per  mile  for  each  mile  run  oy 
such  cars, — is  one  for  car  rental, 
which  cannot  be  given  priority  over 
a  mortgage  debt,  in  funds  in  the 
hands  of  a  receiver.  Pullman's  Pal- 
ace-Car Co.  V.  American  Loan  d  T. 
Co.  55  U.  S.  App.  170,  84  Fed.  Rep. 
18,  28  C.  C.  A.  2G3. 

The  rental  of  a  tunnel  under  a 
lease  adopted  by  the  court  and  its 
receivers,  and  declared  to  be  essen- 
tial to  the  receivership  and  opera- 
tion of  the  road,  is  properly  given  a 
preferential  lien  upon  the  assets  in 
the  hands  of  the  receivers.  Central 
Trust  Co.  V.  Continental  Trust  Co. 


58  U.  S.  App.  G04,  8G  Fed.  Rep.  517. 
30  C.  C.  A.  235. 

Rentals  of  telegraph  poles,  in  pos- 
session of  and  retained  by  a  third 
person  jjcnding  a  dispute  as  to 
.whether  or  not  they  are  within  the 
terms  of  a  mortgage  under  fore- 
closure, upon  such  .person's  giving 
bond  to  the  mortgagee  to  pay  him 
such  rentals  in  case  the  decision  is 
in  his  favor,  will  belong  to  a  corpo- 
ration to  whom  the  receiver  ap- 
pointed for  the  mortgaged  property 
has  leased  the  entire  property  under 
permission  of  the  court  for  a  fixed 
comjiensation,  and  not  to  the  mortga- 
gee, in  case  they  are  determined  to 
be  within  the  terms  of  the  mortgage. 
Western  U.  Teleg.  Co.  v.  Boston  Safe 
Dep.  &  T.  Co.  87  Fed.  Rep.  788. 

Rentals  due  before  appointment 
are  not  preferential  over  lien  credit- 
ors. Grand  Trunk  R.  Co.  v.  Central 
Vermont  R.  Co.  90  Fed.  Rep,  103. 


Page  582,  sec.  350. — Compensation. 


A  receiver  who  after  the  death  of 
a  coreceiver  continues  to  act,  and 
whose  acts  were  ratified  by  the  court, 
is  entitled  to  commissions.  Bur- 
roughs V.  Bunnell,  70  Md.  18. 

A  receiver  is  entitled  to  a  com- 
mission on  deposit  notes  coming  into 
his  hands  and  surrendered  on  order 
of  court.  Van  Buren  v.  Chenango 
Count ij  Mut.  Ins.  Co.   12  Barb.  671. 

Receivers  are  usually  allowed  such 
compensation  as  is  allowed  by  law  or 
by  contract  between  individuals  for 
similar  services,  to  be  ascertained  by 
proof,  but  not  from  opinions  of  wit- 
nesses. Stretch  v.  Gowdey,  3  Tenn. 
Ch.  565. 

A  receiver  is  entitled  to  commis- 
sions on  all  property  (personal)  of 
which  he  became  possessed  and 
which  he  transferred.  Bennett  v. 
Chapin,  3  Sandf.  673. 

Where  the  Federal  court  has 
passed  upon  and  allowed  a  receiver's 
compensation,  it  will  not  entertain 
a  petition  for  an  allowance  based  on 
a  finding  in  the  state  court  in  an- 
other case.  Re  Hinckley,  3  Fed.  Rep. 
556. 

Partial  or  intermediate  allowances 
144 


of  compensation  to  a  receiver,  or  his 
counsel,  of  an  insolvent  corporation, 
clothed  with  the  duty  of  winding  up 
its  affairs  with  convenient  speed, 
should  be  materially  less  than  the 
value  of  the  services  rendered  by  the 
receiver  prior  to  the  making  of  such 
allowances;  and  the  final  allowance 
made  at  the  close  of  the  receivership 
should  be  so  adjusted  tliat  the  re- 
ceiver will  have  fair  and  just  com- 
pensation for  his  services  as  a  whole, 
notwithstanding  the  inadequacy  of 
the  partial  or  intermediate  allow- 
ances considered  by  themselves. 
Maxivell  v.  Wilmington  Dental  Mfg. 
Co.  82  Fed.  Rep.  214. 

The  receiver  of  a  mutual  insur- 
ance company  is  entitled  to  com- 
missions on  the  value  of  deposits 
or  premium  notes  coming  into  his 
hands.  Van  Buren  v.  Chenango 
County  Mut.  Ins.  Co.  12  Barb.  671. 

The  want  of  foresight  in  regard 
to  the  future  development  of  the 
business  is  not  ground  for  refusing 
compensation  to  a  receiver.  Cowd- 
rey  v.  Galveston,  H.  &  II.  R.  Co.  1 
Woods,  331. 

A  compensation  of  8   per  cent  is 


RECEIVERS'    COMPENSATION. 


§  350 


not  uniform^  but  it  varied  with  each 
case.  Abbott  v.  Baltimore  d  R. 
Steam  Packet  Co.  4  Md.  Ch.  310. 

The  court  has  a  right  to  fix  tlie  ex- 
penses of  a  receivership  when  the 
appointment  is  made.  Howell  v. 
Daicson,  L.  R.  13  Q.  B.  Div.  07. 

The  compensation  of  a  temporary 
receiver  of  a  corporation  appointed 
under  N.  Y.  Code  Civ.  Proc.  §  2423, 
to  collect  and  receive  debts,  preserve 
the  property,  and  sell  or  otherwise 
dispose  of  the  property  as  directed 
by  the  court,  and  collect  and  preserve 
proceeds,  is  not  confined  to  cash  re- 
ceived by  him,  but  may  be  reckoned 
at  not  more  than  21,-3  per  cent  of  the 
value  of  other  property  coming  into 
his  hands,  under  §  3320,  providing 
for  the  papnent  to  receivers  as  com- 
missions not  exceeding  5  per  cent  of 
the  "sums  received  and  disbursed" 
by  him.  lie  Warren  E.  Smith  Co.  31 
App.  Div.  39. 

The  compensation  of  a  receiver 
and  the  expenses  of  the  receivership 
will  not  be  deferred  to  the  payment 
of  existing  liens,  where  the  appoint- 
ment of  the  receiver  is  legal,  al- 
though it  was  made  without  preju- 
dice to  the  pre-existing  liens,  and 
the  assets  are  insufficient  to  pay 
them  and  the  expenses  of  the  receiv- 
ership. Gallagher  v.  Gingrich,  105 
Iowa,  237. 

In  this  case  the  receiver  was  al- 
lowed poundage  though  his  report 
had  been  delayed  at  the  request  of 
the  parties.  Purcell  v.  Woodley,  10 
Ir.  Eq.  Rep.  422. 

A  receiver  of  a  corporation  is  en- 
titled to  compensation  for  his  serv- 
ices rendered  after  the  revocation  of 
his  appointment,  where  he  has  no  of- 
ficial notice  of  such  revocation. 
'New  Birmingham  Iron  &  Land  Co. 
V.  Blevins  ( Tex.  Civ.  App. )  40  S.  W. 
829. 

Where  the  object  of  a  consent  is  to 
appoint  a  receiver  over  an  outstand- 
ing estate  the  salary  should  be  fixed 
by  the  consent.  Burke  v.  Burke, 
Flan.  &  K.  89. 

An  allowance  to  a  receiver  of  ho- 
tel property,  being  10  per  cent  of  the 
receipts  of  the  business  and  amount- 
ing to  about  $2,500,  for  his  services 
from  May  to  Deceml>er,  during  which 
he  spent  ordinarily  only  his  evenings 


10 


at  the  hotel  and  employed  a  man- 
ager at  $125  or  $150  per  month  and 
under  bond,  will  not  be  disturbed  on 
appeal  after  it  has  been  approved 
by  two  lower  courts,  where  there  is 
testimony  by  hotel  proprietors  that 
$5,000  a  year  was  fair  compensation, 
and  he  had  no  comijensation  for  the 
custody  and  responsibility  of  a  large 
amount  of  personal  property,  and 
the  position  was  attended  with  con- 
siderable anxiety,  and  lae  retained  it 
apparently  against  his  own  inclina- 
tions, in  compliance  with  the  wishes 
of  the  party  in  interest.  Cake  v. 
Mohun,  164  U.  S.  311,  41  L.  ed.  447. 

A  judgment  creditor  of  a  receiver 
cannot  maintain  an  action  to  compel 
him  to  fix  the  value  of  his  services 
and  pay  the  same  to  such  creditor, 
as  it  is  the  duty  of  the  court  to  fix 
the  compensation  of  the  receiver. 
Hamburger  v.  Darusmont,  3  Ohio  N. 
P.  222.  ' 

Where  the  order  of  the  court  in 
reference  to  a  receiver's  commission 
is  in  its  discretion  it  will  not  be  in- 
terfered with  except  for  abuse. 
Hembree  v.  Dawson,  18  Or.  474. 

The  compensation  of  a  receiver  and 
the  manner  of  payment  should  be 
fixed  in  the  final  decree.  Cutter  v. 
Pollock,  4  N.  D.  205,  25  L.  R.  A.  377. 

A  purchaser  who  allows  the  re- 
ceiver to  continue  in  possession  un- 
til the  title  is  declared  good  is  bound 
to  pay  the  receiver's  fees.  Brown  v. 
Dowdall,  2  Hogan,   198. 

The  purchasers  of  a  railroad  at 
foreclosure  sale  are  not  interested 
to  contest  the  compensation  allowed 
the  receiver  out  of  the  proceeds. 
Northern  Alabama  R.  Co.  v.  Hop- 
kins, 59  U.  S.  App.  74,  87  Fed.  Rep. 
505,  31  C.  C.  A.  94. 

Compensation  of  receiver  and 
counsel  fees  should  not  be  fi.xed  ex 
parte  and  without  notice.  Mer- 
chants' Bank  v.  Crysler,  32  U.  S. 
App.  187,  67  Fed.  Rep.  388,  14  C.  C. 
A.  444. 

The  only  question  was  a  question 
before  the  jury  as  to  receivers'  fees 
and  the  court  held  that  the  instruc- 
tions were  correct.  Wilkins  v. 
Georgia  Iron  Works,  74  Ga.  532, 
533. 

By  agreement  of  the  parties  one  of 
them  may  become  liable  for  the  pay- 

145 


§  350 


RECEIVERSHIPS— SUPPLEMENT. 


ment  of  the  receiver's  commissions. 
Kelscy  v.  Sargent,  40  Hun,  150. 

An  order  requiring  a  receiver  to 
pay  over  all  funds  in  his  hands,  witli- 
out  regard  to  his  commissions,  is  un- 
just. Galstcr  v.  Syracuse  Sav. 
'liauk,  29  Hun,  594. 

The  basis  of  a  receiver's  commis- 
sion should  be  the  same  as  that  of 
trustees  under  a  will.  Holcombe  v. 
Holcomhe,  13  N.  J.  Eq.  415,  417. 

For  (inestion  of  receivers'  compen- 
sation as  between  them  and  trustees 
in  bankruptc}',  see  Ellis  v.  Boston, 
H.  d  E.  R.  Co.  107  Mass.  1. 

A  receiver  is  entitled  to  poundage 
except  in  cases  of  executors,  trustees, 
etc.  Bevan  v.  White,  8  Ir.  Eq.  Rep. 
675. 

A  receiver  of  a  building  and  loan 


association  may  be  allowed  a  fee  for 
transferring  shares  upon  the  hooka 
of  the  association.  Chapman  v. 
YoiDip,  65  111.  App.  131. 

There  is  no  general  rule  as  to  com- 
pensation of  receivers.  Day  v.  Croft,. 
2  Beav.  488. 

The  compensation  is  payable  from 
time  to  time.  Special  Bank  Comrs. 
V.  Franklin  Inst,  for  Sav.  11  R.  1. 
557. 

The  fees  of  a  referee  appointed  to 
report  as  to  the  amount  of  compen- 
sation of  a  receiver  who  has  been  re- 
moved and  who  has  applied  for  pay- 
ment of  his  commission,  must  be 
paid  by  the  latter  if  the  report  is  in 
his  favor.  Atty.  Gen.  v.  Continen- 
tal L.  Ins.  Co.  27  Hun,  524. 


Page  582. — (a)  Ifust  he  reasonable. 


Compensation  is  not  determined 
by  the  amount  passing  through  the 
receiver's  hands,  but  must  be  such 
as  would  be  reasonable  for  services 
rendered  by  a  person  competent  to 
perform  the  duties.  Jones  v.  Keen, 
115  Mass.  170. 

Compensation  was  held  to  be  rea- 
sonable in  McArthur  v.  Montclair 
R.  Co.  27  N.  J.  Eq.  77. 

Compensation  fixed  by  responsibil- 
ity, skill,  labor,  and  rate  usually  al- 
lowed. Special  Bank  Comrs.  v. 
Franklin  Inst,  for  Sav.  11  R.  I.  557. 

A  report  that  a  receiver's  compen- 
sation is  reasonable,  made  by  a  mas- 
ter and  sustained  by  competent  evi- 
dence, will  not  be  disturbed.  Karn 
V.  Rarer  Iron  Co.  8G  Va.  754. 

A  special  order  was  made  that  such 
compensation  should  be  made  a  re- 
ceiver as  the  judge  should  think  rea- 
sonable. Neat'C  V.  Douglas,  26  L.  J. 
Ch.  N.  S.  756. 

The  amount  which  the  receiver  of 
a  corporation  would  be  able  to  earn 
at  his  profession  during  the  time 
covered  by  the  receivership  does  not 
necessarily  furnish  a  criterion  for 
determining  the  amount  of  his  com- 
pensation as  receiver;  but  the 
amount  for  which  another  person 
possessing  equal  qualifications  could 
have  been  emploj-ed  to  perform  the 
services  is  ordinarily  a  fair  and  rea- 
146 


sonable  criterion.  United  States 
Nat.  Bank  v.  'National  Bank,  6  Okla. 
163. 

An  attorney  of  a  creditor  should 
not  be  appointed  as  the  attorney  of 
a  receiver  of  an  insolvent  estate ;  but 
an  attorney  so  appointed  may  receive 
a  reasonable  compensation  for  his 
services,  if  no  objection  to  his  ap- 
jiointment  was  made  to  him  or  to  the 
court.  Geyser  Min.  Co.  v.  Bank  of 
Salt  Lake,  16  Utah,  163. 

In  fixing  the  compensation  to  be 
allowed  the  receivers  of  an  assigned 
estate  and  their  solicitors,  the  court 
should  determine  from  the  evidence 
how  much  is  usually  paid  to  person^ 
possessing  the  requisite  capacity  and 
experience  for  like  services  under 
similar   responsibilities.     Ihid. 

The  court  cannot  determine  what 
is  reasonable  compensation  for  the 
services  of  the  attorney  of  a  receiver, 
in  the  absence  of  evidence  on  that 
subject,  although  it  is  familiar  with 
what  has  actually  been  done  by  him. 
Hammond  v.  Atlee,  15  Tex.  Civ.  App. 
267. 

The  judges  of  the  court  in  passing 
on  the  reasonableness  of  charges  by 
the  receiver  of  an  insolvent  for  coun- 
sel fees  for  himself  and  other  attor- 
neys employed  by  him  may  right- 
fully use  their  personal  knowledge  as 
to  what  has  been  done  by  the  attor- 


RECEIVEKS'    COMPENSATION. 


§  350 


neys,  and  also  take  into  considera- 
tion the  character  of  legal  services 
theretofore  rendered  by  counsel,  and 
the  amount  already  allowed  on  ac- 
count thereof,  Olson  v.  State  Bank, 
72  Minn.  320. 


What  another  competent  person 
would  have  done  the  work  for  is  not 
proper  evidence  in  fixing  the  com- 
pensation for  receiver.  Cowdrey  v. 
Galveston,  H.  c£-  H.  li.  Co.  1  Woods, 
331. 


Page  586. — (c)  Sometimes  a  salary. 


A  receiver  who  was  placed  upon 
the  pay  roll  at  a  monthly  sum  as  an 
allowance  upon  his  compensation  as 
receiver  should  be  allowed  such 
monthly  sum  after  the  sale  of  the 
railroad  for  which  he  was  appointed 
and  the  payment  of  a  sum  as  a  com- 
promise for  his  services,  where  none 
of  the  parties  interested  moved  to 
reduce  such  allowance  or  discharge 
such  receiver,  and  he  was  allowed  to 


go  on  as  such,  with  all  the  responsi- 
bilities attached  to  the  position  and 
to  the  business  in  hand,  and  his  ac- 
count had  been  filed  and  stood,  pre- 
sumably approved  by  the  court,  up 
to  within  two  years  of  the  time  when 
the  question  was  raised,  although 
within  such  two  years  objection  was 
made  and  overruled.  Dillingham  v. 
Moran,  52  U.  S.  App.  425,  81  Fed. 
Rep.  759,  26  C.  C.  A.  596. 


Page  587. — (d)     When  compensation  refused. 


A  receiver  is  not  entitled  to  com- 
pensation for  the  collection  and  dis- 
bursement of  the  government  tax  on 
whisky  which  belongs  to  third  par- 
ties. White  V.  Allen,  10  Ky.  L.  Rep. 
1025. 

Fees  of  trustees  will  not  be  al- 
lowed from  a  trust  fund  when  they 
are  extravagant.  Trustees  v.  Green- 
ough,  105  U.  S.  527,  sub  nam.  Inter- 
nal Improvement  Fund  v.  Green- 
ough,  26  L.  ed.  1157. 

The  compensation  of  a  receiver, 
and  expenses  incurred  during  the  re- 
ceivership other  than  those  which 
would  necessarily  have  been  incurred 
had  no  receiver  been  appointed,  can- 
not be  allowed  out  of  the  funds  in 
hia  hands,  where  his  appointment 
has  been  revoked,  but  they  constitute 
charges  against  the  parties  procur- 
ing his  appointment.  Ogden  City 
V.  Bear  Lake  &  It.  W.  &  I.  Co.  18 
Utah,  279. 

As  to  when  defendants  were  re- 
quired to  pay  the  compensation  of 
the  receiver — see  Hayes  v.  Ferguson, 
15  Lea,  1. 

Compensation  may  be  denied  to 
the  receiver  of  a  corporation  wliere 
he  has  kept  no  proper  accounts,  and 
has  put  the  foiirt  to  a  grc^at  deal  of 
trouble  in  determining  his  rights,  or 


has  negligently  or  wilfully  misman- 
aged the  estate.  United  States  Nat. 
Bank  v.  National  Bank,  0  Okla.  1G3. 

While  a  receiver's  right  to  com- 
pensation and  allowance  for  ex- 
penses does  not  depend  upon  the  cor- 
rectness of  the  order  of  appointment, 
nevertheless  he  is  not  entitled  to 
compensation  out  of  the  fund  or 
property  received  by  him  under  such 
order,  where  its  enforcement  has 
be'en  subjected  to  the  check  of  a  writ 
of  prohibition  on  the  ground  that  it 
was  unauthorized  on  making  return 
to  such  writ,  but  is  only  entitled 
thereto  on  his  accounting  with  the 
court  in  the  suit  wherein  he  was  ap- 
pointed. St.  Louis,  K.  d  S.  li.  Co. 
v.  Wear,  135  IMo.  230,  sub  nom.  State 
St.  Louis,  K.  d  S.  R.  Co.,  v.  Wear, 
33  L.  R.  A.  341. 

A  partner  appointed  receiver  is 
not  entitled  to  compensation.  Berry 
v.  Jones,  11  lleisk.  20(1. 

A  receiver  is  not  entitled  to  com- 
pensation for  attending  a  survey  of 
minor's  estate,  no  order  being  ob- 
tained.    Re  Ormsby,  1  Hall  &  B.  189. 

Full  compensation  is  not  allowed 
a  second  receiver  for  funds  collected 
by  the  first  receiver  and  turned  over. 
A  til/.  Gen.  v.  Continental  L.  Ins.  Co. 
32  iiun,  223. 

147 


§  350  RECEIVERSHIPS— SUPPLEMENT. 

Page  587. — (e)     W/ie)i  to  he  jmid  by  plaintfjf'. 


An  order  for  the  appointment  be- 
ing reversed,  tlie  receiver  was  di- 
rected to  turn  over  to  the  defendant 
all  partnership  property  held  bj' 
him,  and  the  plaintitl'  was  ordered  to 
pay  the  receiver's  compensation. 
HVs/oM  v.  Watts,  45  Hun,  219. 

The    fees    of   temporary   receivers 


appointed  pending  an  action  to  set 
aside  an  alleged  fraudulent  convey- 
ance of  goods  are  properly  chargeable 
to  the  plaintiffs  therein,  where  such 
fees  were  incurred  in  converting 
such  goods  into  cash,  of  which  such 
plaintiffs  received  the  benetit.  lioun- 
saville  v.  Langston,  99  Ga.  117. 


Page  589. — (If)  Additional  allowances. 


The  compensation  of  temporary 
receivers  of  corporations,  for  which 
no  specific  provision  is  made  by  stat- 
ute, is  governed  by  N.  Y.  Code  Civ. 
Proc.  §  3320,  providing  that  a  re- 
ceiver, except  as  otherwise  pre- 
scribed by  law,  is  entitled,  in  addi- 
tion to  his  lawful  expenses,  to  such 
commissions,  not  exceeding  5  per 
cent  of  the  sums  received  and  dis- 
bursed by  him,  as  the  court  by  which 
he  is  appointed  allows.  Re  Warren 
E.  Smith  Co.  31  App.  Div.  39. 

The  receiver  of  an  insolvent  bank 
is  entitled  to  credit  for  a  charge  of 
$600  made  by  a  surety  company  for 
becoming  the  surety  on  his  bond  for 
$80,000,     under    Wis.     i.aws     1893, 


chap.  190,  authorizing  the  execution 
of  a  bond  by  such  a  company  as 
surety,  and  Wis.  Laws  1895,  chap. 
219,  expressly  authorizing  a  reason- 
able charge  therefor  not  exceeding  2 
per  cent.  Hamacker  v.  Commercial 
Bank,  95  Wis.  359. 

The  objection  that  a  receiver  had 
no  standing  in  court  to  oppose  a  mo- 
tion vacating  his  appointment,  or  to 
make  a  motion  to  vacate  the  lea^e 
granted  another  to  sue  him,  is  not 
available  for  the  purpose  of  defeating 
his  right  to  an  allowance  for  services 
on  such  motions,  where  the  court  per- 
mitted him  to  be  heard  and  recog- 
nized him  on  the  motions.  Hardt 
V.  Levy,  20  App.  Div.  400. 


Page  590. — (i)  /Statutory  compensation. 


The  compensation  of  a  temporary 
receiver  appointed  under  N.  Y.  Code 
Civ.  Proc.  §  2423,  is  not  fixed  by  2 
N.  Y.  Rev.  Stat.  p.  470,  tit.  4,  chap. 
8,  §  76,  which  by  N.  Y.  Laws  1880, 
chap.  245,  was  made  applicable  to 
receivers  appointed  under  N.  Y.  Code 
Civ.  Proc.  §  2429,  which  relates  to 
permanent  receivers  only.  Re  War- 
ren  E.  Smith  Co.  31  App.  Div.  39. 

As  to  allowance  of  expenses  and 
various  charges  of  receivers. — see  Re 
Union  Bank,  37  N.  J.  Eq.  420. 

Fees  of  receiver  as  fixed  by  N.  Y. 
Code  Civ.  Proc.  §  3220.  Re  Security 
Life  Ins.  &  Annuity  Co.  31  Hun,  36. 

A  statute  relative  to  the  compen- 
148. 


sation  of  receivers  was  held  to  be 
prospective,  in  People,  yeiocomh, 
V.  McCall,  99  N.  Y.  587. 

A  receiver  is  an  officer  of  the 
court,  and  the  court  has  a  right  to 
fix  his  compensation  irrespective  of 
N.  Y.  Code,  §  244,  subd.  4.  Baldwin 
V.  Eazler,  2  Jones  &  S.  275. 

The  commissions  to  be  allowed  a 
receiver  joined  in  an  action  in  which 
a  decree  was  rendered  setting  aside 
a  general  assignment  for  creditors 
are  not  definitely  fixed  by  statute, 
but  are  left  to  the  discretion  of  the 
court  in  South  Carolina.  Mann  v. 
Poole,  48  S.  C.  154. 


REPORTS,   ACCOUNTS  AND   DISTRIBUTION. 
Page  592,  sec.  355. — Keports  and  accounts. 


§  355 


The  report  must  be  full,  clear^  and 
specific.  Bertie  v.  Abingdon,  8  I3eav. 
53. 

Where  a  receiver  makes  default  in 
payment  of  a  balance  due  from  him, 
payment  may  be  enforced  by  com- 
mittal,    lie  Bell,  L.  R.  9  Eq.  172. 

The  order  on  a  receiver's  account 
is  not  appealable.  Colgate  v.  Mich- 
igan L.  S.  R.  Co.  28  Mich.  288. 

On  appeals  respecting  receivers' 
accounts,  it  is  the  practice  in  this 
country  to  entertain  objections  to 
the  amount  of  the  items.  Beytagh 
V.  Concannon,  10  Ir.  Eq.  Rep.  351. 

In  matters  pertaining  to  a  receiv- 
er's account  he  is  entitled  to  a  trial 
by  jury  on  questions  of  fact.  Hamm 
V.  J.  Stone  d  Sons  JAve  Stock  Co.  13 
Tex.  Civ.  App.  414. 

The  receiver  is  entitled  to  all  prop- 
er legitimate  and  necessary  outlays 
by  him  made  as  receiver.  Hardt  v. 
Levij,  20  App.  Div.  400. 

It  is  the  duty  of  the  court,  whether 
objections  are  made  by  creditors  or 
not,  to  supervise  and  closely  scrati- 
nize  the  account  of  a  receiver  of  an 
insolvent.  Olson  v.  State  Bank,  72 
Minn.  320. 

A  receiver's  account  must  be  filed 
in  court.  People  v.  Knickerbocker 
L.  Ins.  Co.  18  X.  Y.  Week.  Dig.  492; 
Re  Burke,  1  Ball  &  B.  74. 

After  bill  is  dismissed  he  should 
be  compelled  to  account.  Pitt  V. 
Bonner,  5  Sim.  577. 

But  a  person  not  a  party  to  the 
suit  has  no  right  to  compel  him  to 
account.  Colburn  v.  Cooper,  8  Ir. 
Eq.  Rep.  510;  Locke  v.  Ashe,  1  Ho- 
gan,  143. 

Nor  is  he  required  to  unless  it  is 
shown  that  assets  have  come  to  his 
hands.  Lyons  v.  Atlanta  Hill  Gold 
Min.  &  Mill.  Co.  38  N.  Y.  S.  R.  892, 
14  N.  Y.  Supp.  533. 

In  passing  upon  his  accounts  the 
court  may  consider  general  prinoi- 
ples  upon  which  the  master  has  pro- 
ceeded in  taking  the  account,  but  not 
the  items.  Sheiccll  v.  Jones,  2  Sim. 
&  Stu.  170. 

His  accounts  should  be  presented 


at  least  once  a  year.     Loicc  v.  Lowe, 
1  Tenn.  Ch.  515. 

At  least  where  they  are  large. 
Day  V.  Croft,  6  Eng.  L.  <!c  Eq.  02. 

A  judge  in  passing  upon  the  ac- 
counts of  the  receiver  of  a  corpora- 
tion is  not  bound  by  the  approval  of 
his  expenditures  by  the  judge  ap- 
pointing him,  even  if  such  judge  was 
a  wholly  disinterested  person  and 
otherwise  qualified  to  act  in  the 
premises,  where  such  expenditures 
were  unnecessary  and  unreasonable. 
United  States  Nat.  Bank  v.  Xation- 
al  Bank,  6  Okla.  163. 

The  burden  is  on  the  receiver  to 
show  the  correctness  of  his  accounts. 
Ibid. 

Before  a  receiver  is  discharged  he 
should  pass  his  accounts  and  provi- 
sion be  made  for  his  compensation; 
and  if  it  has  been  done  by  agreement 
of  parties  the  order  may  be  set  aside 
on  application  of  the  receiver.  Hoff- 
man V.  Bank  of  Minot,  4  N.  D.  473. 

A  final  order  by  the  district  court, 
allowing  the  account  of  a  receiver, 
and  directing  the  payment  of  a  spe- 
cific sum  for  services  rendered  in  con- 
nection with  the  receivership,  is  not 
within  N.  D.  Rev.  Codes,  §  5499.  pro- 
viding that  "mutual  final  judgments 
may  be  set  off  pro  tanto."  Patter- 
son V.  Ward,  8  N.  D.  87. 

A  final  order  allowing  the  account 
of  a  receiver,  and  directing  the  pay- 
ment of  a  specific  sum  to  one  who 
has  rendered  services  connected  with 
the  receivership,  creates  a  demand 
against  the  receiver  in  favor  of  the, 
claimant,  which  is  free  from  equities 
in  favor  of  a  judgment  creditor  of 
the  claimant,  and  ends  the  jurisdic- 
tion of  the  court  over  sucli  clainx 
further  than  to  require  the  ]iaynu'nt 
of  the  amount  allowcsd  to  the  party 
to  whom  it  is  due.     Ibid. 

Rents  are  enforceable  by  suit  on 
a  bond  given  in  lieu  of  the  appoint- 
ment of  a  receiver,  and  not  on  motion 
to  compel  the  obligor  to  account  as 
a  receiver,  to  wliicli  position  lie  was 
subsequently  appointed,  liaker  v. 
Baker,  30  App.  Div.  485. 

149 


§  355-357  RECEIVERSHIPS— SUPPLEMENT. 

Page  593. — (b)  Reference  to  vnaster. 


Accounts  of  a  receiver,  if  not  as- 
sented to,  should  be  referred  to  a 
master.  American  Trust  &  Sav. 
Bank  v.  Frankenthal,  55  111.  App. 
400. 

If  the  master  adopts  an  erroneous 
principal  in  the  matter  of  a  receiv- 
er's account,  it  may  be  referred  back 
for  correction.  Cowdrey  v.  Galves- 
ton, H.  d  H.  R.  Co.  1  Woods,  331. 

The  report  of  a  master  on  a  receiv- 
er's account  requires  confirmation. 
Richards  v.  Morris  Canal  &  Bkg.  Co. 
4  N.  J.  Eq.  428. 


If  the  report  of  the  master  is  not 
satisfactory  it  should  be  excepted  to. 
Mechanics'  Bank  v.  Bank  of  'New 
Brunswick,  3  N.  J.  Eq.  437;  Wool- 
sey  V.  Gummings  Car  Works,  33  N. 
J.  Eq.  432. 

Exceptions  to  the  master's  report 
on  a  receiver's  accounts  must  first 
be  made  before  the  master.  Cow- 
drey V.  Galveston,  E.  d  H.  R.  Co.  1 
Woods,  331. 


Page  594,  sec.  357. — Distribution. 


Money  paid  by  tenants  before  an 
extending  order  belongs  to  the  first 
petitioner.  O'Callaghan  v.  O'Cal- 
laghan,  3  Ir.  Ch.  Rep.  376. 

Rents  collected  prior  to  extension 
belong  to  the  first  plaintiff.  Agra 
&  Mastcrmayi's  Bank  v.  Barry,  Ir. 
Rep.  3  Eq.  443. 

Rents  must  be  applied  according 
to  the  legal  rights  of  the  parties. 
Corbet  v.  Mahon,  2  Jones  &  L.  671. 

Rents  collected  should  be  applied 
to  the  satisfaction  of  liens.  Pepper 
V.  Shepherd,  4  Mackey,  269. 

Application  of  rents  to  discharge 
of  liens.  Milhous  v.  Dunham,  78 
Ala.  48,  59. 

An  attachment  execution  against 
a  corporation  in  the  hands  of  a  re- 
ceiver is  properly  served  upon  him, 
and  when  so  served  the  plaintiff  in 
attachment  becomes  entitled  to  the 
dividend  in  the  receiver's  hands  when 
declared.  Merchant's  Nat.  Bank  v. 
Binder,  6  Pa.  Dist.  R.  633. 

A  prior  mortgagee  who  is  code- 
fendant  in  a  proceeding  to  foreclose  a 
junior  mortgage  is  entitled  to  rents 
where  he  has  taken  an  assignment 
thereof.  Harris  v.  Taylor,  35  App. 
Div.  462. 

A  judgment  creditor   who   files   a 


bill  in  aid  of  his  execution,  to  remove 
a  prior  mortgage  as  a  cloud  upon  his 
title,  is  not  entitled  to  the  rents  col- 
lected by  a  receiver  appointed  at  his 
instance  pending  the  action,  if  the 
mortgage  is  valid,  the  mortgagors 
are  insolvent,  the  property  insuffi- 
cient security,  and  the  receiver  was 
appointed  for  the  benefit  of  all  the 
parties  to  the  suit,  and  not  for 
his  benefit  alone.  Cross  v.  Will 
County  Nat.  Bank,  177  111.  33. 

Rents  may  be  applied  on  taxes, 
insurance,  and  repairs.  American 
Nat.  Bank  v.  Northwestern  Mut.  L. 
Ins.  Co.  89  Fed.  Rep.  610,  32  C.  C. 
A.  275. 

Rents  may  be  applied  on  taxes 
where  there  is  a  deficiency.  Elliott 
V.  Magnus,  74  111.  App.  436. 

A  receiver  will  not  be  allowed  for 
rents  paid  by  him  which  the  pur- 
chaser should  have  paid.  French  v. 
Pittsburgh  Vehicle  d  Harness  Co. 
184  Pa.  161. 

The  receiver  of  rents  in  an  action 
to  foreclose  a  junior  mortgage  should 
not  be  allowed  to  pay  the  rents  to  the 
plaintiff  until  it  appears  that  there 
is  a  deficiency  upon  the  sale  of  the 
premises.  Harris  v.  Taylor,  22  App. 
Div.  109. 


Page  601,  sec.  370. — Practice  and  pleading. 


The  proper  remedy  by  a  party 
claiming  to  have  a  paramount  inter- 
est as  a  cestui  que  trust  in  a  fund  re- 
covered by  a  receiver  of  a  corporation, 
150 


in  case  he  disputes  the  propriety  of 
a  deduction  for  services  made  by  the 
receiver's  attorney  before  turning 
over  the  fund  to  the  receiver,  is  an 


PRACTICE   AND   PLEADING. 


I  373 


application  to  the  court  for  an  order 
on  the  receiver  to  sue  the  attorney 
for  the  money  withheld  by  him,  and 
not  a  petition  to  compel  the  receiver 
to  account  for  the  amount  improper- 
ly withheld  by  the  attorney, — in  the 
absence  of  collusion  between  the  re- 
ceiver and  attorney.  Johnson  v. 
Johnson  Railroad  Signal  Co.  57  N. 
J.  Eq.  79. 

Claims  for  amounts  received  by  a 
court  receiver  in  chancery  causes 
should,  in  an  action  against  the  es- 


tate of  such  receiver  and  the  sureties 
on  his  bond,  be  preferred  in  the 
names  of  those  beneficially  entitled 
to  the  fund,  or  the  parties  may  go 
into  the  several  chancery  causes  and 
have  the  accounts  settled  and  a  re- 
ceiver appointed  to  collect  the  bal- 
ance ascertained  to  be  due,  notwith- 
standing a  great  lapse  of  time;  and 
they  should  not  be  audited  simply  in 
the  name  of  the  causes  in  which  he 
was  appointed  receiver.  Williams  v. 
'Newman,  93  Va.  719. 


Page  603,  sec.  373. — Parties;  allegations. 


In  an  action  by  a  receiver  to  set 
aside  an  assignment  of  a  chose  in 
action  by  a  judgi/ient  debtor  the  lat- 
ter is  a  necessa»y  party.  Miller  v. 
Ball,  70  N.  Y.  250. 

The  first  mortgagee  is  a  proper 
party  where  a  reii^iver  is  prayed  for. 
Miltenberger  v.  Logansport  R.  Go. 
106  U.  S.  286,  27  L.  ed.  117. 

The  receiver  of  an  insolvent  rail- 
road company  in  possession  of  its 
assets  and  exercising  its  franchises 
is  a  necessary  party  in  a  proceeding 
by  the  state  to  restrain  the  further 
exercise  of  its  franchises.  Re  George 
Mathers'  Sons'  Go.  52  N.  J.  Eq.  007. 

In  a  suit  against  the  fraudulent 
associates  of  a  corporation  the  re- 
ceiver of  the  corporation  is  not  a 
necessary  party.  Wheeler  v.  Clinton 
Canal  Bank,  Harr.  Ch.   (Mich.)  449. 

A  receiver  appointed  to  take 
charge  of  mortgaged  property  in  a 
proceeding  between  parties  is  not  a 
necessary  party  in  a  proceeding  to 
foreclose  a  mortgage  on  the  same 
property,  subsequently  commenced. 
Beffron  v.  Gage,  149  111.  182. 

The  receiver  of  a  railroad  company 
is  not  a  necessary  party  to  an  action 
against  the  company  on  a  note  ex- 
ecuted by  it.  Dullnig  v.  Weekes,  16 
Tex.  Civ".  App.  1. 

An  insolvent  corporation  is  not  a 
necessary  party  to  an  action  by  the 
temporary  receiver  thereof  to  recover 
money  collected  under  a  judgment 
confessed  by  the  corporation  for  the 
purpose  of  giving  the  judgment  cred- 
itor an  unlawful  preference.  Nealis 
v.  American  Tube  d  Iron  Go.  150  N. 
Y.  42. 


The  receiver  of  a  bank  is  a  neces- 
sary party  in  a  proceeding  in  error 
to  reverse  a  judgment  in  favor  of  the 
bank  against  an  interpleader  seeking 
to  recover  property  from  the  receiv- 
er. Mosler  v.  State  Bank,  6  Kan. 
App.  172. 

A  person  not  a  party,  claiming 
property  in  the  hands  of  a  receiver, 
must  intervene  in  the  suit  in  which 
the  receiver  is  appointed.  Potter  v. 
Spa  Spring  Brick  Go.  47  N.  J.  Eq. 
442. 

The  receiver  is  a  proper  party  in 
an  action  for  an  injury  from  an  as- 
sault by  an  agent  of  such  receiver 
while  acting  for  himself  and  the  re- 
ceiver. Casey  v.  Oakes,  17  Wash. 
409,  Reversing  on  Rehearing  15 
Wash.  450. 

And  as  such  he  is  entitled  to  all 
the  constitutional  rights  guaranteed 
to  any  other  party.  Banini  v.  ./. 
Stone  d  Sons  Live  Stock  Go.  13  Tex. 
Civ.  App.  414. 

But  a  receiver  against  whom  judg- 
ment has  been  taken  is  not  a  neces- 
sary party  to  an  action  on  the  re- 
ceiver's bond.  Black  v.  Gcntery, 
119  N.  C.  502. 

And  the  receivers  of  a  railroad 
company  are  not  necessary  parties 
to  a  suit  brought  against  it  after  the 
receivership  is  virtually  closed  and 
the  property  has  been  restored  to  the 
company  and  is  operated  by  it.  San 
Antonio  &  A.  P.  R.  Co.  v.  Barnett 
(Tex.  Civ.  App.)  44  S.  W.  20. 

A  certain  averment  in  a  suit  on  a 
receiver's  bond  hekl  sullicient.  Rex 
V.  Lidwfll,  1   Dm.  &  W.  2(i. 

Where  suit  is  by  tlie  receiver  in  be- 

151 


t5  383 


RECEIVERSHIPS— SUPPLEMENT. 


half  of  creditors  the  pleadings  must 
set  forth  facts  entitling  each  credi- 
tor to  maintain  the  action.  Fouche 
V.  Broua;  74  Ga.  251,  2G4. 

A  receiver's  petition  in  an  action 
by  a  receiver  must  set  out  facts 
showing  his  appointment,  and  by 
what  jurisdiction  he  was  appointed, 
and  so  nuich  of  the  proceedings  as  to 
show  that  his  appointment  was  legal. 
Rhorer  v.  iliddltsboro  Toion  &  Lands 
Co.  19  Ivy.  L.  Rep.  1788. 

It  is  not  necessary  to  allege  that 
the  debtor  has  no  other  property, 
where  it  is  alleged  that  he  is  in  fail- 
ing circumstances  and  has  more 
judgments  against  him  than  he  can 
pay.  ^Vhitehouse  v.  Point  Defiance, 
T.  d-  E.  R.  Co.  9  Wash.  558. 

An  action  by  a  receiver  against 
directors,  where  it  does  not  appear 
that  they  were  severally  liable,  and 
which  is  not  for  accounting,  will  be 
regarded  as  an  action  at  law,  and 
may  be  demurrable  for  misjoinder. 
O'Brien  v.  Fitzgerald,  143  N.  Y.  377. 

In  an  action  by  a  receiver,  aver- 
ments that  on  a  certain  date  by  or- 
der of  court  in  a  certain  suit  against 
his  insolvent  he  was  appointed  re- 
ceiver   of    the   insolvent's    property, 


with  the  right  to  take  possession  of, 
sue  for,  and  demand  the  same,  are 
sullicient.  Dagyett  v.  Gray  (Cal.) 
40  Pac.  959. 

The  prayers  of  a  petition  for  the 
granting  of  an  injunction  and  the 
appointment  of  a  receiver  are  prop- 
erly denied  where  the  allegations  of 
the  petition  do  not  make  out  a  case 
either  for  an  injunction  or  for  a  re- 
ceiver. Short  V.  Melton,  103  Ga. 
567. 

When,  upon  decree  pro  confesso 
in  foi-eclosure,  the  plaintiff  asks  for 
a  receiver,  he  must  show  by  affidavit 
the  amount  due  for  prinoipal,  inter- 
est, and  costs,  a  statement  in  the  bill 
is  insufficient.  Rogers  v.  Newton,  2 
Ir.  Eq.  Rep.  40. 

A  denial  that  a  receiver  was  prop- 
erly appointed  is  not  sufficient; 
facts  must  be  stated.  Goodhue  v. 
Daniels,  54  Iowa,  19. 

Verification. 

Where  the  petition  and  answer  are 
not  verified  in  positive  terms,  and 
there  is  no  evidence  offered,  the  court 
should  refuse  an  appointment.  New 
South  Bldg.  &  L.  Asso.  v.  Willing- 
ham,  93  Ga.  218. 


Page  607,  sec.  382.— Scope  of  order. 


Practice  under  N.  Y.  Code,  §  298, 
requiring  an  order  of  appointment 
to  be  filed  and  recorded,  and  also  cer- 
tified copy,  etc., — considered  and  de- 
termined. Fredericks  v.  Niver,  28 
Hun,  417;  Scroggs  v.  Palmer,  66 
Barb.  505. 

Other  property  belonging  to  de- 
fendant against  whom  a  judgment 
has  been  rendered  requiring  him  to 
discharge  a  specified  indebtedness 
within  a  given  time,  and  that  in  de- 
fault tlioreof  specified  land  shall  be 
sold  and  the  proceeds  applied  in  pay- 
ment of  the  indebtedness,  cannot  be 
included  in  an  order  appointing  a 
receiver  on  an  application  made  aft- 
er the  rendition  of  the  judsrment. 
Ereling  v.  Kreling,  118  Cal.  421. 

An  order  allowing  an  ex  parte  in- 
junction in  attachment  proceedings 
without  the  filing  of  the  bond  re- 
quired by  2  How.  (Mich.)  Stat.  § 
152 


6687,  and  an  order  appointing  a  re- 
ceiver of  the  property,  are  void. 
Lawton  v.  Richardson,  115  Mich.  12. 

A  substitution  of  receivers  of  an 
insolvent  bank  cannot  be  effected 
under  the  guise  of  a  resettlement 
of  an  order  which  properly  expressed 
the  decision  of  the  court  as  made  .at 
the  time  it  was  granted.  People  v. 
Murray  Hill  Bank,  10  App.  Div.  328. 

Parties  cannot  stipulate  away  the 
order  of  appointment.  It  is  beyond 
their  control.  People  v.  Globe  Mut. 
L.  Ins.  Co.  57  How.  Pr.  482. 

An  order  appointing  a  receiver 
may  be  admitted  as  testimony,  but 
may  be  defeated  by  the  instructions 
of  the  court  as  to  its  object.  A  re- 
ceiver appointed  by  a  master  in 
chancery  may  defend  his  action  in 
suit  for  trespass.  Brush  v.  Blanch- 
ard,  19  111.  31. 

When  the  complaint  does  not  al- 


PRACTICE  AND  PLEADING. 


381,  396,  399 


lege  the  facts  constituting  the  neces- 
sity for  the  immediate  appointment, 
an  order  appointing  a  receiver  with- 
out notice  is  erroneous.  Bank  of 
Florence  v.  United  States  Sav.  &  L. 
Co.  104  Ala.  297. 


The  order  should  embrace  a  find- 
ing as  to  facts  justifying  appoint- 
ment. Morey  v.  Grant,  48  Mich. 
326. 


Page  607,  sec.  384. — Affidavits. 


Affidavits  may  accompany  the  pe- 
tition in  an  action  by  partners, 
which  ask  for  the  appointment  of  a 
receiver,  under  Tex.  Rev.  Stat.  1895, 
art.  1465,  and  may  be  read  in  sup- 
port of  its  allegations,  but  they  can- 
not serve  as  pleadings  in  the  case  or 
enlarge  upon  the  case  made  by  the 
petition.  Wehh  v.  Allen,  15  Tex. 
Civ,  App.  605. 

Abatement. 

The  appointment  of  a  receiver  in 
one  action  for  a  fund  to  be  collected 
by  a  city  from  drainage  assessments 
does  not  abate  other  actions  then 
pending  against  the  city  to  compel 
payment  of  claims  to  which  the 
money  in  such  funds  is  applicable. 
Wilder  v.  "New  Orleans,  58  U.  S.  App. 
109,  87  Fed.  Rep.  843,  31  C.  C.  A. 
249. 

Appeal. 

An  insurance  company  which  ap- 
pears on  the  rule  to  show  cause  why 
the  receiver  should  not  be  appointed 
to  collect  certain  policies,  and  makes 
no  objection  to  the  appointment,  can- 
not claim  on  appeal  that  such  ap- 
pointment was  error.  'New  York  L. 
Ins.  Co.  V.  Davis,  94  Va.  427. 


Suit  in  bar. 

A  judgment  in  favor  of  receivers 
of  a  bank  in  one  state  is  a  bar  to  a 
suit  by  the  receivers  in  the  name  of 
the  bank  on  the  same  cause  of  action 
in  another  state.  Bank  of  North 
America  v.  Wheeler,  28  Conn.  433, 
73  Am.  Dec.  683. 

Attacking  judgment. 

An  intervention  by  a  debtor  in  a 
judgment  in  favor  of  a  receiver,  in  an 
application  by  the  attorney  •  of  the 
receiver  to  have  the  attorney's  fees 
fixed  and  allowed,  whereby  such  debt- 
or seeks  to  reduce  the  judgment  by 
one  half  of  the  attorney's  fees  in- 
cluded therein,  which  the  attorney 
had  agreed  to  allow  the  receiver  to 
retain,  is  a  direct  proceeding  within 
the  rule  that  a  judgment  may  be  as- 
sailed in  a  direct  proceeding  for 
fraud  or  accident  preventing  the 
party  from  availing  himself  of  a 
valid  defense  where  the  court  is  the 
same  which  rendered  the  judgment, 
and  has  jurisdiction  of  all  tlio  par- 
ties interested,  and  control  of  the 
funds.  Uamniond  v.  Atlee,  15  Tex. 
Civ.  App.  267. 


Page  615,  sec.  396. — Void  appointment. 


An  erroneous  appointment  does 
not  render  the  consequent  proceed- 
ings void.  Mcllhenny  v.  Binz,  80 
Tex.  1. 

An  order  directing  a  receiver  to 
sell  property  of  a  corporation  is  nec- 
essarily erroneous  where  he  was  im- 
properly appointed  receiver.  Em- 
pire Hotel  Co.  V.  Main,  98  Ga.  176. 


The  appointment  of  a  receiver  un- 
der a  judgment  which  was  dis- 
charged in  bankruptcy  is  void.  Qib- 
S071  V.  Oorman,  44  N.  J.  L.  325. 

An  insolvent  estate  is  not  liable 
for  money  loaned  by  one  acting  as 
its  receiver  under  a  void  appoint- 
ment. Ludington  v.  Thompson,  4 
App.  Div.  117. 


Page  618,  sec.  399.— Right  of  set-off. 


The  debts  of  a  bank  in  the  hands 
of  a  receiver  cannot  be  deducted  from 
its  credits  in  the  hands  of  a  receiver, 
in  fixing  the  amount  of  an  assess- 


ment against  the  receiver  under  the 
Washington     revenue     act.     Hewitt 
v.  Traders'  Bank,  18  Wash.  326. 
A   counterclaim    or    sot-ofT   comes 


899 


RECEIVERSHIPS— SUPPLEMENT. 


within  tlie  spirit  of  the  act  of  Con- 
gress of  August  13,  1SS8,  allowing  a 
receiver  of  a  Federal  court  to  be  sued 
in  a  state  court  without  leave  of  the 
court  appointing  him.  Grant  v. 
Buckncr,  172  U.  S.  232,  43  L.  ed.  430. 

A  claim  for  breach  of  covenants 
of  warranty  may  be  set  off  by  the 
vendee  against  the  receiver  of  the 
vendor,  in  a  suit  for  rent  due  by  the 
vendee  to  the  vendor,  where  the  re- 
ceiver is  merely  a  general  one  to  col- 
lect and  preserve  assets.  Central 
Appalachian  Co.  v.  Buchanan,  90 
Fed.  Rep.  454,  33  C.  C.  A.  598. 

A  depositor  in  an  insolvent  bank 
is  entitled  to  an  equitable  set-off  of 
liis  deposit  against  a  note  on  which 
he  is  primarily  liable,  although  the 
note  is  not  due  at  the  time  of  the 
appointment  of  the  receiver  of  the 
bank,  where  he  elects  to  waive  the 
additional  time.  Clute  v.  Warner, 
8  App.  Div.  40. 

Where  receivers  are  representa- 
tives of  the  creditors  of  an  insolvent 
corporation,  and  the  suit  is  against 
the  stockholders,  the  right  of  set-off 
does  not  exist.  Osgood  v.  Ogden,  4 
Keyes,  70. 

A  receiver  is  entitled  to  deduct 
from  money  due  to  a  creditor  any 
sum  paid  to  him  by  mistake.  Peo- 
ple V.  E.  Remington  &  Sons,  60  Hun, 
42. 

Indebtedness    due    from    an    em- 

154 


ployee  may  be  set  off  against  wages 
due  from  a  receiver.  Davis  v.  Stover, 
,16  Abb.  N.  S.  225. 

Rights  of  set-off  are  not  affected 
by  the  appointment  of  a  receiver. 
Re  Middle  District  Bank,  1  Paige, 
585. 

Rent  wrongfully  paid  to  a  receiver 
may  be  offset  against  future  rents. 
Grant  v.  Buckner,  172  U.  S.  232,  43 
L.  ed.  430. 

For  equitable  set-off  against  funds 
in  the  hands  of  receivers — seeMerrill 
V.  Cape  Ann  Granite  Co.  161  Mass. 
212. 

Debts  of  a  partner  and  his  firm  to 
a  bank  cannot  be  set  off  by  a  bank 
receiver  against  trust  moneys  which 
the  partner  mixed  with  his  own  or 
the  firm's  deposit,  without  the 
bank's  knowledge,  the  whole  amount 
remaining  until  the  bank  failed. 
Knight  v.  Fisher,  58  Fed.  Rep.  991 ; 
Fisher  v.  Knight,  17  U.  S.  App.  502, 
61  Fed.  Rep.  491,  9  C.  C.  A.  582. 

Depositors  of  a  bank  in  the  hands 
of  a  receiver  have  a  right  of  set-off" 
as  against  the  demands  of  the  receiv- 
er due  from  them  on  notes.  State 
V.  Brohston,  94  Ga.  95. 

Demands  due  a  lessee  before  the  ap- 
pointment cannot  be  set  off  against 
rents  accruing  afterwards.  Farmers' 
Loan  c£  T.  Co.  v.  Northern  P.  R.  Co. 
58  Fed.  Rep.  257. 


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